Filipinas Marble v.

IAC Facts: Filipinas Marble applied a loan with DBPwhich is secured by a chattel mortgagetogether with DBP s management contract of Filipinas Marble. It was alleged that DBPmismanaged and misspent the loan leaving Filipinas Marble desolate and devastated.Instead of helping Filipinas Marble, DBPabandoned the project and proceeded toforeclose the properties mortgaged. Filipinas contested the foreclosure for there was noloan to speak because there was a failure of consideration. Issue: Whether or not a chattel mortgage can exist even if there is no loan to speak of.Whether or not a chattel mortgage is valid even if it is not registered Ruling: For mismanaging the corporation, it is as if the loan was never delivered to it and thus, therewas failure on the part of DBP to deliver the consideration for which the mortgage wereexecuted. The foreclosure of Filipinas Marbles properties is not valid. There was nomortgage in the first place because there is noloan to speak of. The mortgage being anaccessory contract, its validity is dependenton the validity of the loan secured by it. However, a chattel mortgage that isunregistered is not null and void. Under theCivil Code, registration is necessary only forthe purpose of binding third persons.