Priority Of The Lessor’s Rights

The priority rules of the lessor’s rights established by Article 745 of the Civil Code cannot be understood as a substantial securitization of title.The purpose of introducing ownership registration in leases is to highlight the credibility of registration in order to reach the elimination of invisible security in leases with security functions,to ease the logical obstacles of formalistic legislation on the issue of lessor’s ownership protection and to achieve an integrated treatment of the security regime for movable assets.The priority rule of the lessor’s rights is not sufficient to change the nature of the lease transaction itself.The functionalist integration treatment has boundaries in leases and should not be understood as a substantive securitization of ownership.The priority of the lessor’s rights in a lease is closely related to the specific lease transaction model.Sale and leaseback does not meet the criteria of indirect financing and acquiring new objects from outside,and therefore does not belong to a lease.Operating leases,on the other hand,belong to long-term leases and should be positioned as leases rather than rental.For non-fully satisfied leases such as operating leases,the lessor’s ownership cannot be discussed substantively,and the priority rules do not apply;while for fully satisfied leases,the lessee mortgages or pledges the leased property without authorization,at this time the lease and the movable property mortgage are functionally homogeneous,and the consistency of the application of norms should be maintained in terms of priority.The competing relationship between the lessor’s rights and the property right created by the forehand of the leased property is not related to whether the lease contract relationship is established or not,and whether the lessor’s rights is registered or not.Under the institutional environment of registration of lessor’s rights and functionalist security,the rules of good faith acquisition rather than priority rules should still be applied to the treatment of the lessee’s unauthorized transfer of ownership of the leased property.For leases with security functions,the right to repossess the leased property and the mortgage of the price claim are both remedies for rental claims,and only the functions but not the conditions of exercise overlap between them,while affirming that they are not contradictory in interpretation.On the premise that the logical basis should be consistent,there is no fundamental difference between the unauthorized subleasing in leasing and the unauthorized subleasing in general leasing,and both should be treated the same in principle.Except for the lessee in normal business activities,the second lessee should not be included in the category of the third party.If the concept of general creditor is used only in the narrowest sense,then the general creditor is not a third party under the priority of ownership rule of the lessor in a lease.An adjudicative security right can only be established in the property of the debtor and not in the property of other rights holders.In lessee bankruptcy proceedings,the possibility exists that the lease itself will be classified as the bankruptcy estate,but the corresponding transfer of lessor ownership.No competing relationship can be formed between the lessor’s ownership and the bankruptcy claim.None of the seizing creditors,participating distribution creditors,or bankruptcy creditors are also third parties under the priority rules of lessor’s rights in leasing.