1 "Authority to sell at public or private sale" certain notes pledged as collateral to secure the pledgor's debt, will not authorise the pledgee to surrender them after due, having made no attempt to collect them, to the maker for a sum less than due, but that if a creditor sells negotiable paper held * by him as security, he will be presumed to have taken it in payment of the debt. (m) And he must exercise due diligence in the collection of it, if he holds it as security. (mm) One who has given security for a note is not entitled to a return of his security merely because the note is outlawed. (mn)

An ordinary loan of stocks does not amount to a bailment, but to a sale, to be paid for in similar kind and quantity, as otherwise the purposes of a loan could not be effected. (n)

Although transfer of possession must accompany a pledge, a re-transfer to the owner for a temporary purpose, as agent or special bailee for the pledgee, does not impair the title or possession of the pledgee. (o)

(m) Cocke v. Chaney, 14 Ala. 65; Hawks v. Hinchcliff, 17 Barb. 492.

(mm) Wakeman v. Gowdy, 10 Bosw. 208.

(mn) Jones v. Merchants Bank, 6 Rob. 162.

(n) Per Walworth, C., in Dykers v. Allen, 7 Hill (N. Y.), 497.

(o) Hayes v. Riddle, 1 Sandf. 248; Reeves v. Capper, 6 Bing. (N. C.) 186. In this last case one Wilson, the captain of a ship, pledged his chronometer, then in the possession of the makers, to the defendants, the owners of the ship, in consideration of their advancing him £50, and allowing him the use of the instrument during a voyage on which he was about to depart. After the voyage was ended he placed it at the makers' again, and then pledged it to the plaintiff, for whom the makers, being ignorant of the pledge to the defendants, agreed to hold it. The money advanced by the defendants not having been repaid, it was held, that the property in the instrument was in the defendants. The counsel for the plaintiff contended, that the possession of the chronometer having been parted with by the defendants, their property in it was entirely lost, upon the ground, that where the party to whom a personal chattel is pledged parts with the possession of it, he loses all right to his pledge. But, per Tindal, C. J.: "As to the second point, we agree entirely with the doctrine laid down in Ryall v. Rolle, 1 Atk. 166, that in the case of a simple pawn of a personal chattel, if the creditor parts with the possession, he loses his property in the pledge; but we think the delivery of the chronometer to Wilson under the terms of the agreement itself was not a parting with the possession, but that the possession of Captain Wilson was still the possession of Messrs. Capper. The terms of the agreement were, that 'they would allow him the use of it for the voyage;' words that gave him no interest in the chronometer, but only a license or permission to use it for a limited time, while he continued as their servant, and employed it for the purpose of navigating their ship. During the continuance of the voyage, and when the voyage terminated, the possession of Captain Wilson was the possession of Messrs. Capper; just as the possession of plate by a butler is the possession of the master; and the delivery over to the plaintiff was, as between Captain Wilson and the defendants, a wrongful act, just as the delivery over of the plate by the butler to a stranger would have been; and could give no more right to the bailee than Captain Wilson had himself." See also Roberts v. Wyatt, 2 Taunt. 268; Spalding v. Adams, 82 Me. 211; Flory v. Denny, 11 E. L. & B. 684; s. c. 7 Exch. 581.

enough to pay the debt; such a transaction is not a sale, but a compromise, giving the pledgor a right of action against the pledgee. Union Trust Co. v. Rigdon, 93 III. 458; Zimpleman v. Veeder, 98 Ill. 618. Joliet Iron Co. v. Scioto Brick Co. 82 Ill. 548, was to the effect that commercial paper, bonds, and mortgages pledged as collateral security cannot be sold in the absence of a special power, but must be held and collected as they become due.

But while it is essential to a pledge, that delivery should be made, and possession retained, it seems that there may be a hypothecation - whether we translate this pledge or mortgage - of property which cannot yet be delivered. Thus, in admiralty, at least, and in equity, property not yet in existence - as a ship to be built - may be effectually hypothecated. (p)

At common law, pledges could not be taken in an execution * in favor of a third party against the pledgor. (q) The common law, however, has been changed to some extent in this particular, in some of our States, by statutes. (r) But provision is always made to protect the interest of the pledgee, and to give to the attaching creditor only the interest of the pledgor.

The pledgee cannot retain a pledge for the purpose of securing other debts than those for which it was given, unless he can show that that was the intention of the parties. (s)

The pledgee, after the pledgor fails to pay the debt as due, may sell the pledge. If there be no definite time for the payment of the debt, the pledgee may require an immediate payment, but must, as we have seen, demand payment before selling the pledge. In all cases of sale, the pledgee must, before the sale, give a reasonable notice to the pledgor. (t) 1 And it is safer and better to have a judicial sale by a decree in chancery, whenever the State courts have power to make such decree. Such judicial process was once necessary to make the sale valid; but it is not so now. (u) The pledgee should not buy the pledge himself; (v)

(p) See the Hull of a New Ship, Da-veis, 100. See also Langton v. Horton, 1 Hare, 649.

(q) Bro. Abr. tit Pledges,28; Rex v. Hanger, 3 Bulst. 1, 17; Badlam v. Tucker, 1 Pick. 389, 399. In this last case, a quaere is made whether the creditor might not remove the incumbrance, and then attach the property. See also Pomeroy v. Smith, 17 Pick. 85; Srodes v. Caven, 3 Watts, 258.