| The Civil Code,borrowing from the UCC,provides in its Article 416 for a purchase-money security interest system,under which a legally registered purchase-money security interest is effective against other creditors of the buyer of the mortgage as a public prior security interest.The purchasemoney security interest system has been widely practiced in foreign countries,and its introduction has the function of counteracting the super-effectiveness of floating mortgage and promoting financing.However,in China,the super-priority system is a new system in the Civil Code,which is not yet supported by practice,and there are many imperfections in the existing legal provisions.The Civil Code adopts a combination of functionalism and formalism in the field of security in movable assets,adding and changing some rules while keeping the basic types of security interest unchanged,so as to achieve the same effect as the functionalist security model of foreign countries by making these rules play the role of security.The functionalist legislative feature of the purchase-money security interest system is arranged by the legislator in the title of security interest,but the legislator does not characterize it as a type of security interest in a clear legal formulation,and the purchasemoney security interest rules become a typical system combining functionalist and formalist legislative approaches.From a formalist view of security,the purchase-money security interest is a special type of mortgage in the Security Interests section.From a functionalist view of security,the purchase-money security interest is a priority rule in common law systems that protects creditors from realizing their claims.The characterization of the purchase-money security interest affects the standard of application of the priority rules when it competes with other security interest,and also affects the interface between its application and other security regimes.From the legislative position,the purchase-money security interest is by nature a mortgage.The content and effectiveness of the superpriority system are clearly defined by law,and defining it as a mortgage does not violate the principle of statutory rights in rem.In case of competing with other security interest and atypical security,the resolution of conflict of priority should follow the principles of fairness,justice,protection of transaction security,honesty and credit and commercial efficiency.From the perspective of comparative law,the determination of the subordination rules of the purchase-money security interest is mainly based on the time of establishment,the time of registration,the degree of importance of the claim and different priority rules according to the type of goods.When the purchase-money security interest and the prior floating charge compete,the former has priority over the latter from the perspective of the purpose of the system and the improvement of the efficiency of commercial transactions,but attention should be paid to the interests of the floating charge holder by stipulating the notice obligation of the price creditor.When the purchase-money security interest is competing with the prior registered fixed mortgage,the former will over-expand the functionalism and hollow out the rule of registration priority,therefore,the elements of the purchase-money security interest should be strictly limited to prevent the super-priority from overexpanding.Specifically,the super-priority effectiveness of purchase-money security interest may be prevented from expanding unduly to the detriment of prior fixed security interest holders by distinguishing between civil and commercial transactions,by strictly limiting the elements of registration and by strictly defining the price.The rule of subordination in the event of competition between the purchase-money security interest and the lien may be based on the rule of subordination between the priority of the seller and the priority of the custodian under extraterritorial law,because the custodian realizes the preservation and appreciation of the value of the object through its own labor,and the seller can also benefit from it,and the latter is generally in a position of priority based on the principle of maintaining fairness.The commercial lien is not necessary for the claim to belong to the same legal relationship,and the commercial lien holder often does not contribute to the preservation and appreciation of the value of the object,and there are frequent transactions between commercial entities.The issue of subordination of multiple purchase-money security interest can be resolved by Article 414 of the Civil Code,which on the one hand treats sellers and financiers equally and helps to implement the principle of equality,and on the other hand simplifies the subordination rules and improves commercial efficiency.Under the functionalist security perspective,the retention of title is a model of transaction with a security function,and the seller’s right to the subject matter is transformed into a security interest.In order to simplify the subordination rules,it is not appropriate to consider the good faith or bad faith of the buyer.When the retention of title satisfies the registration requirement of the Judicial Interpretation of the Security System,the issue of subordination when competing with the price super priority is converted into the issue of competing with the two purchase-money security interest. |
