Research On The Hypothec Effect After The Expiry Of Statue Of Limitations For The Principal Creditor’s Right

As for how to deal with the problem of the hypothec effectiveness after the expiry of the statute of limitations, there are two kind of theories which are “natural property right” and “elimination”. The theory of “elimination” can be divided into “elimination of scheduled period pass” and “elimination of statute of limitations pass”. But the several theories above all have something incorrect. Although the judicial point of view “natural property right” has noticed the accessory of hypothec, but it has the suspicion of build the priority of compensation on stilts, and it protect the interests of pledgee too much and it’s not conducive to the flow of object. The judicial view “elimination of scheduled period pass” applied scheduled period to hypothec mistakenly, and there is a suspicion that it’s a kind of dislocation in the theoretical premise. The judicial view “elimination of statute of limitations pass” summarized the legal consequence of statute of limitations pass to the elimination of entity right. But it remains controversial in theory that whether the hypothec as a kind of property right can be applied to the statute of limitations. And both as statute of limitations, there are totally different effect to the principal creditor’s right and hypothec. The argument goes against not only the accessory of hypothec, but also the basic logical judgment.According to the analysis of legislation in Germany, Japan and Taiwan area in our country which all belong to civil law system, it can be known that under the similar legislation system, there exists the sort of legislation that hypothec becomes eliminated after the expiry of the statute of limitations of principal creditor’s right, and the conclusion that the hypothec is eliminated will not lead the application of article 191 of property law of PRC to an embarrassment, and at the same time, it’s in favor of the flow of object and more desirable to the realistic society. But it should be reconsidered that what the real reason of the elimination is.The principle of the invalidation of right originated from Germany, and is reflected in the civil law system in civil law countries. It includes not only the case that obligations being breached leads to invalidation of right or revoked of right, but also the case that right eliminated because the obligee does not exercise their right in a certain period. The constitutive requirements of the principle of the invalidation of right shall include the following three aspects: first, the obligee does not exercise right; Second, the related obligee believes the obligee will not exercise right on account of good faith principle; Third, exercising the right will lead to imbalance of interests between the obligee and obligor. Due to the pledgee doesn’t exercise the right in a long time, the pledger has every reason to believe that the pledgee has no intention to exercise his hypothec. And if it is allowed that the pledgee can still exercise his right after the expiry of the statute of limitations, it will leads to the appearance of such condition that the pledger may not be able to recourse against the debtor. Thus the principle of the invalidation of right can be concluded as the reason of the elimination of hypothec after the expiry of the statute of limitations.The principle of the invalidation of right is a specific embodiment of good faith principle in property law. If the applicable conditions are not limited, the principle may be abused, so the applicable conditions should be limited. On condition that the two parties come to an agreement about the period of hypothec, this agreement should be deemed to be valid because the agreement is not contrary to the numerus clausus principle, and is an embodiment of the autonomy of the two parties. And for the reasons above, the principle of the invalidation of right shouldn’t be applied. As real right of security, mortgage and lien should also exclude the application of the principle of the invalidation of right, because their effect and survival conditions are different from the conditions of hypothec, the related obligee can hardly draw a conclusion that the obligee gives up exercising his right from the inaction of obligee.