Research On The Conflict And Balance Of Ownership Retention And Floating Mortgage

In order to optimize the business environment,China movable security legislation draws on the concept of functionalist security while adhering to the formalist concept of security,creating a parallel situation between the two.However,since the two belong to different legal systems,it is inevitable that the rules pursuing different philosophies are jointly stipulated in the Civil Code of the People’s Republic of China(hereinafter referred to as the "Civil Code"),resulting in systemic inconsistency.The legislator intended to reshape the ownership retention system through functionalist view of security,but the transformation is not complete: the seller still enjoys the right of retrieval under the influence of the formalist view of security.The floating mortgage has a strong "entry" feature,and once the transaction is concluded,the specific movable property enters the pool of floating mortgage property,and the two rights compete in the specific movable property,which leads to a series of problems.What should be done if the seller claims the right of retrieval while the floating mortgage holder claims the right to exercise the right on the specific movable property? In view of the fluidity of the floating mortgage and the abstract nature of the law,does the specific movable property fall within the scope of the property determined by the floating mortgage?Finally,if the seller claims to exercise the right under the rule of priority of satisfaction of a security right,what should be in priority?The root of the problem is the conflict of interest between the seller in sale and the owner of the floating charge.In order to protect financing and promote transactions,on the one hand,it is necessary to limit the reasonable range of both.Firstly,the functionalist guarantee concept should be implemented,the nature of the right reserved by the seller should be interpreted as a security right,and the exercise of the right of retrieval should be strictly restricted from the perspective of the security function;secondly,the scope of the property at the time of the determination of the floating mortgage should be defined to clarify whether it is in competition with the ownership retention,and the application of the rules related to the determination of the floating mortgage property should be clarified to avoid the arbitrary flow of the mortgaged property to the detriment of the legitimate rights and interests of other subjects.On the other hand,the application of the priority rules of both should be defined.Since there is a certain overlap between the ownership retention and price claim mortgage,if the condition of 10-day grace period for registration is satisfied,the reservation of ownership can be applied to the super-priority of price claim mortgage;otherwise,the priority of the two when they compete should refer to the application of Article 414,and the right of the first one to be publicized shall have priority.