Section 588: Consequences of pledge or deposit of goods by non-owner

1) If anyone borrows a debt or enters into a promise by consequences pledging to the creditor any goods in which the he or she has no right or ownership or which has been obtained under a contract which is void under this Part and the pledgee does not know that fact, the pledgee shall have the right to demand the borrower giving such a collateral or deposit to give collateral or deposit of the goods owned by him or her equal to that amount, and if the he or she fails to give the collateral or deposit so demanded, the pledgee shall have the right to get the contract voided.

2)  If any goods obtained under a void contract are pledged as a collateral or deposit and the contract has already become void before giving such collateral or deposit or the pledgee had the knowledge that the goods pledged as the collateral or deposit did not belong to the pledger, the pledgee shall have no right in such goods and may recover the amount to be recovered by him or her or have the promise performed from other goods belonging to the pledger.

3) If the pledger has a partial or limited title to, or ownership of, the goods pledged as collateral or deposit, the pledgee also shall have the right and title to such goods to that extent only.