Viewpoint. The path selection and analysis of the lessor's priority compensation right to the lease price in the financial lease.

Published:

2023-03-03

Introduction There is a widespread situation of "self-mortgage" in the financial leasing business, that is, under the structure of the financial leasing transaction, the lessor is the owner of the leased property, and at the same time, in order to guarantee the realization of the creditor's rights under the financial leasing contract, the lessor and the lessee sign a mortgage contract, agreeing to mortgage the leased property under the financial leasing contract to the lessor as collateral, that is, the lessor is, the mortgagee. In judicial practice, there are many disputes over the determination of whether the lessor enjoys the priority right of compensation in the case of "self-property mortgage", and the results of the court decisions are not uniform. The Supreme People's Court on the application<中华人民共和国民法典>Article 65 of the Interpretation on the Guarantee System (hereinafter referred to as the Interpretation on the Guarantee System of the Civil Code) stipulates that the lessor has the right to "receive compensation" with the proceeds from the auction and sale of the leased property, but it is not clear whether it has priority. After searching the relevant cases, the application of the rules on the payment of the leased property by the lessor is not uniform, and there are also disputes over the determination and judgment standards of the lessor the priority of the lessor the right of the lease price of the lease price. 1. the determination of the priority right of payment of the lease price under the situation of "self-property mortgage". There has always been controversy in the theoretical and judicial practice about the validity of "self-mortgage" in the financial leasing business. Part of the view is that the "self-property mortgage" is invalid because it violates the statutory rules of property rights, and the lessor already enjoys ownership of the leased property, it cannot also enjoy the mortgage on the leased property, so the lessor has no right to claim priority compensation for the price of the leased property in the case of "self-property mortgage. Another view is that the lessor's ownership and mortgage rights to the leased property can coexist, and in the case of the lessor and the lessee agreeing to use the leased property as collateral and having gone through the mortgage registration procedures in accordance with the law, the lessor should be deemed to have the right to exercise the mortgage on the leased property and to receive priority compensation for the price of the proceeds from the auction and sale of the leased property. The provisions of Article 9 of the interpretation of the Supreme People's Court on the application of legal issues in the trial of financial lease contract disputes (hereinafter referred to as the judicial interpretation of financial leasing) issued by the Supreme People's court in 2014 recognize the effect of "self property mortgage" to a certain extent, that is, "the lessee or the actual user of the leased property shall transfer the leased property or establish other real rights on the leased property without the consent of the lessor, if the third party acquires the ownership or other real right of the leased property in accordance with the provisions of Article 106 of the Property Law, and the lessor claims that the third party's right is untenable, the people's court shall not support it, except for one of the following circumstances: ...... (II) the lessor authorizes the lessee to mortgage the leased property to the lessor and register the mortgage right in the registration authority according to law", according to the provisions, the lessor right to which, and can be registered by the mortgage against a bona fide third party. This provision provides a certain legal basis for the application of "self-property mortgage", but the Judicial Interpretation of Financial Leasing issued by the Supreme People's Court in 2020 has deleted the above-mentioned content, which seems to further hinder the lessor's path of priority compensation for the subject matter of the lease in accordance with the "self-property mortgage" claim. The author tends to believe that, from the perspective of maintaining financial leasing transactions and guaranteeing financial leasing claims, without prejudice to the legitimate rights and interests of the lessee and third parties, the lessor should be recognized as having the right to give priority to the payment of the lease price of the "self-mortgage. 2. the path of the lessor's priority compensation for the price of the lease under the system of the Civil Code and the Interpretation of the Civil Code Guarantee System. The Supreme People's Court on the application<中华人民共和国民法典>Article 65 of the Interpretation of the Guarantee System (hereinafter referred to as the Interpretation of the Guarantee System of the Civil Code) stipulates that the lessor has the right to pay the price of the financial lease, that is, "in the financial lease contract, the lessee fails to pay the rent as agreed, but still fails to pay within a reasonable period after being urged, and the lessor requests the lessee to pay all the remaining rent and pays the price from the auction or sale of the lease, the people's court shall support it; if the parties request to pay the rent by auction or sale of the leased property with reference to the relevant provisions of the Civil Procedure Law" cases of realization of security interests ", the people's court shall allow it." It should be noted that the provision only provides for "compensation at the price of the proceeds of the auction or sale of the leased property", but there is no expression of "priority. Therefore, on the basis of this provision alone, the lessor is not yet able to claim the right of priority compensation in respect of the price of the leased property. With regard to the issue of the right to priority compensation for the price of the leased property, the Supreme People's Court held in the book "Understanding and Application of the Judicial Interpretation of the Civil Code Guarantee System" that "whether the lessor can claim priority compensation for the price of the proceeds from the auction and sale of the leased property depends on whether the lessor's ownership of the leased property has been registered. According to Article 745 of the Civil Code, if the lessor's ownership of the leased property is not registered, it shall not oppose a bona fide third party. Therefore, when the lessor's ownership of the leased property is not registered, the people's court shall not support the lessor's request for priority compensation with the proceeds from the auction or sale of the leased property, but only support the request for compensation with the proceeds from the auction or sale of the leased property." From this, it can be seen that the lessor has registered the ownership of the financial lease on the premise that the price of the proceeds from the auction and sale of the lease has been paid first. Therefore, even if the lessor claims the priority compensation path for the mortgage of the leased property under the situation of "self-mortgage" may be blocked, according to the relevant provisions of the Civil Code, the Interpretation of the Civil Code Guarantee System and the views of the Supreme People's Court, the lessor should be able to obtain the priority compensation right for the price of the leased property by registering the ownership of the financial leased property. But at the same time, it should be noted that the applicable rules of the right of priority compensation of the lease price are not clearly stipulated by law, and the opinions of the courts in practice are not uniform. 3. relevant referee rules According to the above analysis, whether it is the "self-property mortgage" or the rule of payment of the lease price, there is some controversy as to whether the lessor can enjoy the priority right of payment of the lease price. After searching the relevant cases, the judicial practice of the lessor's priority right of compensation in the legal relationship of financial leasing mainly includes the following: 1. The act of "self-property mortgage" is invalid and the lessor does not have the right of priority compensation for the price of the leased property; 2. The lessor is not only the owner of the lease, but also claims that the exercise of the mortgage on the lease is in contradiction with the nature of the transaction, and it should not be recognized that it has a priority right to pay the price of the lease; 3. The act of "self-property mortgage" is valid, and if the mortgage registration procedures have been completed, the lessor shall have the right to exercise the mortgage on the leased property and may give priority to the auction and sale price of the leased property; 4. According to the provisions of the Interpretation of the Civil Code Guarantee System, if the lessor has registered the ownership of the leased property, it shall be determined that the lessor shall have priority in the payment of the auction and sale price of the leased property. 5. The Interpretation of the Civil Code Guarantee System only provides that the lessor has the right to be paid for the auction and sale price of the lease, and there is no basis for the lessor to claim priority compensation. 6. According to the provisions of the Interpretation of the Guarantee System of the Civil Code, the lessor has the right to be paid in respect of the lease, and if the mortgage of the lease has been registered, the lessor shall be deemed to have the right of priority to be paid. The relevant cases are as follows: <案例一>: Dispute over Financial Lease Contract between Maotai Town Maotai Liquor Industry Co., Ltd. and Zunyi Rongxin Real Estate Development Co., Ltd., renhuai city, Guizhou Province [Supreme People's Court (2016) Supreme Law Minzong No. 540]] The court held that the collateral of the "Mortgage Guarantee Contract" No. 0106-3-4 (2014) involved in the case was the lease of the financial lease contract involved, and Article 4-1 of the Lease Back Sale Contract stipulated that after the contract was signed and came into effect, the ownership of the leased property involved was transferred to Great Wall Guoxing Company. Article 34 of the the People's Republic of China Security Law provides that the mortgaged property is the right to use the movable or immovable property owned by the mortgagor. The company will not belong to its lease as collateral, in violation of the law, is an invalid contract. According to the Mortgage Guarantee Contract, Great Wall Guoxing Company claims that the request for priority compensation for the leased equipment provided by Maoxiang Spring Wine Company is not valid. <案例二>: China Youth Travel Industry Development Co., Ltd. and Jinyin Financial Leasing Co., Ltd. Financial Leasing Contract Dispute [Supreme People's Court (2019) Supreme Law Minchong No. 222]] The court held that, according to the selection clause in Article 4 of Part I of the Financial Lease Contract, the ownership of the four Lingbi stones involved in the case belonged to Jinyin Company before the judgment came into effect. Combined with the first instance litigation request of Jinyin Company, it proposed to exercise the mortgage right on the collateral (four Lingbi stones) owned by Suzhou Jingsi Garden Company and deposited in Suzhou Jingsi Garden, which contradicts the nature of the transaction involved in the case. <案例三>: Jiaohe Kaidi Green Energy Development Co., Ltd. and Kaidi Ecological Environment Technology Co., Ltd. Financial Lease Contract Dispute [Supreme People's Court (2019) Supreme Law Minzhong No. 547]] The court held that the question of whether Datang Leasing Company's request for preferential compensation for the price of the mortgage under the Maximum Mortgage Contract enjoyed by Jiaohe Energy Company should be supported. In this case, Datang Leasing Company signed the Maximum Mortgage Contract with Jiaohe Energy Company, and Jiaohe Energy Company mortgaged its biomass power generation equipment to Datang Leasing Company, and registered the mortgage with the Jiaohe Market Supervision and Administration Bureau, so Datang Leasing Company already enjoyed the mortgage right to the biomass power generation equipment. Now Jiaohe Energy Company and Kaidi Ecological Company are unable to perform their contractual obligations and comply with the contract to realize the mortgage. Datang Leasing Company requires the exercise of the mortgage on the biomass power generation equipment provided by Jiaohe Energy Company, which complies with the contract and legal provisions. Should be supported. <案例四>: Guotai Leasing Co., Ltd. and Qinghai Pingan Gaojing Aluminum Co., Ltd. have disputes over financial leasing contracts [Shandong Higher People's Court (2019) Lu Minchu No. 76]] The court held that on the issue of whether Cathay Pacific Leasing Company has the priority to be paid for the collateral involved, Cathay Pacific Leasing Company and Qinghai Aluminum Company signed a "mortgage contract" on September 25, 2017, agreeing to use the leased property as collateral to guarantee the realization of all claims of Cathay Pacific Leasing Company under the financial lease contract. On the same day, Cathay Pacific Leasing Company and Qinghai Aluminum Company registered the movable property mortgage with Cathay Pacific Leasing Company as the mortgagee, during the trial, Qinghai Aluminum Company also recognized the claim of Cathay Pacific Leasing Company. Therefore, the Court supports the claim of Cathay Leasing Company. <案例五>: Puyin Financial Leasing Co., Ltd. and Hanbang (Jiangyin) Petrochemical Co., Ltd. have disputes over financial leasing contracts [Shanghai Financial Court (2020) Hu 74 Min Chu 3458]] The main dispute in this case is whether the plaintiff has the right to auction, sell and give priority to the lease. Article 65 of the Judicial Interpretation of the Guarantee System stipulates that in a financial lease contract, if the lessee fails to pay the rent in accordance with the agreement and fails to pay it within a reasonable period of time after being urged, the lessor requests the lessee to pay all the remaining rent and pay the price of the proceeds from the auction or sale of the leased property, the people's court shall support it. According to the provisions of the new law, the lessor's ownership of the leased property in a financial lease has a guarantee function. If the lessee still fails to pay the rent within a reasonable period of time after being urged, the lessor requests the lessee to pay all the unpaid rent through litigation. Under the condition that the compensation of the proceeds from the auction and sale of the leased property is more conducive to the repayment of the debts of both parties, and does not violate the reasonable expectations of the contract parties. Thus, the provisions of the Civil Code and the Judicial Interpretation of the Security System on "payment of the proceeds from the auction and sale of the leased property" may be retroactively applied to the Financial Lease Contract in this case. As for whether the lessor can enjoy the priority of compensation, the court held that according to Article 745 of the Civil Code, "the lessor's ownership of the leased property shall not be opposed to a bona fide third party without registration"; and Article 63 of the Judicial Interpretation of the Guarantee System, "In atypical guarantees, if the parties fail to register in the legal registration agency in accordance with the law and claim that the guarantee has the effect of real rights, the people's court will not be supported, the lessor enjoys the right of priority compensation on the premise that the financial lease contract and the lessor's ownership of the lease have been registered, and the corresponding registration has the effect of public trust. ...... The court held that the registration of the financial lease contract and the leased property in question should be effective in rem from January 1, 2021, and that the priority of the plaintiff in the disputed leased property could also be determined according to that point in time. <案例六>: Pioneer International Financial Leasing Co., Ltd. and Xiao Peng Financial Leasing Contract Dispute [Beijing Chaoyang District People's Court (2021) Beijing 0105 Minchu No. 31084]] Regarding whether Pioneer Company can claim the priority of compensation for the auction and sale price of the leased property, the first paragraph of Article 65 of the Interpretation of the Supreme People's Court on the Application of the Guarantee System in the the People's Republic of China Civil Code stipulates that in a financial lease contract, if the lessee fails to pay the rent as agreed and still fails to pay within a reasonable period after being urged, the lessor requests the lessee to pay all the remaining rent, if the price of the proceeds from the auction or sale of the leased property is paid, the people's court shall support it; if the parties request to pay the rent by the price of the proceeds from the auction or sale of the leased property by reference to the relevant provisions of the Civil Procedure Law, the people's court shall allow it.... According to the provisions of the above judicial interpretation, Pioneer Company has the right to request the payment of the proceeds from the auction and sale of the leased property within the scope of the creditor's rights in this case, because the vehicles involved in the case have been mortgaged and registered in the name of Pioneer Company, so Pioneer Company claims to give priority to the payment of the proceeds from the auction and sale of the vehicles involved in the case, which is supported by this court. <案例七>: Ping An International Financial Leasing Co., Ltd. and Mo Yujian Financial Leasing Contract Dispute [Tianjin Pilot Free Trade Zone People's Court (2021) Jin 0319 Min Chu No. 10567]] The Supreme People's Court on the application<中华人民共和国民法典>The first paragraph of Article 65 of the interpretation of the relevant guarantee system stipulates that in the financial lease contract, if the lessee fails to pay the rent in accordance with the agreement and still fails to pay within a reasonable period of time after being urged, the lessor requests the lessee to pay all the remaining rent and pay the price from the auction or sale of the leased property, the people's court shall support it. In this case, the defendant failed to pay the rent on time, the plaintiff requested that the lease involved in the case and the defendant agreed to discount or auction and sell the lease, and the proceeds were used to pay off the defendant's above-mentioned debts with factual and legal basis, so the Court supported it. If the proceeds are not sufficient to pay off the above-mentioned debts, the shortfall shall continue to be paid by the defendant; if the proceeds exceed the above-mentioned debts, the excess shall belong to the defendant. The plaintiff's request for priority settlement of the above-mentioned debts on the proceeds has no clear legal basis, so the Court does not support it. 4. epilogue At present, in judicial practice, there are disputes over the determination of the priority right of payment of the lease price under the system of "self-property mortgage" and "Civil Code" and "Civil Code Guarantee System Interpretation", and no unified rule of judgment has yet been formed. From January 1, 2021, the People's Bank of China will be registered.</中华人民共和国民法典></案例七></案例六></案例五></案例四></案例三></案例二></案例一></中华人民共和国民法典></中华人民共和国民法典>

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