A pignus or pledge is a bailment to secure the performance of an obligation, with the power of sale, in case of default.6

In such a bailment the contract of bailment is a secondary one, incidental to the main contract whose performance it is intended to secure.

The principal difference between a pledge and a chattel mortgage is that while the mortgagee acquires the legal title, the pledgee only acquires a special property in the property. Furthermore, the title of the mortgagee becomes absolute at law upon breach of the condition, while the title of the pledgee never can become absolute, a breach of conditions merely giving to the pledgee a power of sale.

"It has been doubted whether incorporeal things like debts, money and stock, etc., which cannot be manually delivered, were the proper subjects of a pledge. It is now held that they are so, and there seems to be no reason why any legal or equitable interest whatever in personal property may not be pledged, provided the interest can be put, by actual delivery or by written transfer, into the hands or within the power of the pledgee."7

Incorporeal property is pledged by the delivery

4 Hillyard vs. Craleties Admr., 11

Tes., 264; 62 Am. Dec, 475.

5 Britton vs. Turner, 6 N. H., 481;

26 Am. Dec, 713.

6 Goddard on Bailments, Sec. 69. 7 22 Am. and Eng. Eny. of Law, of the paper which represents the property. In pledging corporate stock, the rules contained in the by-laws of the company must be followed. Bills and notes can be pledged by indorsement and transfer.

846; Wilson vs. Little, 2 N. Y.,

443; Am. Dec, 307.

Property not yet in existence cannot be pledged, but a contract of pledge of such property is valid, and when the pledgor comes into possession, the rights of the pledgee immediately attach and may be enforced.

The pledgee has the right to the exclusive possession of the thing pledged, but, under the modern view has no right to use it. The pledge is an incident of the debt and may be assigned with it.

The pledgor may extinguish the bailment either by performance of the obligation or default in performance. In the first case he is entitled to the return of the pledge; in the second case, the pledgee may sell the pledge. The pledgee may terminate the pledge either by voluntarily relinquishing it, or forfeit the pledge by his own wrong. The destruction of the chattel works an extinction of the pledge relation by operation of law.

The pledgee is not compelled to bring suit before selling the pledge; he may demand payment and sell the pledge at public sale. If he choose the pledgee may bring a personal suit against the pledgor. In such a case the pledge security continues until he has obtained not only judgment but satisfaction of the debt.