Short answer. Yes, the pledge itself is presumed remitted. Article 1274 says it is presumed that the accessory obligation of pledge has been remitted when the thing pledged, after delivery to the creditor, is found in the possession of the debtor or a third person who owns it. The main loan, however, remains.
What the law says
It is presumed that the accessory obligation of pledge has been remitted when the thing pledged, after its delivery to the creditor, is found in the possession of the debtor, or of a third person who owns the thing.
Civil Code, Article 1274 — Presumed Remission of Pledge. Read the full provision →
Possession raises a presumption the pledge is gone
Article 1274 deals with the security, not the loan behind it. It provides: It is presumed that the accessory obligation of pledge has been remitted when the thing pledged, after its delivery to the creditor, is found in the possession of the debtor, or of a third person who owns the thing. A pledge is an accessory obligation — it exists only to secure a main debt, and it depends on the creditor holding the item. So when the pledged thing turns up back in your hands after having been delivered to the creditor, the law presumes the creditor gave up the pledge, treating the security as remitted.
The loan itself is not extinguished
This is the crucial distinction. The presumption reaches only the pledge, the accessory security — not the principal loan it secured. Remission of the pledge means the creditor is presumed to have released his security interest in the item; it does not mean your debt is forgiven. You can still owe the full loan even though the item that guaranteed it is back with you. The practical effect is that the creditor may have lost the special advantage of holding your property as collateral, while his ordinary right to be paid the borrowed money continues unaffected.
The presumption can be overcome
Because Article 1274 speaks of what is presumed, the conclusion is not absolute. The creditor may rebut it by showing that your possession does not reflect any intent to release the pledge — for example, that the item came back to you temporarily, for a limited purpose, or without his consent. If he proves the security was never given up, the pledge can be treated as still in force. So while finding the item in your possession works in your favor on the question of the pledge, the creditor is entitled to explain the circumstances and defeat the presumption with contrary evidence.
What this means for you
If your pledged item is back with you after being delivered to the creditor, you have a presumption that the pledge — the security — has been remitted, even though you have not fully paid. But do not mistake that for cancellation of the loan; the money you borrowed generally remains due. The situation can also turn on how the item returned to you, since a temporary or non-consensual return may let the creditor keep the pledge alive. The presumption gives you a starting advantage on the security question, not a discharge of the underlying obligation.