Pledge by Mercantile Agent.
The law in order to facilitate mercantile transaction has recognized certain exception to the general rule of the owner pledging the goods. It is because of this fact that these pledges are for bonafide pledges made by the persons who are not the actual owners. These would include the following: In case of pledge by a mercantile agent, the following necessary conditions of validity under this section are:
- The person pledging the goods must be a mercantile agent.
- Mercantile agent must be in possession either of the goods or the documents of title to goods.
- Such possessions must be with the consent of the owner.
- Pledge must have been made by the mercantile agent when acting in the ordinary course of business.
- The pledgee must act in good faith.
- The pledgee should have no notice of the pledgees defect of title.
The Right of Retainer of a Pawnee.
According to Section 173 and 174, the pawnee has the right to retain the pledged goods till his payments are made. The pawnee may retain the goods for the following payments:
- For the payment of the debt or performance of the promise.
- Interest on the debt.
- For all the necessary expenses incurred by him in respect of the possession or for the preservation of the pledged goods.
This right of the pawnee to retain the pledged goods till the time of payment is also referred to as the pawnee’s right of particular lien. However, in case where there is no contrary contract, the pawnee cannot retain the goods pledged for any debt or promise other than the debt or promise for which the goods are pledged.