Priority Theory & Future Chinese Civil Code's Choice

Priority is a kind of security real right in which creditor of specific obligation could be paid from debtor's property prior to general creditor. General priority refers to priority on debtor's general property while specific priority means priority on debtor's specific property. Priority and priority order is created by law. Priority doesn't need perfection by possession or filing financing statement. The secured obligation and its object are special. Priority has the following effects: priority payment, subrogation and limited right of pursue. Priority originated from ancient Rome, matured in modern Europe. Civil code of civil law system countries which follow French code all regulate priority specifically. In the countries and regions, priority is an important system to balance the related party's interests, embody just reasoning of civil law and fulfill justice and specific social policy. While in those following Germany civil code, there is no uniform priority in civil code (except in Japan). These countries use other law system to substitute priority to satisfy social needs. Social needs fulfilled by priority exist objectively in every market economy society and many law systems could meet these demands. Chinese civil code should choose priority system because there are social needs of priority; priority has more advantages than other substitute systems, priority system could fill gaps of law in force, priority system is not in conflict with Chinese law and legal concepts. But we must focus on theory difficulties of priority. Whether we could solve these theory difficulties or not has great impacts on the harmony between priority system and the whole civil law structure and its acceptability in the circle of academy, legislation and justice. These theory difficulties include: conflicts between priority and perfection system, conflicts between priority and civil law legislation, effects of priority coexisting with other secured real rights. This article tries to give solutions to the afore mentioned difficulties and offer advices on how to perfect priority system. Firstly, on legislation model, we could follow Japanese civil code. Secondly, on system design, priority should be an independent secured real rights as lien, mortgage and pledge. Thirdly, following the Japanese civil code, we should keep it harmonize with the existing secured real rights system.