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  • Interpretation
  • No.671
  • Date
  • 2010/01/29
  • Issue
    • Is Article 107 of the Land Registration Regulation unconstitutional?
  • Holding
    •     The purpose of Article 15 of the Constitution concerning the protection of people*s property right is to ensure the free exercise of usage, benefit, and disposition under the status quo of the given property, and may not be infringed by the legal act of others. For joint ownership (tenancy in common), once the real property is partitioned after the creation of a mortgage, the mortgage right on the individual ownership is not affected (see Articles 825 and 868 of the Civil Code). For those who did not obtain consent from the mortgagee(s) prior to engaging in the partition, the subject matter of the mortgage right shall naturally be the entitlement of the respective parcels of property being conveyed and recorded. Thus the compulsory enforcement is levied against the title of the respective real property being partitioned, conveyed and recorded. After the bidding is completed, given that the winning bidder obtains the title to the mortgaged subject matter, the winning bidder restores the joint ownership of the specific real property with other co-owner(s), who also reinstate the respective entitlement prior to the partition, and the mortgage right on the partition being conveyed and recorded is eliminated by its enforcement, so that the rights and interests of the co-owner(s) and the mortgagee can be maintained. As such, Article 107 of the Land Registration Regulation, as amended and promulgated on September 14th, 2001, is in compliance with the purpose of the Civil Code and does not contravene the stipulation to protect people*s property right under Article 15 of the Constitution.
  • Reasoning
    •     The purpose of Article 15 of the Constitution concerning the protection of people*s property right is to ensure the free exercise of usage, benefit, and disposition under the status quo of the given property, and may not be infringed by the legal act of others. The entitlement of a joint ownership is the proportion of the co-owners’ ownership, by nature not different from fee simple absolute (see J. Y. Interpretation Nos.400 and 562). Article 819, Paragraph 1 of the Civil Code stipulates that each co-owner may freely dispose of his/her entitlement. Disposal, as mentioned in that provision, includes the assignment of entitlement or creating mortgage right on the entitlement (see J. Y. Interpretation No. 141), that aims to protect the property right of the entitlement. Furthermore, mortgage right also falls within the scope of property right protection under the Constitution. However, since each co-owner may individually create mortgage rights on his/her entitlement without the consent of other co-owners, as long as the result of such mortgage creation does not harm other co-owners’ interests, it is in compliance with the principle of autonomy in private law and the meaning and purpose of Article 15 of the Constitution in protecting people*s property right.
      
    •     For entitlement in a joint ownership (tenancy in common), once the real property is partitioned after the creation of a mortgage, the mortgage right on the individual ownership is not affected (see Articles 825 and 868 of the Civil Code). Article 107 of the Land Registration Regulation, as amended and promulgated on September 14th, 2001, stipulates: “For real property of joint ownership (tenancy in common) having some of the joint owners creating mortgages on their respective entitlements, the recordation of the partition of the joint property should duly record that each mortgage is fixed upon each respective parcel of land as conveyed in proportion with its original entitlement. However, in the event the mortgagee has provided prior consent, the mortgage right shall only be conveyed and recorded on the [specific] parcel of land acquired by the mortgagor.” (hereinafter the disputed provision)  In other words, to take the specific parcel of land acquired by the mortgagor after the partition as the subject matter of the mortgage is limited to the situation where the mortgagee has provided prior consent before the partition.  In the situation that prior consent from the mortgagee was not obtained before the partition, although the method of conveyance and recordation of the mortgage right provided by the disputed provision can prevent the mortgagee(s) on the entitlement(s) from being disadvantaged due to  the partition, the disputed provision, however, conveys and records the mortgage right on each parcel of the land after partitions, causing the parcels of land acquired by other co-owners also encumbered with the mortgage, and the mortgagee may foreclose the entitlement portion conveyed on each parcel to satisfy the debt payment.  Since the mortgaged subject matter was the entitlement of the original joint ownership, for those who did not obtain consent from the mortgagee(s) prior to engaging in the partition, the subject matter of the mortgage right shall naturally be the entitlement of the respective parcels of property being conveyed and recorded. Thus the compulsory enforcement is levied against the title of the respective real property being partitioned, conveyed and recorded. After the bidding is completed, given that the winning bidder obtains the title to the mortgaged subject matter, the winning bidder restores the joint ownership of the specific real property with other co-owner(s), who also reinstate the respective entitlement prior to the partition, and the mortgage right on the partition being conveyed and recorded is eliminated by its enforcement, so that the rights and interests of the co-owner(s) and the mortgagee can be maintained. As such, the disputed provision is in compliance with the purpose of the Civil Code and does not contravene the stipulation to protect people*s property right under Article 15 of the Constitution.
      
    • Translated by Amy Huey-Ling Shee
      
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