On the issue of competing mortgage and pledge rights

Legal analysis: 1. The requirements for establishment and the requirements for maintenance are different. In addition to the signing of the mortgage contract, the establishment of the mortgage right is in principle conditional on the registration of the mortgage.

For the establishment of the pledge, in addition to signing the pledge contract, the pledgor shall hand over the pledge to the creditor for possession in accordance with the pledge contract. 2. The subject matter is different. The subject matter of the mortgage is immovable property, usufruct of immovable property and movable property; The subject matter of the pledge is movable property and other property rights other than the usufructuary right of immovable property, including property rights such as creditor's rights, equity rights, and intellectual property rights.

3. The difference between a mortgage and a pledge is whether to transfer the possession of the secured property.

Legal basis: Article 394 of the Civil Code of the People's Republic of China stipulates that in order to guarantee the performance of a debt, if the debtor or a third party does not transfer the possession of the property and mortgages the property to the creditor, the debtor fails to perform the due debt or the mortgage is realized as agreed by the parties, and the creditor has the right to be repaid in priority for the property. The debtor or third party provided for in the preceding paragraph is the mortgagor, the creditor is the mortgagee, and the property provided for by the guarantee is the mortgaged property.

1. Does the mortgage have priority over the pledge?

A mortgage does not necessarily take precedence over a pledge.

There are two security interests in the same movable property that can coexist: one is a mortgage and the other is a lien. According to Article 456 of the Civil Code, if a mortgage or pledge has been created on the same movable property, and the movable property is again liened, the lienholder shall be compensated in priority.

Even the right of purchase money mortgage under Article 416 of the Civil Code shall not have priority over the right of lien.

For example, Article 25 of the Maritime Law stipulates that the priority of a ship shall be repaid before the lien of the ship, and the mortgage of the ship shall be repaid after the lien of the vessel.

2. What are the contents of the priority of mortgage repayment?

On the one hand, the mortgagee is entitled to be paid in priority over the ordinary creditor for the sale of the collateral compared to the ordinary creditor of the debtor. When the debtor is declared bankrupt, the mortgagee has the right of exclusion and can still be repaid in priority for the mortgaged property.

On the other hand, compared with the debtor's other mortgagees, the order in which the mortgage is registered is different, and the order in which the creditor is paid is also different; A registered mortgagee is paid before an unregistered mortgagee.

3. What are the mortgaged properties that are preferentially repaid?

a) Property that is allowed to be mortgaged.

According to Article 180 of the Civil Code, the property that is allowed to be mortgaged can be roughly divided into: immovable property, immovable property and other property rights, movable property and other property not prohibited by laws and administrative regulations.

2) Property that is prohibited from being mortgaged.

1 Land ownership;

2. Collective land use rights such as cultivated land, homesteads, self-reserved land, and self-maintained mountains;

3. Educational facilities, medical and health facilities, and other public welfare facilities of non-profit legal persons established for the purpose of public welfare, such as schools, kindergartens, and medical institutions;

4. Property whose ownership or right to use is unclear or disputed;

5. Property that has been sealed, seized, or supervised in accordance with law;

6. Other property that shall not be mortgaged as stipulated by laws and administrative regulations. According to Article 456 of the Civil Code, if a mortgage or pledge has been created on the same movable property, and the movable property is again liened, the lienholder shall be compensated in priority.

According to Article 394 of the Civil Code of the People's Republic of China, which came into effect on January 1, 2021, in order to guarantee the performance of a debt, if the debtor or a third party does not transfer the possession of the property and mortgages the property to the creditor, the debtor fails to perform the due debt or the mortgage rights are realized as agreed by the parties, and the creditor has the right to be repaid in priority for the property. Article 425 of the Civil Code of the People's Republic of China provides that if the debtor or a third party pledges its movable property to the creditor for the possession of the debt in order to guarantee the performance of the debt, and the debtor fails to perform the due debt or the pledge is realized as agreed by the parties, the creditor has the right to be repaid in priority for the movable property.

1. The mortgage right and the pledge right are both security interests.

2. Both mortgage and pledge shall be signed in writing as a mortgage contract or pledge contract.

3. It shall not be stipulated in the contract that when the debt performance period expires and the mortgage or pledge is not repaid, the ownership of the mortgage or pledge shall be transferred to the mortgagee or pledgee.

4. Both the mortgage contract and the pledge contract have provisions for registration with the relevant departments.

5. If both the collateral and the pledge must be registered, the mortgage contract and the pledge contract shall take effect from the date of registration.

6. The mortgage and pledge rights exist at the same time and are extinguished at the same time as the creditor's rights secured by them.

7. If the mortgage right is extinguished due to the loss of the mortgage, the compensation obtained due to the loss shall be regarded as the mortgaged property; If the pledge is extinguished due to the loss of the pledge, the compensation obtained due to the loss of the orange key shall be regarded as the pledged property.

8. The scope of mortgage guarantee includes the main creditor's right and interest, liquidated damages, damages and the cost of realizing the mortgage right; The scope of the pledge security includes the main creditor's right and interest, liquidated damages, damages, custody costs of the pledge and the cost of realizing the pledge.

9. The part of the price of the collateral discounted or auctioned or sold in excess of the creditor's right shall be owned by the mortgagor, and the debtor shall make up the shortfall; The part of the price discounted or auctioned or sold in excess of the creditor's right shall be owned by the pledgee, and the debtor shall make up the shortfall.

10. Regardless of mortgage or pledge, when the debtor fails to perform its obligations, the creditor has the priority right to be repaid for the discount of the mortgage or pledge or the auction or sale price.

11. When the mortgagor transfers the registered mortgage, it shall notify the mortgagee and inform the transferee that the transferred property has been mortgaged, and if the mortgagor fails to notify the mortgagee or the transferee, the transfer shall be invalid; ** It shall not be transferred after the pledge, except for the agreement of the pledgee and the pledgee before the pledgee. After the property rights in the trademark right, patent right and copyright are pledged, the pledgor shall not transfer the pledgee, except for the agreement of the pledgor and the pledgee, and the proceeds of the transfer shall pay off the creditor's rights in advance.

12. The collateral is not transferred to possession; The pledge is set by **pledge, and due to the electronic market, there is no need to transfer possession.

13. The mortgagor may set up a mortgage with the right to use state-owned land, the right to use the house, and other rights that have the right to dispose of it in accordance with law; The pledgee takes bills of exchange, checks, promissory notes, bonds, etc. Pledge and mortgage rights need to be handled strictly on the basis of actual rights matters, and also need to be dealt with according to the consequences of the determination of rights, especially the matters identified by different rights are different, and legal liabilities need to be pursued for illegal acts, and the two parties can sign relevant contracts to determine the relevant matters.

Legal analysis: If the mortgage right and the pledge right coexist, the priority shall be determined by distinguishing the order of establishment.

Legal basis: Civil Code of the People's Republic of China

Article 429:The right of pledge shall be established when the pledgor delivers the pledged property.

Article 436:Where the debtor performs its debts or the pledgor pays off the secured creditor's rights in advance, the pledgee shall return the pledged property. In the event that the debtor fails to perform the due debts or the parties agree on the realization of the pledge with an empty core, the pledgee may negotiate with the pledgor to discount the pledged property, or may give priority to the repayment of the price obtained from the auction or sale of the pledged property. Where the pledged property is discounted or sold, it shall refer to the market**.

Summary. The act of the security right holder causes the handling of competing security interests.

That is, there is already a security interest in a collateral, and the guarantor has created more than one security interest in it through its own conduct. In this case:

1. If there is a mortgage first, it is impossible to create a pledge, lien or mortgage.

In the case of a mortgage, the holder of the security right does not take possession of the collateral, and of course it is not possible to transfer possession of the mortgage and create another pledge or lien. At the same time, since the mortgage cannot be transferred separately from the claim or used as security for other claims, it is not possible for the bearer to create another mortgage with the mortgage as the subject matter.

2. If there is a pledge first, it is divided into three situations:

First, if a mortgage is created again, the law does not expressly stipulate that it is not possible in principle. However, from a legal point of view, if the consent of the guarantor is obtained, the mortgage has priority over the pledge.

Second, if the pledge is established again, it is promised that the pledge can be transferred, and the pledge right has priority. However, the transfer of liability is invalid.

Why is the pledge priority of the competing security interests pledged first and then mortgaged?

Hello, what is the principle of competing security interests: security interests are the rules for dealing with competing security interests. That is, there is already a security interest in a collateral, and the guarantor has created more than one security interest in it through its own Kuankai behavior.

In this case: 1. The lien has the highest priority to be repaid (it can also be said to have priority over the mortgage); 2. The registered mortgage has priority over the pledge; 3. Pledge takes precedence over unregistered mortgage.

The act of the security right holder causes the treatment of competing security interests, that is, there is already a security interest in a security object, and the security right holder has created more than one security interest in it through its own conduct. In this case: 1. If there is a mortgage first, it is impossible to give rise to a pledge, lien or mortgage.

Because in the case of a mortgage, the security holder does not take possession of the collateral, and of course it does not transfer the possession of the collateral and create another pledge or lien. At the same time, since the mortgage cannot be transferred separately from the claim or used as security for other claims, it is not possible for the bearer to create another mortgage with the mortgage as the subject matter. 2. If there is a pledge first, it is divided into three situations:

First, if a mortgage is created again, the law does not expressly stipulate that it is not possible in principle. However, from a legal point of view, if the consent of the guarantor is obtained, the mortgage has priority over the pledge. Second, if the pledge is established, it is promised that the pledge can be transferred, and the pledge right is preferentially matched and defeated.

However, the transfer of liability is invalid.

Pledge first and then mortgage is the priority of pledge.

Hello, when the mortgage and pledge of the same property are legally registered, the mortgagee has priority over the pledgee to be compensated.