Legal Definitions - pigneratio

Pigneratio refers to the act of pledging a movable item as security for a debt or obligation. In this arrangement, the debtor (the person owing the debt) physically transfers possession of the item to the creditor (the person to whom the debt is owed), but retains legal ownership. The creditor holds the item until the debt is repaid. If the debt is not repaid, the creditor typically gains the right to sell the item to recover the money owed.

Here are some examples illustrating pigneratio:

• Example 1: Pawn Shop Loan
  A musician needs quick cash and takes their vintage guitar to a pawn shop. The pawn shop assesses its value and offers a loan, taking physical possession of the guitar as security. The musician receives the cash but still legally owns the guitar. If the musician repays the loan plus interest within the agreed timeframe, the guitar is returned. If not, the pawn shop can sell the guitar to recoup its losses.

  This illustrates pigneratio because the guitar (a movable item) is physically transferred to the pawn shop (creditor) as security for the loan (debt), while the musician (debtor) retains ownership until the terms of the pledge are violated.

• Example 2: Business Equipment Pledge
  A small manufacturing company requires a short-term loan to cover an unexpected expense. They approach a private lender and offer a specialized, movable piece of machinery as collateral. The lender agrees, takes possession of the machinery, and stores it in a secure facility until the company repays the loan. The company continues to own the machinery but temporarily loses its use.

  Here, the machinery serves as the movable item, and its physical transfer to the lender as security for the business loan demonstrates pigneratio. The company retains legal ownership but surrenders possession temporarily.

• Example 3: Securing a Personal Debt
  Sarah borrows money from a friend to cover an emergency. To assure her friend that she will repay, Sarah hands over her valuable antique watch, agreeing that her friend can hold it until the debt is settled. Sarah still owns the watch, but her friend has physical custody of it as a guarantee.

  This scenario exemplifies pigneratio because the antique watch (a movable item) is given into the physical possession of the friend (creditor) as security for the personal debt, while Sarah (debtor) maintains ownership of the watch.