Also known as: pledges · pledged · pledging · pledgee · pledger · pledgor · pledgery
Written by attorneys — see sources below.
2 senses
A bailment of personal property delivered to a creditor to secure a debt or obligation. The creditor obtains a security interest while the debtor retains an equity of redemption.
A bailment of personal property delivered to a creditor to secure a debt or obligation. The creditor obtains a security interest while the debtor retains an equity of redemption.
A formal promise or undertaking to perform an act or to forbear from acting.
A formal promise or undertaking to perform an act or to forbear from acting.
Each sense below has its own examples, sources, and questions.
Preston Pratt obtains a loan from Pacific Bank to build a warehouse. He executes a deed of trust conveying title to the land to a trustee for the bank's benefit. When Pratt defaults on payments, the bank initiates foreclosure proceedings to sell the property and satisfy the debt.
Pinnacle Holdings needs additional working capital. Its board adopts a resolution authorizing officers to pledge corporate equipment and inventory to secure a line of credit from Paragon Construction's lender. The pledge is executed without shareholder approval.
Precision Tools borrows funds to expand its plant. The board approves a mortgage that pledges the factory building and surrounding acreage as collateral. The lender records the mortgage and advances the loan proceeds.
Pacific Bank lends money to Paragon Construction. As security, Paragon pledges all shares it owns in a wholly owned subsidiary. The bank takes possession of the share certificates and obtains a signed pledge agreement.
Pinnacle Holdings issues bonds to finance new equipment. The indenture grants bondholders a pledge of the corporation's future income stream and certain real property as additional security for repayment.
3 common questions
A pledge requires delivery of the collateral to the creditor, while a mortgage allows the debtor to retain possession. Delivery provides notice to third parties and perfects the security interest without filing.
No. When the secured party takes possession of the collateral pursuant to the debtor's agreement, the security interest attaches and is enforceable without a signed record.
Intent to pledge the goods is sufficient because it creates a substantial risk of permanent loss to the owner, equivalent to an intent to deprive permanently.
Supporting sources
A public school board adopts a policy requiring every student to recite the pledge of allegiance each morning. Pamela Phillips, a student whose religious beliefs prohibit such recitations, refuses and is suspended. Her parents challenge the suspension as compelled speech.
1 common questions
Recovery turns on whether the nonprofit's losses were avoidable. Reasonable but unsuccessful mitigation efforts do not bar full recovery, yet rejection of viable substitute funding may limit damages.
Supporting sources
…the Carolina proprietors applied the religious liberty provision of the Carolina Charter of 1665 to permit Quakers to enter pledges in a book. Curry, The First Freedoms, at 56. Similarly, in 1691, New York enacted a law allowing Quakers to testify by affirmation, and in 1734, it permitted Quakers to qualify to vote by…