The Protection Of Mortgagee's Interests As Hypothecated Real Estate Transferred

The thesis is the protection of mortgagee's interests as hypothecated real estate transferred.Since mortgagee doesn't occupy hypothecated real estate, so it is transferred by mortgager become possible. What impingement will mortgagee confront with as hypothecated real estate transferred? What factors and ways does law ought to take to protect mortgagee's interests? Legislator must answer such questions.However, our present related legislation has not answered the questions perfectly, so does the newly published . On the base of the review of our present related legislation, this article will discuss the three ways of protecting mortgagee's interests as hypothecated real estate transferred, and then analyze their legal effect, and conclude the necessary choice of Chinese legislation in the end. The summary of the four parts of this article is as follows:Part One The review of Chinese present related legislationThe newly published does not differentiate estate and chattel in the case of hypothecated property being transferred, and takes mortgagee'consent as the condition of validate transfer of hypothecated property. Mortgager does not be allowed to sale hypothecated property unless mortgagee agrees. When mortgagee agrees with the transfer of hypothecated property, adopts the mechanism of subrogation of sale payment just as what dose, and ordains the payment which the mortgager obtains shall be advanced paid to mortgagee or drawing. However, there are many shortcomings in the regulations of , such as it maintains the validity of transfer behavior conflict with the validity of hypothec; it concerts mortgager'disposition right should be limited by mortgagee'volition, which lead to the restriction of hypothecated property'currency. Besides, it adopts the mechanism of subrogation of sale payment to protect mortgagee'benefits, but has not regulated the buyer'obligation of subrogation, which is not properly.Current takes mortgager'information and announcement as the condition of validate transfer of registered hypothecated property, and acknowledges mortgagee's supplant guaranty claim when hypothecated property is sold in low price, in these aspect, is more reasonable than which published in 2007 in a certain extent. Nevertheless, also has it particular defects.Part Two Ways of protecting mortgagee's interests as hypothecated real estate transferredThis part will analyze three ways for protecting mortgagee's interests, which are the mechanisms of recourse force, subrogation, and the coexistence of recourse force and subrogation.Recourse force mechanism takes the way of recognizing mortgagee'recourse right to transferred hypothecated estate to protect his benefits, which on the premise that disposition behavior is validate. The validity of mortgager'disposition are not contrast with the effect of hypothec, and it also do not need to depend on mortgagee'will. Resignation system of hypothec makes sure the buyer knows or should know that the target estate is hypothecated, so when mortgagee is competing with buyer for the right estate, legislation should protect the former preferentially.Subrogation mechanism acknowledges that the sale payment is the substitution of hypothecated property which mortgagee could claim, and it remedy mortgagee in this way. Subrogation mechanism should guarantee the buyer'subrogation obligation, in case of mortgagee'real right weakened to creditor's right when the sale payment lost its speciality.The coexistence of recourse force and subrogation mechanism recognizes simultaneously mortgagee'recourse right to estate and subrogation right to sale payment, which divides two theories:"overlapped coexistence theory"and"selective coexistence theory".Part Three Analysis of legal effect of the ways for protecting mortgagee's interestsThe mechanisms of recourse force, subrogation, and the coexistence of recourse force and subrogation are advanced as ways of protecting mortgagee'interests, nevertheless, the transfer of hypothecated real estate involved three parties: the mortgagee, the mortgager, and the buyer. Infect, mortgagee'right of priority for payment, the mortgager'right of disposition, and the trade security which the buyer represent should be considered together. Hence, if we plan to design or choose a legal system to protect mortgagee'interest as hypothecated estate transferred, its legal effect to these three parties should be analyzed.Recourse force mechanism is perfect to protect mortgagee'benefits, and it also guarantee the static security of mortgage and the circulation of currency, but it makes the mortgager break away from the regulation of mortgage, which is opposed to guaranty legislation. Subrogation mechanism is benefit for the buyer, but it lead to mortgagee'real right weakened to creditor's right, and will damage the static security of mortgage. The coexistence mechanism pays too much attention to the benefit of mortgagee, while overpass the protection to the mortgager and the buyer, which could break beneficial equilibrium of three parties and should not be adopted.Part Four The necessary choice of Chinese hypothecated real estate transfer systemTo protecting the mortgagee'benefits as hypothecated real estate, if we could not design a perfect system to against three parties'risks well-rounded , the problems could be left to party autonomy. To consider contract Parties'autonomy sufficiently is the premise of Chinese legislation.On the premise of party autonomy, we choose recourse force mechanism ultimately. Considering that it is the mortgager and the buyer could decide the sale payment in contrast of hypothecated estate transfer, therefore, legislator should acknowledge recourse force of hypothecated to protect mortgagee'benefits perfectly, rather than to adopt subrogation of sale payment mechanism, in which that the price decided by contrast parties would influence mortgagee'interests. Meanwhile, the mortgager'disposition right ought to be recognized.However, if the sale payment of advanced paying or drawing, or the mortgagee's supplant guaranty, or the buyer's substituted paying off could fulfill the debt, their effect of leading the extinction of hypothec should be validated, in order to limit the application of recourse force which lead to the mortgager break away from the regulation of guarantee system.