Section 241 and concordant of 1947 Mortgage Regulations
Judgment of Province Court of Asturias of 23 June 2004
By virtue of the principle "prior in tempore, potior in iure", our jurisdiction giver preference over and ranks rights registered in the Land Registry ahead of any incompatible or prejudicial act, whether unfiled or filed afterwards with the Land Registry (Supreme Court judgment of 26 January 2000, among others).
Mortgage rank, however, is embodied with a financial value and, even if initially conferred by the date of filing (Sections 24 and 25 of the 1946 Mortgage Act) is likely of being postponed, swapped and reserved (Section 241 of the 1947 Mortgage Regulations and concordant provisions).
By agreeing to postpone, a current mortgagee agrees to transfer his rank to a future mortgagee whose right is yet to be created, further determining the minimum features of the future mortgage (at least the financial terms, liability of the property under a mortgage), whereas by agreeing to swap rank, two current mortgagees agree to exchange their respective rank. At last, but not least, the reservation of rank is defined as a variation of postponement, where one creditor whose mortgage right is yet to be registered, defers his future rank to a future mortgagee.
The above-mentioned judgment resolves anew that it is also conforming to law that two mortgagees share the same rank by mutual agreement, as long as the consent of any affected third party is available.
Besides, this judgment brings back the query on whether holders of property rights other than mortgages can also legally trade their rank, as was admitted on October 25, 1979 by the General Directorate of Registers and the Notarial Profession, analogously, for registered conditions subsequent securing payment of installed purchase price.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
