On The Mechanism Of Obtaining Real Property With Goodwill

In traditional theory of civil law, obtaining with goodwill is restricted to movables, however, by investigation of actual civil life, we find the disagreement between registered rights and real rights and hence the requirement of the founding of the mechanism of obtaining with goodwill in the realm of real property. Efforts have been made in this paper to analyze the traditional mechanism of obtaining with goodwill, to use as the cutting point the problems and solutions of the variance between registered right and real right, and to make the proclamation that the mechanism of obtaining real property with goodwill is a must in order to ensure safe transaction and economic development. The mechanism of registration is the foundation of obtaining real property with goodwill. Publicity and public trust is the theoretical foundation of obtaining with goodwill but it cannot be equated to its existence. The mechanism of obtaining with goodwill also has its practical basis and we can perfect this mechanism with a better design of the relevant mechanisms. The first chapter of this paper is devoted to the discussion of the traditional mechanism of obtaining with goodwill, the historical development and the survey of the relevant legislation in different countries. The mechanism of obtaining with goodwill ensures that the third party with goodwill can obtain the movable under the condition that he does not the seller has no right to sell. Here the sacrifice of the benefits of the original owner is for the sake of the protection of the benefits of the third party with goodwill and it is a reflection of the purpose of civil law: from the protection of static safety to dynamic safety. The reason why civil law adopts such measures is because the third party with goodwill represents transaction order and the protection of the third party means the protection of transaction order. And a good transaction order is a must for the development of social economy. Therefore, the source of the appearance of the mechanism of obtaining with goodwill is the tension between static safety and dynamic safety brought about by the disagreement between the appearance of right and real right. The value of the mechanism is to maintain transaction order and to ensure safe and convenient transaction. The second chapter analyzes the foundation of the existence of the mechanism of obtaining with goodwill in two perspectives, namely the realistic and the theoretical. In practice, the reasons of the disagreement of registered right and real right concerning real property consist of the following: First, reasons beyond legal actions. 1. wrong registration, repeated registration or deletion because of the mistakes of the registration staff; 2. legal change outside the law, for instance, A dies and B inherits while C is the real owner; 3. obtaining real property according to law but the ownership is not registered. Second, reasons concerning legal actions: in the real property alteration caused by debts, the registration of the alteration of the ownership of real property does not stand, becomes invalid, or is withdrawn due to incompetence of legal actions, fraud, duress while the alteration is not registered. Under different alteration systems, the registrations have different effectiveness including effectiveness of formation, of rivalry or of public trust. Whatever effectiveness is has, all the countries asserts that the ownership ofreal property has to be registered and made public in order to make it complete and prevent it from been entrenched. In the mechanism of obtaining movables with goodwill, the obtaining of the movables by the third party with goodwill has as its foundation the state of rights via the possession of the movables. Accordingly, registration, as the publicity means of real property, is also that of movables. The publicity and public trust of registration make the alteration of ownership in mind public as a form of material existence and thus help ensure the speed and safety of transaction. People involved in transactions need only base his transactions on the publicized state of ownership and he does need to investigate about the real affairs concerning the property in question. This accords to the social need of prompt transaction. However, it cannot solve the problem in which the third party gets the ownership when the seller has no right to do so. The mechanism of obtaining real property with goodwill, as one of the means of obtaining ownership, provides persons in the transaction with legal basis to obtain the property and cuts at the same time the retroactivity of the obligee. Thus, the mechanism of obtaining real property with goodwill has as its basis publicity and public trust and it is also a logical development of these principles. Chapter three of this paper raises the legislative design of the mechanism of obtaining real property with goodwill by the combination of the legislative and judicial circumstances. In terms of the inscapes of this mechanism: first, the registered contents of the relations of rights disagree with the real condition. This wrong registration should not appear in the record book but it exists objectively; second, the alteration of real property should accord to law, that is to say, the obtaining has legal reasons; third, the obtainer should havefinished the registration; fourth, the obtaining of the real property by the third party should be based on the goodwill of the third party. With the application of the mechanism of obtaining real property with goodwill, the following legal results can be achieved: first, the alteration of the ownership. If the inscapes of the mechanism appear, they buyer can get the ownership and the right of the original owner and restrictions on that right disappear; second, there are a series of alteration of creditor's rights between the real owner, the powerless endorser and the transferee; third, the original owner of the real property should not appeal to get back the benefits on the ground of improper obtaining of benefits; fourth, if the damage is caused by the mistakes of the registration offices, the offices should shoulder the responsibility of compensation according to the national compensation law; fifth, if the transferor later obtain the ownership of the real property, under no circumstances should he get back that ownership, thus come the revival of the ownership of the real owner. As far as the economic life in China in concerned, the application of the mechanism of obtaining real property with goodwill includes: first, some members of the co establishments sell the registered real property; second, real property or mortgage with wrong registration; third, lawful real property without registration; fourth, real property of unlawful buildings. The mechanism of obtaining real property with goodwill is not an isolated mechanism but one ring of the whole system and it has to accord to other mechanisms and its application should have strict conditions due to its nature of being a mechanism of regulating benefits. Therefore, there should be some perfection in legislation: the perfection of registration of transference,...