The Liability Of The Mortgagor On Unregistered Real Estate Mortgages

This paper mainly studies the mortgagee's liability when the third party provides real estate mortgage without mortgage registration,and it is divided into five parts except the introduction.The first part introduces the basic types of cases to be discussed and classifies them according to judicial decisions.The cases selected in this paper are related to the contract and property disputes caused by the third party's providing real estate mortgage.The court decisions are divided as follows: Firstly,according to Item 41 of the Law of Guarantee,without registration on the collateral,the mortgage contract is judged invalid.Secondly,based on Item 15 of the Property Law,the force of mortgage contract can be recognized,but courts have different results in the verdict.Some courts have approved the validity of the contract,but pronounce the mortgagee not responsible with the reason that the mortgage is not set on the grounds.Part of the courts deliver a verdict that the mortgagor has to bear the liability for breach of contract,for the mortgagee did not apply for mortgage registration and this leads to a default.Other courts sentence the mortgagor and the debtor to bear joint liability because the mortgagor is ready to shoulder responsibilities for the debtor's debt when the two parties sign a mortgage contract.The second part presents the influence of different property change modes on the mortgage contract and analyzes their disadvantages.Before the promulgation of the Property Law,China put the conditions of property right as the requirements of contract.In consequence,the mortgagor can deny the mortgage contract at any time before mortgage registration,which cannot guarantee the legitimate rights and interests of the mortgagee.Under the legislation of Doctrine of Confrontation,the mortgage is established once the parties express their meaning of establishing mortgage,which is easy to create a property without confrontation.For example,if the mortgagor sells the collateral,the mortgagee's mortgage right cannot be achieved.According to Registration Validity Doctrine,the real estate mortgage is set up at the time of registration,and the mortgage contract is not affected without registration.On the one hand,this separates real right alteration and the effect of the contract.On the other hand,it also avoids the discretionary disposition of real right under Doctrine of Confrontation.Based on this situation,the third part summarizes the existing different views,and focuses on the limitations of the mortgagee's liability for breach of contract.The mainstream view in academic circle is that the mortgagor should take responsibilities,but there are some limitations in it.Firstly,as for the claim of registration rights,the law does not specify the rights of registration,and the mortgagee's claim of the rights is based on the contract's obligation.However,in the cases under investigation,the parties did not make an agreement on the registration obligations.Moreover,even if the court makes a judgment that the mortgagor should assist in handling the mortgage registration,the mortgagor will treat it negatively.It is also rather troublesome if the mortgagee requests the court to enforce it or request the registration authority to register the mortgage in accordance with the judgment.What's more,the collateral may have been sold or sealed up so the court decision cannot be performed.Secondly,as for the damage compensation for breach of contract,due to the indefinite scope of damage,the mortgage's liability may be too heavy(the collateral value is less than the damage),or the creditor cannot get sufficient compensation(negligence offset).Additionally,it will bring some inconvenience to the implementation behaviors if the mortgagor bears the supplementary liability with the limit of the collateral value.The fourth part draws on the experience of foreign legislation,takes the invalid legal action conversion system as the theoretical basis,and argues that if the mortgage is not registered and when it is converted into the atypical guarantee similar to the “joint liability guaranty”,the mortgagor assumes joint liability limited to the collateral value.This part also makes explanations on the value of collateral under different situations.For one thing,there is mature legislation on the conversion system of invalid legal action abroad.And by combing China's legislative and judicial judgments,we can see that our country has also been inclined to use this system,providing space for invalid mortgage conversion.For another,from the perspectives of private law autonomy and judicial initiative,this part puts forward that judicial practice can take the lead in using this system to convert invalid mortgages.As for the specific elements of conversion,invalid mortgage conversion needs to be is consistent with three major requirements of invalid legal action conversion: the first legal action is invalid;alternative action exists effectively;it complies with the parties' thoughts.Compared with the mortgagor's assuming liability for breach of contract,this transformation can avoid the creditor's failure to be sufficiently compensated or assuming too many responsibilities on one hand,and one the other hand,the mortgagee can skip the registration of right of claim toapply to the court for direct execution of the mortgagor's liability property,both avoiding the trouble of realizing mortgage right through a second litigation and solving the difficulty in execution.The fifth part summarizes the nature and mode of the responsibilities to be assumed by the mortgagor.The Mortgagor shall assume joint and several obligations for liquidation to the extent of the “collateral” and determine the value of such “collateral” based on whether the real estate is subject to any mortgage right when the contract is signed.If such real estate is subject to no mortgage right when the contract is signed,the value of the “collateral” shall be its “market value” at the time when the dispute arises,otherwise,the value of the “collateral”shall be the value remaining after the part that should have been compensated to other mortgagees with such “collateral” as a matter of priority.