Study On The Application Of Purchase-Money Security Interest

Under the influence of the World Bank Group’s evaluation instructions on the business environment of various countries and the concept of substantial guarantee of chattel secured transactions in the United States(U.C.C),the Civil Code of People’s Republic of China(Civil Code)introduces the system of PMSI in combination with the demand for chattel secured transactions in China’s current commercial practice.On the establishment of PMSI,first of all,the object scope of PMSI is not clearly defined in China,but based on the internal relationship between PMSI and floating mortgage,the object scope of PMSI in China is basically consistent with the scope of this system in the United States,and the object of guarantee must be chattel purchase,and it should be implicated with the secured creditor’s rights.Secondly,the "delivery" in Article 41 6 should be refined according to different delivery methods,and the change of possession is difficult to apply to the PMSI,because of the particularity of the system behavior mode.Finally,in order to give full play to the functionalism of PMSI,and unify the application of atypical guarantee,China should optimize the unified registration system of chattel guarantee.The Interpretation of Guarantee System states that the retention of ownership,also has the effect of super priority when it meets the conditions for the establishment of the PMSI,which is the expansion of the application scope of Article 416.Both the PMSI and the atypical guarantee have the function of guarantee.Therefore,under the expansion of the concept of substantive guarantee,this provision is reasonable.As for the competitive ranking of the PMSI,firstly,the ranking of competing claims and mortgages is established by registration,which can simplify the ranking of competing rights,and both the seller who sells on credit and the third party who provides financing can have equal competition opportunities,and also provide applicable rules for atypical guarantees.Secondly,the PMSI has priority over the legal priority of the construction project price,which is the result from the perspective of social policy and legal interest comparison.Thirdly,the poor floating mortgage is compensated by the PMSI,but the PMSI is registered beyond the grace period,and when the floating mortgage is not registered,it should return to the general ranking rule of the Civil Code.Finally,when multiple PMSI coexist,giving the seller of credit purchase priority over the third party providing financing can protect the seller of credit purchase who has no professional knowledge,low supervision ability and poor financial risk.In terms of the survival requirements of the PMSI,first of all,China does not know whether the change of creditor’s rights and debts will lead to the conversion of the PMSI into general mortgage,and we should also build a "dual identity rule" by learning from the experience of foreign countries.Secondly,China does not clearly stipulate whether the effectiveness of the PMSI with premium will be affected by normal business activities.From the perspective of system interpretation,the buyer’s rule of normal business limits the effectiveness of the PMSI with premium.Finally,combined with the dual identity rule,it can explain that the effectiveness of the PMSI can survive when cross-guarantee and replacement are carried out,so that the interests of all parties can be balanced.