Study On The Subrogation Of Proceeds From Chattel Mortgage

In chattel mortgage,the mortgagee of chattel often realizes his mortgage right through the pursuit and effect of the mortgage right and the mortgaged property.Even if the mortgaged property is transferred to a third party,the mortgagee can auction,sell or discount the mortgaged property to pay off his creditor’s right.However,the normal operation buyer rule stipulated in Article 404 of the Civil Code,as one of the chattel guarantee innovation rules arising from the needs of optimizing the business environment,has a great impact on the path for the mortgagee of chattel to realize his mortgage right.This rule expands the scope of application of the previous normal business buyer rule and extends the scope of application which is only applicable to floating mortgage to general chattel mortgage.The change of this rule makes the buyer who accepts the transfer of the mortgaged property in the normal operation process of the mortgagor,can fight against the pursuit and effect of the mortgage right enjoyed by the mortgagee to obtain the ownership of the mortgaged property without burden,and thus cuts off the general way for the mortgagee to realize the mortgage right.At this time,we must find another way for the mortgagee to realize the mortgage right,so as not to make it fall into the vacuum of right protection.The subrogation of the property which belongs to the same relief path as the pursuit and effect of the mortgage should be the best choice for the mortgagee.In traditional civil law,the scope of application of subrogation is limited to the absolute loss of the mortgaged property such as damage,loss or expropriation.Therefore,the object of subrogation of the mortgaged property is the insurance money,compensation money and so on corresponding to the above situation.However,Article 406 of the Civil Code stipulates that the mortgagee can pay off or deposit the proceeds of the transfer of the mortgaged property in advance.Most scholars believe that this regulation clearly defines the proceeds from the transfer of mortgaged property as the applicable object of subrogation,which is a breakthrough to the restriction of traditional civil law and makes subrogation of property applicable even when the mortgaged property is relatively lost.Although this stipulation makes some progress compared with the previous stipulation,it still fails to meet the practical demand of chattel mortgage transaction by only making the price obtained from the transfer of mortgaged property as the object applicable to subrogation of property except insurance,compensation and compensation.After all,the proceeds from the transfer of mortgaged property are only money subrogation,while the subrogation obtained in real chattel mortgage transfer transaction is more than money.With the development of society,the subrogation of chattel mortgage has shown a trend of diversification,including but not limited to notes,accounts receivable and other assets.In order to cover many types of subrogated objects,our country can use comparative law for reference to refer to the object of chattel guarantee as "income".Combining with the existing legal provisions of our country,the "transfer income" is expanded into "income".In the general case of chattel mortgage,if the mortgagee of chattel has registered the chattel mortgage,the settlement sequence on the subrogation of the chattel mortgage when applicable is a direct continuation of the settlement sequence on the original mortgage,without further notice.However,under the rule of normal business buyer,the mortgagor is an operator engaged in commodity trading,and the movables mortgaged by the mortgagor are mostly raw materials,semi-finished products,products,etc.These movables themselves have the property of rapid circulation,and the mortgage financing of the mortgagor is mainly for the expansion of re-operation.The subrogation of the chattel may therefore involve not only the transfer price but also income or even multigenerational income.If these earnings are not publicized,it is easy to produce secret mortgage on it,which is very unfavorable to the protection of the rights of the mortgagee who takes the income as collateral.So it is necessary for our country to carry on the income publicity,the design of the income publicity system can "suppl" the spirit absorption and use for reference the relative provisions which are automatically perfected on the comparative law.If the system of subrogation in property is to relieve the realization of mortgage right when the pursuance effect of chattel mortgagee is cut off,the realization of subrogation in property right should be further perfected.At present,there are only a few simple rules on the realization of the right of the system of subrogation in property,and there are only two main ways: deposit and early liquidation.These two methods still have some disadvantages such as unclear preconditions and weak force when applied,which cause some obstacles for the realization of the mortgage right of chattel mortgagee.In view of the problems of realizing the right of subrogation in material,our country can improve it based on its own national conditions and draw lessons from the legislative experience of comparative law.