of pledgee 2997. A pledgee, or a pledge holder for reward, Obligation assumes the duties and liabilities of a depositary for reward. NOTE.-See notes to Secs. 2992 and 2995, ante. and pledge holder, for reward. 2998. A gratuitous pledge holder assumes the Gratuitous duties and liabilities of a gratuitous depositary. NOTE.-See notes to Secs. 2992 and 2995, ante. pledge holder. misrepre sentation of value of pledge. 2999. Where a debtor has obtained credit, or an Debtor's extension of time, by a fraudulent misrepresentation of the value of property pledged by or for him, the creditor may demand a further pledge to correspond with the value represented; and in default thereof may recover his debt immediately, though it be not actually due. NOTE." When the creditor has been deceived as to the substance or quality of the thing in pledge, he may claim another thing in its stead, or demand immediately his payment, though the debtor be solvent."-Civ. Code La., Art. 3141. pledgee 3000. When performance of the act for which a When pledge is given is due, in whole or in part, the pledgee may sell. may collect what is due to him by a sale of property pledged, subject to the rules and exceptions hereinafter prescribed. pledgee demand 3001. Before property pledged may be sold, and When after performance of the act for which it is security is must due, the pledgee must demand performance thereof performfrom the debtor. NOTE.-Wilson vs. Little, 2 N. Y., p. 443; aff'g S. C., 1 Sandf., p. 351; Lewis vs. Graham, 4 Abb. Pr., p. 106; Castello vs. City Bank, 1 N. Y. Leg. Obs., p. 25; Brown vs. Ward, 3 Duer, p. 660; see also, note to Sec. 2986, ante. 3002. A pledgee must give actual notice to the pledgor of the time and place at which the property pledged will be sold, at such a reasonable time before the sale as will enable the pledgor to attend. 38-vol. ii. ance. Notice of pledgor. sale to Waiver of notice of sale. Waiver of demand. Sale must be by auction. 3003. NOTE.-NOTICE TO THE PLEDGOR of the sale is an essential prerequisite.—Lewis vs. Graham, 4 Abb. Pr., p. 106; Castello vs. City Bank, 1 N. Y. Leg. Obs., p. 25; Brass vs. Worth, 40 Barb., p. 648; Brown vs. Ward, 3 Duer R., p. 660. And this notice must apprise the pledgor of the time and place of sale. For the object of the notice is, not merely to enable the pledgor to redeem, but also to enable him to be present at the sale, and see that it is fairly conducted.— Wheeler vs. Newbould, 16 N. Y., p. 392. And where notice cannot be given to him personally, e. g., where he has absconded, the pledgee cannot dispose of the pledge without notice, but must resort to judicial proceedings.-Garlick vs. James, 12 Johns., p. 146. An advertisement in the newspapers is not sufficient notice.-Stearns vs. Marsh, 4 Den., p. 227; see note to Sec. 2986, ante. DEMAND AND NOTICE must be given to authorize pledgee to sell.-Dewey vs. Bowman, 8 Cal., p. 145. May be sold, if at public auction, after debt is due and notice is given for a reasonable time prior thereto.Wilson vs. Brannan, 27 Cal., p. 258. If sold without demand and notice it is a conversion and pledgee liable.-Gay vs. Moss, 34 Cal., p. 125. This right to demand and notice existed at COMMON LAW, so held as to pledge in chattels in Mauge vs. Heringhi, 26 Cal., p. 577; consult the case of Treadwell vs. Davis, 34 Cal., p. 601. Notice of sale may be waived by a pledgor at any time; but is not waived by a mere waiver of demand of performance. NOTE.-Millikin vs. Dehon, 27 N. Y., p. 364; Wilson vs. Little, 2 id., p. 443; see, also, note to Sec. 2986, ante, and the preceding note. 3004. A debtor or pledgor waives a demand of performance as a condition precedent to a sale of the property pledged, by a positive refusal to perform, after performance is due; but cannot waive it in any other manner except by contract. NOTE.-See Wilson vs. Little, 2 N. Y., p. 443. 3005. The sale by a pledgee, of property pledged, must be made by public auction, in the manner and upon the notice to the public usual at the place of sale, in respect to auction sales of similar property; and must be for the highest obtainable price. NOTE.-See note to Sec. 3002, ante; Wheeler vs. Newbould, 16 N. Y., p. 392; Brown vs. Ward, 3 Duer, p. 660. Even in the case of stock pledged, a sale at the rooms of a Board of Brokers in the City of New York, whose transactions were, by their regulations, not open to the public, has been held invalid, without the consent of the pledgor.-Wood vs. Hamilton, cited in Castello vs. City Bank, 1 N. Y. Leg. Obs., p. 25; Rankin vs. McCullough, 12 Barb., p. 103; Willoughby vs. Comstock, 3 Hill, p. 389; Brass vs. Worth, 40 Barb., p. 648. sale of 3006. A pledgee cannot sell any evidence of debt Pledgee's pledged to him, except the obligations of Governments, securities. States, or corporations; but he may collect the same when due. NOTE.-Wheeler vs. Newbould, 16 N. Y., p. 392, limited by the exception, which is not inconsistent with the principle of that case; see, also, Garlick vs. James, 12 Johns., p. 146; Nelson vs. Wellington, 5 Bosw., p. 178; Brookman vs. Metcalf, id., pp. 429, 445; White vs. Platt, 5 Den., p. 269; Hays vs. Riddle, 1 Sandf., p. 248. Of course a different agreement may be made by the parties. See note to Sec. 2986, ante. 3007. Whenever property pledged can be sold for a price sufficient to satisfy the claim of the pledgee, the pledgor may require it to be sold, and its proceeds to be applied to such satisfaction, when due. NOTE. This provision is new, or, at least, it is very doubtful whether such a right existed before the adoption of this Code. But its justice is very clear.-Story Bailm., Sec. 320. It is not proposed to extend the same privilege to mortgages, as they are used as permanent securities. A pledge should be used only as a transient security. 3008. After a pledgee has lawfully sold property pledged, or otherwise collected its proceeds, he may deduct therefrom the amount due under the principal obligation, and the necessary expenses of sale and Sale on the the pledgor demand of Surplus to pledgor. be paid to Same. Pledgee's purchase collection, and must pay the surplus to the pledgor, on demand. 3009. When property pledged is sold before the claim of the pledgee is due, he may retain out of the proceeds all that can possibly become due under his claim, until it becomes due, with the proper rebate of interest. NOTE. This and the preceding section are made necessary by, and harmonize with, Sec. 3007, ante, which is there said to be new. 3010. A pledgee, or pledge holder, cannot pur of property chase the property pledged, except by direct dealing pledged. Pledgee may fore with the pledgor. 3011. NOTE.--Story on Bailm., Sec. 319; see, also, Dykers vs. Allen, 7 Hill, p. 497, and the Title on Trusts. But it has been held that a special partner of a firm with whom property is pledged is not incapacitated from purchasing it at a sale made by the firm. As he was prohibited from transacting any business on account of the partnership, and could not be employed as agent, attorney, or otherwise, no duty devolved upon him in reference to the bailment. He could not aid or direct in the sale; and, hence, was not within the rule that one shall not be permitted to purchase who has a duty inconsistent with the character of purchaser.-Lewis vs. Graham, 4 Abb. Pr., p. 106. Of course this section is subject to the right of the pledgor to purchase at a judicial sale, as provided in the next section. Instead of selling property pledged, as here close right inbefore provided, a pledgee may foreclose the right of redemp tion. of redemption by a judicial sale, under the direction. of a competent Court; and in that case may be authorized by the Court to purchase at the sale. NOTE.-See note to Sec. 2986, ante. Secs. 338 to 343, inclusive, Penal Code, Cal., provide punishments for the violations of obligations imposed upon pawnbrokers or pledgees. CHAPTER IV. BOTTOMRY. SECTION 3017. Bottomry, what. 3017. 3018. Owner of ship may hypothecate. 3019. When master may hypothecate ship. 3020. Same. 3021. When master may hypothecate freight money. 3022. Rate of interest. 3023. Rights of lender, when no necessity for bottomry existed. 3024. Stipulation for personal liability void. 3025. When money loaned is to be repaid. 3026. When bottomry loan becomes due. 3027. Bottomry lien, how lost. 3028. Preference of bottomry lien over other liens. what. Bottomry is a contract by which a ship or Bottomry, its freightage is hypothecated as security for a loan, which is to be repaid only in case the ship survives a particular risk, voyage, or period. NOTE.-Defined by Bouvier to be a contract in the |