Scribd Logo
Upload

Welcome to Scribd!

  • 9K views

    Pledged by Non Owner

    Uploaded by

    Adan Hooda
    The document discusses various exceptions to the general rule that only an owner can validly pledge goods. It outlines six categories of non-owners who can pledge goods: 1) a mercantile agent in possession with owner's consent, 2) a person in possession under a voidable contract before it is rescinded, 3) a person with only a limited interest to the extent of that interest, 4) a co-owner in joint possession with consent, 5) a seller left in possession after sale, and 6) a buyer given possession before sale, provided the pawnee/lender acts in good faith without notice of defective title. Examples are given to illustrate some of the exceptions.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd

    Pledged by Non Owner

    Uploaded by

    Adan Hooda
    9K views2 pages
    The document discusses various exceptions to the general rule that only an owner can validly pledge goods. It outlines six categories of non-owners who can pledge goods: 1) a mercantile agent in possession with owner's consent, 2) a person in possession under a voidable contract before it is rescinded, 3) a person with only a limited interest to the extent of that interest, 4) a co-owner in joint possession with consent, 5) a seller left in possession after sale, and 6) a buyer given possession before sale, provided the pawnee/lender acts in good faith without notice of defective title. Examples are given to illustrate some of the exceptions.

    Original Title

    pledged by non owner

    Copyright

    © © All Rights Reserved

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    The document discusses various exceptions to the general rule that only an owner can validly pledge goods. It outlines six categories of non-owners who can pledge goods: 1) a mercantile agent in possession with owner's consent, 2) a person in possession under a voidable contract before it is rescinded, 3) a person with only a limited interest to the extent of that interest, 4) a co-owner in joint possession with consent, 5) a seller left in possession after sale, and 6) a buyer given possession before sale, provided the pawnee/lender acts in good faith without notice of defective title. Examples are given to illustrate some of the exceptions.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    9K views2 pages

    Pledged by Non Owner

    Uploaded by

    Adan Hooda
    The document discusses various exceptions to the general rule that only an owner can validly pledge goods. It outlines six categories of non-owners who can pledge goods: 1) a mercantile agent in possession with owner's consent, 2) a person in possession under a voidable contract before it is rescinded, 3) a person with only a limited interest to the extent of that interest, 4) a co-owner in joint possession with consent, 5) a seller left in possession after sale, and 6) a buyer given possession before sale, provided the pawnee/lender acts in good faith without notice of defective title. Examples are given to illustrate some of the exceptions.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    Pledge by Non- owner

    As a rule, pledge can be made only by the owner of the goods. But there are certain exceptions to
    this general rule. Hence the following persons can also make a valid pledge:

    1. Mercantile agent:
    According to the Sale of Goods Act, 1930, “Mercantile agent means a mercantile agent having in
    the customary course of business as such agent authority either to sell goods, or to consign goods
    for the purpose of sale, or to raise money on the security of goods.”

    A mercantile agent, who is in possession of the goods or documents of title of goods with the
    consent of the owner, can make a valid pledge of the goods while acting as a mercantile agent in
    the ordinary course of the business. The pledge will be valid even if the agent has no authority to
    pledge the goods provided that the pawnee acts in goods faith and has no notice, at the time of
    pledge, that the pawnor has no authority to pledge (Sec. 178).

    2. Pledge by persons in possession of goods under a voidable contract:


    A person who is in possession of goods under a voidable contract can make a valid pledge of the
    goods, if at the time of pledge the contract was not rescinded. The pawnee will get a good title to
    the goods provided he acts in good faith and without notice of the pawnor’s defect of title (Sec.
    178A).

    Example:
    ADVERTISEMENTS:

    A, by fraud, induced B to sell goods. A pledged these goods with C who acted in good faith and
    has no knowledge of the fraud. The pledge is valid.

    3. Pledge by a person having only a limited interest:


    Where a person has limited interest, he can make a valid pledge to the extent of that interest (Sec.
    179).

    Example:
    ADVERTISEMENTS:

    A finds B’s transistor on the road. In spite of making reasonable search, A could not find the true
    owner. A spent Rs. 20 on its repair and pledged it for Rs. 100 with C. B can get the transistor
    only on paying Rs. 20 (Sec. 179).
    4. Pledge by a co-owner in possession:
    In case one of the joint owners is in possession of the goods with the consent of the others, he
    can make valid pledge.

    5. Pledge by seller in possession of goods after sale:


    ADVERTISEMENTS:

    Very often A after purchasing the goods, leaves the goods with the seller. In such a case, the
    seller can make a valid pledge provided the pawnee acts in goods faith and without knowledge of
    the pawnor’s defect of title.

    6. Pledge by buyer in possession of goods before sale:


    Sometimes, a buyer may obtain possession of the goods with the consent of the seller before sale.
    In such a case also, a valid pledge can be created by the prospective buyer provided the pawnee
    acts in good faith and has no knowledge of the pawnor’s defect of title

    You might also like