question, when you bought the van, did you seek the approval of the bank first or the sale took place just between you and original owner (the mortgagor)?

btw the bank is the mortgagee... under such premise, i will presume that you were referring to the bank and the answer to your query is in the negative... the bank will not be in default in case of conversion of actual use of the vehicle.

if you were referring to the mortgagor (owner of the vehicle), the answer will defend on the provisions of the mortgage (chattel) contract itself. check if its one of the proscription and if it is, then the mortgagor will be in default and his the total obligations will become due and demandable. if the sale between you and the original owner of the vehicle was approved or consented by the bank (mortgagee) by way of "assume balance" and thereafter it was you who converted its use despite the prohibition, the result will be the same. the bank may demand the immediate payment of your outstanding obligation because you simply subrogated to the obligations of the original mortgagor.

if the sale was without the bank's consent, that's the worse scenario. the original owner is liable under our penal law aside from the right of the bank to foreclose the van and take its possession by way of replevin...HTH