Pawnbroker - Definition - Law Dictionary Home Dictionary Definition pawnbroker

Definition :

Pawnbroker, contemplates that every person who keeps a shop for the purchase or sale of goods or chattels and who purchases goods or chattels and pays or advances thereon any sum of money, with or under an agreement or understanding expressed or implied that the goods or chattel may be afterwards repurchased on any terms, is a 'pawnbroker', Karnataka Pawnbrokers' Assn. v. State of Karnataka, (1998) 7 SCC 707.

One who lends money on goods which he receives upon pledge.

The rate of interest which pawnbrokers may take has been fixed by law since 1800, by 39 & 40 Geo. 3, c. 48, which Act placed their whole business under various other restrictions. By the (English) Pawn-brokers Act, 1872 (which applies to Scotland, but not to Ireland), this Act, together with its amending Acts, is repealed, and the statute law of the subject consolidated. Sch. IV., dealing with profits and charges, has been amended by the (English) Pawnbrokers Act, 1922, in respect of loans not exceeding 40s.

By s. 5 of the Act, the term ''pawnbroker' includes every person who carries on the business of taking goods and chattels in pawn,' but by s. 10 the Act does not apply to loans above 10l.

Pawnbrokers must take out annual excise licences from the Inland Revenue Commissioners, which may be forfeited on conviction of fraud or receiving stolen goods, knowing them to be stolen, and are not grantable without magisterial or district council certificates, not to be refused except for failure to produce satisfactory evidence of good character (ss. 37-40, and ss. 27 32 of the (English) Local Government Act, 1894).

By ss. 14 and 16-19 of the Act it is enacted that:

14. Pawn-ticket. A pawnbroker shall, on taking a pledge in pawn, give to the pawner a pawn-ticket, and shall not take a pledge in pawn unless the pawner takes a pawn-ticket.

16. Redemption. Every pledge shall be redeemable within 12 months from the day of pawning, exclusive of that day; and there shall be added to that year of redemption 7 days of grace, within which every pledge (if not redeemed within the year of redemption) shall continue to be redeemable.

17. Forfeiture of pledge for 10s. or under. A pledge pawned for ten shillings, or under, if not redeemed within the year of redemption and days of grace, shall at the end of the days of grace become and be the pawnbroker's absolute property.

18. Pledge above 10s. redeemable until sale. A pledge pawned for above ten shillings shall further continue redeemable until it is disposed of, as in this Act provided, although the year of redemption and days of grace are expired.

19. Sale by Auction of Pledges above 10s. A pledge pawned for above ten shillings shall, when disposed of by the pawnbroker, be disposed of by sale by public auction, and not otherwise; and the regulations in the fifth schedule to this Act shall be observed with reference to the sale.

A pawnbroker may bid for and purchase at a sale by auction, made or purporting to be made under this Act, a pledge pawned with him, and on such purchase he shall be deemed the absolute owner of the pledge purchased.

The regulation in the 5th Schedule are very precise, directing, e.g., publication of catalogues of the pledges, that 'the pledges of each pawnbroker in the catalogue shall be separate from any pledges of any other pawnbroker'; that sales are to be advertised 'in some public newspaper'; that pictures, books, china, and other specified things are to be sold by themselves, 'four times only in every year, on the first Monday in the months of January, April, July and October, and on the following day and days, if the sale exceeds one day, and at no other time,' and that catalogues are to be preserved for three years at least.

Special Contracts.--By s. 24, special contracts [see Sch. III., Form 7, and Jones v. Marshall, (1889) 24 QBD 269] may be made with a loan above 40s. Extended by the (English) Moneylenders Act, 1927 (17 & 18 Geo. 5, c. 21), s. 10 (3), giving powers to the Court to reopen special contracts.

By s. 30, upon the conviction of a thief who has pawned the stolen property, an order can be made on the pawnbroker for its restitution upon payment of the loan; but if such order is not made on the application of the owner, he is not thereby prevented from bringing a common law action, Leicester v. Cherryman, (1907) 2 KB 101.

By s. 31, if a pawnbroker, without reasonable excuse, neglects or refuses to deliver up a pledge to a person entitled to it, he is liable to be summarily convicted, but if the article has been honestly lost by him, this will be a reasonable excuse, Allworthy v. Clayton, (1907) 2 KB 685.

Unlawful Pawning.--Unlawful pawning is specially guarded against by ss. 33-36. Firearms and ammunition must not be taken in pawn [(English) Firearms Act, 1920, s. 2 (2)]; nor must pledges be accepted from children under 14. [(English) Children and Young Persons Act, 1933 (23 Geo. 5, c. 12), s. 8]

Rate of Interest.--The 4th Schedule of the Act gives the rate of interest thus:-

On a loan of 40s. or under, one halfpenny per month for every 2s. or fraction of 2s. lent.

On a loan of above 40s., one halfpenny per month for every 2s. 6d. or fraction of 2s. 6d. lent.

And the charge on a pawn-ticket thus:-

Where loan is 10s. or under, one half penny.

Where loan above 10s., one penny.

By the (English) Act of 1922 the pawnbroker, in addition, may charge the pledger upon receipt of the pledge, 'd. for each 5s. or part of 5s. lent where the loan does not exceed 40s. In Singer Manufacturing Co. v. Clark, (1879) 5 Ex D 37, it was held that the indemnity under s. 25 of the Act, to a pawn-broker delivering a pledge to the person producing the pawn-ticket, applies only as between the pawnbroker and the pawner, or the owner who has authorized the pledge, and that the Act does not affect the common law rights of the owner of property pledged against his will. As to the power of an executor to pledge the personal chattels of his testator, see Solomon v. Attenborough, 1913 AC 76. A trustee in bankruptcy may inspect goods pawned [(English) Bankruptcy and Deeds of Arrangement Act, 1913, s. 26]. Consult Attenborough on Pawnbroking.

Pawnbroker is a person who carries on the business of taking goods and chattels in pawn for a loan. On payment of the money lent with interest and other admissible incidental express, the pawnbroker is liable to return the articles pledged, Karnataka Pawnbroker Assoom v. State of Karnataka, (1988) 7 SCC 707: AIR 1998 SC 201 (203). [Karnataka Pown-brokers Act, 1961 (13 of 1962), s. 2(7)]