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A pledge is a bailment that conveys title to property owned by a debtor (the pledgor) to a creditor (the pledgee) to secure repayment for some debt or obligation and to the mutual benefit of both parties. [1] [2] The term is also used to denote the property which constitutes the security. [3] The pledge is a type of security interest.
Control that vests in the pledgee is known as quasi-control. The primary claim, however, remains vested in the pledgor. An act of publicity may be required: for example, sending notice of cession to the pledgor's debtors. The creation of a pledge usually takes place in two stages: The parties enter into a valid and binding pledge agreement.
The pledgor was liable for damage done by his thing deposited, if he acted without the care of a bonus paterfamilias. If the pledgee fell short of the expected standard, the contract was terminated immediately. The pledgee could claim for expenses incurred in maintaining the thing (such as an animal or slave). [16]
The major flaw with the pledge is that it requires physical possession by the pledgee, which traps a business pledgor in a paradox. Unless the pledgee literally occupies the same premises as the pledger, the collateral once transferred is unavailable for the pledgor to operate its business and generate income to repay the pledgee.
Such property is then said to be pledged, or given in pledge. Book 5 includes the fundamental basis of the contract of the pledge, stipulations of the pledgor and pledgee, fundamental rules relating to the pledge, and sale of the pledge.
Jus tertii (English: rights of a third party/ stranger) is a term for the legal argument by which a person can defend a claim made against them by invoking the rights of a stranger to the dispute.
Permitting a pledgee of restricted securities to sell the pledged securities without having to aggregate the sale with sales by other pledgees from the same pledgor (as long as there is no concerted action by those pledgees), for purposes of the Rule 144 volume limitation condition
Schoolchildren in 1899 reciting the Pledge of Allegiance. The Pledge of Allegiance is a patriotic recited verse that promises allegiance to the flag of the United States and the republic of the United States of America.