Study On The Recovery And Effectiveness Of Mortgage Rights

Before the promulgation of the Civil Code,China had always adopted the model of restricted transfer of collateral,which was more inclined to protect the interests of the mortgagee,but at the same time,it also violated the disposal rights of the mortgagor.Article 406 of the Civil Code changes the restricted transfer mode of collateral and redefines the rules for the free transfer of mortgaged property.This provision releases the disposal power of the mortgagor,which means that the mortgagor has the right to freely dispose of the collateral during the property mortgage period.In order to balance the interests of the mortgagor and the mortgagee,it also determines the effectiveness of the mortgage for the first time.However,the recovery effect of the mortgage right is not unobstructed,and in specific situations involving conflicts of interest with the transferee of the collateral,the recovery effect of the mortgage right must be limited.How to balance the conflicts of interest among the mortgagor,mortgagee,and mortgagee,and maximize the circulation of goods,is the significance of studying the effectiveness of mortgage rights under the free transfer mode of mortgaged property.Firstly,there are three legislative models and academic perspectives on the debate between the effectiveness of mortgage rights and the effectiveness of subrogation in rem under the free transfer mode of collateral.Article 406(1)(3)of the Civil Code only grants retroactive effect to the mortgage right.Although Article 406(2)of the Civil Code establishes a new rule from the perspective of "rights based" when there is a possibility of damage to the mortgage right,it does not clearly indicate how the rights claimed by the mortgagee under the mode of free transfer of collateral are determined.In this regard,there are two main views in the academic community,namely "subrogation in rem" and "right to claim debt".Most views believe that it should be recognized as having the effect of "subrogation in rem".The second controversial focus is whether,in this situation,if the mortgagee accepts a portion of the price through "double withdrawal" but the creditor’s rights have not been fully realized,it is still possible to continue to claim the mortgage right on the mortgaged property from the mortgagee.Secondly,although Article 406 of the Civil Code specifies the retroactive effect of mortgage rights,it does not clearly distinguish the application of immovable or movable property.There are three main viewpoints in the academic community.The author believes that both real estate and movable property have the effect of mortgage recovery,but the specific application of mortgage recovery will be subject to varying degrees of limitations,such as priority protection for commercial housing consumers,normal buyer rules,and so on.Furthermore,while affirming the effectiveness of mortgage rights,the Civil Code allows for the establishment of "restricted transfer agreements" between the parties involved.Article 43 of the Interpretation of the Guarantee System further explains the special agreement,but there is still controversy in the academic community regarding the legal effect of the prohibited special agreement on third parties.There are mainly two views: the "creditor’s rights effect theory" and the "property rights effect theory".Therefore,although Article 43 of the Interpretation of the Guarantee System provides clear provisions on the effectiveness of restrictive treaties,it does not mean that differences do not have any meaning.On the contrary,by discussing the legal effects of the special agreement,it is necessary to examine and apply the rules of free transfer of collateral and the validity of the recovery of mortgage rights.