The Choice Of Fixed Sequence And Promoted Sequence Of Mortgage

As the King of guarantee, mortgage plays an important role in the economic activity. Because of being frequently used in social life and the collateral value being higher than a single debt value, it may result to several mortgages on one object. Whether the subsequent mortgage shall be ascended if the prior mortgage is eliminated, we have two patterns to choose: the theory of fixed sequence or the promoted sequence. We can conclude that our country now chooses the theory of promoted sequence. But there’s a trend of the theory of fixed sequence in judicial explanation in our country. There are big arguments about whether we should choose the theory of fixed sequence or the promoted sequence in our country. But instead of breaking the existing legislation pattern, the legislator keeps the application of the theory of promoted sequence. It’s worth studying whether this is reasonable to choose the theory of promoted sequence in our country. Moreover, it’s necessary to discuss if there are any points to be improved in the existing institution.Through the methods such as historical research methods, comparison methods,the author aims to analyze the basis of legislation, the advantages and disadvantages of the two patterns of mortgage sequence. The author analyzes the existing institution in our country. On the base of learning from the design of legislation of Germany, 2Switzerland and other countries or regions, the author wants to put forward his own opinions about the design of mortgage legislation of China.The dissertation includes the preface, the text and the end words.The preface firstly discusses the problem of mortgage sequence resulted from several mortgages on one object. The text is composed of three main sections.The first section introduces the legislation in different countries or regions. The author analyzes the basis and historical background of legislation of both two patterns, introducing the design of legislation in different countries or regions(German and Switzerland which advocate the theory of fixed sequence, France,Japan and Taiwan of China which advocate the theory of promoted sequence). The author holds the point that the viewpoint that the essence of mortgage is value attribute is concerned in both the theory of fixed sequence and the theory of promoted sequence. But they are different in emphasis and attention point. What’s more, there are both similarities and differences between the legislation design in German and Switzerland. The development of legal system of every countries or regions is rooted in its unique social, economic environment. The analysis on these factors will be helpful for the improvement of existing institution.The second section introduces the advantages and disadvantages of the two patterns of mortgage sequence and analyzes how legislators in these countries or regions make up for the deficiency. There are three advantages in the theory of fixed sequence: preventing unjust enrichment,lending,the securitization of hypothec. The disadvantage in the theory of fixed sequence is that it’s hard for debtors to set up the subsequent mortgage. The legislators in German and Switzerland make up for the deficiency in the design of legislation. But these problems have not been solved thoroughly till now. There is one advantage in the theory of promoted sequence:being easier to set up the subsequent mortgage. But there are disadvantages in the theory of promoted sequence, such as unjust enrichment. The legislators in these countries or regions which advocate the theory of promoted sequence are trying to make up for the deficiency as well. When the ownership and mortgage is mixed up, owner mortgage is accepted in these countries or regions. Moreover, legislators in Japan design the mortgage securities to strengthen circulation. In a word, there are pros and cons of both two patterns. Which pattern should be adopted depends on the existing legal system, social situation and legal tradition in these countries or regions.The third section analyzes the mortgage sequence of our country. Firstly, The author analyzes the legislation and judicial status in our countries. Based on the analysis of several factors, the author concludes our country now chooses the theory of promoted sequence. Secondly, analyzing the meaning and disadvantages of adopting the promoted sequence, the author draws the conclusion that it is reasonable to keep the theory of promoted sequence in our country. Because there are deep social and institutional foundations in the promoted sequence throughout our country. What’s more, the mortgage system of German is in conflict with the existing legal system in our country. However, there are defects in the theory of promoted sequence. Especially the problem that the lack of circulation of the mortgage has not been solved yet. With the development of economy, the demand for fund is increasing highly in our country. The mortgage is one of the best methods of financing. Finally the author proposes the points of view over perfecting the system in our country: learning from the mortgage system in Switzerland and introducing the system of mortgage securities in Japan.