On The Legislative Perfection Of The Transfer Rules Of Mortgaged Property

The repetitive legislation in China 's mortgage transfer rules and the vague use of the terms in Article 191 of the “Property Law of the People 's Republic of China” have led to different interpretations by judges and inconsistent judicial practice.Scholars and judicial practitioners have not reached any agreement on the legal effect of transfers approved by the mortgagee and the legal effect of transfers without the mortgagee 's consent.Based on the review of the legislative evolution and judicial status of China 's mortgage transfer rules,this article interprets the provisions of Article 191 of the “Property Law of the People 's Republic of China” from the perspective of the interpretation of meaning and purpose: If the transfer is approved by the mortgagee,the effect of the mortgage is only on the transfer price,and the mortgage cannot be pursued on the collateral;if the transfer is not approved by the mortgagee,the transfer contract is valid,but there is no effect of the change in property.If the transferee helps the mortgagor to pay off the debt and wipe out the mortgage,he has the right to request the mortgagee to go through the procedures for releasing the mortgage and then to go through the transfer registration with the mortgagor.The provisions of this article not only violated the civil law theory,but also caused the imbalance of interests between the mortgagee and the transferee in practice,hindered the functioning of the mortgage,and caused the idleness and waste of resources.In addition,this article adopts the same provisions for real estate mortgage and chattel mortgage,which conflicts with Article 188 of the Property Law of the People's Republic of China,which provides the countervailing effect of the registration of chattel mortgage.With the change of social background and the establishment of a unified real estate registration system,the real right publicity system has become increasingly mature,the market subject's risk awareness and risk recognition capabilities have been greatly improved,and the drawbacks of this article have become increasingly prominent.Therefore,many scholars have unanimously called for the amendment of the provisions of this article to allow the free circulation of collateral,and to use the pursuing effect as the basis for the protection of the interests of the mortgagee.However,the author believes that simply amending the provisions of this article is not enough.In China,the publicity method of chattel ownership is possession,but the publicity method of chattel mortgage is registration.This double publicity system has led to the particularity of the transfer of chattel mortgage compared to the transfer of real estate mortgages.On the premise of generally acknowledging the pursuing effect of the mortgage right,since the assignee of ordinary chattel does not have the obligation to check the registration,if the assignee can only judge whether he can resist the pursuing effect of the mortgage right by registration,then the assignee 's good faith in possession cannot be protected by law.Therefore,in the process of compiling the property rights in the Civil Code,a sequence of rights should be arranged to allow such assignees to be able to cut off the pursuing effect of the mortgage right when he is unknown.As a remedy to the mortgagee,the effect of the mortgage should be extended to the transfer price.Only in this way can we formulate mortgage transfer rules that meet the principles of civil law and meet the practical needs.Regarding the method of protecting unknown assignees when transferring chattel mortgage,there are debates between scholars on reconstructing the chattel rights publicity system and regulating conflicts of interest.The author believes that expanding the scope of chattel mortgage and giving play to the financing guarantee function of the mortgage has become the trend of the market economy.It is not appropriate to cancel the registration of chattel mortgage,so it should be proper to adjust the conflict of interest.The provisions in the Draft Civil Code(Draft for Comment)should be a relatively ideal plan.In Article 404,the provisions of Article 189 of the Property Law were reformed,and the standard of "buyers in normal transactions" was no longer limited to the floating mortgage of chattel.This provides a basis for protection for such unknown assignees who pay a reasonable price to obtain the ownership of chattel mortgages during normal business activities.Article 406 provides protection for the mortgagee whose pursuing effect is cut off in such cases by extending the validity of the mortgage right to the transfer price.If the assignee is not the buyer in a normal transaction,he can only judge whether he can resist the exercise of mortgage rights according to whether the mortgage is registered according to Article 403.