PIANSAY V. DAVID, G.R. No.

L-19468, October 30, 1964

FACTS:
David secured a loan from Vda. De Uy Kim, and to secure the payment, he executed a chattel
mortgage over a house in favor of Kim. Due to failure to pay, the CM was foreclosed and Kim
was the highest bidder in the public auction. Kim then sold the house to Mangubat. The latter
then filed charges against David for the collection of loan and praying that the deed of sale
issued by Kim in favor of Piansay be declared null and void. The trial court held David liable to
Mangubat but dismissed the complaint with regard Kim and Piansay.

Kim and Piansay then filed charges against David and Mangubat. Due to the civil case, David
demanded from Piansay the payment of rentals for the use of the house, which the latter claims
to be his property.

ISSUE:
W/N the chattel mortgage constituted in favor of Mrs. Uy Kim is valid.

HELD:
Regardless of the validity of a contract constituting a chattel mortgage on a house, as between
the parties to the said contract, the same cannot and doesn’t bind third persons who aren’t
parties to the aforementioned contract or their privies. As a consequence, the sale of the house
in question in the proceedings for the extrajudicial foreclosure of said chattel mortgage, is null
and void insofar as Mangubat is concerned and didn’t confer upon Kim as buyer in said sale, any
dominical right in and to said house.