This article is compiled based on the recording of lectures by Liu Baoyu, professor and doctoral supervisor of the Law School of Beijing University of Aeronautics and Astronautics, at the 2017 Civil Trial Training Class of Shandong Court. It has been approved by myself and published in the third issue of "Shandong Trial" in 2017.
1995's promulgation of the " Guarantee Law " played a huge role in promoting the development of the financial industry, resolving creditor-debtor disputes and guarantee disputes in economic life. However, due to the overall cognitive level of the theoretical, practical and legislative bodies at that time, there were many problems in the provisions of the "guarantee Law". Afterwards, the "Interpretation of the Guarantee Law" issued by the Supreme People's Court in 2000 made changes to many of the rules, which can be said to have many highlights, but there are still some problems. The Property Law promulgated in 2007 has systematic and complete provisions on the security rights system, which also involves the relationship between the Property Law and the "Guarantee Law" after its implementation. There are many things worthy of affirmation in the provisions of the Property Law, but in the past 10 years since the implementation of the law, after practical testing and theoretical reflection, we found that the Property Law is not perfect, and there are many things worth improving. The compilation of the " Civil Code " in China is underway, the General Principles of Civil Law have been promulgated, and the draft proposals of scholars from various parts have been submitted to the Legal Affairs Committee. In the process of sorting out, pondering and putting forward legislative improvement suggestions for the current civil laws, especially the legal system of property rights guarantee, I personally thought about and found some problems. Here, fourteen more important and controversial issues related to the understanding and application of the security rights system and the improvement of rules were selected for discussion.
1. Easing and applying the principle of legal rights of property rights and identifying new and special guarantee methods
First, the provisions on security rights in new types of guarantees and special legal norms. After the promulgation of the Property Law, economic life has developed new developments, and innovation in social practice is always constantly promoting the development of legislation. In 2004, the Supreme People's Court held a seminar on atypical guarantee legal issues, and invited experts from the academic, financial, judicial practice and other fields to discuss new problems that arise in security rights in practice. There are many new types of guarantee cases in judicial practice, such as the mortgage or pledge of store rental rights in the south, mortgage or pledge of taxi operating qualifications, mortgage or pledge of financial products, pledge of pollution discharge rights, etc. Mortgage or pledge of store lease rights is not a standard legal term, but a situation that occurs in financial practices in the south. A certain kind of store or store leasing right may be worth hundreds of thousands of yuan. It is used as a guaranteed property and is registered internally with the property management agency of the trading market. If the debt cannot be repaid when it expires, it will be auctioned or sold with the store leasing right. This large number of financing methods are accepted by banks, but if a dispute arises, it is a controversial issue. There are different views during the discussion process of this meeting: some believe that the statutory statutory of property rights can be eased. This situation is indeed a reasonable and legitimate need in financial practice. It is better to determine that the creditor has the right to repayment first; but some believe that the statutory statutory right is one of the basic principles of property rights law and cannot be broken arbitrarily. There is no legal guarantee method, and the court should be cautious. It is not advisable to determine that it is a security right before explicit provisions. The contract can be determined to be valid, but the creditor does not have the right to repayment first.
In addition, many legal documents with lower ranks also have many provisions on security rights, such as "private student apartment fee rights pledge", which is not stipulated in laws, administrative regulations or even departmental regulations, but is mentioned in notice documents of the Ministry of Education and the People's Bank of China, and is encouraged. The background is that in the past few years, the population peak was the peak and colleges and universities expanded enrollment. In order to alleviate the employment pressure of high school graduates, the Ministry of Education also required colleges and universities to expand enrollment. The corresponding classrooms, canteens, student dormitories, etc. need to be equipped and built, and construction requires financing. The teaching facilities of public welfare institutions such as schools shall not be used for mortgage or pledge, that is, student dormitory buildings and teaching buildings shall not be used as guaranteed property, otherwise they will be invalid.In order to solve the financing problem, relevant departments encourage the use of student apartment charging rights to pledge to guarantee the repayment of construction funds. If the school fails to repay the bank's corresponding debts when it expires, the bank has the right to directly collect accommodation fees for student apartments and receive priority payment. Financial institutions are more at ease with the pledge, but there is no legal provision to affirm this practice. Another example is the pledge of cemetery charging rights - a company and the local civil affairs department jointly developed a public cemetery. The company first invested 30 million yuan, but the investment in the later stage was insufficient. It planned to pledge the bank with the cemetery's operating and management rights and charging rights. The bank said it was acceptable, but if the company could not repay the loan when it expired and it was incurred other debts, can the bank that obtained the right to obtain the cemetery income be paid first from the auction of the cemetery? This situation also has no corresponding provisions in the law and is an exploratory and innovative method. There are also documents with lower ranks that there is trading and pledge of pollution discharge rights. So can pollution discharge rights be traded or used as a guaranteed property? Individuals initially tend to think that they are franchise qualifications and using this qualification as a guarantee may be inappropriate. Later, after reviewing the relevant regulations, I found that many local regulations and rules have stipulated that pollution discharge rights can be used for transactions. For example, a certain enterprise produces a specific product and the state allows it to emit 100 tons of pollutants per year. The enterprise only uses the 70 tons indicator through energy conservation and emission reduction. This is worthy of encouragement and affirmation. Whether the remaining 30 tons indicators can be cashed or traded? The existing regulations are to allow the transfer of pollution emission rights. Almost all normative documents have not mentioned the pledge of pollution emission rights, but it has appeared in practice. Whether this is recognized in judicial practice is also worth discussing. Therefore, it is worth pondering whether the current provisions on property rights statutory provisions in Article 5 of the Property Law are too rigid, whether they hinder the development of the social economy, and whether there will be some relaxation in the future legislation.
Second, attitude in judicial practice. There is currently no unified opinion on this. According to the draft for soliciting opinions on the relevant judicial interpretation draft formulated by the Supreme Court in recent years, the principle of distinction is proposed to be resolved, that is, in principle, only the validity of the contract is recognized, and the validity of the property rights is not recognized (the right of priority compensation is given). This cautious attitude is understandable, but will this hinder the development of economic life? I think this way of handling is not conducive to promoting the development of related businesses. Whether it is legislation or judicial interpretation, it has not played a positive role in promoting economic development in this field, which is worth reflecting on.
In the relevant provisions of the draft internal draft for soliciting opinions within the Supreme People's Court, the basic spirit includes the determination of security rights: the creditor and the guarantor enter into a security contract, which stipulates that property or property rights such as shop rental rights, taxi management rights, financial products, utility charging rights, etc. that are not prohibited from establishing mortgages or pledges, such as property rights or property rights that are not prohibited by laws and administrative regulations, should be set up as security property, and if the security rights registration is not registered at the statutory registration authority or cannot be registered due to the lack of a clear statutory registration authority, it will not have the property rights against a third party, but the security contract will not be deemed invalid because of this. This is the current attitude. Whether there will be some relaxation in the future can be discussed further. My personal view is to adopt the majority view of the academic community, that is, the statutory easing of property rights, and it is properly expressed in legislation, leaving room for the development of economic life. Regrettably, the provisions of Article 5 of the Property Law on "legality of property rights" were copied in Article 116 of the General Principles of the Civil Law. The General Principles of Civil Law mention "laws and administrative regulations" in many provisions, and even "habits" are used as one of the types of legal sources. Why is the type and content of property rights necessarily limited to "laws" and even administrative regulations are not listed? Is this shrinkage too narrow? Personally, I think it is better to recognize the creation effectiveness of administrative regulations in terms of the types and content of property rights, and even include habits in the legal source of property rights. In addition, the closed guarantee clause of Article 223, Article (7) of the Property Law on the object of the right pledge should be modified to an open guarantee provision, that is, property rights that do not prohibit pledged by laws and regulations can be pledged. This improvement can be said to be a strong call in financial practice.Many relevant meetings in recent years and the model legal texts proposed by the World Bank reflect the unanimous voice of financial institutions, that is, as long as things that can be cashed out should be allowed as a guarantee, risks are controlled by the financial system, and the law only needs to be recognized and stipulated public disclosure methods, and there is no need to be asked about anything else. The same is true in the international financial community. As long as it does not violate the rigid provisions of the law, except for the property that is absolutely prohibited from trading, it may be allowed to be used as guaranteed property.
The "Property Rights Law (Draft)" in my country has loosened the principle of statutory property rights, one of which is stipulated: the right that does not stipulate the laws and administrative regulations, but is in line with the characteristics of property rights and can be publicized in an appropriate manner is deemed as property rights. However, due to the great controversy, it was not written into the legal text in the end. I personally believe that the provision has its own value, and whether further restrictions can be made can be discussed. It is necessary to respond positively to the circumstances deemed to be property rights. Whether the legislation will adopt this statement in the future can be considered. I tend to believe that as long as it does not cause chaos in economic life, does not have an undue impact on the legitimate rights of others, and can be made public in an appropriate manner, we may wish to recognize the priority compensation effect of the security holder.
2. The understanding and application of the "principle of distinction" and its status
First, the problems existing in the "Guarantee Law" and the "Interpretation of the Guarantee Law". The Guarantee Law has misunderstandings and many erroneous provisions on the principle of distinction, such as Article 41: A mortgage contract takes effect when the mortgage registration is handled in accordance with the law, which confuses the relationship between the mortgage contract taking effect and the establishment of mortgage right in terms of expression, and improperly expresses "mortgage registration" or "mortgage registration" as "mortgage registration". In the provisions of Articles 64, 76, 78, 79, etc. of the pledge chapter, there is also a problem of confusing the entry into force of of the pledge contract with the establishment of the pledge right. The correct statement should be that the mortgage contract takes effect when it is established in accordance with the law, and the mortgage right is established when it is registered in accordance with the law. A mortgage contract is a type of contract and the provisions of the Contract Law should be subject to it. The mortgage right is a property right, and its establishment and effect are in accordance with the provisions of the Property Law. The Property Law particularly emphasizes the disclosure of property rights, and strictly speaking, property rights should be established from the time of public disclosure.
The Interpretation of the Guarantee Law has improved this. Article 56, paragraph 2 stipulates: "After the law stipulates that after the mortgage contract that is registered and effective, the mortgagor refuses to apply for mortgage registration in violation of the principle of honesty and trustworthiness, the mortgagor shall bear the liability for compensation." Article 86 stipulates: "If the debtor or a third party fails to transfer the pledge property at the time agreed in the pledge contract, and thus causes losses to the pledgee, the pledgee shall bear the liability for compensation according to his fault." That is, when the mortgage right and pledge right are not established in accordance with the law, the mortgage contract and pledge contract are not a piece of waste paper, and the mortgagor is obliged to apply for mortgage registration for the mortgagee. Those who fail to register in violation of the contract agreement shall bear the liability for compensation. This provision affirms the validity of a contract, not the contract only takes effect when the mortgage right is registered. According to the provisions of the "Guarantee Law", it is obviously inappropriate for the mortgagor to fail to register as agreed in the contract. However, there are still misunderstandings and expressions in the provisions of this interpretation: (1) When a third party provides a mortgage or pledge guarantee but the security right is not established, whether the liability that the mortgagor and the pledgee should bear is a liability for breach of contract compensation is worth considering; (2) The statement of "a mortgage contract that is registered and effective" and Article 87's provisions on "If the pledgee possesses a pledgee, the pledge contract will not take effect", there is still a question of confusing whether the security right is established and the validity of the contract. It was not until the "Property Law" was formulated that the basic relationship between the change of property rights and the effectiveness of the establishment of property rights was truly distinguished, and ultimately reflected in legislation.
Second, provisions of the Property Law, their understanding and application.The Property Law corrects the previous legislation based on vague understanding and misrepresentation, and clearly stipulates in Article 15 that the "principle of distinguishing the effectiveness of changes in property rights and creditor's contracts" (hereinafter referred to as the principle of distinction): "The parties enter into a contract for the establishment, change, transfer and extermination of real property rights, unless otherwise provided by law or otherwise agreed in the contract, and shall take effect when the contract is established; if the property rights registration is not processed, it will not affect the validity of the contract."
The same rules are of course applicable to the relevant provisions on changes in movable property rights. However, Article 15 of the Property Law is stipulated in the section "Registration of Real Estate", and the changes in the property rights of movable property are sporadic provisions. It is necessary to carefully analyze the law to find out the specific application of the principle of distinction, such as the relationship between the sales contract and the transfer of ownership of movable property, the relationship between the pledge contract of movable property and the establishment of pledge of movable property, etc. In addition, the relevant provisions of the Property Law (such as Articles 187, Article 212 and the provisions on the establishment of pledges of rights, etc.) also reflect the same spirit. The only regret is that the legislation has not yet made clearer and more comprehensive provisions on the principle of distinction.
Third, legislative improvement suggestions. In the compilation of the property rights chapter of the Civil Code of our country, I suggest that the principle of distinction be made comprehensive provisions and elevate them to the provisions of general principles or general rules. The proposal article is: "The parties enter into a contract regarding the acquisition, change, transfer and extermination of property rights, unless otherwise provided by law or otherwise agreed in the contract, and shall take effect when the contract is established; if the real estate registration or delivery of movable property is not handled, it will not affect the validity of the contract."
Fourth, an example analysis of the application of the principle of distinction to solve the category and validity of atypical guarantee contracts.
Case 1: The effect of a third party establishing a "pled guarantee" for the debts of others using the house. The creditor had a creditor-debtor relationship of hundreds of thousands of yuan with the debtor. The third party used his real estate as a pledge guarantee for the debtor and handed over the property certificate and key to the creditor to control. The debtor failed to repay the debt. The creditor claimed to cash in the house to pay off the debt. At this time, the pledgee raised an objection and claimed that the law did not allow pledge of real estate, so the pledge was invalid and the pledgee refused to bear any responsibility. The question now is: Is there a piece of waste paper in the pledge contract? Is the third party responsible? Some scholars believe that it is better to identify the guarantee method provided by a third party in this case as a guarantee, and characterize the responsibility of the third party as Guarantee liability . I think it is not appropriate to characterize it as a guarantee liability. At best, it should be characterized as an irregular guarantee, that is, it is similar to a guarantee, but not exactly the same. The guarantee is guaranteed by the guarantor's unspecified general property. In this case, the third party uses the value of the house, which is the specific property, as guarantee, and he bears the guarantee liability only within the scope of the house. The value of the house is not enough to repay the debt, and he is irresponsible for the remaining debts; if the house is lost due to earthquakes, floods, etc., the third party shall not be liable for this, and the corresponding guarantee liability is also exempted. This is fundamentally different from guaranteeing existence. The same thing as guarantee is that in this kind of guarantee, the creditor does not have the right to repay, and only has the effect of the contract law and the debt law, but has no effect of the property law.
Case 2: The effectiveness of the "pled commitment letter" issued by an enterprise using a series of comprehensive property as a guaranteed property. A raised seven or eight million yuan, and invested in a certain investment management company for a few points. Later, the company lost its house and the person in charge of the company was controlled by the public security organs for suspected fraud and illegal fundraising. A and the company have a guarantor Company B in the investment relationship. The main contract mentioned that Company B provides mortgage/pled guarantee. Company B also issued a special "Pledge Commitment Letter", promising to insure the debt between A and the investment management company, and attached a list of guaranteed property including land use rights, factories, machinery and equipment, raw materials, etc., covering real estate and movable property, etc., but the real estate in it has not been registered and the movable property has not been transferred to possession. In the arbitration, in order to avoid the issue of public announcement, A's agent advocated that Company B should only bear the mortgage guarantee liability for the movable property in the pledge commitment letter. However, since Company B's letter of commitment did not appear in the word "mortgage", the claim was not supported. However, the guarantee contract in this case should be valid and Company B shall bear the corresponding responsibilities.Next, I will discuss issues such as the nature of the guarantor's responsibility in this situation.
Fifth, if the security right is not established, the nature and scope of liability of the third party who provides the guarantee of the property are issues. Article 56, Paragraph 2 of the Interpretation of the Guarantee Law: "After the law stipulates that after the mortgage contract that is registered and effective, if the mortgagor refuses to apply for mortgage registration in violation of the principle of honesty and trustworthiness, the mortgagor shall bear the liability for compensation." Article 86: "If the debtor or a third party fails to transfer the pledge property at the time agreed in the pledge contract, and therefore causes losses to the pledgee, the pledgee shall bear the liability for compensation based on his fault."
has an impact on the result because the qualitative effect on the result, so the liability is liability for compensation or guarantee liability, which should be discussed. This is not a purely theoretical issue or a game of words, but has practical significance. In the above case 2, it is assumed that Company B shall bear the liability for breach of contract compensation, and there is another guarantor in the debt. Regardless of whether it is registered or not, is there any common guarantee relationship between the two guarantors, whether there is a mutual compensation or sharing of losses? If there is a counter-guarantee, is the counter-guarantee valid? Assuming that both the debtor and the third party provided mortgage guarantees and were not registered, what is the relationship between them? Personally, I believe that if it is determined as liability for breach of contract, many issues cannot be explained clearly, so it should be a guarantee liability, which is similar to a guarantee, but is not exactly the same as a guarantee.
The Supreme People's Court's "Interpretation on Several Issues Concerning the Application of Laws in the Trial of Security Right Disputes Cases" (Draft Discussion in April 2013) Article 30 (Liability for Breach of Contract Refusal to Register) stipulates: If the law stipulates that after the mortgage contract for registering a mortgage right is signed, the mortgagor shall bear the liability for compensation for breach of contract after the mortgage contract is signed with a mortgage right that the mortgagor refuses to register the mortgage right as contract. Article 56, paragraph 1, Article 57 and Article 86 of the Judicial Interpretation of the Guarantee Law mentioned above all adopt the view that liability for compensation is liable.
, but Article 56 of the other draft judicial interpretation regarding the identification of security rights: If the creditor and the guarantor enter into a security contract, agreeing to use property or property rights such as shop rental rights, taxi management rights, financial products, utility charging rights and other property rights that are not prohibited by laws and administrative regulations, as the security property, and set up mortgages and pledges, but fail to register with the statutory registration authority or cannot register due to the lack of a clear statutory registration authority, it will not have the property rights against a third party, but the security contract will not be deemed invalid. If the parties request to repay the debt in accordance with the provisions of the guarantee contract, the price of the guaranteed property, the price of the auction proceeds, etc., it shall be supported. I personally agree with this view.
In many cases of the Supreme Court and the District Court, there has been a situation where "different judgments are made in similar cases": some judges that the third party bears the guarantee liability; some judges that the breach of contract liability; some judges that the guarantee property value shall be within the scope of the guaranteed property agreed in the contract; some directly convert the third party's guarantee contract into a joint and several liability guarantee contract. On this issue, the following points should be clarified: 1. Are the mortgage or pledge rights established between the parties established in accordance with the law? 2. How should the validity of the guarantee contract (mortgage contract, pledge contract, pledge commitment letter) between the parties be determined? 3. How to understand the nature and scope of liability when a third party provides a guarantee but fails to effectively establish a security right?
Personally believes that the guarantee contract is still valid without registering real estate mortgage or transfer of movable property, but the mortgage right and pledge right are not established, and the guarantee contract between the parties is valid, but the creditor does not have the right to repay the secured property.
The security right failed to be established. There are unilateral reasons, both parties, subjective reasons, objective reasons and other reasons. The nature of the liability of the property guarantor also has different views on breach of contract (compensation) liability or guarantee liability, which has been discussed above. Is the scope of liability of the guarantor limited to the value of the guaranteed property? Personally, I believe that the value of the guaranteed property should be limited to the limit. Regarding the form of liability, is it joint and several liability or limited joint and several liability? Or is it not really joint and several liability? Or is it parallel or parallel liability? The Supreme People's Court has a jurisprudence that directly converts it into a guarantee of joint and several liability.From a certain perspective, this is very similar to joint and several liability. For example, the real estate mortgage guarantee provided by a third party has a debt of 10 million yuan and the value of the guaranteed property is no less than 10 million yuan. The creditor can not only ask the debtor to repay, but also require the third party to assume the guarantee liability for the guarantee property. As far as creditors can claim liability for repayment from either, it seems to be similar to joint and several liability. However, the General Principles of the Civil Law restricts the aggravated liability of joint and several liability, that is, joint and several liability shall be stipulated by law or agreed upon by the parties. Therefore, in this case, it does not conform to the legal principles of determining joint and several liability. Moreover, if it is deemed to be joint and several liability, can the third party claim compensation from the debtor after assumed the guarantee liability to the creditor? Personally, I believe that a third party should have the right to recover , and there is no issue of proportional liability between the debtor and the third party when seeking compensation, so there is a difference between it and joint and several liability. If you hold the view of "liability for breach of contract compensation", there is no issue of recovery. Therefore, the characterization of responsibility is also closely related to the right to seek compensation. What kind of responsibility is? I personally think that it is better to innovate a new term to describe this form of responsibility: parallel responsibility or parallel responsibility. This kind of liability is reflected in the Tort Liability Law and other relevant laws, but this term does not summarize it from me.
3. The issue of the choice of the transfer guarantee system, the effectiveness of the sale type guarantee and the limited opening of the liquid contract
First, the issue of the choice of the transfer guarantee system. During the formulation of my country's "Property Law", there was great controversy over whether the transfer guarantee system should be introduced. In the end, the system did not gain a place in the "Property Law". However, there is still debate about whether to establish a transfer guarantee in the property rights system and how to establish it, especially what problems in reality should be solved, after the promulgation of the Property Law. Individuals have previously held a negative attitude towards the establishment of this system, believing that the effectiveness of this system in foreign legislation or judicial practice has been achieved in other systems (mainly the movable property mortgage system and the right pledge system) in my country, and there is no need to repeatedly introduce this system. But now my attitude has changed. I believe that the transfer guarantee should not be on theoretical issues such as concepts and requirements, but should discuss the reasons for the introduction, and what problems are introduced to the system used to solve, and under what circumstances it is intricate or difficult to solve problems will arise. This is the most important thing. Now it seems that at least one place is valuable to introduce this system, that is, Article 164 of the revised draft of my country's Securities Law stipulates: "In order to ensure the realization of a debt, the debtor or a third party may transfer the securities it holds to the creditor, and after the debt is paid, the securities will be returned to the debtor or a third party; if the debt is not fulfilled, the security holder has the right to be paid first for the securities." "If a guarantee is established in accordance with the provisions of the preceding paragraph, the transfer of the securities shall take effect when the securities registration and settlement agency handles the securities change registration. The transferred securities are trust property. If a guarantee is established in accordance with the provisions of the first paragraph, the security holder may use or dispose of the security securities in accordance with the provisions of the guarantee contract; the security holder shall return the same securities or other securities agreed by both parties to the guarantor after the main contract is performed." This article is designed in accordance with the rules of assignment and guarantee. If securities are used as guarantees, the creditor may dispose of or use the guaranteed securities during the guarantee period without the consent of both parties. After the debt is paid off, the creditor will return the same securities or other securities recognized by both parties. That is, during the transfer period, the rights of the securities are transferred. This is also done in practice. If this draft provision is passed, it will be the first legislative affirmation of the transfer guarantee system in my country, and it can be foreseeable that it will expand in the scope of application in the future. What other similar situations need to be solved by a system structure of transfer guarantees, and they still need to be investigated, but I believe there are definitely some.
Second, regarding the effectiveness of buying and selling guarantees. This is a similar issue to assignment guarantee. In recent years, in financial and judicial practice, a large number of problems have encountered in establishing sales-based guarantees based on houses or equity. If the debt is failed to perform due diligence, the equity or real estate shall belong to the creditor.Another thing is to first transfer the property rights to the creditor's name. If the maturing debt is paid, the ownership will be returned. Otherwise, the claim is equivalent to the consideration of the property rights, that is, it is equivalent to the performance of the sales contract. In trial practice, the Supreme People's Court has two typical cases: one is the contract dispute between Zhu Junfang and Shanxi Jiahetai Real Estate Development Co., Ltd. for commercial housing sales, the Civil Judgment No. 344 of the Supreme People's Court (2011) (Judgement date 2012.12.08); the other is the contract dispute between Guangxi Jiamei Real Estate Development Co., Ltd. and Yang Weipeng for commercial housing sales, and the Civil Judgment No. 135 of the Supreme People's Court (2013) (Judgement date 2013.11.19). The first jurisprudence believes that the sale guarantee is valid, while the second jurisprudence believes that the sale guarantee is a lien mortgage clause and should be invalid. Some people believe that the two cases have different judgments, while others believe that the results are different because the case is different.
Article 24 of the Supreme People's Court's "Regulations on Several Issues Concerning the Application of Laws in the Trial of Private Lending Cases" (Fashi [2015] No. 18) also stipulates this situation: "If the parties use the signing of a sales contract as a guarantee for the private lending contract, the borrower cannot repay the loan after the loan expires, and the lender requests to perform the sales contract, the people's court shall hear it in accordance with the legal relationship between private lending and explain to the parties the change. Litigation request. If the parties refuse to change, the People's Court shall rule to dismiss the lawsuit. "After the judgment made in accordance with the legal relationship of private lending takes effect, if the borrower fails to perform the monetary debt determined in the effective judgment, the lender may apply for the auction of the subject matter of the sale contract to repay the debt. The borrower or lender has the right to claim return or compensation for the difference between the price obtained from the auction and the principal and interest of the loan to be repaid." This provision should be said to be somewhat conservative.
The attitude of the relevant judicial interpretation draft draft draft draft is: if the parties reach an agreement to use property to offset debts before the expiration of the debt performance period, and the debt-deposited property has not been delivered yet and the creditor requests the debtor to fulfill the delivery obligation, it shall not be supported in accordance with the relevant provisions of the Property Law on prohibiting liquidation and liquidation; if the debt-deposited property has been delivered to the creditor and the debtor requests the creditor to fulfill the liquidation obligation or claim redemption, it shall be supported. Regarding the issue of debt repayment with property agreed upon after the expiration of the debt performance period, the draft judicial interpretation mentioned two plans: Plan 1: If the parties reach an agreement to repay debt with property after the expiration of the debt performance period, the debt repayment property has not been delivered to the creditor, and one party repents, and the other party requests to perform the debt repayment agreement, it should be supported; if the debt repayment property has been delivered to the creditor, and the parties repent, it will not be supported. Plan 2: If the parties reach an agreement to pay off debts by property after the expiration of the debt performance period, the debt-deserved property has not been delivered to the creditor, and one party repents and the other party requests to perform the debt-deserved agreement, it will not be supported; if the debt-deserved property has been delivered to the creditor, and the parties repent, it will not be supported. I do not advocate the use of the second solution, and the statement of the content of this article is not smooth. I agree with the first option, and at the same time, it is recommended to add, Article 195 of the Property Law regarding that "if the agreement harms the interests of other creditors, other creditors may request the people's court to revoke the agreement within one year from the date of knowing or should know the reason for revocation."
Third, the issue of limited opening of liquid contracts and litigation contracts. Sales-based guarantees are very common in current practice, and there are many related cases. Why does this happen? I personally believe that there is indeed a suspicion of the parties evading the legal provisions of litigation and liquidity prohibition. However, when most people are evading a certain provision in practice, it is likely that there is a problem with the provision itself, and the legislators should review it. When the Property Law was formulated, several plans were proposed on how to reduce the cost of realizing security rights, one of which was the issue of limited opening of liquid contracts and lien contracts. Another is that the security holder can directly apply for compulsory enforcement by the court to implement the mortgage right without passing a lawsuit. Later, the Property Law adopted the latter method (Article 195, Paragraph 2). Subsequently, the Civil Procedure Law and its interpretation further stipulate the special procedures for realizing security rights.However, whether the goal of reducing costs and improving efficiency has been achieved, I personally believe that judging from the large number of liquid contracts, liquid deposit contracts and their disguised debt repayment agreements, sale-based guarantees, and "post-transfer guarantees" phenomena that still exist in current financial practices, this goal has not been fully achieved, and the parties are still seeking faster and cheaper solutions to resolve their rights and obligations.
The current exception provision is the special provision in Article 43 (II) of the "Pawn Management Measures" (Ministry of Commerce and Ministry of Public Security Order No. 8 of 2005): If the estimated amount of the absolute item is less than 30,000 yuan, the pawnshop may sell it on its own or deal with it at its own discount, and shall bear the profit and loss at its own expense. The legal level of this provision should be a departmental rule. The relevant institutions have proposed to raise the method to administrative regulations and appropriately increase the limit (for example, to an estimated amount of RMB 100,000 or RMB 50,000). However, due to conflicts with the prohibited provisions of the law, it was ultimately not adopted and is still on hold.
Regarding the validity of liquid clauses, lien clauses and property-based debt settlement agreements, I argue that in order to reduce the cost of realizing mortgage rights and pledge rights, the effectiveness of such clauses can be recognized conditionally in the Civil Code in the future, with the condition that the interests of other creditors shall not be harmed. Otherwise, other creditors may request the people's court to revoke the agreement within one year from the date of knowing or should know the reason for revocation. Referring to Article 195 of the Property Law, the provisions of the proposal I made are: "Before the expiration of the debt performance period, the creditor and the mortgagor or the pledgee agree that the guaranteed property shall belong to the creditor when the debtor fails to perform the due debt. If the performance of the agreement harms the interests of the mortgagor, the pledgee or other creditors, the mortgagor, the pledgee or other creditors may request the people's court or arbitration institution to revoke within one year from the date of knowing or should know the reason for revocation. If the parties fail to exercise the right of revocation within five years from the date of conclusion of the contract, the right of revocation shall be extinguished." "If laws and administrative regulations have other provisions on pawn business, they shall be in accordance with their provisions." Key points of the rules for limited liquid clauses on the restricted liquid clauses: ⑴ The period and starting point of the right of revocation are "one year from the date of knowing or should know the reason for revocation." ⑵ The criterion for judging the price comparison relationship between the value of the pledged property and the amount of the secured debt is "the performance of the agreement harms the interests of the mortgagor, the pledgee or other creditors." If the ratio of the value of the secured property and the amount of the debt is seriously unbalanced and obviously unfair, the criterion for judging the judicial interpretation of the Contract Law can be limited to 30% of the provisions of the Supreme Court on the judicial interpretation of the Contract Law; the time point shall be based on the debt maturity date, that is, when the liquid clause is actually started to be performed, and the price comparison relationship between the mortgaged or pledged property and the guaranteed debt amount will change before and after. ⑶The above design also has an important potential intention, that is, to reserve space for conditionally acknowledging the effectiveness of the sale-based guarantee agreement and the transfer of guarantee agreement through legislation or judicial interpretation in the future. As long as the agreement does not seriously harm the interests of others, it is legally advisable to recognize its effectiveness and simplify complex issues. ⑷ Integrated grasp of the effectiveness of liquid and liberalization clauses. The provisions of liquidity and pledge clauses in the Property Law respectively stipulate that they are in the provisions of the mortgage and pledge. Personally, it is recommended that you consider combining these two parts into one provision and placing their location in the general provisions of the security rights seal.
Another plan suggested by scholars who participated in the draft legislation is to allow limited lien contracts and add compulsory liquidation procedures, and the provisions of lien contracts shall be used for liquid contracts. This plan is consistent with my plan in the direction of limited liquidity and liquidity clauses, but the details are different. What should be done is yet to be decided by the legislature. It should be noted that legislative suggestions are only legislative suggestions and have not yet been elevated to the legislative level. However, when dealing with similar issues in practice, it is not advisable to be invalid for all transaction-based guarantees and acts of evading the prohibition of liabilities. As long as it does not harm the legitimate rights and interests of others, it is better to be lenient and respect the parties' autonomy. Because no matter whether it is an agreement in advance or an negotiation in the afterwards, the legitimate rights and interests of other people shall be harmed. This is a basic principle.
4. Several common rules on guarantees and their application issues
According to the current legislative situation, after the Civil Code is passed, the Guarantee Law will be completely abolished. The provisions on guarantees and deposits in the Guarantee Law are included in the contract section, while mortgage rights, pledge rights, lien rights, etc. are included in the property rights section. But there is also a problem with this plan, that is, there are indeed some common rules for guarantees. The Guarantee Law has been abolished, where are these common rules stipulated? Some scholars suggest that some common provisions on guarantees shall be made in the order of the contract and the property rights, or some common provisions on guarantees shall be used for mortgage rights and pledge rights; or some common provisions on guarantees shall be stipulated in the general provisions of the security rights part of the property rights, and shall be used for guarantees. Some scholars also suggest that a separate "guarantee section" is established in the Civil Code, and many people hold this claim. What should be done in the end is left to the legislature for consideration. However, the common rules for guarantees still need to be stipulated. There are many common rules for guarantees, such as attachment, relative independence, etc., which will not be pointed out or listed here one by one. We will only focus on the application of the following common rules:
first, whether the material guarantor can invoke the guarantor's right of defense. For example, the creditor and the debtor agree to repay the new loan, defraud a third party of mortgage guarantee, and apply for mortgage registration. In this case, can the mortgagor be exempted from liability? Article 30 of the Guarantee Law and Article 39 of the Interpretation of the Guarantee Law have explicit provisions on the new loan in the guarantee, whether the guarantor is the original guarantor, and whether the guarantor is responsible. But the question now is that it is not a third party that provides the guarantee, but a third party that provides the mortgage guarantee and registers. Can the third party claim disclaimer? The current laws and judicial interpretations do not clearly stipulate this, resulting in legal loopholes. We believe that the rules of these situations are consistent, that is, the guarantor of the material can also claim disclaimer. For example, Article 23 of the Guarantee Law stipulates the impact of debt transfer on guarantee liability. So if the third party provides a mortgage guarantee, can he claim exemption in this case? Article 24 of the "Guarantee Law" stipulates the impact of the change of the debt on the guarantee liability. Can it be applied to mortgage and pledge guarantees provided by third parties? There is no provision in the current law. Personally, I believe that the principles are the same and the same rules should be applied.
Second, the rules for the right of recovery and subrogation between co-guarantors. In practice, it is very common for a debt to have multiple guarantees, and the key to solving the rules of dealing with multiple guarantee relationships. There are some controversies in theory and practice on this issue. For example, does the composition of a joint guarantee require several guarantors to have the intention to jointly provide a guarantee? If more than two guarantors do not know that they have provided guarantees to each other, they will not know until the lawsuit occurs, is this situation considered a joint guarantee? Have different opinions on this. Individuals tend to believe that the composition of a joint guarantee does not require several guarantors to express intention or contact with each other to provide a guarantee. As long as there are more than two guarantees objectively in the same debt, it constitutes a joint guarantee. The forms of common guarantee include joint guarantee, joint mortgage, and joint pledge composed of a single guarantee method, as well as guarantee and mortgage coexistence of mixed guarantee methods, guarantee and pledge coexistence, mortgage and pledge coexistence, etc. For the basic issues of joint guarantee, please refer to my article "Structural form of joint guarantee and the assumption of guarantee liability" (Published in "Chinese Law" No. 2, 2003). Article 12 of the Guarantee Law has provisions on joint guarantees, and Article 28 has provisions on the coexistence of guarantees and property guarantees. Article 20, paragraph 2 and Article 38 of the Interpretation of the Guarantee Law also have relevant provisions. It should be noted that according to Article 12 of the Guarantee Law and Article 20, paragraph 2 of the Interpretation of the Guarantee Law, in the joint guarantee, the guarantor who has assumed the guarantee liability has the right to seek compensation from the debtor or require other guarantors who bear joint and several liability to repay the share they should bear. Article 28 of the Guarantee Law on the coexistence of property insurance was abolished by the later Property Law.Article 38 of the Interpretation of the Guarantee Law stipulates that if the same claim has both a guarantee and a guarantee provided by a third party, the creditor may request the guarantor or the guarantor of the property to bear the guarantee liability. If the parties have no agreement on the scope of the guarantee guarantee or the scope of the guarantee of the property or the agreement is unclear, the guarantor who assumes the guarantee liability may seek compensation from the debtor or require other guarantors to repay the share they should share. The provisions of the Property Law are different from those of Article 38 of the Interpretation of the Guarantee Law. Article 176 of the Property Law stipulates the coexistence of PICC and property protection. The main meaning of this article is to follow the agreement if there is an agreement. If there is no agreement or the agreement is unclear, if the debtor himself provides a guarantee of the property, the creditor shall first realize the claim on the guarantee of the property; if a third party provides a guarantee on the property, the creditor may realize the claim on the guarantee of the property, or may require the guarantor to bear the guarantee liability. If a third party providing the guarantee assumes the guarantee liability, he or she has the right to seek compensation from the debtor. What should I do if I cannot seek compensation from the debtor? This article does not stipulate. According to the spirit of the legislation, it can be said that Article 176 of the Property Law actually abolished the original provisions of the Guarantee Law and the Interpretation of the Guarantee Law, and did not recognize the right to claim sharing losses between several guarantors. There is actually another question here. How to understand and coordinate the rules on joint guarantees in Article 12 of the Guarantee Law and Article 176 of the Property Law? What is the right to claim loss sharing among several guarantors in the joint guarantee, but the situation where the civic insurance and property protection coexist or the legally do not recognize the guarantors' right to claim loss sharing among each other?
gives an example to illustrate whether the provisions of Article 176 of the Property Law are appropriate. There are two guarantees for the same debt: Company A is the creditor, Company B is the debtor, Company C is the guarantor, and Company D is the mortgagor. When the debt expires, debtor B is unable to repay the debt, creditor A aims at guarantor C asserts rights. According to Article 176 of the Property Law, if the guarantor bears the liability for repayment on his behalf, he can only seek compensation from the debtor. The debtor is obviously unable to repay the debt, and the guarantor will definitely suffer significant losses. In order to protect his own interests, the guarantor came up with a plan. The guarantor actively repays the debt to the creditor through another affiliate E, and requires the creditor to transfer the debt to E. The mortgage right is transferred to E, and then the rights are claimed from the mortgagor. There are no legal obstacles to this plan. According to this plan, the mortgagor will be the final loss. There is another question in this case, which is whether transfer registration should be handled when the mortgage right is transferred with the debt? If you do not apply for transfer registration, what are the consequences? Such controversies have also emerged in large numbers. According to the provisions of the current law, if the principal debt is transferred, the mortgagor can be notified, and the consent of the mortgagor does not need to be obtained. Failure to register for transfer does not mean that the mortgage right is gone. At the same time, the creditor may require the mortgagor to register first and then claim the mortgage right. Going back to this case itself, if the mortgagor also operates in accordance with the guarantor's method, while actively repaying the debt, the creditor is required to go through the creditor's transfer procedures, and the guarantee will also be transferred with it. How to deal with it in the end? Regarding the above issues, I personally argue that based on the principle of shared guarantee and the two common rules of "sharingism" or "subrogationism", in order to safeguard the fair interests of each guarantor, if the guarantee contract does not clearly stipulate the exclusion, the guarantor who assumes the guarantee liability can claim the part that cannot be paid from the debtor, and other guarantors may require other guarantors to bear the share they should share. This issue needs to be resolved in the formulation of the Civil Code. At the same time, in terms of title, I suggest distinguishing between the "right to claim", "right to claim subrogation" that requires other guarantors to share the losses, and the "right to claim subrogation" and "right to claim subrogation" for the debtor.
Third, in the case of bankruptcy, the advance exercise of the right of recovery of the property guarantor. Article 32 of the Guarantee Law stipulates that if the people's court accepts a bankruptcy case for the debtor and the creditor fails to declare the debt, the guarantor may participate in the distribution of bankruptcy property and exercise the right of recovery in advance. The problem now is that if a third party provides mortgage or pledge guarantee, there are no similar regulations.Personally, if a third party provides a mortgage pledge guarantee, the principle is the same and should also have the right to recover.
Fourth, there are several guarantees for the same debt. The creditor waives one of the guarantees, what are the consequences? Regarding this issue, the Interpretation of the Guarantee Law already stipulates that if a creditor fails to exercise his rights, it will be deemed to have a waiver of the guarantee and others will be exempted from liability. If the law stipulates that there is a guarantee period or the parties agree that there is a guarantee period, and the creditor fails to assert the rights of the guarantor, resulting in the guarantee period exceeding the guarantee period, can other guarantors claim corresponding exemption? I think the principle is the same.
Fifth, the ranking of the right pledge for registration and establishment. The current law clearly stipulates the order of mortgage rights, that is, when a property is deducted, how to arrange the order of mortgage rights will be handled in accordance with Article 199 of the Property Law. However, in the pledge of rights, there is no rule for ranking. The question now is, can more than two rights pledges be registered on the same property rights? From the perspective of legal principles and practice, of course it is possible. For example, when pledging property rights in patent rights, there may be multiple registered rights pledges. Personally, I believe that the ranking of the mortgage rights should be used for the ranking of the pledges of these registered rights.
5. How to view the amount of claims recorded in other rights certificates
A few years ago, a lawyer asked me about a case like this: the creditor-debtor relationship is clear, the mortgage right is also registered, and the registration agency issued another rights certificate or mortgage right registration certificate. The structural design of the mortgage certificate includes columns such as creditors, debtors, mortgagors, time, amount of claims, and notes. Among them, the amount of the debt is 30 million. The 30 million yuan is the principal amount, and there is no record of interest, liquidated damages, and the cost of realizing the security right. Later, when a dispute arose between the parties, the mortgagee litigated to the court, claiming that the mortgaged property would be paid first with the principal, interest, liquidated damages, and the expenses for realizing the security rights. The court ruled that it only supports the priority right of 30 million yuan, and that the others will not be supported and treated as ordinary debt. During the court trial, the judge asked why the interest, liquidated damages, and the expenses for realizing the security rights were not recorded at that time. The parties said that the registration agency did not provide records, and even the remarks column did not allow these contents to be recorded. Later I found that this phenomenon is not an isolated case and is very common. The other rights certificate forms provided by the registration agency often only have one principal, no interest, liquidated damages, and fees for realizing security rights. The substantive question here is that the other rights certificates produced by the registration agency have had a significant impact on the protection of the interests of the parties. Who is the responsibility? In accordance with the provisions of the current law, if the parties have an agreement on the scope of guarantee, they shall follow the agreement; if there is no agreement, they shall follow the provisions of the law. The scope of guarantee stipulated by law includes principal, interest, liquidated damages, and the expenses for realizing security rights. If there is no agreement in the contract, it shall be stipulated in accordance with the law, that is, the scope of the security right shall include all the above expenses. In practice, some courts are cautious not only based on the records of other rights certificates, but also check the records of the original registration book. If the original registration book records interest, liquidated damages, costs of realizing security rights, etc., the claim of the security rights holder will be supported. If neither the other right certificate nor the original registration book is recorded, only the claim of principal is supported. Personally, I believe that the consequences of the registration agency's certificate design problem should not be imposed on the parties involved. The records in the certificate column are only records of the principal amount, not limiting the scope of the guarantee. Therefore, it is possible to fully recognize the security holder's right to receive priority payment in accordance with the contract agreement and legal provisions.
Edited by: Fu Dehui
