A Study Of Chattels Mortgage Protection System

Any business has risks and the existence of risks needs guarantee. In other words, the guarantee system of debt is born together with the appearance of business. From the ancient time till now, people have always been exploring and perfecting guarantee means. Including chattels mortgage, the means of material object guarantee has existed from the old times. With less or even without real estate, modern industries can still conduct production or management with only equipment, materials and labor force. When an industry needs to borrow funds because of production or expanded reproduction, or when the industry needs to offer guarantee because of some other things, the available property is mainly immovables. Once machines and other equipment are pledged, on one hand, the industry cannot go on with its production, and on the other hand, the creditor has to find a place to put the equipment and be responsible for the taking care of them. In this way, both sides feel uncomfortable. Just as the famous scholar Wang Zejian put it, "as far as the system of pawning the movable property is concerned, there is no difficulty in carrying out it in agricultural society because at that time, decorations such as books and pictures are served as guarantee articles. But in today's industrial society, it is hard to practice because machines and materials are both productive materials on which factories rely to engage in the production. So it is impossible to hand the productive materials over to the creditor as guarantee for funds."This thesis will discuss this important guarantee means--chattels mortgage in the market-oriented economy from the following respects.Introduction. This part explains what this thesis will discuss. Because movable property is the subject-matter in chattels mortgage system, it brings more insecurity to the mortgagee than immovable property brings to him. Therefore, one of the basic points of chattels mortgage is to strengthen the protection of mortgagee in various respects. In the meanwhile, the expounding method is also explained in this part. That is, to protect chattels mortgage, the most important is to choose appropriate demonstration method to regulate the validity of mortgage. On the basis of this, special protection measures can be set by legislation.Chapter one. This chapter shows the significance and the intrinsic defect of chattels mortgage and explains the history of chattels mortgage system and the reason why much importance is attached to it. Also, the absence of demonstration method and the defect of validityconflict in chattels mortgage are analyzed. These defects combining with the characteristics of chattels mortgage, results in the unprecedented risks for the mortgagee. Based on the above reasons, this chapter concludes that chattels mortgage should be preserved but mortgagee should be given more protection.Chapter two. This chapter discusses the proper demonstration method—the basis of protecting mortgage. By comparing and analyzing the current way of solving chattels mortgage demonstration, both advantage and disadvantages are pointed out. On the basis of this, this chapter explains that in our country, the demonstration of chattels mortgage should adopt the method of being effective with registering, so that chattels mortgage will be in conformity with the nature of material right, avoiding violating the current material right system in the academic field. In the meanwhile, the validity of chattels mortgage should be strengthened, which will make chattels mortgage more feasible.Chapter three. This chapter explains that making the validity of chattels mortgage clear is the embodiment of protecting chattels mortgage. In this chapter, the interior validity and the exterior validity of chattels mortgage are analyzed. Because the interior validity can be regulated freely by the party concerned in the chattels mortgage, this chapter will only improve the points that are imperfect in the current law of our country. The exterior validity is concerned with the realization of chattels mortgage, so on the basis of adopting the demonstration of being effective with registering, this part puts emphasis on analyzing the conflict between chattels mortgage and other rights, and furthermore explains solutions.Chapter four. This chapter discusses the protection of special design of chattels mortgage legislation. The scope of hypothecated immovables should be strictly restricted so that mortgage can be given complete protection. The chapter also points out that special mortgage protecting system should be designed to protect mortgage directly and mortgagor's criminal responsibility should be set up to protect mortgage indirectly.Conclusion. It is concluded that the protection of chattels mortgage affects whether chattels mortgage system can practice effectively or not. However, in the current law of our country, chattels mortgage and real estate mortgage are set together, ignoring chattels mortgagee's unfavorable position. Therefore, chattels mortgage system can play its role only by amending and improving the current law.