Research On The Legal Application Of The Title Retention System

Retention of title is a form of transaction in which the parties to a sales contract reach a special agreement on the transfer of ownership of the subject matter.With the emergence of credit economy and the enrichment of chattel transaction means,retention of title is widely used in civil law system and common law system.The core of this paper is the controversial focus of "retention of title" in the theoretical circle,that is,the legal nature of title retention and the legal effect based on different legal nature.From the perspective of comparative law,there are two theories about there retention of title: the composition of ownership and the formation of a security interest.Theory and judicial practice are based on the theory of security functionalism,which interprets the retention of title as a "functional" security interest.However,the theory the formation of a security interest holds that it is not a traditional security right,its essence is still ownership.On this basis,this article analyzes the present situation of ownership reservation in our country.The Civil Code attempts to functionalize title retention into security property right by introducing extraterritorial functionalism,which is in conflict with the dichotomy system of property debt,legalism of property right and the principle of distinction to some extent.This paper supports the theory of the formation of a security interest.Because it can more reasonably explain the institutional composition of ownership retention.First,the nature of title retention is the cessation condition attached to title transfer.Secondly,"registration antagonism" does not have the institutional function of transforming title retention into interest,but is only the endorsement of the seller’s ownership credibility.Finally,the "delivery" rule does not have legal consequences for changes in property rights.The buyer can only acquire the right to use and benefit from the subject matter on the basis of its possession.At the same time,the seller has the right to recover but not have the secured credit in bankruptcy.The receiver has the option.All these further prove that under our legislation system,the retention of title is still essentially the ownership right rather than the security interest.Based on the above content,this paper further analyzes the legal effect of title retention,and clarifies and balances the relevant rights and obligations of seller and buyer in title retention transactions.Based on the identity of the owner of the subject matter,the seller protects its own rights and interests through the right of retrieval.And the buyer protects its own rights and interests based on the expectation of the ownership of the subject matter.The competing depository of rights between the retention of title and other movable property security is also an important application of the ownership reservation system in judicial practice.When the title retention is explained by the theory of formation of a security interest,the general sequence rule of chattel security right stipulated in Article 414 of the Civil Code cannot be directly applied,but the "registration antagonism" rule stipulated in Article 641 of the Civil Code should be applied.At the same time,there is also a conflict of application between title retention and purchase money security interest(PMSI)in Article 416 of the Civil Code.Because the slanting protection of the PMSI by legislation makes the unregistered title retention cannot take precedence over the PMSI.