What Are the Advantages of a Chattel Mortgage?

Movable property mortgage refers to the form of mortgage provided by the debtor or a third party for security of movable property. When the debtor does not perform the debt, the mortgagee owns the mortgaged movable property and is settled that its selling price takes precedence over other claims. As immovable property possession is different from pledge rights with movable property as the subject, because movable property mortgages are guarantees against movable properties provided by the debtor or a third party, a written contract must be entered into and registered for the establishment of a movable property mortgage. Mortgage mortgages often occur due to special regulations of the law, and ship mortgages and aircraft mortgages are common. Countries also have their own special movable property mortgages, such as the United Kingdom mortgage of goods in stock, the French commercial property mortgage, the German agricultural appliance mortgage, and the Japanese movable agricultural property mortgage. ^[1]

Chattel mortgage

The purpose of setting up a movable property mortgage is to use its exchange value as the demand for financing guarantee, to activate finance, promote economic development, and achieve the purpose of making the best use of goods and smoothing the flow of goods. The subject matter of movable property mortgages is very wide, and basically covers all movable properties. If these properties are mortgaged instead of pledged, sometimes they will be more effective. For example, the factory mortgages machinery and equipment to banks to guarantee its debt,

China's movable property mortgage system has no general restrictions, except for "

Because our country's movable property mortgage system is basically nothing, so our country's movable property mortgage system is full of loopholes, and the protection of the parties is seriously insufficient, which seriously endangers the transaction security. For this reason, many scholars have set some theoretical regulations for the movable property mortgage system. For example, the auxiliary publicity method is adopted. The specific methods include engraving the mortgage mark and pasting the mortgage label. There are three regulations:

First, the auxiliary disclosure method is only applicable to movable property that is suitable for using this method outside the existing registration system. Such as machinery and equipment, electrical tools, raw materials, semi-finished products, etc. (the category list can be formulated by relevant departments). As for motor vehicles, ships, aircrafts, etc. that already have a registration system, it is not necessary to use them. The publicity of such movable property mortgages is sufficient for registration; it is not possible to mark or paste labels with small value or small volume and special texture. (Such as jewelry antiques, diamond rings, necklaces, etc.), should not be used.

Second, the auxiliary publicity method shall be adopted by the registration authority at the same time as the mortgage registration is processed. In other words, all mortgages of movable property suitable for marking and pasting labels must be completed at the same time as the registration and marking or pasting of labels are completed, and the real right effect can be obtained.

Third, the engraved marks or labels affixed by the registration authority must not be destroyed or damaged without authorization; otherwise, they shall be severely punished by law. Without the cooperation of disciplinary measures, the recognized mark will lose its meaning, so the mortgage mark or label should be given authority equivalent to the seal of the people's court. Actors who smear or damage mortgage marks or labels without authorization should be punished according to the circumstances, ordered to have penalties, and detained. If the circumstances are serious and constitute a crime, they can also be investigated for criminal responsibility according to law.

In addition, in order to further enhance the effectiveness of mortgage disclosure and facilitate the parties 'and interested parties' access to it, consideration may also be given to publicizing the contents of mortgage registration through computer-assisted methods when conditions are available in the future. Of course, there may be trade-offs between the content that is publicly available on the Internet and the contents of the mortgage registration that the parties and interested parties are allowed to check in order to safeguard the reasonable trade secret rights of the mortgage parties.

First, the administrative design of China's current mortgage registration system is strong. The registration departments are mostly administrative agencies, and the mortgage contract must be substantively reviewed for the effectiveness of the main contract and the mortgage contract, the ownership and value of the mortgaged property during mortgage registration, which leads to an increase in the risk of liability directly faced by the government. National compensation; on the other hand, the broad scope of review and the intensity of review will inevitably increase the time and cost of mortgage registration, hinder the widespread development of mortgage guarantee business, and reduce economic efficiency.

Second, China does not have a centralized mortgage registration system. Different mortgages must be registered in different departments. According to relevant investigations, China has as many as 15 mortgage registration agencies. More than a dozen administrative departments have registered separately, and they are not connected to each other or even within the same department. The electronic level of the registration system is low, the registration information is relatively dispersed and isolated, and the lack of transparency makes it more difficult for parties to search and retrieve. It is not conducive to the full and effective use of information, which reduces the effectiveness of publicity of registration; multiple departments are responsible for registration, the registration system is repeatedly constructed, and the operating and management costs of the entire registration system are increased, burdening the parties.

Third, movable property mortgage registration procedures are cumbersome, the registration content is complicated, the charging standards are not uniform and irregular, which results in long mortgage registration time, high cost, and difficult; some mortgage registration periods do not match the mortgage guarantee period, resulting in the parties in the same mortgage contract The registration of mortgage ownership has been carried out multiple times within the period.

Fourth, the registration of movable property mortgages has different effects on mortgage rights. Some adopt registration registration doctrine, while others adopt registration confrontation doctrine. For example, according to China's "Guarantee Law" ^[3]

Always register confrontationalism

Cancellation of the provisions of the Guarantee Law on the registration of the real estate and specific movable property mortgage element requirements (the mortgage contract will take effect from the date of registration), will all be registered as antagonistism. Because even if the parties do not register the movable property mortgage, the mortgage contract has already occurred between the parties. As long as the content of the contract is legal and the meaning is true, it should take effect between the parties. In fact, a major obstacle encountered in adopting the movable property mortgage system is whether all movable properties can be registered.

The machinery, transportation means, and other property owned by the mortgagor as stipulated in the guarantee law. Whether the other property refers to the property that can be registered or all the property that can be mortgaged, the legislation does not provide a clear explanation. Judging from the actual situation, it is impossible to register all movable property mortgages. Even if the scope of registration is expanded in the future, it seems difficult to enable all movable property mortgages to be registered.

This is mainly because the range of movable property is quite wide, the characteristics and appearance are also very different, and the value is often difficult to determine. Each movable property is required to be registered, the registration authority will be overwhelmed, and the parties will not be bothered. Therefore, it is very difficult for many movable properties to set up a mortgage. It is worth studying how effective the mortgage of the movable property is if the parties have not handled the mortgage registration. China's guarantee law stipulates that if a party mortgages other property, it can voluntarily register the mortgaged property, and the mortgage contract takes effect on the date of signing. If the parties have not gone through the registration of the collateral, they shall not confront the third party. Where the parties handle the registration of the mortgaged property, the registration department shall be the notary office where the mortgagor is located.

Unified department and judicial power

Change the status of "multiple registrations", unify the registration department, and give the registration department judicial power. Throughout China's guarantee law, the registration system has a "multiple governing" situation, and the mortgage registration system implements separate registration according to the type of mortgage. The registration right is the real estate registration authority where the mortgaged property is located with land use rights, houses and other fixed objects, and forest and other real estate and real estate usufructs as the subject. The "Guarantee Law" stipulates that: Mortgages such as urban real estate or factory buildings of township (town) and village enterprises shall be the local people's governments at or above the county level. In practice, local people's government regulations are rather chaotic, such as requiring the land department, real estate department, real estate management department, industrial and commercial administration department, or notary department to handle real estate registration. This conflicts with the Real Estate Law and relevant regulations of the Ministry of Construction. And the above-mentioned registration department is only administrative and not judicial.

Handling of unregistered movables

What about movables that are not required by law to be registered? I think if the parties are willing to register, they can go to the statutory registration department. After registration, they can be effective against third parties. If the parties do not register, I do nt think they can fight against the third parties. As a guide of causality theory, the real right relationship between the mortgagor and the mortgagee disappears, and the mortgagee becomes the general creditor of the mortgagor.

Because the law does not require such movable property to be registered, that is to say, their value is small, and there is not much damage to the public interest. If you intentionally protect the interests of the mortgagee of such movable property, it will undoubtedly cost a lot. The cost is not in line with its value. Besides, the movable property transfers quickly. When the mortgagee finds out that the collateral is no longer there, I don't know how many times the collateral has changed hands. If the mortgagee of such movable property is given an effect against a third party, it will undoubtedly hinder the transaction and damage the interests of more people, and only a movable property of low value.