Unit – 17 : Law Relating to Securities and Modes of Charge-II
Pledge Mortgage Hypothecation Banker’s Lien Set-Off
| Pledge | Mortgage |
| Pledge required only a limited interest in the property and ownership remains with the right of pledger. | Here the legal ownership passes to mortgagee. Of course subject to the mortgagor to redeem the property |
| The Pawnee has “special property” in the goods decree of pledged | The mortgage as a rule, takes decree of a Court of Law before having recourse against the property mortgaged. |
| Pawnee has no right to foreclosure | In certain cases, the mortgagee can foreclose the property. |
- Pawnor – The person whose goods are bailed
- Pawnee – The person who takes the goods for security
- Pledge means bailment of goods for the purpose of securing a payment of debt or an obligation.
- A valid pledge can be created by owner of goods or a mercantile agent
- A constructive pledge involves only delivery of keys of the warehouse.
- Under the Contract of pledge the Pawnee can sell the goods pledged after notice or retain the goods and file a suit for recovery of debt.
| The mortgage of moveable property is called Hypothecation | Mortgage relates to immoveable property |
| There is only obligation to repay the money and no transfer of interest | There is transfer of interest. |
