Article 501 of the Interpretation of the Civil Procedure Law stipulates: "When a people's court enforces a person subject to enforcement's due claims against another person, it may make a ruling to freeze the claims and notify the other person to perform on the application for enforcement." Where the other person has objections to the matured claims, and the applicant for enforcement requests partial enforcement of the objections, the people's court will not support them. Where interested parties have objections to the matured claims, the people's courts shall handle them in accordance with the provisions of Article 227 (now Article 234) of the Civil Procedure Law. Where a matured claim determined by an effective legal document is denied by the other person, the people's court will not support it. In this provision, "other" refers to the sub-debtor, while "interested party" refers to a person who claims the existence of a matured claim but is the right holder. The remedies for objections of two different identities to the maturity of the claims are different, and the interested party should be resolved through the litigation of enforcement objections because it claims that the matured claims have civil rights and interests, but the remedies of "others" should generally be remedied through procedures such as objections and reconsiderations.
Supreme People's Court of the People's Republic
Civil Settlements
(2021) SPC Min Zai No. 257
Applicant for retrial (plaintiff in the first instance and appellant in the second instance): Chaoyang Hongda Enterprise Group Real Estate Development Co., Ltd., domiciled in Section 6, Changjiang Road, Chaoyang Development Zone, Chaoyang City, Liaoning Province.**
Legal representative: Wang Jianhua, chairman of the board of directors of the company.
Entrusted litigation agent: Li Longchang, lawyer of Liaoning Hongfeng Law Firm.
Respondent (defendant in the first instance, appellee in the second instance): Zhao Qiang, male, born on May 11, 1963, Han ethnicity, living in Shuangta District, Chaoyang City, Liaoning Province.
Entrusted litigation agent: Xu Muyang, lawyer of Liaoning Dongbao Law Firm.
Respondent (defendant in the first instance, appellee in the second instance): Chaoyang Shengtong Construction Engineering Co., Ltd., domiciled in section 4 of Zhulin Road, Shuangta District, Chaoyang City, Liaoning Province**.
Legal representative: Zhou Yingguang, the general manager of the company.
Entrusted litigation agent: Liu Min, lawyer of Liaoning Junpeng Law Firm.
Respondent (defendant in the first instance and appellee in the second instance): Zhou Yingguang, male, born on October 10, 1968, Han ethnicity, living in Shuangta District, Chaoyang City, Liaoning Province.
The retrial applicant, Chaoyang Hongda Enterprise Group Real Estate Development Co., Ltd. (hereinafter referred to as Hongda Company), applied to this court for a retrial in connection with the respondent Zhao Qiang, Chaoyang Shengtong Construction Engineering Co., Ltd. (hereinafter referred to as Shengtong Company) and Zhou Yingguang, and zhou Yingguang, and applied to this court for a retrial against the Civil Judgment of the Higher People's Court of Liaoning Province (2019) Liaomin Zhong No. 1507. On June 23, 2021, the Court rendered the (2021) SPC Minshen No. 1924 Civil Ruling and arraigned the case. This court formed a collegial panel in accordance with law and heard the case in open court. Li Longchang, the entrusted litigation agent of the retrial applicant Hongda Company, Zhao Qiang, the respondent, and Xu Muyang, the entrusted litigation agent, and Liu Min, the litigation agent jointly entrusted by the respondent Shengtong Company and Zhou Yingguang, attended the court to participate in the litigation. The case is now closed.
Hongda Company applied to this court for a retrial, saying that the basic facts determined in the original judgment lacked evidence to prove it. Hongda Company is the owner of the house involved in the case, and the original judgment has not entered the substantive examination of whether there are mature claims, and should not be enforced against The property of Hongda Company. Although Hongda Company had used the house involved in the case to cover the maximum project price for Beipiao Xinda Real Estate Development Co., Ltd. (hereinafter referred to as Xinda Company), the debt had been executed, and There was no creditor-debtor relationship between Xinda Company and Zhou Yingguang and Shengtong Company, and there was no creditor-debtor relationship between Hongda Company and Zhou Yingguang and Shengtong Company. Apply for a retrial in accordance with the provisions of items 2, 3 and 6 of article 200 of the Civil Procedure Law of the People's Republic of China.
Zhao Qiang argued that Hongda Company was not a qualified subject, but the identity of an outsider. According to the facts ascertained and determined by the (2019) Liaomin Zhong No. 1507 Civil Judgment, Hongda Company sold the house involved in the case to Li Jian, and Li Jian should raise an enforcement objection in this case, and Hongda Company has no right to file an enforcement objection and an enforcement objection lawsuit as an outsider. After nearly a year of seizure, Hongda Company colluded with Shengtong Company and Li Jian to advance the contract time earlier than the sealing time, and after the evidence was falsified, it was submitted to the court and raised two enforcement objections.
Shengtong Company and Zhou Yingguang argued that Hongda Company and Shengtong Company did not have a creditor-debtor relationship, shengtong company did not enjoy ownership of the real estate involved in the case, and the real estate involved in the case was still owned by the retrial applicant Hongda Company.
Hongda Company filed a litigation request with the court of first instance: 1. Stop the execution of the property No. 01012, 01022 and 01032 of Building 13 of Lingyuan Shengshi Huacheng (Kindergarten) and lift the seizure measures; 2. The defendant bears the litigation costs of the case.
The court of first instance found the facts: in the case of Zhao Qiang's loan dispute with Shengtong Company and Zhou Yingguang, the court seized the property involved in the case on September 29, 2014 with the (2014) Chaoli Yimin Baozi No. 21 Civil Ruling, and on December 17, 2014, issued a (2014) Chaomin Yichuzi No. 00216 Civil Judgment, ordering Shengtong Company and Zhou Yingguang to repay the principal of Zhao Qiang's loan of 3.6 million yuan and interest. After the judgment takes effect, the court files the case for enforcement. Upon Zhao Qiang's application, on November 17, 2015, the court of first instance directly served Hongda Company with the (2015) Notice of Performance of Debts No. 17 of Chao Zhi Zi, informing it that it would perform its obligations within seven days after receiving the notice, and that if there was no objection to the debts and it could not perform its obligations within the period specified in the notice, the court would enforce it. On the same day, the court froze the matured claims of Shengtong Company and Zhou Yingguang against Hongda Company in the (2015) Chao Zhi Zi No. 17 ruling. Hongda Company did not raise any objection within the time limit, and the court seized the property involved in the case on September 21, 2016. After the seizure, Hongda Company raised an objection on the grounds that there was no creditor-debtor relationship with Shengtong Company and Zhou Yingguang, and the court made a (2016) Liao13 Zhiyi No. 41 ruling on January 18, 2017, ruling to reject Hongda Company's objection request.
It was also found that on May 13, 2015, Hongda Company and Li Jian signed the "Contract for the Sale and Purchase of Commercial Housing", and Hongda Company sold the house involved in the case to Li Jian, and issued a unified invoice for li Jian to sell real estate, which was rented out by Li Jian. Due to the failure to go through the transfer procedures, Li Jian filed a lawsuit with the Lingyuan Municipal People's Court, and the Lingyuan Municipal People's Court issued the (2016) Liao1382 Min Chu No. 4988 Civil Mediation Letter on December 28, 2016, the mediation content of which was that Hongda Company assisted Li Jian in handling the transfer procedures for the house involved in the case before January 28, 2017, and the two parties had no other disputes in this case.
On September 20, 2018, Xinda Company issued a situation statement, which reads: When my unit was developing the A2 plot residential project in the starting area of Beipiao New Town, Zhou Yingguang contracted construction in the name of Shengtong Company, Chaoyang Hongxia Construction Engineering Co., Ltd., and Chaoyang Jinhui Construction Engineering Co., Ltd. My unit once used part of the house to reach the top of Zhou Yingguang's project, including the house in Shengshihuacheng developed by Hongda Company in Lingyuan City, and later after settlement, the house price exceeded the project payment. The fact that the house of Shengshi Huacheng was used to reach the top was lifted. There is no building construction relationship between Hongda Company, Shengtong Company and Zhou Yingguang. In 2017, the Shuangta District People's Court of Chaoyang City completed the execution of the company's debts of 1,499,580.94 yuan due to the judgment debtors Zhou Yingguang and Shengtong Company through enforcement.
The court of first instance held that article 61 of the Provisions of the Supreme People's Court on Several Issues Concerning the Enforcement Work of the People's Courts (for Trial Implementation) stipulates that if the person subject to enforcement is unable to pay off his debts, but enjoys a matured claim against a third party other than the case, the people's court may, on the application of the person applying for enforcement or the person subject to enforcement, issue a notice to the third party to perform the due debts (hereinafter referred to as the notice of performance). Notice of performance must be delivered directly to a third party. The notice of performance shall contain the following contents: (1) the third party shall directly perform its debts to the person applying for enforcement and shall not pay off to the person subject to enforcement; (2) the third party shall perform the debt to the person applying for enforcement within 15 days after receiving the notice of performance; (3) if the third party has objections to the performance of the mature claim, it shall submit it to the enforcement court within 15 days after receiving the notice of performance; (4) the legal consequences of the third party's breach of the above obligations. Article 65 provides that if a third party does not raise an objection within the time limit specified in the notice of performance and fails to perform, the enforcement court shall have the power to rule on its enforcement. The above provisions provide a legal right for third parties to raise an objection, as well as the legal consequences of not raising an objection within the specified time limit and failing to perform in accordance with the notice of performance. After receiving the notice of performance issued by the court, Hongda Company neither raised an objection within the statutory time limit nor performed the obligation in accordance with the requirements of the notice of performance, and the court of first instance took compulsory enforcement measures against it, which was in line with the provisions of the above-mentioned judicial interpretation. In summary, Hongda Company's litigation request to stop the enforcement of the house involved in the case and lift the seizure measures was not supported. In accordance with Articles 61 and 65 of the Provisions of the Supreme People's Court on Several Issues Concerning the Enforcement Work of the People's Courts (for Trial Implementation), <中华人民共和国民事诉讼法>Articles 312, Paragraphs 2 and 501 of the Interpretation of the Supreme People's Court on Application, and Article 144 of the Civil Procedure Law of the People's Republic of China, the first instance judgment: Reject the plaintiff Hongda Company's litigation claims. The case acceptance fee is 100 yuan, which is borne by the plaintiff Hongda Company.
Hongda Company appealed: the original judgment was revoked, the enforcement measures for the house involved in the case were stopped, and the litigation costs were borne by Zhao Qiang. Facts and reasons: (1) When the enforcement court served the notice of performance on Hongda Company on November 17, 2015, Hongda Company was in the first case of an outsider enforcement objection lawsuit and did not raise an enforcement objection on the issue of enforcement of mature creditors. (2) After receiving the notice of performance, Hongda Company did not raise an objection within the statutory time limit, and did not have the substantive legal effect of acknowledging the existence of debts, and the legitimate rights and interests of Hongda Company should still receive judicial relief. The house involved in the case is owned by Hongda Company, and the (2016) Liaomin Zhong No. 237 Civil Judgment, which has taken effect, confirms that Zhao Qiang, as the applicant for execution, did not provide evidence to prove that there were mature claims in this case, and the court of first instance did not review this, and the law was wrong.
The facts determined by the court of first instance shall be confirmed by the court of second instance.
The court of second instance also found that Zhou Yingguang, in the name of his daughter, signed a subscription agreement with Hongda Company on July 3, 2014, and rented out the property, and the rental proceeds were included in the financial accounts of Shengtong Company. As of October 2015, the property involved in the case was occupied, used and profited by Zhou Yingguang and Shengtong Company. The above facts are supported by evidence such as Yuan's testimony, the notice of account satisfaction, and the relevant financial details of Shengtong Company in the file, which is sufficient to determine.
The court of second instance held that after the court of first instance served the notice of performance on Hongda Company, Hongda Company neither raised an objection within the statutory time limit nor performed its obligations in accordance with the requirements of the notice of performance, and the court of first instance had a basis in law for taking compulsory enforcement measures against it.
Although the third party did not raise an objection within the statutory time limit after receiving the notice of performance, and did not have the substantive legal effect of acknowledging the existence of the debt, that is, whether Zhou Yingguang, Shengtong Company, Xinda Company and Hongda Company still existed in the creditor-debtor relationship is uncertain, the existing evidence is sufficient to prove that Hongda Company is the developer of the real estate involved in the case, although it is the owner of the property rights registration right of the property, Hongda Company has reached a house subscription agreement with Zhou Yingguang and Shengtong Company in June and July 2014, and submitted to Zhou Yingguang, Shengtong Company delivered the house involved in the case. From July 2014 to October 2015, the property involved in the case was occupied, used and benefited by Zhou Yingguang and Shengtong Company, and Zhou Yingguang and Shengtong Company were the actual rights holders of the property. The court of first instance seized the property in accordance with the law in September 2014, which was not improper. Hongda Company knew that the property involved in the case had been seized, but still jointly transferred the seized property with Zhou Yingguang and others without good faith. Paragraph 1 of article 26 of the Provisions of the Supreme People's Court on the Sealing, Seizure, or Freezing of Assets in Civil Enforcement by the People's Courts stipulates that the transfer, creation of a burden of rights, or other acts that obstruct enforcement that the person subject to enforcement has already made to the property that has been sealed, seized, or frozen, must not confront the person applying for enforcement. Accordingly, HTC's claim should not be upheld.
The court of second instance ruled: the appeal was rejected and the original judgment was upheld.
The Court held that the application of the litigation procedure for the objection of an outsider should meet the statutory requirements. Article 501 of the Interpretation of the Supreme People's Court on Application <中华人民共和国民事诉讼法>stipulates: "When a people's court enforces a judgment debtor's due claim against another person, it may make a ruling to freeze the claim and notify the other person to perform it to the applicant for enforcement." Where the other person has objections to the matured claims, and the applicant for enforcement requests partial enforcement of the objections, the people's court will not support them. Where interested parties have objections to mature claims, the people's courts shall handle them in accordance with Article 227 of the Civil Procedure Law. Where a matured claim determined by an effective legal document is denied by the other person, the people's court will not support it. In this provision, "other" refers to the sub-debtor, while "interested party" refers to a person who claims the existence of a matured claim but is the right holder. The remedies for objections of two different identities to the maturity of the claims are different, and the interested party should be resolved through the litigation of enforcement objections because it claims that the matured claims have civil rights and interests, but the remedies of "others" should generally be remedied through procedures such as objections and reconsiderations. Specifically, according to Articles 61-65 of the Provisions of the Supreme People's Court on Several Issues Concerning the Enforcement Work of the People's Courts (for Trial Implementation), when enforcing the matured claims enjoyed by the person subject to enforcement against the sub-debtor, the people's court shall inform the parties of the objection period in the notice of performance of the mature debts, and if the sub-debtor raises an objection within the time limit specified in the performance notice, the people's court shall not enforce it; if the sub-debtor does not raise an objection within the time limit specified in the performance notice, and fails to perform, Although the enforcement court has the power to rule on its enforcement, the failure of the sub-debtor to object within the time limit specified in the notice of performance does not mean that the effect of acknowledging the existence of the obligation has occurred. If the sub-debtor raises an objection such as the absence of a matured claim after the time limit has expired, the enforcement court shall generally conduct a substantive examination of whether the matured claim exists and the specific amount of the matured claim in accordance with article 225 of the Civil Procedure Law of the People's Republic of China, rather than applying the provisions of article 227 of the Civil Procedure Law of the People's Republic of China and guiding outsiders to file an objection lawsuit. As far as this case is concerned, after the enforcement court served the notice of performance on Hongda Company, although Hongda Company did not raise an objection within the statutory time limit and did not perform its obligations in accordance with the requirements of the performance notice, after the enforcement court took enforcement measures, Hongda Company still had the right to raise an objection to the enforcement court, and if it was dissatisfied with the objection ruling, it could apply for reconsideration according to law.
In summary, the first and second instance judgments improperly applied the law and should be corrected. In accordance with the provisions of Paragraph 1 of Article 207 and Paragraph 2 of Article 170 of the Civil Procedure Law of the People's Republic of China, this Court ruled as follows:
1. Revoke the Civil Judgment of the Higher People's Court of Liaoning Province (2019) Liao Min Zhong No. 1507 and the Intermediate People's Court of Chaoyang City, Liaoning Province (2018) Liao 13 Min Chu No. 21 Civil Judgment;
2. Reject the lawsuit of Chaoyang Hongda Enterprise Group Real Estate Development Co., Ltd.
The first-instance case acceptance fee of 100 yuan and the second-instance case acceptance fee of 100 yuan will be refunded.
This ruling is final.
Judge Zhou Qimeng
Judge Xiang Guohui
Judge Zheng Yong
December 8, 2021
Legal Officer Assistant Fang Chuntang
Secretary Zhou Jian
Source: Civil Trials
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