Short answer. Yes. Article 2103 says that although the debtor remains the owner of the thing pledged, the creditor may bring the actions that pertain to the owner in order to recover it from, or defend it against, a third person. So the pawnshop can sue the thief even though you keep ownership.
What the law says
the creditor may bring the actions which pertain to the owner of the thing pledged in order to recover it from, or defend it against a third person
Civil Code, Article 2103 — Debtor Remains Owner. Read the full provision →
You keep ownership, but the creditor can act
Article 2103 separates ownership from the power to protect the item. It confirms that Unless the thing pledged is expropriated, the debtor continues to be the owner thereof. Pledging your item does not transfer title — it stays yours. Yet the same article gives the creditor a practical tool: the creditor may bring the actions which pertain to the owner of the thing pledged in order to recover it from, or defend it against a third person. So even though you remain the owner, the pawnshop can go to court against a thief or other stranger to get the item back or defend it. Ownership is yours; the recovery action is available to the creditor too.
Why the creditor is allowed to sue
The creditor has a real stake in the item because its possession is the security for the debt. If a third person takes or threatens the pledged thing, the creditor's security is endangered, not just your ownership. Rather than forcing the creditor to sit helpless and depend entirely on you to act, the law lets him bring the owner's actions himself to protect the pledge. This makes sense: the person holding the item as security should be able to defend it against outsiders, since a loss to a thief would otherwise undermine the very arrangement the pledge created.
The limits of this power
The article authorizes actions against a third person — outsiders like a thief — to recover or defend the item. It does not turn the creditor into the owner, and it is expressly subject to the exception where the thing is expropriated. It also does not erase your own rights as owner; you remain entitled to your property and its return once the debt is settled. The creditor's ability to sue a third person is a protective mechanism for the security, working alongside your ownership, not replacing it. Both you and the creditor have an interest the law recognizes.
What this means after a theft
If your pledged item is stolen, the pawnshop is not powerless and need not wait on you — it may itself pursue the thief to recover the item or defend it in court. That protects the security while your ownership stays intact. Because the item remains yours, its recovery ultimately benefits you as well; once the debt and any proper charges are settled, the thing is to be returned to you. Article 2103 simply ensures that the party currently holding it as security can take legal steps against outsiders who interfere with it.
Cases citing this provision
These Supreme Court decisions cite the provision above. We list them so you can read them yourself; the summaries of what each decided are not ours to give.
- Ramona Ramos, et al. vs. Philippine National Bank, et al, G.R. No. 178218, December 14, 2011 — read the decision on LawPhil →