Malaysia legislation
Section 125
Section 125
The bailment of goods as security for payment of a debt or performance of a promise is called “pledge”. The bailor is in this case called the “pawnor”. The bailee is called the “pawnee”.
Pawnee’s right of retainer 126.
The pawnee may retain the goods pledged, not only for payment of the debt or the performance of the promise, but for the interest of the debt, and all necessary expenses incurred by him in respect of the possession for the preservation of the goods pledged.
Pawnee not to retain for debt or promise other than that for which goods pledged. Presumption in case of subsequent advances 127.
The pawnee shall not, in the absence of a contract to that effect, retain the goods pledged for any debt or promise other than the debt or promise for which they are pledged; but such contract, in the absence of anything to the contrary, shall be presumed in regard to subsequent advances made by the pawnee.
Pawnee’s right as to extraordinary expenses incurred 128.
The pawnee is entitled to receive from the pawnor extraordinary expenses incurred by him for the preservation of the goods pledged.
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Pawnee’s right where pawnor makes default 129.
If the pawnor makes default in payment of the debt, or performance, at the stipulated time, of the promise in respect of which the goods were pledged, the pawnee may bring a suit against the pawnor upon the debt or promise, and retain the goods pledged as a collateral security; or he may sell the thing pledged, on giving the pawnor reasonable notice of the sale.
If the proceeds of such sale are less than the amount due in respect of the debt or promise, the pawnor is still liable to pay the balance.
If the proceeds of the sale are greater than the amount so due, the pawnee shall pay over the surplus to the pawnor.
Defaulting pawnor’s right to redeem 130.
If a time is stipulated for the payment of the debt, or performance of the promise, for which the pledge is made, and the pawnor makes default in payment of the debt or performance of the promise at the stipulated time, he may redeem the goods pledged at any subsequent time before they are actually sold; but he must, in that case, pay, in addition, any expenses which have arisen from his default.
Pledge by possessor of goods, or of documentary title to goods 131.
A person who is in possession of any goods, or of any bill of lading, dock-warrant, warehouse-keeper’s certificate, wharfinger’s certificate, or warrant or order for delivery, or any other document of title to goods, may make a valid pledge of the goods or documents:
Provided that—
(a)
the pawnee acts in good faith, and under circumstances which are not such as to raise a reasonable presumption that the pawnor is acting improperly; and
(b)
the goods or documents have not been obtained from their lawful owner, or from any person in lawful custody of them, by means of an offence or fraud.
Pledge where pawnor has only a limited interest 132.
Where a person pledges goods in which he has only a limited interest, the pledge is valid to the extent of that interest.
Contracts 69
Suits by Bailees or Bailor againts Wrongdoers
Suit by bailor or bailee against wrongdoer 133.
If a third person wrongfully deprives the bailee of the use of possession of the goods bailed, or does them any injury, the bailee is entitled to use such remedies as the owner might have used in the like case if no bailment had been made; and either the bailor or the bailee may bring a suit against a third person for such deprivation or injury.
Apportionment of relief or compensation obtained by such suits 134.
Whatever is obtained by way of relief or compensation in any such suit shall, as between the bailor and the bailee, be dealt with according to their respective interests.