Legal Definitions - pawnee

A pawnee is the individual or entity that receives and holds personal property as collateral to guarantee the repayment of a debt. In essence, they are the lender who takes possession of a valuable item from a borrower, keeping it as security until the loan is fully repaid.

Here are a few examples to illustrate this concept:

• Imagine David needs a short-term loan and takes his valuable vintage watch to "Quick Cash Pawn Shop." The shop appraises the watch and provides David with a loan, holding onto the watch until David repays the borrowed amount plus any agreed-upon interest or fees.

  • In this situation, Quick Cash Pawn Shop is the pawnee because they have received David's personal property (the watch) and are holding it as security for the debt David owes them.

• A small business, "Artisan Crafts Co.," needs to secure a loan to purchase new materials. They approach "Business Asset Lenders" and offer a piece of their specialized, movable manufacturing equipment as collateral. Business Asset Lenders approves the loan and takes physical possession of the equipment, storing it in their facility until Artisan Crafts Co. repays the loan in full.

  • Here, Business Asset Lenders functions as the pawnee. They have received the business's personal property (the manufacturing equipment) and are holding it as security to ensure the repayment of the loan.