Study On The Acquisition Of Movable Property Without Encumbrance

The ownership of the movable property obtained by the assignee will suffer the danger of the loss of value, when there are some encumbrance on this property. For the purpose of trade protection, it is necessary to ensure that the assignee has the chance to obtain the ownership without encumbrance. The encumbrance of the movable property mainly consists of mortgage, pledge and lien in China. Articles 108, 188 and 191 in Property Law of the People’s Republic of China are involved in this issue, but they have caused several application problems which should be clarified. For instance, if the assignee wants to obtain movable property without encumbrance, the subjective and objective constitutive elements must be satisfied pursuant to article 108 of the Property Law of China. Namely that the assignee should not find any appearance of rights on the movable property and he must be in good faith. Due to the simple articles of Property Law and its interpretation I of the Supreme People’s Court, the reliance fundaments in actual delivery and substitutive deliveries are not clear. Also the scope of protection of Bona Fide referring to no encumbrance, and the relationship between Bona Fide and counter force of right to mortgage of movable property are not definite. Such problems should be analyzed on the basis of cases. There are legal loopholes in the exception of the elimination of original rights in the transference of movable properties. To fill this kind of loopholes, we can refer to the experience of extraterritorial law. In this thesis, I have used the methods of legal history review, comparative law, legal interpretation and continued creation of law to demonstrate the application problems of the rule of acquisition of movable properties without encumbrance in the field of property law. And at last I have also put forward some recommendations for legislation. This thesis is divided into four parts:Chapter 1 describes the problem of acquisition of movable properties without encumbrance briefly. Firstly, I have introduced the three articles of Property Law, including article 108, article 188 and article 191, which are related to my thesis directly. Secondly, I have analyzed the legitimacy, the extent of involved rights and the acquisition way of movable properties.Chapter 2 focuses on the application and corresponding review of article 108, article 188, and article 191 of Property Law in China. According to literal meaning of article 108, article 108 can only be applied in the bona fide acquisition of ownership. But this literal range is too narrow, and it suffers from legal loophole. To solve this problem, we can use the method of application by analogy. Through this way, we can also apply article 108 to regulate the elimination of right of pledge and lien in the situation that the owner transfers his movable property. Although article 191 becomes the registration obstacle for the transference of real property and special movable property in the judicial practice, this article can’t stop the change of ownership of ordinary or special movable property. So whether the right to mortgage is eliminated or not, should apply articles 108 and 188 of Property Law. The doctrine of registration against others pursuant to article 188 refers to that unregistered right of mortgage will be eliminated, when the assignee is bona fide. But the function of chattel mortgage publication, which is the necessary premiss of counter force, may be open to doubt.Chapter 3 tries to ascertain the subjective and objective constitutive elements of the movable property acquisition without encumbrance. With the development of the modern trade forms, the possession of transferor has been insufficient as the base that the assignee has faith in the transferor’s outright ownership. With regard to the objective element, we should distinguish the actual delivery and substitutive deliveries. For example, in the case of brevi manu tradio, it is required that the possession of assignee must be transferred from the transferor. The subjective element, namely Bona Fide, decides, which kind of assignee’s trust deserves protection. This element serves as an adjusting tool. Compared to the objective one, the subjective one is much flexibler when judged. This chapter also demonstrate the scope of bona fide protection, the judging standard, the burden of proof and the determining time points.Chapter 4 discusses the exceptions of the movable properties acquisition without encumbrance. The first exception is the direct application or application by analogy of article 107 of Property Law:(1) In the event of bona fide acquisition, when the lienor or pledgee loses possession against his wish, he can exercise the right to request restitution by applying this article. As a result, the ownership and the real rights for security will be restituted.(2) When the movable property is transferred by the owner, the lienor or pledgee can also exercise the right to request restitution by analogy of article 107 except that the lienor or pledgee loses possession not against his wish. Consequently, the real rights for security will be recovered. Secondly, when the transferor replaces the actual delivery by assignment of claim for possession and the real rights for security on the movable property belong to the third party possessor, the third party rights will not be extinguished even if the assignee is in good faith. Thirdly, when the ownership of the movable property is restituted to the transferor by the assignee, the third party rights will be reborn.