Short answer. Yes. Article 2140 turns on possession versus registration. A chattel mortgage secures an obligation by recording the personal property in the Chattel Mortgage Register, the debtor keeping the thing. If instead the movable is delivered to the creditor or a third person, the contract is a pledge, not a chattel mortgage.
What the law says
By a chattel mortgage, personal property is recorded in the Chattel Mortgage Register as a security for the performance of an obligation. If the movable, instead of being recorded, is delivered to the creditor or a third person, the contract is a pledge and not a chattel mortgage.
Civil Code, Article 2140 — Chattel Mortgage Defined. Read the full provision →
Possession is what separates the two
The Civil Code lets you use a movable as security in two distinct ways, and Article 2140 tells them apart by a single fact — who holds the thing: By a chattel mortgage, personal property is recorded in the Chattel Mortgage Register as a security for the performance of an obligation. If the movable, instead of being recorded, is delivered to the creditor or a third person, the contract is a pledge and not a chattel mortgage. Registration with the debtor keeping the thing points to a chattel mortgage; delivery of the thing points to a pledge.
Chattel mortgage: register and retain
In a chattel mortgage the security is made known to the world by recording the property in the Chattel Mortgage Register, and the debtor stays in possession and continues to use it. Delivery is not part of it; the record is what gives notice to others that the movable already answers for a debt. This is why chattel mortgages suit things a debtor needs to keep working with — a vehicle, equipment, stock — because he can go on using the asset while it stands as security for the loan.
Pledge: deliver and let the label go
The moment you hand the movable to the creditor, or to a third person the parties agree upon, the arrangement is a pledge — whatever the paperwork happens to call it. Article 2140 is explicit that delivery, not the name the parties chose, is decisive. This matters because pledge and chattel mortgage are governed by different rules on how the creditor is protected, how the security binds third persons, and how it is enforced on default. Believing you have a chattel mortgage while having, in law, created a pledge can lead you to follow the wrong set of requirements.
Match the form to what you did
Decide deliberately which security you intend and then act consistently with it. If the debtor needs to keep using the thing, do not deliver it — record a chattel mortgage in the register instead. If the thing is handed to the creditor, accept that pledge rules apply and observe them, including what is needed for the security to bind other creditors and buyers. Because the consequences on enforcement and priority differ, the safest course is to make the substance of the transaction — possession or registration — line up with the security you actually want.