Study On The Scope Of Application Of Purchase-money Security Interest

In order to protect the purchase price,Article 416 of the Civil Code provides for the right to mortgage the purchase price,and the scope of its application is clarified in the Judicial Interpretation of the Security System of the Civil Code.However,the scope of application of the system is very controversial,so it is meaningful to conduct a systematic study of the scope of application of the system.In addition to the introduction and conclusion,this paper is divided into the following four sections.The first part,the history and institutional function of the purchase-money security interest.Our legislation on purchase-money security interest was formulated with reference to Chapter 9 of the United States Uniform Commercial Code.Firstly,the function of the system in China is expected to be the same as the function of the system since its birth,to counteract the adverse effects of floating mortgages,to promote the application of floating mortgages,and to enable floating mortgage debtors to have new financing opportunities.Secondly,in addition to the natural function of the system,the purchase-money security interest is also conducive to the elimination of the implicit guarantee of the security system in China.Prior to the provision of the purchase price mortgage in China,there was no codified protection of the right to purchase price mortgage that existed under the title of security interests.The reservation of title system,which can give priority to the sale creditor,is also written in the contract section,which is prone to problems such as "invisible security",and the application of this system is also controversial.With the provision of the sale price mortgage,the protection of the sale price mortgage is formalized,thus contributing to the elimination of the hidden security.Thirdly,the sale price mortgage also contributes to the improvement and enrichment of the security system in China.Our guaranteed system has always been the rule of "registration first,payment first",but the provision of sale price mortgage has created a new logic of "registration second,payment first".Regardless of the controversial scope of its application now,the innovative value of the new compensation logic should be affirmed,and it creates a new logic for the future security compensation system in China-that is,on the basis of the logic of the order of compensation in Article 414 of the Civil Code,it gives the claims that need more protection to break the order of registration in the way of compensation.The second part,the inherent scope of application of the purchase-money security interest.We have adopted a strong floating charge,where the floating mortgagee has a charge on the collateral when it is registered rather than having to wait until it is crystallized.However,the strong floating mortgage also has its limitations.On the one hand,it is easy to lead to the problem of excessive financing,because the inflow of the collateral all the time and the floating mortgagee always enjoys the prior registered mortgage,it may lead to the value of the collateral is much higher than the financing amount of the mortgage contract signed by both parties;on the other hand,it is also easy to the situation of financing monopoly,because after the signing of the floating mortgage contract,the seller who makes the sale contract or the lender who finances the On the other hand,it is difficult for the debtor to obtain new financing because the seller of the sale contract or the lender who finances the sale contract will have inferior rights to the floating mortgage,and the debtor will not be able to provide the priority of the security.In response to these problems,our Civil Code provides for a sale price mortgage,which gives the seller or the contributor to the sale contract a super-priority right,which is registered within 10 days after the establishment of the sale contract,to obtain a priority right in the mortgage that only lags the lienholder.The provisions of this system can promote the application of the floating charge system in China,so that the floating charge will not block other financing ways of the debtor.At the same time,the application of the purchase price mortgage to the floating mortgage also considers the interests of all parties,neither the parties to the purchase and sale contract,nor the lender or the prior floating mortgage holder will suffer any loss of interest,and to a certain extent,the floating mortgage holder will also gain benefits such as reducing the cost of supervision of the mortgage.Therefore,it is justified and reasonable to apply the purchase price mortgage to the floating mortgage.The third part,the limitation of the scope of application of the purchase-money security interest.The provision of applying the purchase-money security interest to fixed mortgage has generated a great controversy in the academic circles.Most of the scholars think that the sale price mortgage should not be applied to the fixed mortgage.Firstly,the system of purchase-money security interest is not justified to be applied to fixed mortgage both in terms of its historical origin and the purpose of its establishment;secondly,applying the purchase-money security interest to fixed mortgage will unduly affect the generally applicable subordination of the guarantee to be paid as stipulated in Article 414 of the Civil Code,and override the original principle of "first to register,first to pay";furthermore,applying the purchase-money security interest to fixed mortgage will unduly affect the principle of "first to register,first to pay"."Furthermore,extending its application to fixed mortgages would seriously harm the interests of prior guarantors,increasing the risk that they will fall behind in the payment of later-registered security rights,and unreasonably increase the waiting obligations of prior guarantors,imposing the cost of the right to a grace period on prior guarantors for sale price claims;finally,it would increase the probability of creating Finally,it increases the probability of moral hazard that,after the security right holder creates security,the debtor may reverse the contract with the seller or create a fictitious contract of sale to create a security right in the purchase price,thereby impairing the priority of the security right holder.The fourth part,the expansion of the scope of application of the purchase-money security interest.The priority effect of the purchase price mortgage in the retention-of-title system and the financial lease system is firstly recognized that the retention-of-title and the financial lease belong to the security contract,and the scope of the recognition of the security contract is also expanding when the Civil Code of China is moving from pure formalism to both formalism and functionalism.From the perspective of functionalism,the retention of title contract and financial lease contract should be recognized as "other contracts with security function" in the security contract.Secondly,retention of title and financial leases should also have super priority.Both Article 57 of the Judicial Interpretation of the Security System of the Civil Code establishes the super priority of retention of title and financial leases,and from the perspective of fair protection of the purchase and sale price,retention of title and financial leases should also be recognized as having super priority.Finally,based on the first two points,when the retention-of-title or financial lease system and the purchase price mortgage are competing,since both systems have superpriority,the determination of the priority effect should be based on the requirement of first-to-register and first-to-pay in accordance with Article 414 of the Civil Code.The innovation of this paper lies in the justification of the scope of application of the sale price mortgage based on the Civil Code and the Judicial Interpretation of the Security System of the Civil Code,and the discussion of the limitation and expansion of the scope of application of the sale price mortgage through theoretical research and comparative law research on the basis of the system study.In order to solve the controversy of the scope of application of the system and clarify the ambiguity of the scope of application.The shortcoming is that the author’s academic foundation is insufficient and the theoretical preparation is inadequate,and the theoretical interpretation of the scope of application of the purchase price mortgage is still na?ve.