Article 430
A pledgee has the right to collect the fruits and proceeds accrued from the pledged property unless otherwise agreed in the contract.
The fruits and proceeds as specified in the preceding paragraph shall first be applied to offset the expenses of collection of them.
Article 431
A pledgee who, during the effective period of the pledge, uses or disposes of the pledged property without the consent of the pledgor and thus causes damage to the latter shall be liable for compensation.
Article 432
A pledgee is obligated to well keep the pledged property, and shall be liable for compensation where the pledged property is destructed, damaged, or lost due to his improper custody.
Where the pledgee’s act is likely to cause the pledged property to be destructed, damaged, or lost, the pledgor may request the pledgee to place the pledged property in escrow, or request the pledgee to discharge the obligation before it is due and return the pledged property.
Article 433
Where, due to a cause the pledgee is not responsible for, the pledged property is likely to be damaged or significantly diminished in value which suffices to jeopardize the pledgee’s rights, the pledgee has the right to request the pledgor to provide additional security; where the pledgor fails to do so, the pledgee may have the pledged property sold at auction or in a sale and may, by agreement with the pledgor, apply the proceeds obtained from the auction or sale to discharge the obligation before it is due or place such proceeds in escrow.
Article 434
A pledgee shall be liable for compensation where he, during the effective
period of the pledge, repledges the pledged property without the consent of the pledgor to a third person and thus causes destruction, damage, or loss to the pledged property.
Article 435
A pledgee may waive his right to the pledge. Where a debtor creates a pledge on his own property and the pledgee waives his right to the pledge, the other security providers shall be exempted from the security liability to the extent of the rights and interests of the pledgee that are forfeited owing to the waiver of his priority to be paid from the collateral, unless the other security providers are committed to still provide security.
