- Petitioner
- Union Bank of the Philippines
- Respondent
- Alain Juniat
- Citation
- G.R. No. 171569
- Court
- Supreme Court
- Division
- First Division
- Ponente
- Del Castillo, J.
- Decided
- August 1, 2011
Summary
Union Bank sued borrowers for unpaid loan secured by chattel mortgage over sewing machines. Nonwoven intervened claiming superior rights based on subsequent pledge agreement. Both security documents were unnotarized. RTC favored Union Bank under 'first in time' rule. Court of Appeals reversed, finding valid pledge and dacion en pago. Supreme Court reinstated RTC decision, ruling that unnotarized pledge cannot bind third parties under Article 2096 of Civil Code. No evidence supported dacion en pago claim. Case demonstrates requirements for valid security interests in movable property and their enforceability against third parties. Union Bank entitled to sale proceeds despite unnotarized chattel mortgage since primary action was collection suit with attachment.