Issues About Special Chattel Collection Mortgage Of The Property Law Of China

The present booming commercial and consumer credit market needs the development and improvement of modern security more than ever. To keep abreast of the market economy commodities needs and capital financing, the legislation and practice requests of the introduction of the common law floating charge system is increasing.The Property Law of China Article 181 follows the example of the Floating Charge system as the core to set up a Special Collection of Movable Property Mortgage System. However, from the Scholars Suggested Draft to the official "Property Law" promulgated, Article 181 has experienced from scattered in separate sections to the general security system, and also experienced scholars attitudes significant changes in the legislative process of the "Property Law" Article 181. Such changes are the compromise of the modern way of thinking and the reality way of thinking.The Special Collection of Movable Property Mortgage System, as the core of Article 181 is a brand new legal system. However, as the results of China's credit market environment defects, the social credit system still calling for improvement, and the unchangeable complexity, uncertainty, easy variability in such factors of the chattel mortgage system itself, the Article 181 provision appears slightly rough and random ,and obviously needs to be amended and improved in many aspects. With comparison to other countries with developed and mature Fluctuation Mortgage System, there are quite a few defects and issues with the Special Collection of Movable Property Mortgage System of China.This article is divided into three parts, and aims to make comparative analysis of Article 181 through evolution path, evolving the special chattel collection of mortgage's "scope- attachment and perfection- priority- enforcement". Making recommendations based on the comparison analysis of the Secured Transaction System of U.S. and the United Kingdom, with the Special Collection of Movable Property Mortgage System of our country in particular ,for making an attempt to solve the legislative and judicial issues with Article 181, extended in order to play a real right, make the legislative ideas of best use come into reality.The first part is focusing on, on the equitable basis of balancing the safety of trading and the efficiency of the transaction, there are requirements to amend the mortgage scope of the object, and the scope of the collaterals.Hereinafter are the issues with the Special Collection of Movable Property Mortgage System of China: the scope of the mortgagor is too broad, though not as much as the scope of U.C.C., compared to Britain's Floating Charge, then obviously there broadened; the collateral scope is too narrow, not only excluding the Real Estate ,such as the building, land, attachments to then, Construction Land Use Rights, but also excluded Accounts Receivable, Intellectual Property Rights, the Rights to Claim against the Third Defects of interests.Therefore, the conclusion based on comparative analysis presented that, the scope requirements should be combined with the interests of its actual principal and balance of the mortgage, means the mortgagor scope should be limited, while the collaterals scope expanding. The second part focuses on the Establishment and Perfection of Secured Interest, while the issues of define the definition of "Purchaser in due course" in the operator's use of disposal of the mortgaged property, protection the interests of "has paid a reasonable price and get the collateral property" of the bona fide third party, and the problem of the protection to the point of balance between the three important parties.Our Special Collection of Movable Property Mortgage System lacks of the fit registration procedures set specific security settings, the perfection is not sufficient, could not prevent the emergence of bona fide third party, and conflicts with the "security law" and its interpretation and implementation about the registration issue; in addition, due to the case of operator in business could be consider always know better and has more comprehensive understanding of their own business operation situation and mortgage condition than outsiders.Then before the mortgaged property is finalized, the operator may have demonstrated a significant business risks or other reasons, use of "Purchaser in Due Course", "has paid a reasonable price and get the mortgaged property," the ambiguity of the scope of such provisions in law, and in the mortgagee knows dispose of the mortgaged property before, so that kind of mortgage risk among people is at large, The insecurity has also led to the unsecured transaction. So how to fix mortgage registration system to force more perfection, and "Purchase in Due Course" to clearly define the normal business activities on the implementation of and restrictions on the buyer protection is particularly crucial.The third part is focusing on the exercise and enforcement of the Special Collection of Movable Property Mortgage. Our country's implementation procedures of the system design, does not have such specified regulations and rules on those issues; Neither has rules on priority, considerably reducing the regime operational of such provisions.There should be judicial interpretation of Article 181; public authority should be involved in the assets fixed identified customized applications; regulate the mortgage and legal procedures; clarify the situations of "serious affect claim to achieve " and make it more operational; clarify the priority issue; learn from the experience of the system administrator of the estate, property manager of the provisions of the floating charge; restrictions clauses should be further regulated.