Special preferential rights in immovables are given when an obligation exists based on one of the following grounds: 1. Preservation of an immovable; 2. Work done upon an immovable; 3. Sale of an immovable.
The French Code provides for the protection of whatever expenses may be incurred in the last illness and also for the protection of those who supplied the purchase money of immovables, by giving a preferential right over movables in the former and over immovables in the latter case. I do not see the necessity of increasing the list of preferential rights by the inclusion of these cases. Preferential rights are special rights conferred on particular creditors to satisfy their claims in full, without any consideration whether the remainder would or would not be sufficient to meet the demands of general creditors. Such right ought to be conferred sparingly.
A preferential right is to be exercised over the thing in respect of which the right exists. It so happens sometimes that the thing is destroyed, but something else remains in its stead. A house may be burned down and a right may arise therefrom to receive the insurance money. Without special provision the preferential right will not be extended to such a case. Such provision is made in Article 304 of the Japanese Code, wherein it is stated that a preferential right may be exercised against money or other things which the debtor is to receive by reason of the sale, letting or loss of the subject of the right or damage to it, but the holder of the preferential right must make a judicial seizure of such money or thing before it is paid or delivered. These provisions are necessary to give full effect to preferential rights, but they are absent from the French and the German laws.
In case of conflict between a general preferential right and a special preferential right over the same thing, the French law gives precedence to the former (Article 2105). On this point the Japanese Code makes the contrary provision. Article 329 may be rendered thus: “If a general preferential right conflicts with a special preferential right the latter takes precedence; but the preferential right on account of expenses for the common benefit takes precedence as against all creditors who are benefited thereby.” The right of a creditor who has a special preferential right is limited to a particular thing, while the right of a creditor with a general preferential right extends to all the property of the debtor; therefore, if, like the French law, precedence should be given to the latter, it is possible that the former might be entirely deprived of protection. This would nullify the reason for which such special protection is given. The Japanese
