On Realization Of The Joint Mortgage

The joint mortgage is a special mortgage regulation, which plays very important roles in accommodation of money , making the best use of things and protecting the creditors'rights. Many countries of continental law system, such as France, Germany and Italy, have stipulated the regulation clearly. These countries are so advanced in civil legislation that they not only give the rights to choose the mortgagee, but also balance relevant right people's benefits based on Distribution principle, splitting principle, the price ratio of share principle and adjustment principle. Whether the joint mortgage can play good role depends on pros and cons of the system construction.However, China has not clearly stipulated the joint mortgage, which could only be reflected in the 75th article of the Judicial Interpretation of the Supreme People's Court on Some Issues Regarding the Application of Security Law. The 180th article of the Property Law only permits to set up the joint mortgage, but doesn't stipulate the contents in details. Concentrating on realizing the joint mortgage, this paper analyses the system thoroughly and comprehensively from the theoretical aspects, and focuses on the effectiveness of the joint mortgage, i.e. the rules of realization of the joint mortgage and remedies of guarantee in real security and guarantee in after order. The first part analyses the joint mortgage and its premise of realization. First, it discusses the two characteristics of the joint mortgage in view of its connotation and function. There are two functions of the joint mortgage. One is accumulating the exchange value of most objects, so as ensuring the repayment of debts. The single collateral, provided by the mortgagor, can't ensure the repayment of debts, so the mortgagor needs to provide several collaterals to accumulate the exchange value to secure the claims. The other is reducing the risks. Although the collateral can secure the claims, when it is damaged, disappeared or the value reduced, the claims also hardly to be repaid. In order to avoid these risks, the mortgagor needs to provide several collaterals. Second, it discusses the nature of the joint mortgage. Actually, the academic circles have not reached a conclusion. There are single mortgage theory, plural mortgage theory and compromise theory. The author advocates the plural mortgage theory. Third, it introduces five types to classify the joint mortgage. Fourth, it analyses the establishment and publicity of the joint mortgage. The legislation of the real rights needs corresponding regulation, particularly in the registration system of the real estate, otherwise the property law will not be available. Lastly, it analyses the ways of realizing the joint mortgage.The second chapter, the focus of this article, discusses the rules of realizing the joint mortgage. Firstly, it analyses the security principle of choice of the realization of joint mortgage. This principle does not absolute freedom to the mortgagee. It aims at ensuring that the debts will be paid thoroughly. The varieties of the special circumstances shall be restricted when exercising the mortgage right, so that we can protect the rights of both the mortgagee and guarantee in real security and let the objects fully promote the social economic development. We need to consider the social costs of realizing the joint mortgage, and whether it needs to auction all the collaterals. Second, the author mentions we shall realize the claims according to the proportion of the burden of the collaterals in the quota joint mortgage. If the distribution is simultaneously in the full joint mortgage, we should realize the claims in price ratio distribution principle; if the distribution is unsimultaneous and the auctioned collateral includes one of the debtors. We need to pay the debts by the money converted the collateral, or to realize the claims according to price ratio distribution principle. The joint mortgagees exercise the free choose right, auction the parts of collaterals, which will influence the mortgagee in later sequence and the owner. The legislation, which avoids the influence or adjusts the right to claims, is called adjustment principle.The third part analyses the subrogation of realizing the joint mortgage. The other focus of the article is the subrogation of the guarantee in real security, right of claim and the subrogation of the mortgagee in the latter sequence. The establishment of mortgage reflects the principle of autonomy, from which the establishment of the subrogation breaks away. According to the agreement between the mortgagee in the latter sequence and the mortgagor, the mortgagee in the latter sequence can only be paid based on the collateral. According to the mortgagee and the joint mortgagors'agreement, the collateral only can guarantee the specific claim. While the establishment of the subrogation can let the mortgagee in the latter sequence and the guarantee in real security can be paid in addition to the agreement collateral. And the joint collateral also plays the roles of guarantee outside of the agreement. Although it is inconsistent with the principle of general mortgage system, it meets the requirements of the function of the joint mortgage. The author mentions the guarantee in real security possesses the subrogation right and the right of claim. The two rights have the same reason to take effect, but the purpose, nature, exercise object and the scope are different. Then, the author analyses the subrogation of the mortgagee in latter sequence, focusing on the following aspects: the plausibility, premise of the exercise, conditions of the exercise, the subrogation and claim right of the guarantee in real security, etc.