The term is also used to denote the property which constitutes the security. A pledge is type of security interest. Pledge is the pignus of Roman law, from which most of the modern European-based law on the subject difference between bailment and pledge pdf derived, but is generally a feature of even the most basic legal systems.
It differs from hypothecation and from the more usual mortgage in that the pledge is in the possession of the pledgee. It is similar, however, in that all three can apply to personal and real property. A pledge of personal property is known as a pawn and that of real property is called an antichresis.
This distinction still remains in some systems, e. Token, symbolic reciprocal pledges were commonly incorporated into formal ceremonies as a way of solidifying agreements and other transactions. Roman law, while there is no such restriction in English law. In the case of a pledge, a special property passes to the pledgee, sufficient to enable him to maintain an action against a wrongdoer, but the general property, that is the property subject to the pledge, remains in the pledgor.