Article 1274. 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.
Artikulo 1274 Ipinagpapalagay na ang accessory obligation of pledge ay nagampanan na kapag ang bagay na naipangako o na i-pledge ay makikitang nasa puder ng nangutang o ng tao na may ari ng bagay kung itong sitwasyon na ito ay mangyayari matapos na maibigay ang bagay na ito sa nagpautang.
In a contract of pledge, it is necessary that the thing pledged be placed in the possession of the creditor, or of a third person by common agreement. A third person who is not a party to the principal obligation may secure the latter by pledging his own property.
If the thing pledged is later found in the hands of the debtor or the third person, only the accessory obligation of pledge is presumed remitted, not the obligation itself. The debtor shall continue to be indebted but he does not have to return the thing pledged. The presumption yields to contrary evidence.
ILLUSTRATION
Harry delivers to Hermione his diamond ring in pledge to guarantee the payment of a loan. If later on the ring is found in the possession of Harry, the presumption is that Hermione agreed to the loan without the pledge. Hermione may prove that he returned the ring to Harry upon the latter’s request to be delivered back to him.
OBLIGATIONS AND CONTRACTS 