Civil Code, Article 2098 — Pledgee's Right of Retention

What this article means

The pledge gives the creditor a right to retain the thing until the debt is paid.

The pledgee's right here is one of retention, not ownership — holding the pledged thing (personally, or through a third party who keeps it on the pledgee's behalf) is leverage to secure payment, and it does not transfer title or let the pledgee use the item as if it were his own. This possessory hold is what distinguishes a pledge from an unsecured loan: the creditor has something tangible in hand rather than a mere promise to pay, though converting that leverage into payment still requires following the law's foreclosure procedures, alongside the pledgee's own duty to take care of the thing meanwhile.

Questions about this provision

• Does a pledge require the item to actually be handed over to the creditor to be valid?
• If the creditor hands the pledged item back to me, is the pledge extinguished even though the debt is unpaid?
• I pledged a piece of jewelry as security - can the lender keep holding it until I pay off the entire loan?

Related provisions

• Article 2097 — Alienation of the Thing Pledged.
• Article 2099 — Pledgee's Duty of Care.

Cases citing this article

• Spouses Bonifacio and Faustina Paray, et al. vs. Dra. Abdula C. Rodriguez, et al, G.R. No. 132287, January 24, 2006 — read the decision on LawPhil →

Compiled automatically from Supreme Court decisions published on LawPhil that expressly cite this article, most frequently cited first. A listing means the decision cites the provision — it is not a statement that the case is the leading authority, and it does not show whether a ruling has since been modified or abandoned. Always read the decision itself.