Filipinas Marble Corportaion vs. Intermediate Appellate Court, 142 SCRA 180

In its desire to develop the full potentials of its mining claims and deposits, Filipinas Marbles Corporation (FMC) applied and was granted a loan in the amount of $5,000,000 by respondent Development Bank of the Philippines (DBP) on the conditions that the management contract will be handled by Bancom System Control and the DBP. and the loan shall be secured by a final mortgage on the assets of petitioner with a total approved vale of PhP 48,630,756.  The chattel mortgage was not registered pursuant to Article 2125 of the Civil Code.

ISSUE: WON the non-registration of the mortgage will nullify the contract between the parties, considering that a mortgage contract is an accessory contract?

HELD:
The SC have to say this, we agree with the petitioner that a mortgage is a mere accessory contract, and, thus its validity would depend on the validity of the loan secured by it.  We, however, reject the petitioner's argument that since the chattel mortgage involved was not registered, the same is null and void.  Article 2125 of the Civil Code clearly provides that non-registration of the mortgage does not affect the immediate parties.  The petitioner cannot invoke the mentioned provision to nullify the mortgage (chattel).