“When the debt falls due and he refuses to repay it: if the pledgor has authorized the pledgee or the custodian to sell it, he sells it and settles the debt. Otherwise, the judge compels him either to repay it or to sell the pledged property. If he does not do so, the judge sells it and settles his debt.”

His statement, “When the debt falls due,” refers to the debt owed by the debtor, who is the pledgor.

His statement, “and he refuses to repay it,” means that the debtor, who is the pledgor, refuses to repay it.

His statement, “if the pledgor has authorized the pledgee or the custodian to sell it, he sells it and settles the debt,” means that he authorizes the pledgee, if the pledged property is in the pledgee’s possession, or the custodian, if the pledged property is held by a custodian—that is, by a trustworthy person upon whom the two parties have agreed. Thus, if the pledgor has authorized the pledgee or the custodian to sell it, he sells it and settles the debt.

For example, he pledges his car to a person from whom he borrowed one hundred thousand. Then the debt falls due, and he had previously authorized the pledgee, saying, “If the debt falls due and I do not repay it, then sell it.” In this case, when the debt falls due, the pledgee says, “Pay me what you owe,” and he replies, “I have nothing.” The pledgee may then sell it and does not need renewed authorization, because the initial authorization is sufficient.

His statement, “or the custodian,” is exemplified by a case in which the car he pledged to the creditor is held by a third party. That is, the pledgor who borrowed the money did not trust the pledgee, so he placed the car with another person, a trustworthy custodian, and said to him, “If the debt falls due and I do not repay it, sell the car and pay the pledgee.” We therefore say: when the debt falls due and the pledgor refuses to repay it, the custodian sells it. He does not need renewed authorization, because of the prior authorization. This is why he said, “If the pledgor has authorized the pledgee or the custodian to sell it, he sells it and settles the debt.”

His statement, “Otherwise, the judge compels him either to repay it or to sell the pledged property,” means: if