Part II Description of Interests, 5 Possessory Security
Hugh Beale, Michael Bridge, Louise Gullifer, Eva Lomnicka
- Repayment of credit — Pledge — Debt
This chapter explores the nature of pledge. It is a common law security interest created by delivery of tangible property to the pledgee as security for the payment of a debt or performance of another obligation. It confers on the pledgee not only the right to possession of the pledged assets but the right of sale on default and the right to sub-pledge without destroying the pledge. As it is a security interest, the pledgor has the right to redeem the pledged assets by repaying the debt or performing the obligation secured, and the pledgee is obliged to account for any surplus arising on the sale of the pledged assets over and above the amount required to discharge the secured obligation.