The Study About The System Of The Transfer Of The Mortgaged Property

The transfer of mortgaged property impacts the interests balance among the mortgagor, the mortgagee and the purchaser of the mortgaged property in microcosmic level, influences the coordination of the system of ownership, the system of mortgage and the safety of transaction, thus designing an efficient and just transfer system is the goal of lawmakers of nations. The mortgaged property transfer system has been stipulated in four statutes in sequence, and the attitude to the transfer has changed accordingly. The current system imposes strict conditions on the transfer of the mortgaged property that without the mortgagee’s consent, the mortgagor shall not transfer the property. There are there main issues in the current system. The first is that the mortgagor’s consent is the condition of the transfer, but the law has not clarified the legal status of the consent. What’s worse, the law has not clarified the validity of the transfer contract and the effectiveness of the change of real right where the mortgagor transfers the mortgaged property without the mortgagee’s consent. That the ambiguity of the transfer system not only causes disputes in the academic circles, but also leads divergence in practices makes the rules clear is meaningful. Second, the transfer of the mortgaged property limited by the mortgagee’s consent is China’s creation, but the creation not only fails to balance the interests among the parties, but also deviates from the theory of civil law. So it is necessary to review the transfer system and make some improvement. The third is that the interest conflict in the transfer of the mortgaged property is unavoidable, but the current system fails to balance the interests well among the parties. Thus, to design a system which can achieve the interests balance is the goal of the paper. With the reply to the issues, the paper is divided into three parts.The first part is to clear the rules of transfer of the mortgaged property in the base of Article 191 in the Property Law. When the mortgagee consents to transfer the mortgaged property, the consent means that the mortgagee waives the right to mortgage, but may execute the right to subrogation in the price to ensure the credit be paid in priority. Without the consent of mortgagee, the contract of transfer shall be valid and the effect of the change of real right is undecided. The effect of the change of real right will be valid where the mortgagee consents to transfer later or the mortgage is cleaned. Otherwise, the change of real right is invalid.The second part analyses the advantages and the disadvantages of transfer with or without the limit of mortgagee’s will. The transfer of mortgaged property limited by the mortgagee’s will is not the effective way to protect mortgagee’s interests because it not only fails to balance the interests among parties, but also deviates from the theory of civil law. The transfer of mortgaged property without the limit of mortgagee’s will not only suits with the marketing spirit of free trading, but also corresponds with the logic of the theory of civil law. As a result, the transfer without limit is the advised choice for the system.The third part is about the interest conflicts among parties and the remedies for them. In the transfer of mortgaged property, the interest conflict is unavoidable, so the interest balance is the goal of the system and only achieving the interest balance can protect the free trade of the mortgaged property. Meanwhile, the remedies for the mortgagee and the purchaser of the mortgaged property are the crucial part of the system. Where the law allows the mortgagor transfer the property free from the mortgagee’s will, the mortgagee’s interest may be fully protected by the tool of force of recourse. From the perspective of a rational-economic person, where the value of the mortgaged property is bigger than the amount of the credit, the way that the purchaser of the mortgaged property liquidate the credit for the mortgagor may successfully achieve the interest balance among parties; where the value of the mortgaged property is smaller than the amount of the credit, the way that the purchaser of the mortgaged property clean the mortgage with the price of the value of the mortgaged property may effectively realize the interest balance among parties.