My pawned item was lost or damaged while in the pawnshop's custody — are they liable?
Last updated: 2026-07-11 · Educational content; not legal advice.
Short answer
Yes. A pawnshop holds your item as a pledgee, and under Civil Code Article 2099 the creditor must take care of the thing pledged with the diligence of a good father of a family and is liable for its loss or deterioration. Article 2100 makes the pawnshop responsible for the acts of its agents or employees regarding the item and bars it from depositing your item with a third person unless you authorized it, and Article 2104 forbids the pawnshop from using your item without your authority. So if your jewelry is lost, switched, or damaged in the branch's custody, the pawnshop is answerable for its value — whether or not it happened to carry insurance. Demand a written accounting and the item's declared value, and escalate to the BSP if the branch refuses to make you whole.
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Frequently asked
What standard of care does the pawnshop owe?
Civil Code Art. 2099 requires the pledgee to keep the thing with the diligence of a good father of a family and holds it liable for loss or deterioration. That is a real duty — carelessness that leads to loss or damage makes the pawnshop answerable.
They say it was 'lost' or a robbery — does that excuse them?
Not automatically. The pawnshop is responsible for the acts of its employees regarding your item (Art. 2100), and it must show it exercised the required diligence. A bare claim of loss does not erase liability; ask for a written incident report and the item's declared value.
Do I need to prove the item was insured?
No. Your claim rests on the pawnshop's Civil Code duty of care, not on whether it insured the item. Whether it carried insurance is its own arrangement — your right is to be made whole for a loss caused in its custody.
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Your rights when you pawn an item at M Lhuillier, Cebuana Lhuillier, Palawan, or any pawnshop — the 90-day redemption period, auction of unredeemed items, lost pawn tickets, and legal charges under PD 114 and BSP supervision.