Research On Relative Legal Problems In Pledge Of Bills

Pledge of bills has achieved great favors for its high safety and vigorous negotiability in recent years with the rapid development of economy. However, due to flaws of relative legislations and regulations, it invites disputes when being put in practice from time to time. Thus, solving the problems such as how to understand and use pledge of bills institution and how to perfect the system becomes important. For this reason, this thesis attempts to analyze the problems of pledge of bills which exist in both theories and practice from different aspects, for instance, the set-up of pledge of bills, the effectiveness and the execution of right of bills. Besides, it also discusses negotiability of the pledges of enactment bills and the bills themselves, and the pledge of non-negotiable bills. Chapter One generally introduces pledge of bills, relative legislations and its significance. The author holds that pledge of bills is one sort of pledge of rights whose essence lies in setting up pledge on the basis of bills to guarantee the creditor's rights. The realization of pledge of bills system varies from country to country. In Great Britain and Taiwan Area of China, the system is implemented through applying relative civil law and commercial law; in the countries like Japan and Germany, the Law of Negotiable Instruments has proclaimed the clauses about pledge of bills endorsement, the rights of a pledgeor and force adeffect after the pledge is endorsed; and in China, pledge of bills is regulated by both Surety Law and Law of Negotiable Instruments. Law of Negotiable Instruments standardizes the legal behavior of bills, in the meanwhile Surety Law regulates the pledge contracts. In the pledge system, chattel mortgage has a stronger security ability, and the transference of bills will not load more burdens on the pledgeor, thus economically speaking, pledge of bills and chattel mortgage function alike. However, the negotiability makes pledge of bills more favorable. Chapter Two focuses on the operative documents. Pledge of bills is set up in accordance with Surety Law and Law of Negotiable Instruments which stipulate different operative documents on pledge of bills. Through analyzing article 35 of Law of Negotiable Instruments and article 76 of Surety Law, the author holds that non-cause character determines the loose relationship between the bill behaviors and its substantiality. With or without a pledge contract, pledge of bills is effective as long as the endorser marks "pledged"on the back of bills. When a bill is pledged, the rights of the pledgeor should be reflected on the bill by recording "pledged"on the endorsement before s/he turns over the bill. Otherwise, it's hard to distinguish a negotiable endorsement from a pledged one. Therefore, the pledge must be labeled by expressions with the meaning of being pledged and passed to the pledgeor. What's more, the long-dated check is not admitted in China, however, Surety Law stipulates that check can be pledged. To utilize the surety function of a pledged check, the author argues for the existence of long-dated check and its paying and credit function. Chapter Three illustrates the effectivity of the endorsement of pledge of bills, conditions of its realization and forms of its execution. The author holds when the endorsement is set up, the setup of pledge, the right to execute the power, certification and guaranty of the rights are produced. The endorsement of innegotiable bills is different from a warranted one in the aspects of purpose and effectiveness of surety and demurrer. The pledge of bills aims atguaranteeing creditor's rights, but the obligor will merely examine the bill holder in forms without knowing if s/he has the pledge in real sense. When the pledge is realized is not consistent with the time when the rights of bills are executed, and the endorsee will carry out the rights in his own name. Law of Negotiable Instruments orders that the pledgeor must carry out his rights after the bill holder realizes his own pledge legally, but the author holds this regulation is to limit the plegeor and will even turn the rights of a pledgeor into thin air. The discussion on the realization forms of pledge of bills emphasizes how the obligor draws back his rights when his/her obligation has been fulfilled. Chapter Four concentrates on pledge of bills in practice. Two particular problems are worth discussing: one is the negotiation and transfer of pledged bills, the other is the pledge of bills which are recorded non-transferable. There are disputes in both foreign legislations and academic circle. The author believes the transfer of pledged bills doesn't allow the arrangement of possessions, however it means the dealing with the guaranteed value. The negotiation of bills will not increase the risks of a pledgee, for the right of possession can't be achieved only after creditor's rights is completed. The setup and the negotiation must be endorsed on the bills to assure the zero possibility of hiding. Legislations should allow negotiation of pledged bills, since the major quality of bills lies in the circulation. This thesis analyzes two typical cases and comes to the conclusion that to pledge the bills recorded as non-negotiable violates the intention of the remitter and damgages his legal rights.