| In the course of studying chattel mortgage system of China, in combination with the reality of China and drawing lesson from mutual lawmaking experience of foreign countries, the author puts forward the opinion that the principle of meaning creed and registration confrontation doctrine adopted in chattel mortgage system of China is correct from the perspective of world development trend. However, as China is practicing traditional civil law in continental law system, the difference between real right and obligatory right should not lie in appellation of right only, but should be regarded as headspring of right validity levels, and play an important role in the public summon of movable property right. In China there are three perplexities and disadvantages facing chattel mortgage right established on meaning creed.1) Illegibility of the legal position of chattel mortgage right; 2) balance between validity of real right of chattel mortgage right and the third party; 3) realization mode of chattel mortgage right. In order to solve the three perplexities, the author puts forward the following measures to improve chattel mortgage system of China.1, To solve the illegibility of the legal position of chattel mortgage right, it should be stipulated by law that chattel mortgage right will be granted real right nature only after registration, but only has creditor’s rights before registration, in order to maintain the unity of real right system of China.According to Property Law of China, chattel mortgage right comes into being as soon as the contract takes effect, and registration is an important opposite factor against the third party. This practice is improper because the difference between juristic act of real right and act of debt is mixed up. A distinction of juristic act of real right and act of debt is a major feature in German Legal Family, and the division of them makes civil law system precise in structural logic and obvious in legal effect and helps to protect the safety of transaction. Most important of all, it is consistent with the facts and so implements the principle of autonomy of private law. The concept of real right in the Civil Law of China and its essential feature derive from German Civil Law, and holds the opinion that real right is of dominant right, absolute right and rights in rem, and by holding real right, obligee can directly dominate subject matter and exclude the interference of the third party. According to the Property Law of China, registration is not an important factor for the effect of chattel mortgage right; instead, it is an opposite factor. Mortgage right comes into being as soon as the contract takes effect. Therefore, chattel mortgage right doesn’t have prior validity of real right and ability to remove the impediment, and its domination is dramatically reduced to nothing. Real right without domination, priority and ability to remove the impediment is inconsistent with the real right nature of Civil Law of China. Due to the above reasons, the author holds the opinion that the nature of legal act of chattel mortgage right must be clearly defined and set. Any legal act deciding occurrence, change and elimination should be of real right act instead of act of creditor right. Only real right act can directly change real right, and the obligation to the occurrence of act of creditor right can not directly influence the effect of the change of real right.Moreover, both registration confrontation doctrine and effectiveness have the problem to guarantee the legal interest of bona fide third party by the public summon and public credit of real property register. Without the legal relation intervention of the third party, it is not worth the candle to protect the prior right of compensation of the mortgagee for certain concrete mortgage property of the debtor while sacrificing the whole real right theory of continental law system and practical framework. Without the third party, there is not much difference in relief from safeguard measures by real right and creditor right. Therefore, it is not necessary to classify by force mortgage right without protest power as real right, because the consistency of the title doesn’t cover the difference of its nature.2, The authority of the principle of registration effectiveness doctrine should be re-established through the perfection of concrete system to guarantee the balance of interest of mortgagee and the third party. inclued:1), Effective public summons should be made by establishing concentrated registration system. A complete and concentrated electric public summons system that is able to disclose to the third party the existence of different kinds of real rights of mortgage should be established, and the validity date of the priority should be established according to the time of registration. The registration authority of chattel mortgage should provide noticeable registration. The staff working in registration agency should not be given the power of essential inspection. The registration of supplication is to satisfy basic requirement. When an application is being determined to be registered or not, the staff working in the registration agency plays an active but limited role.2), The range of subject matter of chattel mortgage should be properly limited. Value of chattel mortgage varies from different types. The mortgage of which type of chattel should be set up and its range should be limited? This is a difficult problem in chattel mortgage system. The author holds the opinion that not all chattels should be mortgaged and abstract general clause about mortgage should not be vaguely stipulated legally. Particularly at present stage, credit system has not been set up in China. Therefore, the range of chattel to be mortgaged should be strictly limited. In fact, in reality, only chattel of large value with clear right that can be easily decided and realized can become mortgage. The interest conflict between mortgagee and transaction transferee chiefly exists in the transaction of chattel mortgage. Therefore, an effective way to reduce the interest conflict between mortgagee and transferee is to limit the range of subject matter of chattel mortgage by setting its range to a larger value that can be easily public summoned, registered and inquired.3), Advocating auxiliary public summon method should be established and relevant specialist transaction agent system should be practiced. The author believes that it is meaningful to establish advocating public summon method in order to draw the attention of the public on public summon of mortgage. The determination of mortgage is the precondition of realizing mortgage right, and registration is a method. Even if chattel is registered, it is hard to decide how to avoid any conflict with any bona fide third party. In addition, the concept to inquire public summon of mortgage has not been formed in China. The conflict becomes inevitable. The method of determining property in mortgage has been put into practice in other countries and areas. For example, mark or label is legally requested to be added on mortgaged property in Japan and Taiwan. But the above mentioned auxiliary methods of public summon don’t necessarily apply to all properties in mortgage. For example, the appearance and volume of the chattels determine that. The author holds the opinion that a third party warehouse supervision system should be set up to determine product and semi-finished product as mortgage. Large commercial group of great strength should be entrusted to build warehousing agent and set up industrial standard of stock and pricing. By means of charging handling fee and evaluation fee, commercialized operation should be realized and they should take fiduciary obligation for warehousing certificate issued by the bank. Meanwhile, we should introduce specialist transaction agent system. For example, house property transfer and mortgage in Germany are done through notary organization and similar stipulation is set in Hong Kong area. All these should be used as reference in China law.4), Validity rule of chattel mortgage right should be perfected:(1) The principle of complete priority must be clearly formulated and prior compensation sequence of all right owners competing for the same guaranty. The author believes that right is the outcome of legal technology and its core question lies in validity. All the questions about chattel mortgage are in relevance to the realization of validity of the prior validity of chattel mortgage right over the third party. In China, the solution to these questions depends on the nature of chattel mortgage right and reasonable design of its validity mode, and a breakthrough in the scope of subject matter of chattel mortgage. Real right in traditional continental law system is systematically established based on the principles of rights over things, one thing one right, public summons and public faith and non-causal character of real right act. All these principles are put into practice by different concrete systems of Real Right Law, and concentrated reflection of legal value such as holiness of private right and transaction security. China is one of the countries practicing traditional theory of continental law system. As a kind of security interest, chattel mortgage will be inevitably included in the harmonious framework of real right system. In order to perfect the validity of chattel mortgage right, the principle of complete priority must be clearly formulated and prior compensation sequence of all right owners competing for the same guaranty. It is suggested that all these rules should reflect the basic principle of transaction law of modern chattel mortgage, including basic prior rule, profit from mortgage and relevant rules about buyer of mortgage. In case that super priority is to be given to certain possessory lien by public policy, this kind of priority should be clearly stipulated in the clause of chattel mortgage law, and publically summoned in the registration system of chattel mortgage right and regulated by its priority rule.(2) Right of disposing mortgaged property of mortgagor should be properly limited. Some obligations should be set to restrict the illegal acts of mortgagor. "It’s the objective of system design to enlarge the burden of perfidious mortgagor and reduce the risk of the transferee", "in order to protect the interest of chattel mortgagee, each country or area should set law to restrict mortgagor from transferring mortgaged property. In case of violation, the mortgagor should be punished." Although the obligations set for mortgagor can not completely eliminate all conflicts in this field, they protect the mortgagee and transaction transferee in particular. Meanwhile the interest of mortgagee is maintained by limited right of disposing mortgaged property of mortgagor, it is an effective way for the transferee to avoid chattel with right flaw and maintain his benefit.(3) Force of recourse of chattel mortgage right should be conditionally limited. Due to the congenital defectiveness in public summon of property as mortgage, in spite of the fact that we try to limit the range of subject matter of chattel mortgage and strengthen the method of public summon of chattel mortgage right, and set obligations to mortgagor to notify the right status, it is impossible to eliminate the bona fide possibilities happening in the transferring of subject matter to the third party. As a result, it could lead to benefit conflict between mortgagee and the bona fide third party. In the transaction of chattel transaction after mortgage right registration, the mortgage right of mortgagee has counter force and should be protected. Transaction transferee trusts that the chattel has no right flaw and obtains the ownership in good faith and should be protected. Legally, the benefit of one party should not be protected at the cost of the others, and interest of both sides should be balanced. In order to guarantee the interest impartiality of the third party, traditional civil law stipulates the counter force for mortgagee to protect his mortgage right on the one hand, on the other hand, replacement discharge and system of elimination right is set to specify the weapon whereby the third party discharges the burden of mortgaged property and enhances his ownership. According to Clause 2 of Article 191 of the Real Right Law of China, without the mortgagee’s consent, a mortgagor may not alienate the mortgaged property during the mortgage term, unless the transferee pays off the debts on behalf of the mortgagor so as to terminate the mortgage right. This clause limits the validity of pursuit on chattel mortgage right with property nature, but concrete explanation needs to be perfected.3, Quick and low-cost realization of chattel mortgage right should be guaranteed by means of giving self-remedy right to creditors and simplifying legal procedure.1) A chattel mortgage contract after notarization should have the validity to directly apply for enforcement from the court.In case of the lack of independency of real right act, in nature, the mortgage contract is a contract for credit or obligatory right document. The acknowledgement of it provides basic logic precondition for notary organization to render validity of enforcement to a mortgage contract according to law. In case of admitting the independency of real right act, and mortgage contract as real right contract, in the existing systematic framework in China, notary organization doesn’t endow it with the possibility of validity of enforcement.’Therefore, the realization of chattel mortgage right established with meaning but unregistered is not high efficient and fast, and not guaranteed. The nature of chattel mortgage right before registration and after registration should be legally distinguished, and unregistered chattel should be allowed to directly apply for validity of enforcement from court via notarization.2) The realization of chattel mortgage right should be allowed in a private way, including A) after the breach of guarantee contract, creditor and debtor can realize the right and method of chattel mortgage right in a private way; B) mortgagee is allowed to privately take possession of and sell mortgaged goods without going through judicial procedure, but not in violation of the limit of "fair and peace"; C) mortgagee is allowed to openly or privately sell or dispose of mortgaged goods without going through judicial procedure, but he must do it in accordance with business practice; D) reasonable procedural regulation should be adopted to protect the right and interest of the debtor or any third party that has right over the mortgaged goods in the course of realizing chattel mortgage right.Concretely speaking, rules should be made to ensure that public order must not be disturbed in taking possession of mortgaged goods by means of self remedy; time, method, location and price whereby to sell and dispose of mortgaged goods must be in consistence with business practice.3) Judicial procedure should be simplified, and allowed to be executed quickly. Only in case that the debtor refuses to cooperate with mortgagee or the mortgage can not adopt legal weapon to take possession of mortgaged goods in a legal self-remedy way, it is necessary to turn to judicial execution. Judicial procedure should be simplified to realize chattel mortgage right, and allowed to be executed quickly. |
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