Analysis Of Purchase-money Security Interest’s Rivalry With Retention Of Title

Article 416 of the Civil Code of the People’s Republic of China,which comes into effect on January 1,2021,stipulates a special mortgage,which originates from the"purchase price guarantee right" stipulated in Article 9 of the Uniform Commercial Code of the United States,and is called "purchase mortgage" in China.When the chattels purchased by the buyer are used as security to finance the purchase funds,the security holder is given "super priority" over the other security holders registered earlier on the chattels.In addition,the ownership retention system stipulated in Article 641-643 of the Civil Code,in essence,realizes the guarantee of purchase financing by means of the seller retaining the ownership of the sold chattel when the chattel is transferred to the buyer.Both systems are designed to give priority to the protection of "purchase financing",and their guarantee functions and setting purposes are very similar,which will inevitably lead to conflicts of competing deposit.Based on this situation,the first part discusses the definition,origin and evolution,classification of mortgage of purchase money and how to introduce our Civil Code from other countries’ laws.The definition,origin and nature of ownership retention system are analyzed.Thus,the similarities and differences between the two are obtained.The second part firstly introduces how the two systems produce competitive depositary in the form of cases,and then starts with the Uniform Commercial Code of the United States,the United Nations Guide to Legislation on Guarantee of Movables Transaction,and the Draft of the European Model Civil Code,summarizes the international solutions to the conflicts of competitive depositary of the two systems,and analyzes the advantages and disadvantages of each.The third part leads to the current solution,namely the expanded interpretation of Article 57 of the Interpretation of the Guarantee System issued by the Supreme People’s Court:the "super priority" scope of the mortgagee of purchase funds stipulated in Article 416 of the Civil Code is extended to the lessee of the reserved title and the lessee of the finance lease.On the basis of this solution,the issue of "super priority" between the title holder and the(narrow sense)mortgagee of the purchase money is generated.There are two common rules in the world:one is the principle of first announcement and first right;the other is that regardless of the priority of the announcement,the seller’s mortgage of the purchase money takes precedence over the lender in terms of subject.The two rules are analyzed respectively and the conclusion is drawn that they should be distinguished according to the subject law.