Viewpoint... The mortgagee's remedy when the mortgage is criminally recovered.

Published:

2022-01-24

Introduction Article 11 of the Provisions of the Supreme People's Court on the Partial Execution of Criminal Judgment Involving Property stipulates that the people's court shall recover the property involved in the case that the person subject to execution has used the criminal judgment as stolen money to pay off debts, transfer or set up other rights burdens under any of the following circumstances: (1) the third party knowingly accepts the property involved; (II) the third party to obtain the property involved free of charge or at a price significantly lower than the market price; (III) a third party to obtain the property involved in the case through illegal debt settlement or illegal and criminal activities; (IV) a third party to obtain the property involved in the case through other malicious means. If a third party obtains the property involved in the case in good faith, it shall not be recovered in the execution procedure. Thus, property acquired in good faith by a third party is exempt from criminal recovery, which includes "mortgages". However, in judicial practice, it is often the case that the criminal procedure has already disposed of the property involved in the case in the form of a criminal judgment in advance. At this time, how should the subject matter of the mortgage be disposed of? Can the mortgagee continue to claim and realize the priority of compensation that he enjoys? What remedies can the mortgagee take? 1. Determination of "Bona Fide Acquisition" of Property Involved in Cases Article 3111 of the Civil Code states that if a person without the right of disposition transfers a real or movable property to a transferee, the owner has the right to recover it; unless otherwise provided by law, the transferee acquires the ownership of the real or movable property if the following circumstances are met: (1) the transferee is in good faith when transferring the real or movable property; (II) transfer at a reasonable price; (III) the transferred real or movable property should be registered in accordance with the law, not required to be registered has been delivered to the transferee. If the transferee acquires the ownership of the immovable or movable property in accordance with the provisions of the preceding paragraph, the original owner shall have the right to claim compensation from the person without the right of disposition. Where the parties acquire other real rights in good faith, reference shall be made to the provisions of the preceding two paragraphs. Thus, in the case of a mortgage on immovable property, a bona fide acquisition should include three elements: the mortgagee must be in good faith, the principal claim is legally valid, and the registration of the mortgage on immovable property has been completed. Related cases: Sichuan Higher People's Court (2018) Chuan Minshen No. 6374 [Liu Yun and liuyong's Application for Execution of Objection to Execution]. The court held that the house involved in the case was registered in the name of the criminal offender. Based on the public credibility of the real right registration, the mortgagee has the right to believe that the criminal offender is the owner of the house involved in the case and has the right to dispose of the house involved in the case. As for how the criminal offender obtains the ownership of the house involved in the case, it is beyond the scope of the mortgagee's examination and judgment. The mortgagee fulfills the loan amount of the loan contract and completes the mortgage registration of the house involved in the case in the housing management department, that is, obtains the mortgage right of the house involved in the case. The mortgage right obtained by the 2. in good faith and the rule of the order of the execution of criminal judgment. Article 13 of the "Several Provisions of the Supreme People's Court on the Partial Execution of Criminal Judgments Involving Property", the person subject to execution shall bear both criminal and civil liabilities during execution, and if his property is insufficient to pay, it shall be executed in the following order: (1) Personal Medical expenses in compensation for injury; (II) refund of the victim's losses; (III) of other civil debts; (IV) fines; (V) confiscation of property. If the creditor has the right of priority compensation for the subject matter of execution in accordance with the law, and its claim for priority compensation, the people's court shall support it after the medical expenses specified in item (I) of the preceding paragraph have been paid. Therefore, the content of the judgment of the victim's refund and confiscation determined in the criminal judgment cannot exclude the enforcement applied by the mortgagee based on his priority right of compensation. The legally and effectively established mortgage and other priority compensation rights can be given priority to the refund and compensation part of the criminal victim, and even the fines and related property confiscated by the people's court. Related cases: Guangdong Provincial Higher People's Court (2018) Yue Zhi Fu No. 80 [Shenzhen Huiye Group Co., Ltd., China CITIC Bank Co., Ltd. Shenzhen Branch Financial Loan Contract Dispute Enforcement Dispute], the court held: The applicant, China CITIC Bank Shenzhen Branch, as the mortgagee of the eight properties involved in the case, enjoys legal mortgage rights to the above-mentioned properties. Even if the dissident Huiye Company is a criminal victim, CITIC Bank Shenzhen Branch, as the mortgagee, will give priority to Huiye Company and other criminal victims in accordance with the law. The way of the right relief of the mortgagee in the criminal execution procedure of the 3.. In the stage of criminal execution, if the mortgagee believes that the execution procedure harms his legitimate rights and interests, he can consider the following three remedies: first, he can submit a written objection to the execution court; second, he requires the procuratorial organ to carry out procuratorial supervision on the execution behavior of the court; third, he can appeal to the effective criminal judgment as an outsider. (I) to file a written objection to the enforcement court Article 14 of the Several Provisions of the Supreme People's Court on the Partial Execution of Criminal Judgments Involving Property stipulates that during the execution process, the parties and interested parties believe that the execution violates the legal provisions, or the outsider's claim on the subject matter of the execution is sufficient to prevent the execution. If a written objection is filed with the enforcement court, the enforcement court shall deal with it in accordance with the provisions of Article 225 of the Civil Procedure Law. The people's court shall open the hearing when examining the objection and reconsideration of an outsider. Thus, when the criminal case has entered into force and enters the execution procedure, and the mortgagee later knows that the mortgage has been confiscated or returned to the criminal defendant, the mortgagee can make it clear that his mortgage has the right of priority compensation by way of execution objection. Related cases: Hunan Hengyang Intermediate People's Court (2021) Xiang 04 Zhiyi No. 99 [Agricultural Bank of China Co., Ltd. Chengdu Xindu Sub-branch, Ye Min Execution Objection], the court held that the objector Agricultural Bank Chengdu Xindu Sub-branch issued full loans in accordance with the "Individual Purchase Guarantee Loan Contract" and paid the corresponding consideration for obtaining the mortgage of the house involved in the case. The house involved in the case has been registered for mortgage, before the seizure of this case, Chengdu Xindu Sub-branch of Agricultural Bank of China did not know about the illegal defects of the house involved in the case, which met the constituent requirements of bona fide acquisition, and the effective judgment has also confirmed its mortgage right of the house involved in the case. Therefore, the objector's request for distribution of the proceeds from the disposal of the house involved in the case conforms to the legal provisions and should be supported. The (II) requires the procuratorial organs to carry out procuratorial supervision over the execution of the court. Article 645 of the Criminal Procedure Rules of the People's Procuratorate, if the People's Procuratorate finds that the property involved in the execution of criminal judgments by the People's Court has one of the following circumstances, it shall put forward corrective opinions in accordance with the law: (5) Damage to the person subject to execution, the victim, interested parties or The legitimate rights and interests of outsiders; "The People's Procuratorate supervises the property involved in the execution of criminal judgments by the People's Courts, and may seal, seize, seize and freeze, the judicial department, case filing department and enforcement department of the people's court shall investigate and verify the transfer, filing and enforcement of the case, and the performance ability of the person subject to execution to relevant units and individuals. (III) appeals against the criminal judgement in force as an outsider Article 15 of the Provisions of the Supreme People's Court on the Partial Enforcement of Criminal Judgments Involving Property. During the enforcement process, outsiders or victims believe that the criminal judgment has made a mistake in determining whether the property involved in the case is stolen money or should be determined but have not been determined. If a written objection is submitted to the enforcement court, the enforcement agency shall transfer the objection materials to the criminal trial department for processing; if it cannot be corrected through the ruling, the objector shall be informed to handle the matter through the trial supervision procedure. Therefore, in the property-related part of the criminal judgment, if the outsider claims to have ownership or bona fide acquisition of the stolen money and goods identified by the criminal judgment, and thus excludes criminal recovery, it is essentially an objection to the relevant judgment of the criminal judgment on the basis of execution, and the dispute should be finally resolved through the supplementary ruling of the criminal trial department or the trial supervision procedure of the outsider. Related cases: Supreme People's Court (2018) Supreme Law Enforcement No. 843 [Wang Chunli and Qu Hui's Application for Recognition and Enforcement of Court Judgments and Execution Review of Arbitration Award Cases]. The court held that Wang Chunli claimed that the property involved in the case was obtained in good faith rather than the property involved in the case that should be recovered. In essence, he did not raise any objection to the execution in the process, but was the basis for execution, that is to say, an objection is raised to the relevant judgment of Dalian Intermediate People's Court (2016) Liao 02 Criminal Judgment No. 17. The objection does not fall within the scope of the execution procedure. Article 15 of the criminal judgment-related property execution regulations stipulates that during the execution process, the outsider or the victim believes that the criminal judgment is wrong in determining whether the property involved in the case is stolen money or should be determined but not determined, and submits a written objection to the execution court, if the correction can be made through the ruling, the enforcement agency shall transfer the objection materials to the criminal trial department for processing; if the correction cannot be made through the ruling, it shall inform the objectors to handle the matter through the trial supervision procedure. According to this regulation, Wang Chunli believes that the Dalian Intermediate People's Court (2016) Liao 02 Criminal Judgment No. 17 has an error in the identification of stolen goods, and can apply for a retrial of the judgment and resolve it through trial supervision procedures. Conclusion For the mortgagee, it is necessary to do its duty of care and caution, can not know that the property is the illegal proceeds of a criminal offence, still in the subject matter of the establishment of a mortgage, not to mention the existence of other false deficiencies in the amount of the claim. At the same time, if the rights and interests of the mortgagee are infringed in the criminal execution stage, the mortgagee should decisively fight for his own legitimate rights and interests, choose the most reasonable and effective way to block the execution procedure of confiscating the mortgage and returning the mortgage in criminal cases, and even change the wrong part of the original criminal judgment in other procedures to safeguard his legitimate rights and interests.

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