Relationship between pledger and pledgee or pledgor

pledger and pledge

relationship between pledger and pledgee or pledgor

W7HEN a debtor who has pledged security pays his debt, desires the immediate return of the pledge. May he, order to ensure this result, lawfully and effectively. Definition of pledge: Cash deposit or placing of owned property by a debtor (the pledger) to a creditor (the pledgee) as a security for a loan or obligation. A pledge is a bailment that conveys possessory title to property owned by a debtor (the pledgor) to a creditor (the pledgee) to secure repayment for some The chief difference between Roman and English law is that certain things (e.g.

At the same time, however, ownership or title of the pledged property remains with the pledgor. John gives the stereo to Mary, but he still legally owns it. If John repays the debt under the contractual agreement, Mary must return the stereo.

But if he fails to pay, she can sell it to satisfy his debt. Pledged property must be in the possession of a pledgee. This can be accomplished in one of two ways. The property can be in the pledgee's actual possession, meaning physical possession for example, Mary keeps John's stereo at her house.

Otherwise, it can be in the constructive possession of the pledgee, meaning that the pledgee has some control over the property, which typically occurs when actual possession is impossible. For example, a pledgee has constructive possession of the contents of a pledgor's safety deposit box at a bank when the pledgor gives the pledgee the only keys to the box.

In pledges both parties have certain rights and liabilities. The contract of pledge represents only one set of these: On the one hand, the pledgor's rights extend to the safekeeping and protection of his property while it is in possession of the pledgee. The property cannot be used without permission unless use is necessary for its preservation, such as exercising a live animal. Unauthorized use of the property is called conversion and may make the pledgee liable for damages; thus, Mary should not use John's stereo while in possession of it.

For the pledgee, on the other hand, there is more than the duty to care for the pledgor's property.

relationship between pledger and pledgee or pledgor

The pledgee has the right to the possession and control of any income accruing during the period of the pledge, unless an agreement to the contrary exists.

This income reduces the amount of the debt, and the pledgor must account for it to the pledgee. Additionally, the pledgee is entitled to be reimbursed for expenses incurred in retaining, caring for, and protecting the property.

pledger and pledge

Finally, the pledgee need not remain a party to the contract of pledge indefinitely. This happens when the banker gives a sale deposit locker to the customer.

So, the banker will become the Licensor, and the customer will become the Licensee. Relationship of Bailor and Bailee The relationship between banker and customer can be that of Bailor and Bailee. Bailment is a contract for delivering goods by one party to another to be held in trust for a specific period and returned when the purpose is ended.

Article Storm: Pledger and Pledgee Relationship

Bailor is the party that delivers property to another. Bailee is the party to whom the property is delivered. So, when a customer gives a sealed box to the bank for safe keeping, the customer became the bailor, and the bank became the bailee.

Relationship of Hypothecator and Hypothecatee The relationship between customer and banker can be that of Hypothecator and Hypotheatee. This happens when the customer hypothecates pledges certain movable or non-movable property or assets with the banker in order to get a loan.

In this case, the customer became the Hypothecator, and the Banker became the Hypothecatee. Relationship of Trustee and Beneficiary A trustee holds property for the beneficiary, and the profit earned from this property belongs to the beneficiary.

relationship between pledger and pledgee or pledgor

If the customer deposits securities or valuables with the banker for safe custody, banker becomes a trustee of his customer. The customer is the beneficiary so the ownership remains with the customer.

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Relationship of Agent and Principal The banker acts as an agent of the customer principal by providing the following agency services: Buying and selling securities on his behalf, Collection of cheques, dividends, bills or promissory notes on his behalf, and Acting as a trustee, attorney, executor, correspondent or representative of a customer. Banker as an agent performs many other functions such as payment of insurance premium, electricity and gas bills, handling tax problems, etc.

Relationship of Advisor and Client When a customer invests in securities, the banker acts as an advisor. The advice can be given officially or unofficially.

While giving advice the banker has to take maximum care and caution. Here, the banker is an Advisor, and the customer is a Client. Other Relationships Other miscellaneous banker-customer relationships are as follows: Obligation to honour cheques: As long as there is sufficient balance in the account of the customer, the banker must honour all his cheques.

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The cheques must be complete and in proper order. They must be presented within six months from the date of issue. However, the banker can refuse to honour the cheques only in certain cases. Secrecy of customer's account: When a customer opens an account in a bank, the banker must not give information about the customer's account to others.