Study On The Rationality Of Chattel Hypothecation And The Improvement Of Relevant Publication System

Hypothecation is one of the most important security methods. Chattel hypothecation is a special type of hypothecation which has long history starting since Roman law. However, the development of chattel hypothecation is not smooth since Roman law. Both Civil law of France and Civil law of Germany give up chattel hypothecation, which make chattel hypothecation breakdown for quiet a long time. The flourish of chattel hypothecation benefits from Anglo-American law. Section 9-Security Transaction of Uniform Commercial Code is also applied to chattel hypothecation. Due to the prominent situation of American in the world after World War II, each development of American law attracts worldwide attention. Meanwhile, Japan and Taiwan acknowledge chattel hypothecation via special law so that continental law acknowledges the importance of chattel hypothecation. Guarantee Law of the PRC. also acknowledge chattel hypothecation in a general scope. While chattel hypothecation under legal system of the PRC. contribute to the development of economic and society, the legislation regarding chattel hypothecation of the PRC. has defect and need to be improved. The basic function of chattel hypothecation should be firstly clarified if studying chattel hypothecation. Considering the history and the application of chattel hypothecation, chattel hypothecation shall have three basic functions: enhance financing possibility, improve financing efficiency, reduce financing cost. The core of chattel hypothecation shall be the effectiveness system which base on how to inform the public of the rights. The effectiveness of chattel hypothecation is on the basis of proper publication of real rights. Most of countries use registration antagonism as the publication method of chattel hypothecation, but such publication method also has some unavoidable limitation and transaction safety cannot be fully protected only by registration antagonism. For remedy of the defect of registration antagonism, four solutions can be resorted to: (1) limiting the hypothecated chattel to important production chattel and valuable livelihood chattel; (2) setting minimum value threshold for hypothecated chattel; (3) only applying chattel hypothecation to guaranty of short-term debt; (4) establishing correct and prompt chattel hypothecation information inquiry system. Meanwhile, the scope of the third party who the registered chattel hypothecation antagonizes against shall be limited to competitive holders of real rights to hypothecated chattel excluding common creditor of debtor. Lastly, realization order of chattel hypothecation shall be addressed. If hypothecation and other real rights for security exist in the same chattel, the realization order shall be considered. Plenty of factors should be weighted in consideration of realization order, but the most important factor shall be the completion order of publication. The right of which the publication procedure is completed earlier preempt over the rights of which the publication procedure is completed later. The rights of which the publication procedure is completed preempt over the rights of which the publication procedure is uncompleted. If publication procedure of all rights is uncompleted, the realization order shall be decided by the establishment order of the real rights and if the realization order is unknown, then all the real rights shall in the same order.