On The Effect Of Mortgage Right

The effect of mortgage right is mainly devoted to the demarcation of the rights and duties of different parties of interest concerning a mortgage target in one mortgage and to the balance and harmonization of their interests with an aim to effect some inclination in our policy-making. In one mortgage, many parties of interest form confrontations of interests around on asset and their interests tend to be different from each other. Therefore, the primary concern in terms of legal philosophy is the demarcation of the tangled interests between different parties, the construction of the impartial interest structure and finally the establishment of their positions in the legal relationship of a mortgage. The purpose of this in its final analysis is the protection of legal rights and benefits of the concerning parties. This paper begins with the registration of mortgage to analyze comprehensively the legal relations in a mortgage. Centered around the balance of interests in a mortgage, this paper is also devoted to the description of rights and duties in a mortgage with as its focus the vouching creditor's duties.This paper is divided into three chapters.Chapter one is devoted to the discussion of the registration of mortgage. The effect of the registration of mortgage is the legal consequence of the action of registration of mortgaged targets. Different countries have different regulations concerning the legal effect of the registration of mortgage, including exclusive registration and actual effect of registration. The Property Law of China distinguishes between real property and movable property concerning the effect of registration. The mortgage of real property will take effect after its registration while that of movable property will become exclusive after its registration. The signing of mortgage contract and the setting of security interest are two distinct legal facts. The two parties of mortgage contract set specific hypothec on specific property and there are actually two relations: first, the contractual relation between mortgagee and mortgager, a relation of debtor and creditor; second, the hypothec of the mortgagee against everybody. The hypothec derives from the contract of mortgage and it is a real right. The mortgage contract is legally different from hypothec and their legal effect is different. The recognition of the difference of hypothec and the mortgage contract is the logical starting point to avoid the misconception that the registration of mortgage is the determining factor of the effect of mortgage contract.Mortgage contract is both a contract of real right and that of debt. In the mortgage contract with an aim to set hypothec on real property, the effect of the hypothec needs as its precondition the registration. Unregistered mortgage contract is both a contract of real right and that of debt. A mortgage contract with effect harbors two-layered meanings. For the one, it is a legally binding contract of debt; for the other, it is a contract of real right with the setting up of a mortgage as its intention. The effect of the contract of debt and the setting up of the contract of real right come together with the setting up of the mortgage contract.Chapter two dwells on the analysis of the content of the hypothec. As the hypothec derives from the mortgage contract, the effect of the mortgage contract determines the effect of the hypothec. As the mortgage contract is a subordinate contract, the effect of the main contract influences the effect of the mortgage contract. Therefore, the effect of the main contract bear some influence on the hypothec.1. the influence of the mortgage contract on the content of the hypothec. (1) The mortgage contract is not only the basis for the hypothec, it is also the precondition of the realization of the hypothec. (2) Even if the two parties perform the registration according to the mortgage contract, this contract still exists and has its effect.2. the alteration of the main contract will have effect on the mortgage contract. The alteration of the main contract includes the alteration of the parties of the contract, that of the nature of the contract and that of the content of the contract. Alteration of the contract obviously affects the basis and characteristics of the original contract, changing fundamental the debt relationship of the original debt and at the same time the foundation of the existence of the mortgage contract, and therefore altering fundamentally the duties and responsibilities of the warrantor. In a word, the alteration of the main contract will change the expectation of the mortgager and therefore influence the realization of the hypothec.The parties of the mortgage is the subjects of a mortgage relation, the mortgager and the mortgagee. The parties of the mortgage contract is the subjects for the setting up of the mortgage contract, the vouching creditor for the hypothec and one who set up the mortgage.The range of the effect of the hypothec is the range of the duration of the effect after the setting up of the hypothec. According of the fundamental principles of the property law and other relevant legislature instances, the range of the effect of the hypothec is under the discretion of the mortgager and is allowed to enter into transaction. It includes specifically subordinate property, interests and add-to.The debt range of the vouch of the mortgage includes all that the mortgager should pay off when the hypothec is implemented, that is, the range within which the mortgagee can take a priority in repayment. According to the 173 article of our Property Law, the range of the vouch of the mortgage includes the main creditor's right, interests, fine for breach, compensation and the cost for the realization of the hypothec for the creditor's right. And if the mortgage contract regulates otherwise, follow its regulation.Chapter three is about the discussion of the rights and duties of the mortgage with some due focus on the elaboration of the duties of the vouching creditor in order to realize the internal balance within the mortgage relationship. As a legal form, the rights and duties in a mortgage relation should be balanced while we find that in our legislation the opposite is just the case. With too much attention on the rights of the mortgagees, their due duties are unduly ignored.The rights of the mortgagee include: 1. the discretion of the hypothec, that is, the mortgagee has right to dispose of the hypothec, including transferring, using it for vouch, abandonment, etc. 2. the right to save the hypothec for damage. 3. right for priority repayment. 4. the rights enjoyed by the mortgagee with the hypothec is violated. The rights of the mortgager include: 1. the discretion of the mortgaged property. 2. the right to set up more than one hypothec. 3. the setting up of usufruct on the mortgaged property. The duties of the mortgager include: 1. duties to inform and to tell and the duty to provide revouch. 2. duty to keep properly the mortgaged property.According to our current legislation, the regulation of the duties of the mortgagee is obviously lacking, causing the imbalance between rights and duties in the mortgage relationship. The levying of certain duties on the vouching creditor can in theory realize the balance in the legal relationship of vouch, and in practice can solve many problems caused by the creditor's breach of the principle of trust. The duties of the vouching creditor do not fall into the category of the vouching responsibility, neither do it fall into the alteration of the main contract. Thus, we can lay down some general duties for them in the process of our legislation. When the voucher is other than the debtor, and when the creditor knows or should know that the debtor's action can damage his ability to repay and the former does not take any action to compensate, or when the creditor have undue mistake in his supervision thus causing the debtor's inability to repay, the voucher is immunized of his duties within the range of the debts influenced by this action of the creditor.