Study Of Purchase Money Security Interest In Uniform Commercial Code And Its Enlightenments

The law is a product of thinking. It is called reservation of ownership in civil law, but it is called purchase money security transaction in the United States Uniform Commercial Code. The reason is that they hold different concept. The drafters of commercial code think that the attribution of ownership is not important, the key point depends on whether they play the function of security. The civil law system influenced by the concept of law grasps the attribution of ownership firmly, tries to explain all social phenomena using the theory of ownership.Using the idea of functionalism, the drafters of article nine of the Uniform Commercial Code find they are the same between the different forms of movable property secured transactions, and create the concept of "security interest ". Under the uniform, the new security concept, security perception, the reservation of ownership (conditional sale) is changed at once into purchase money security transaction in the Uniform Commercial Code. What the creditor has is the purchase money security interest.The first part discusses the origin of the purchase money security interest. The origin of purchase money security interest is closely related to the recognition of after acquired property clause in the floating charge. According the after acquired property clause, in the floating charge, the creditor can not only enjoy the mortgagee in the debtor’s existing property, but also enjoy a mortgage on the property acquired by the debtor in the future. However, if the subsequent attachment of floating charge system imply to the end. it is not conducive to the protection of the legitimate interests of creditors in the subsequent commercial transactions. Thus, in order to restrict the floating charge, the drafters also write the purchase money security interest into the Commercial Code.The second part of the article discusses the meaning of the purchase money security interest. The purchase money security interest is the interest on purchase money collateral which secure the purchase money obligation of the debtor. The purchase money collateral and the purchase money obligation are two important elements of the purchase money security interest. According the code, the purchase money collateral are consist of goods and software. The purchase money obligation is refers to the debtor’s commitment to the delivery of collateral all or part of the price of gold of the obligations or to make the debtor obtain rights or the use on the collateral.The third part of the article discusses the classification of the purchase money security interest. Depending on the types of creditor, it can be divided into the seller’s purchase money security interest, financial institution’s purchase money security interest, and the consignor’s purchase money security interest. Depending on the types of collateral, it can be divided into the purchase money security interest on the goods and purchase money security interest on software.The fourth part of the article discusses the creation of purchase money security interest. The creation of security interest means that security interest comes in to being and can be enforced. It deals with the legal relationship between the creditor and the debtor. The creation of security interest includes the sign of a security agreement and the attachment of security interest. The creation rules of general security interest also apply to the creation of PMSI. Like the creation of the general security interests, the debtor must first sign an appropriate security agreement, the creditor must pay the price and the debtor must have rights in the collateral. In addition. PMSI has more requirements than the general security interests, that to say, the secured credit must be used on the acquisition of collateral. Therefore, from a practical point of view, if you want to get PMSI. you must pay the price no later than the acquisition of collateral. Besides, it must be clear that the price is used on the acquisition of collateral.The fifth part of the article discusses the publicity of purchase money security interest. The publicity of purchase money security interest is the requirement of gaining the validity of against the third person. Due to the special nature of the construction and collateral of purchase money security interest, publicity methods are the registration and automatic publicity. The registration applies to the purchase moncy security interest on non-consumer goods. it is not a security agreement, but the financing statement to be registered. The financing statement only records limited information. The so-called automatic publicity means that the validity of publicity is produced at the attachment of security interest, no longer need to perform additional steps. Automatic publicity applies to the purchase money security interest on non-consumer goods.The six part of the article discusses the continued existence of purchase money security interest. The continued existence of purchase money security interest means that whether the status of purchase money security interest is effected by the change of collateral and obligation and cross guarantee. Prior to the revision of the Commercial Code, it was not dealt with, there are two ways in the practice, that the "transition rules" and "dual status rules". The basic requirement of the transition rules is that in order to retain the purchase money status, and security interest must be a "pure" PMSI. In accordance with the "dual status" rule, a PMSI does not necessarily be affected due to changes in the collateral or obligation. The "dual status" rule was adopted by the revised Commercial Code in the United States. A security interest can in part belong to purchase money security interest, in part belong to the non-purchase money security interest.The seventh part of the article discusses the effectiveness of a PMSI. According to the provision9-324of the Commercial Code, it follows a "second in time" rule, breaking the general "first in time" rule. PMSI is endowed the super priority and jumps before the pre-existing security interest. PMSI’s priority effect is not absolute, it is subject to some of the limitations of itself and the other elements. The limitations come from the PMSI and buyer in ordinary course of business.The eighth part of the article discusses the revelation of the purchase money security interest. In the facet of concept, the use of legislation ideas in the United States Uniform Commercial Code, from the view of functionalism, changes the retention of title (conditional sale) into the purchase money security interest, which can help us to explain the problems in the theory of ownership; in the facet of publicity, the establishment of the uniform registration on movable property, including the registration of retention of title, can solve the problem of transaction security:in the facet of effectiveness, there is a systemic defect in the priority rules, China’s security interest priority rules have not established the "second in time" rule.