[Direct answer]In the Beijing area, when a mortgage and a pledge are established on the same property, the order of repayment is not simply "mortgage first" or "pledge first", but determined according to the time of public disclosure. According to Articles 414 and 415 of the Civil Code of the People's Republic of China, the mortgage that has been registered is repaid according to the time of registration; if the mortgage is registered and the pledge is established, it is repaid according to the time of registration and delivery; and if the order is the same, the repayment is made in proportion to the creditor's rights. Therefore, the key lies in proving the time of registration and delivery. It is recommended to check the registration and fix the delivery certificate before the transaction to clarify the order of repayment. For more details, please refer to the following link:Financial capital and cross-border legal services involving foreign affairs.

1. Problem background and typical scenarios

When mortgages and pledges coexist on the same property, it is common in financing overlapping and guarantee restructuring. Typical scenarios include: an enterprise first mortgages equipment to a bank and then pledges it to a small loan company; inventory is first pledged as movable property, and the owner then sets up a floating mortgage on the batch of goods; the borrower first registers a pledge and then a mortgage on the same receivable. Disputes often arise due to the overlapping of registration and delivery timelines and conflicting publicity effects. Many creditors mistakenly believe that their guarantees are "naturally prioritized", neglect to check the rights of previous parties, and ultimately find themselves lower in the repayment priority. In cases involving the disposition of collateral, it may be necessary to combineCreditor-debtor relations and enforcement case servicesAdvance.

II. Key points of contention

There are three key points of contention. Firstly, the comparison between the date of registration of the mortgage right and the date of delivery (or registration) of the pledge right is the core of the priority judgment. Secondly, the opposability of movable mortgage registration: whether an unregistered movable mortgage can oppose a pledge right established in good faith thereafter directly affects the order of repayment. Thirdly, the application of proportional repayment: when the two guarantees have the same priority, the creditor shall be repaid in proportion to the creditor's claim. However, how to determine that "the priority is the same" often leads to disputes. For real estate guarantees, reference can be made to the relevant provisions of the Real Estate Registration Law.Real estate sales and construction project servicesThe registration rules of the National Intellectual Property Administration.

III. Professional analysis by Hengluo Lawyers

Based on practical experience in handling disputes over security rights, the core of cases involving concurrent mortgages and pledges lies in the "evidence battle at the time of publicity". According to Article 414 of the Civil Code, the mortgagor shall be paid off in priority according to the order of registration; Article 415 specifically stipulates that when the mortgagor and the pledgee coexist, the mortgagor shall be paid off in priority according to the order of registration and delivery. In practice, some creditors neglect to check the movable property mortgage registration before establishing the pledge, resulting in the pledge being established later and having a lower priority; there are also cases where the mortgagor fails to register the mortgage and is subsequently acquired by a bona fide pledgee based on delivery. Hengluo Lawyers usually suggest: Before establishing the guarantee, first check the registration system to confirm that there are no rights burdens; when establishing the pledge, simultaneously fix the delivery and possession evidence; the mortgage must be registered in a timely manner; when a priority dispute arises, build an evidence chain with the registration certificate and delivery vouchers to claim their own priority or proportional repayment. For cross-border guarantees, it can be followed up accordingly.Financial capital and cross-border legal services involving foreign affairsEvaluate the applicable law and registration requirements.

IV. Practical suggestions and legal basis

The core basis is Article 394 (Definition of Mortgage) of the Civil Code of the People's Republic of China (effective January 1, 2021), Article 414 (Order of Satisfaction of Mortgage: Registered according to the order of registration, unregistered according to the proportion of creditor's rights, and registered takes precedence over unregistered), Article 415 (When Mortgage and Pledge Coexist, Satisfaction is in the Order of Registration and Delivery Time), Article 425 (Definition of Pledge), and Article 429 (Pledge Establishes upon Delivery). Practical suggestions: Before the transaction, check the Unified Registration System for Movable Property Financing and the enterprise credit information; register the mortgage in a timely manner and deliver the pledge in a timely manner and keep records; when signing the guarantee contract, clarify the priority of claims and the method of realizing them; when there is a competing claim, fix the evidence at a specific point in time to claim priority. For enterprises' financing structures, it can be combined with other relevant provisions.Intellectual property protection and corporate legal servicesImprove the guarantee arrangements.

5. Henglu Law Firm's Advice

When dealing with mortgage and pledge simultaneously, don't assume that "the one who handles it first has priority". First, check the rights encumbrances of the prior party to avoid a gap in the order of priority; Second, the mortgage right must be registered, and the pledge right must be delivered and retain the relevant documents to fix the publicity time point; Third, the contract must clearly stipulate the order of realization and the proportion of repayment; Fourth, in the event of a dispute, use the evidence of registration and delivery to claim the order of priority. It's difficult to resist a bona fide pledge right if the movable property mortgage is not registered. Don't lose priority due to procedural negligence. If professional support is needed, you can seek help from relevant professionals.Special services and other case servicesEvaluate the plan.

VI. Frequently Asked Questions

Q1: If the same property is both mortgaged and pledged, can I, as the mortgagee, definitely have priority?

Not necessarily. It depends on the order of public disclosure rather than the type of guarantee. According to Articles 414 and 415 of the Civil Code, mortgages that have been registered are ranked according to the registration time; if a mortgage and a pledge coexist, they are repaid in the order of registration and delivery; if the order is the same, they are compensated in proportion to the creditor's claim. If the registration date of your mortgage is later than the delivery date of the other party's pledge, or if your movable property mortgage has not been registered while the other party is a bona fide pledgee, you may be subordinated. It is recommended to first check the registration and delivery dates, then determine the priority, and never misjudge it as "mortgages are naturally prioritized" and miss out on remedies.

Q2: To prove the priority of mortgage pledges, what evidence should be prepared?

The core evidence includes: the certificate of mortgage registration and the registration date (queries from the real estate registration book or the unified registration system for movable property financing), the pledge contract and the delivery or registration certificates (records of transfer of possession, certificates of pledge registration), the main creditor's contract and the guarantee contract, as well as correspondence and payment records that can prove the establishment time. The organization of evidence revolves around "registration date - delivery date - comparative order". If the materials are missing, you can apply to the court to retrieve the registration files, and never lose the right of priority due to incomplete certificates.

Q3: Regarding disputes over the order of priority of security rights, what are the attorney fees and litigation costs?

The litigation fees shall be calculated in accordance with the "Measures for the Payment of Litigation Fees" based on the amount of the litigation request (such as the amount of priority compensation and the amount of the creditor's claim), and shall be borne by the losing party; the amount of the claim for confirmation of priority shall be the subject of the claim. The attorney's fees shall be charged on a per-case basis or based on a percentage of the subject matter amount, depending on the complexity of the case, the amount of the claim, and the workload. The specific fees shall be subject to the terms of the agency contract, and there is no uniform standard. The risk-based attorney's fees shall be subject to a percentage cap. It is recommended to calculate the amount of the claim and the fees before entrusting the attorney, and to negotiate or send a letter to the other party for small-amount guarantees before litigating the overall dispute.

Q4: How long does it usually take to reach a conclusion in disputes over the priority of mortgage pledges?

If there is no dispute over the order of succession between the two parties, the security right can be realized directly through registration and delivery, which takes a relatively short time; it is even faster to apply for the realization of the security right through special procedures. If the case goes to litigation, the first-instance ordinary procedure takes six months, the summary procedure takes three months, and the appeal to the second instance generally takes three months; after the judgment takes effect, the procedures for disposal and distribution need to be carried out. Overall, if there is no dispute, the case can be settled in a few weeks; if there is a dispute, it often takes several months to a year from litigation to the execution of the recovery of the money. It is recommended to apply for property preservation at the same time to prevent the mortgaged property from being disposed of in advance.

Q5: If I find that the same property is both mortgaged and pledged, what should I do specifically?

It is recommended to follow four steps: First, check the registration system and credit information to confirm the previous party's rights and obligations and the respective establishment dates; Second, fix the registration of the guarantee or the delivery certificate to lock in the order of public disclosure; Third, communicate with the other party about the priority of repayment and, if possible, negotiate repayment in proportion or in chronological order; Fourth, if no agreement can be reached, claim one's own priority in the process of realizing the security right or in litigation, and submit evidence of registration and delivery. Throughout the process, keep the search results and certificates, and, if necessary, entrust a lawyer to evaluate the priority and disposal path.

The above content is based on the judicial practice in the Beijing area. The facts of individual cases and the jurisdiction of the court may affect the conclusions. Welcome to consult Hengluo Law Firm for specific cases.

If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the evidence materials, to avoid missing the statutory time limit. →Financial capital legal services·Beijing Hengluo Law Firm

Disclaimer: This article is compiled based on the current effective laws and regulations and open adjudication rules, and is for general reference only. It does not constitute a formal legal opinion on specific cases. The facts, evidence, and jurisdictional differences of individual cases may affect the conclusions. If you encounter disputes, please consult a practicing lawyer in time.