The Application Of Good Faith Acquisition In The Invalidating Judgement

Good faith acquisition is a system in order to protect the transferee who acquires an instrument without malice or great negligence, while the invalidating judgment is a remedy system in order to protect the person who has lost his possession of an instrument against his own will. The problem of how to mediate the rights of the good faith acquirer and the person who acquired the invaliding judgment is the problem of how to apply good faith acquisition in the invalidating judgment. This thesis is concerned with the analysis of this question, and hopefully through which helpful references could be provided to the improvement of the system of public summons for exhortation and the invalidating judgment in China. The thesis is divided into three parts.The first part is about the introduction of the two systems. Concerning with good faith acquisition of negotiable instruments, a brief introduction is made about its concept, valid essentials, legal effects and its difference from good faith acquisition of common movable property. Concerning with the invalidating judgment, a brief introduction is made about the procedure of the system, and its legal effects etc. Based on the introduction, the problem of the mediation between the two systems is put forward. The realization of the economic functions of an instrument is based on its negotiability, therefore, the good faith acquisition of an instrument is recognized in a relatively broader range than that of common movable property. That is, even if when the instruments were separated from the holder against the holder's will, good faith acquisition is still allowed. However, on the other hand, the holder, when relatively losing the possession of the instruments, it is only the proof of his rights that he has lost. He can still apply for public summons for exhortation, once the application is permitted, on the condition that nobody makes the declaration of rights, the court will made the invalidating judgment according to his application, so that the applicant can exercise his right on the basis of the invalidating judgment. Therefore, the conflict and mediation between good faith acquisition system and the invalidating judgment system is, as an unavoidable problem, worth discussing.The second part is concerned with the legal effects of good faith acquisition happened before the invalidating judgment. First, the influence public summons for exhortation has on good faith acquisition is discussed. The Negotiable Instruments Act of our country denies the transference of negotiable instruments during the period of public summons for exhortation. The provision is unfavorable to the safety of trading and the negotiability of instruments, therefore, retards the realization of the various kinds of economic functions of the instruments. Moreover, because the current methods of public summons for exhortation is practically of less effect than expected in exhorting declaration of rights and preventing the happening of good faith acquisition. Therefore, good faith acquisition should not be influenced by public summons for exhortation.Second, the influence the invalidating judgment has on good faith acquisition is discussed. Through the introduction of the interpretation of the effects of the invalidating judgment in basic theory and several cases, and the debate on its positive effect as well, reinterpretation is suggested about the effects of the invalidating judgment in our country. As to its negative effect, there is no disagreement, it is that the judgment invalidates the instrument, so as to make the rights and the instrument separated from each other, and therefore no one can exercise his right on the basis of the invalidated instruments. As to its positive effect, the negative point of view is approved, it is that although the applicant can exercise the right on the basis of the judgment, the invalidating judgment, as a judgment based on public summons for exhortation which is a kind of non-litigation procedure, cannot determine that the applicant has th...