Xiamen Lawyers Association released: 92 practical questions and answers on the handling of cases by lawyers handling private lending disputes
Source: Xiamen Lawyers Association
Xiamen Lawyers Association
92 practical questions and answers on the handling of cases by lawyers in private lending disputes
01. What should be the content of a complete IOU?
Answer: When issuing an IOU, the borrower and the lender, the amount of the loan, the purpose, the interest, the loan period, and the method of lending (cash or transfer) should be clearly explained. In addition, the wording and expression in the IOU should be precise and clear, and avoid some ambiguous or ambiguous words. For example, there are two different interpretations of "X yuan in arrears". Do not issue overly simple IOUs or receipts such as "I received X yuan today", which sometimes cannot even prove who the borrower and the borrower are. In addition, for the annual interest rate, one percent is one percent and one cent is one-tenth, and for the monthly interest rate, one percent is one thousandth and one cent is one percent. This point must be clearly agreed, and in practice it is recommended to use percentages and Arabic numerals to be more accurate and clear.
In order to facilitate the later recovery and realization of the creditor's rights, it is possible to add that "the borrower shall repay the loan in full and on time, otherwise the lender may file a lawsuit with a certain court (the original defendant may choose one of the places where the original defendant is located, the place where the loan is paid or received, or it may be specifically agreed that a certain municipal court shall be specific to the administrative division at the district level), and the costs of realizing the creditor's rights such as litigation costs and attorney fees shall be borne by the borrower" Of course, the above words may cause the borrower's disgust or even refusal to apply the visa, but in view of the fact that the borrower is more likely to accept the lender's conditions at the time of lending, this recommendation will only be considered when the circumstances are appropriate.
Note: If the printed format IOU text is signed, both parties should fill in all the blank spaces of the format text or cross out the inapplicable clauses.
02. What is the difference between "IOU" and "IOU"?
A: An IOU can prove that there is an agreement between the two parties to borrow money. IOUs are often a kind of settlement of past economic exchanges between the two parties, and the creditor-debtor relationship reflected in the IOU is not necessarily a loan relationship. In addition, the statute of limitations is different. For IOUs without a repayment period, the lender can request repayment from the borrower at any time, and the statute of limitations starts from the time when the right holder asserts its rights, and the validity of the IOU can be up to 20 years. However, an IOU without a performance period is a settlement of the past economic exchanges between the two parties, and the right holder shall claim its rights with the people's court within three years from the date of issuance of the IOU.
03. Can foreign currencies and securities become the subject matter of private lending?
Answer: The subject matter of private lending should not be limited to traditional currency, and disputes arising from the borrowing of foreign currency or bearer securities are also private lending disputes. According to Article 1 of the Provisions of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases (Fa Shi [2020] No. 17), "the term "private lending" as used in these Provisions refers to the act of financing between natural persons, legal persons and unincorporated organizations". Therefore, securities such as renminbi, Hong Kong dollars, Australian dollars, Taiwan dollars, foreign currencies and treasury bills can become the subject matter of private lending.
04. What is the scope of liability of the mortgagor in the event that the collateral guarantee contract is invalid?
Answer: According to Article 388 of the Civil Code, "to establish a security interest, a security contract shall be concluded in accordance with the provisions of this Law and other laws. Guarantee contracts include mortgage contracts, pledge contracts and other contracts with security functions. The guarantee contract is a subordinate contract of the main creditor's rights and debts. If the principal creditor's rights and debts contract is invalid, the guarantee contract shall be invalid, except as otherwise provided by law. After the guarantee contract is confirmed to be invalid, if the debtor, the guarantor and the creditor are at fault, they shall each bear the corresponding civil liability according to their faults."
Article 17 of the Interpretation of the Supreme People's Court on the Application of the Civil Code of the People's Republic of China on the Guarantee System stipulates that:
"If the main contract is valid but the guarantee contract provided by a third party is invalid, the people's court shall determine the liability of the guarantor according to different circumstances:
(1) If both the creditor and the guarantor are at fault, the liability of the guarantor shall not exceed one-half of the debtor's inability to pay off;
(2) If the guarantor is at fault and the creditor is not at fault, the guarantor shall be liable for the part that the debtor cannot repay;
(3) If the creditor is at fault and the guarantor is not at fault, the guarantor shall not be liable for compensation.
If the invalidity of the main contract results in the invalidity of the guarantee contract provided by a third party, the guarantor shall not be liable for compensation if it is not at fault, and if the guarantor is at fault, its liability shall not exceed one-third of the part that the debtor cannot repay."
Precedent of the People's Court of Siming District, Xiamen City: The collateral is a real estate owned by the military, and the guarantor provides a guarantee based on it, which was later found invalid by the court, and the guarantor is found to be invalid, and the guarantor is liable for compensation, which is one-half of the amount of the main debt, but the amount of compensation shall not exceed the value of the collateral. "No more than the value of the collateral" here is not seen in the law, but the court makes a thorough decision based on the principle of fairness and justice, which is in line with the guarantor's intention to provide real estate mortgage guarantee, otherwise the collateral guarantor may break through the value of the collateral and assume more guarantee liability.
05. Can the sales contract be used as a guarantee for the loan contract?
A: According to Article 23 of the Provisions of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases (Fa Shi [2020] No. 17), it is stipulated that:
"Where a party concludes a sales contract as a guarantee for a private lending contract, and the borrower is unable to repay the loan after the loan expires, and the lender requests performance of the sales contract, the people's court shall hear it in accordance with the legal relationship of private lending. Where parties modify litigation claims based on the circumstances of the court trial, the people's courts shall permit it."
If the borrower fails to perform the monetary debts determined by the effective judgment after the judgment made in accordance with the legal relationship of private lending takes effect, the lender may apply for an auction of the subject matter of the sales contract to repay the debt. The borrower or lender shall have the right to claim refund or compensation for the difference between the price obtained from the auction and the principal and interest of the loan to be repaid.
06. When there is both a guarantee for the borrower and a joint and several liability guarantee for the guarantor, how to agree to protect the rights and interests of the borrower in the most flexible way?
Answer: When there is both a security in rem and a guarantee from a person, it may be expressly stipulated in the IOU that the lender can not only realize the creditor's rights in respect of the security in rem, but also require the guarantor to bear joint and several guarantee liability, and the latter shall not use the priority of the security in rem as a reason for refusing to assume the guarantee liability immediately and unconditionally. At the same time, if the guarantor provides collateral as a third party, it is also recommended to further specify that the lender may realize the creditor's rights in respect of the guarantor's security, and may also require the guarantor to bear joint and several guarantee liability.
07. If there is an IOU from the guarantor, and the debtor writes the outstanding amount under the same IOU without confirmation from the guarantor, does it belong to the establishment of a new loan relationship, and does the guarantor need to continue to bear the guarantee liability?
Answer: It should be specifically analyzed, if there is a subsequent borrowing and repayment between the borrower and the lender, it should be considered that a new loan contract relationship has been established, and the guarantor does not need to bear the guarantee liability. If the borrower maintains the original loan amount, term and other conditions, but only repays part of the principal and interest and handwrites the outstanding amount on the IOU, the guarantor shall still be deemed to continue to be liable according to its guarantee intention.
However, it should be noted that the courts in different regions have different determinations, and there have been precedents in Fuzhou where courts at both levels have ruled that the guarantor should continue to bear the guarantee liability.
08. How to ensure that the guarantor's liability is joint and several guarantee liability and the effective guarantee period when drafting the IOU?
Answer: In the process of borrowing, when a guarantor provides a guarantee for the borrower's loan debt, it shall be clearly stated in the IOU that "the guarantor shall provide joint and several liability guarantee for the principal and interest of the aforesaid loan of the borrower, as well as the lawyer's fees and preservation insurance premiums incurred by the creditor for the purpose of recovering the creditor's rights, and the guarantee period shall be ** year from the date of expiration of the aforesaid loan term".
09. Is it possible to add an outsider as a guarantor in the process of litigation mediation or enforcement mediation in a loan case?
Answer: If the guarantor voluntarily guarantees, he or she may be added as a guarantor in the litigation mediation. The person or his representative shall sign and confirm in the mediation record.
10. Does the non-borrower have to bear the guarantee liability when signing the IOU?
A: Not necessarily. According to Article 20 of the Provisions of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases (Fa Shi [2020] No. 17):
"Where other persons sign or affix their seals to IOUs, receipts, IOUs, or other proof of creditor's rights or loan contracts, but do not indicate their identity as guarantors or bear guarantee liability, or cannot be presumed to be guarantors through other facts, and the lender requests that they bear guarantee liability, the people's court will not support it."
11. Does the online lending platform need to be held liable for the private lending relationship established through the online lending platform?
Answer: Depending on the circumstances, the online lending platform shall bear the guarantee liability if its behavior meets the guarantee characteristics stipulated by law.
According to Article 21 of the Provisions of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases (Fa Shi [2020] No. 17), it is stipulated that:
"Where a borrower and a borrower form a lending relationship through an online lending platform, and the provider of the online lending platform only provides intermediary services, and the parties request that they bear the guarantee liability, the people's court will not support it. Where the provider of an online lending platform expressly indicates through a web page, advertisement, or other media or has other evidence to prove that it provides guarantee for the loan, and the lender requests that the provider of the online lending platform bear the guarantee liability, the people's court shall support it."
12. If the settlement of other claims is converted into the nature of a loan, is it necessary to examine whether the payment has been delivered or whether the underlying creditor's right relationship exists?
A: In practice, there are controversies, and courts in different cities hold different views, and some courts hold that as long as the underlying creditor's right relationship does exist, the borrower should bear the debt in accordance with the amount specified in the IOU if it fails to provide evidence to the contrary. Some courts have held that the basis for the formation of the underlying relationship should be further ascertained, whether there is a monetary delivery or other delivery of the subject matter.
Taking the Xiamen Siming District agency case as an example, both the first instance and the first instance of retrial partially adopted the amount of the creditor's rights on the grounds that the evidence formed by the underlying creditor's rights relationship was insufficient, and the Xiamen Intermediate People's Court held that the IOU was a settlement voucher, and there were other parts of the supporting evidence, forming a high degree of generality and supporting the entire amount of creditor's rights.
13. When is the loan contract between individuals established?
A: The loan contract between natural persons is a practical contract and is formed when the lender provides the loan. Except for the requirements for the establishment of a loan contract signed between natural persons, if a loan contract is not signed, it is generally established when the money provided by the lender is accepted by the borrower.
14. When borrowing money between individuals, when is the loan contract established when WeChat transfer is used?
A: Article 679 of the Civil Code stipulates that "a loan contract between natural persons shall be established when the lender provides the loan". Paragraph 2 of Article 9 of the Provisions of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases (Fa Shi [2020] No. 17) stipulates that: "If payment is made in the form of bank transfer, online electronic remittance, etc., the funds shall be paid from the time when the funds reach the borrower's account. It can be deemed to meet the requirements for the establishment of a loan contract between natural persons under Article 679 of the Civil Code". It can be seen that when the parties to the loan contract agree to pay by online electronic remittance or other means, the loan contract is only established when the funds arrive in the borrower's account. WeChat transfer is one of the types of online electronic remittances, so this provision should apply.
15. If the name of the borrower on the loan contract is inconsistent with the name of the person who actually received the payment, should a lawsuit be filed against the contract borrower or the actual payee to claim the repayment liability?
Answer: According to Article 679 of the Civil Code, "a loan contract between natural persons shall be established when the lender provides the loan". Therefore, on the basis of the existence of evidence by the lender to prove the establishment of the loan, it should further distinguish according to the basic legal relationship: analyze the specific circumstances, whether the borrower appoints a third party to collect the loan or the borrower accepts the entrustment of the third party to conclude the loan contract. If the loan contract stipulates that the borrower enters into a loan contract, but a third party is appointed to accept the payment, the borrower of the contract shall be required to bear the repayment liability.
According to Article 925 of the Civil Code:
"Where a contract entered into between a trustee and a third party in its own name and within the scope of the principal's authorization, and the third party is aware of the agency relationship between the trustee and the principal at the time of conclusion of the contract, the contract is directly binding on the principal and the third party, unless there is conclusive evidence to prove that the contract binds only the trustee and the third party."
Article 926 of the Civil Code stipulates:
"If the trustee fails to perform its obligations to a third party due to reasons attributable to the settlor, the trustee shall disclose the settlor to the third party, and the third party may therefore choose the trustee or the settlor as the counterparty to assert its rights, but the third party shall not change the selected counterparty."
If the conclusion of the loan contract is that the borrower accepts the entrustment of a third party to conclude the loan contract on its behalf, the choice of litigation strategy shall be made based on the evidence and the above two provisions.
16. If the plaintiff files a lawsuit with the court and submits an IOU that does not indicate the lender, can the plaintiff's qualification as the subject of the lawsuit be recognized by the court?
Answer: The second paragraph of Article 2 of the Provisions of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases (Fa Shi [2020] No. 17) stipulates:
"Where the creditor's rights vouchers such as IOUs, receipts, and IOUs held by the parties do not indicate the creditor, and the parties holding the creditor's rights vouchers file a private lending lawsuit, the people's court shall accept it.
If the defendant raises a factual defense against the plaintiff's creditor qualifications, and the people's court finds that the plaintiff does not have the creditor qualifications after examination, it shall rule to dismiss the lawsuit."
According to this provision, if the defendant has evidence to prove that the plaintiff is not the actual lender of the loan in question, then the court will rule to dismiss the lawsuit, otherwise, the plaintiff, as the holder of the original IOU, will be recognized by the court as the plaintiff's qualification as the subject of the lawsuit.
17. If the name of the debtor on the IOU or IOU is inconsistent with the name on the ID card, how to determine the identity of the defendant?
Answer: Evidence of creditor's rights such as IOUs or IOUs is not only evidence of the amount of claims claimed by the obligee, but also evidence to prove the establishment of the contractual relationship between the two parties. Therefore, the IOU or IOU should be clear in content and written in a standardized manner to avoid disputes.
As long as the signature can reflect the characteristics of an individual's behavior and identify the identity of the actor, it should be recognized that it has the same signature effect as the officially registered name, that is to say, the essence of the signature issue lies in judging the authenticity and validity of the expression of intent, rather than the consistency and comparison of appearance. If there is a dispute between the two parties as to whether the common name, pseudonym, or other informal signatures are indeed signed by the person, the burden of proof needs to be allocated in accordance with the principle of "whoever asserts the claim shall present the evidence", and the authenticity of the facts asserted by the parties can be determined from the public recognition of the people around the signatory, trading habits, daily life experience, etc., or through handwriting and fingerprint identification procedures.
18. If there is a general guarantor in the loan contract, how should the borrower and guarantor be listed when filing a lawsuit?
Answer: In a general guarantee, if the creditor sues the debtor and the guarantor together, the people's court can accept it, and if the general guarantor is sued only, the people's court shall reject the lawsuit. However, when making a judgment, except as provided for in the proviso to paragraph 2 of Article 687 of the Civil Code, it should be made clear in the main text of the judgment that the guarantor shall only bear the guarantee liability for the part of the debtor's property that cannot be performed after being enforced in accordance with law. In addition, if the lender only sues the borrower, the people's court may not add the guarantor as a co-defendant.
19. If there are joint and several liability guarantors in the loan contract, how should the borrower and guarantor be listed when filing a lawsuit?
A: In a joint and several liability guarantee, if the lender only sues the borrower or only the guarantor, the court does not take the initiative to add the guarantor or the borrower as co-defendants. If the guarantor who is sued claims that the borrower participates in the lawsuit, and the lender still does not apply to add the borrower as a co-defendant after the court's explanation, the court may only hear the lawsuit for guarantee, or may add the borrower as a co-defendant.
20. When a branch of a legal person acts as a guarantor of a loan contract, should the branch and its legal person be added as co-defendants?
Answer: In addition to the branch of a financial institution, if the branch structure of another legal person acts as the guarantor, the branch and its legal person shall be added as co-defendants.
Article 11 of the Interpretation of the Supreme People's Court on the Application of the Civil Code of the People's Republic of China on the Guarantee System (Fa Shi [2020] No. 28) provides:
"Where a branch of a company provides a guarantee in its own name without a resolution of the company's shareholders (general meeting) or the board of directors, and the counterparty requests that the company or its branch bear the guarantee liability, the people's court will not support it, except where the counterpart does not know and should not know that the branch has provided external guarantees without the company's resolution procedures.
Where a branch of a guarantee company provides a guarantee to the outside world without the authorization of the guarantee company, and the guarantee company or its branch claims that it does not bear the guarantee liability, the people's court shall support it, except where the counterparty does not know and should not know that the branch provides an external guarantee without the authorization of the guarantee company.
Where a branch of the company provides a guarantee to the outside world, and the counterparty is not in good faith and requests the company to bear the liability for compensation, it shall be handled with reference to the relevant provisions of Article 17 of this interpretation."
Therefore, the external guarantee liability of the branch needs to be resolved by the power authority or enforcement agency of the legal person, otherwise the validity of the guarantee act needs to be judged according to whether the counterparty is in good faith. If the creditor is at fault, the liability of the enterprise legal person may be partially or completely exempted if the creditor is at fault, such as neglecting to examine whether the guarantee of the branch has been subject to the company's resolution procedure and whether it has colluded with the branch. When the creditor colludes with the branch office to provide the guarantee, the enterprise legal person shall not bear the guarantee liability.
21. In private lending, if the creditor transfers the creditor's rights without notifying the debtor, and the assignee sues the debtor, can the debtor determine that the assignment of creditor's rights is invalid on the ground that the creditor has not fulfilled the notification obligation at that time?
Answer: If the debtor has not been notified of the assignment of creditor's rights, but the assignee sues, the fact of the lawsuit is essentially notified to the debtor, which complies with the relevant provisions of the Civil Code. The assignment agreement of creditor's rights shall take legal effect when the complaint reaches the debtor.
22. Can the lender in the loan contract transfer the creditor's rights to a third party?
A: Yes, but the debtor should be notified to perform to a third party. Except where it cannot be transferred according to the nature of the obligatory right, it cannot be transferred in accordance with the agreement of the parties, and it cannot be transferred in accordance with the provisions of law.
23. Can the loan relationship be established only on the basis of the transfer voucher without the IOU?
Answer: Article 16 of the Judicial Interpretation on Private Lending stipulates that: "If the plaintiff files a private lending lawsuit solely on the basis of the transfer voucher of a financial institution, and the defendant argues that the transfer is to repay the previous loans or other debts of both parties, the defendant shall provide evidence to prove his claim." After the defendant provides relevant evidence to prove its claim, the plaintiff shall still bear the burden of proof for the establishment of the loan relationship." According to an online search of existing judgment documents, the Siming District People's Court of Xiamen Municipality and the Intermediate People's Court of Xiamen Municipality have a view that where a unilateral transfer is a loan, and there is no other evidence to prove that there is an agreement to borrow, it is generally not found to be a lawful and valid loan. In addition to the transfer voucher, the lender shall provide evidence such as telephone recordings, WeChat chat records, text message records, etc., to prove that there is a loan agreement between the two parties.
24. If there is only an IOU and other creditor's rights certificates, but no payment voucher is provided, can a loan relationship be determined?
A: If the borrower argues that the borrower has not received the loan, the lender must provide further evidence to prove that the loan has been provided, including how the loan was paid, whether the borrower has repaid the loan, and whether the lender has called for payment. When hearing a private lending dispute case, the people's court shall strictly examine the reasons for the occurrence of the loan, the time, the place, the source of the funds, the method of delivery, the flow of funds, the relationship between the borrower and the borrower, the economic situation, and other facts, to examine whether the loan has actually been performed.
25. Can the torn IOU be re-pasted, can it still be used as evidence?
Answer: An IOU can be used as evidence if the corners are torn off and the general content is not affected, but if the entire IOU is torn and there are major flaws, and there is no other evidence to prove the existence of the loan relationship, it cannot be used as the basis for determining the facts of the case alone, it does not have the legitimacy of the evidence, loses the validity of the evidence, and the law will not protect it.
26. Under what circumstances is a private loan contract invalid?
A: According to Article 13 of the Provisions of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases (Fa Shi [2020] No. 17), it is stipulated that:
"In any of the following circumstances, the people's court shall find that the private lending contract is invalid:
(1) Arbitraging loans from financial institutions for on-lending;
(2) Relending funds obtained by means such as borrowing money from other for-profit legal persons, raising funds from employees of that unit, or illegally absorbing deposits from the public;
(3) Lenders who have not obtained lending qualifications in accordance with law provide loans to unspecified targets of society for the purpose of making profits;
(4) The lender knew or should have known in advance that the borrower was borrowing money for illegal or criminal activities, but still provided the loan;
(5) Violating mandatory provisions of laws or administrative regulations;
(6) Contrary to public order and good customs".
In addition, the Civil Code also provides for the invalidity of contracts, such as:
Article 146 stipulates: "Civil juristic acts carried out by the actor and the counterpart with false expressions of intent are invalid."
Article 153 stipulates: "Civil juristic acts that violate the mandatory provisions of laws and administrative regulations are invalid. However, the mandatory provisions do not lead to the invalidity of the civil juristic act. Civil juristic acts that are contrary to public order and good morals are invalid".
Article 154 stipulates: "Civil juristic acts in which the perpetrator maliciously colludes with the counterpart to harm the lawful rights and interests of others are invalid."
27. What evidence needs to be prepared for the prosecution of private lending cases?
Answer: You need to provide relevant evidence of the loan agreement and the fact of the loan, such as IOUs, telephone recordings, WeChat chat records, SMS records, bank transfer vouchers, WeChat transfer vouchers, Alipay transfer vouchers, etc.
28. In addition to the evidence listed in the preceding paragraph, will the court require other materials?
Answer: In reality, there are many cases of taking credit funds from financial institutions and then lending them to borrowers, and according to the first paragraph of Article 13 of the Provisions of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases, "if a loan from a financial institution is arbitraged and re-lending, the private lending contract shall be invalid. In order to examine whether there is a situation of on-lending of credit funds, the court may require bank statements for three months before and after the loan of funds as auxiliary materials for the review of facts."
29. Can I sue the court if I only have the other party's WeChat and Alipay accounts and no identity information?
Answer: Due to the widespread use of payment platforms such as WeChat and Alipay, the agreement on private lending is often reflected in WeChat chats, and funds are often lent through WeChat and Alipay. If the other party's ID number and other information are not obtained in advance, they may apply to the court to obtain their WeChat and Alipay real-name authentication information from Tenpay Payment Technology Co., Ltd., Shenzhen Tencent Computer System Co., Ltd., and Alipay (China) Network Technology Co., Ltd. through the other party's WeChat and payment account accounts at the time of litigation. In legal practice, the borrower's identity information may be left blank, and an application for investigation and evidence collection may be prepared after the prosecution materials are prepared, and an application for investigation and evidence collection may be submitted at the time of filing the case, requesting the court to issue a supplemental or investigation order, and then use the issued supplemental or investigation order to the corresponding bank to request the bank to provide the specific identity information of the borrower.
30. Will the court require the parties to be present for questioning if there is only IOU and no money delivered? Are there any cases in which false litigation has been found?
A: For loan cases where there are only IOUs and no proof of delivery such as transfers, the court review is relatively strict, and many courts will require the parties to be present for questioning. In Xiamen, there was a case in which the plaintiff filed a private lending dispute against the plaintiff who did not know each other, and in fact the plaintiff filled in the blank IOU as the lender at the request of his friend, so as to act as the plaintiff and file a lawsuit. The defendant has been prosecuted three times before, all of which were sued by the same criminal suspect in different names, so the court's questioning of the plaintiff himself was extremely detailed, and the plaintiff also truthfully confessed the facts of the false litigation on behalf of the plaintiff, and finally the two were investigated for criminal responsibility on suspicion of false litigation. Therefore, to act as an agent for such cases, please refer to the relevant content of the Civil Professional Committee's "Guidelines for Lawyer Lending in Private Lending Cases", and carefully and properly receive and record the case situation.
31. In a private lending case, can the lender require the other party to bear the lawyer's fees incurred in realizing the creditor's rights?
A: If both parties have made a clear agreement that the lawyer's fees shall be borne by the other party, the other party may be required to bear them. If there is no agreement, the court will generally not support it.
32. If the loan contract only stipulates the payment of attorney's fees, but does not clearly stipulate the specific amount of attorney's fees, how to claim attorney's fees?
A: The court generally makes a discretionary decision based on the actual lawyer's fees incurred by the plaintiff and with reference to the current lawyer's fee standard. Therefore, the lender should provide evidence such as the entrustment contract, the invoice for the lawyer's fee and the transfer voucher to prove the actual lawyer's fee for the lawyer's fee. However, if the lawyer's fee is significantly higher than the prescribed lawyer's fee standard, and one party requests an adjustment, the court may adjust it at its discretion.
33. After the annual interest rate of the loan reaches four times the one-year loan prime interest rate at the time of the conclusion of the contract, can the lender still obtain the support of the people's court in claiming other expenses stipulated in the loan contract from the borrower?
A: At present, the determination is controversial. Article 29 of the Provisions of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases (Fa Shi [2020] No. 17) provides:
"If the lender and the borrower have agreed on both the overdue interest rate and the liquidated damages or other expenses, the lender may choose to claim the overdue interest, liquidated damages or other expenses, or they may claim both, but the people's court will not support the portion of the total amount exceeding four times the one-year loan prime interest rate at the time of the conclusion of the contract."
It can be seen that the court only upholds the part of the overdue interest, liquidated damages or other expenses that the lender can claim that does not exceed four times the one-year loan prime rate at the time of the conclusion of the contract. The legislative purpose of this article is to protect the rights and interests of the parties in a balanced manner when the borrower and the borrower agree on the overdue interest rate, liquidated damages and other fees, and prevent the parties from raising the borrowing interest rate in a disguised way.
In addition to the overdue interest rate, some loan contracts also stipulate that attorney's fees, litigation costs, preservation fees, etc. shall be borne by the defaulting party, and there is some controversy as to whether these expenses are "other expenses" as stipulated in the above-mentioned law.
The proponents argue that, from the perspective of legal nature, overdue interest and liquidated damages are the costs or considerations that the borrower should pay to obtain the loan, so the "other expenses" stipulated in the above-mentioned laws should belong to the same type of expenses. However, attorney's fees, litigation fees, preservation fees, etc., are different from the above-mentioned expenses in that they are expenses incurred by the lender to protect its legitimate rights and interests after the lender and the borrower enter into litigation proceedings due to a dispute arising from the loan, and are not the monetary benefits that the lender can directly obtain based on the principal of the loan. If the borrower is able to fulfill the repayment obligation as agreed, attorney's fees, litigation costs and other expenses will not be incurred. From the point of view of the principle of fairness, lenders should not be restricted from claiming such types of fees. The main reasons are:
First of all, according to the legislative intent of Article 29 of the Provisions of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases (Second Amendment in 2020), this article is a provision on the coexistence of overdue interest, liquidated damages and other expenses, and the main purpose is to protect the rights and interests of the parties in a balanced manner when the borrower and the borrower agree on the overdue interest rate, liquidated damages and other fees. According to the above-mentioned judicial interpretation, when the borrower is late in repayment, the lender has the right to require the borrower to pay the overdue interest, liquidated damages and other expenses. From a practical point of view, "other expenses" mainly involve service fees, consulting fees, management fees, etc., agreed between the lender and the borrower. The above-mentioned expenses are still necessary costs paid by the borrower to obtain the loan. The overdue interest and liquidated damages agreed upon by the parties at the same time are no different in nature from interest, and the separate agreement is only to circumvent the upper limit of the interest rate. It is precisely in order to prevent the parties from raising the interest rate of the loan in a disguised way that the judicial interpretation limits the standard of protection for other expenses incurred including service fees, consulting fees, management fees, etc., to less than four times the one-year loan prime interest rate at the time of the conclusion of the contract.
Second, the nature of the expenses incurred by the obligee to protect its legitimate rights and interests, such as attorney's fees and litigation costs, is completely different from the costs paid by the borrower to obtain the loan, and the lawyer's fees and litigation preservation fees should not be classified as "other expenses".
Finally, the costs of litigation are not necessarily borne by the lender claiming repayment. When the dispute is adjudicated by the people's court, according to the principle that the litigation costs shall be borne by the losing party, if the dispute arises due to the borrower's reasons, it is more fair and reasonable for the borrower to bear this part of the costs. In this case, it is reasonable that the costs of the proceedings are not included in the "other costs".
The opposing party argued that the lawyer's fees, litigation costs, preservation fees and the overdue interest specified in the case were also incurred as a result of the loan involved in the case, so they should be "other expenses" as stipulated in the above-mentioned law, so the part that exceeded the one-year loan market prime interest rate at the time of the conclusion of the contract should not be supported. Moreover, the interest rate protected by the law is already a high standard, which shows that the financing cost of private lending is high, and from the perspective of the principle of fairness, it should also be restricted.
There are different adjudication results in judicial practice, and both views are adopted. Therefore, different points of view can be used to assert or defend different positions.
34. If the borrower has paid interest that exceeds the maximum standard prescribed by law, how will the interest on the excess part be handled?
Answer: Article 25 of the Provisions of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases (Fa Shi [2020] No. 17) stipulates that: "If the lender requests the borrower to pay interest at the interest rate agreed in the contract, the people's court shall support it, except where the interest rate agreed upon by both parties exceeds four times the one-year loan market prime interest rate at the time of the conclusion of the contract". This provision is mandatory, and the interest rate of private loans shall be limited to four times the interest rate of similar bank loans, and the excess part shall not be protected by law. In private lending disputes, the interest paid by the borrower in excess of the maximum standard prescribed by law will generally be determined by the court to offset the principal, which is also the mainstream trend of adjudication in judicial practice.
However, if the borrower has paid all the principal and interest, can the borrower claim that the lender should return the interest it has paid in excess of the maximum standard prescribed by law?
On September 1, 2015, the Provisions of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases came into effect, in which Article 26 stipulates that:
"Where the interest rate agreed upon by the borrower and the borrower does not exceed 24% per annum, and the lender requests the borrower to pay interest at the agreed interest rate, the people's court shall support it. If the interest rate agreed between the borrower and the borrower exceeds 36% per annum, the interest agreement on the excess part shall be invalid. Where the borrower requests the lender to return the interest paid in excess of 36% of the annual interest rate, the people's court shall support it."
However, the Provisions of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases (Fa Shi [2020] No. 17) amended the above provisions on August 20, 2020 to read:
"Article 25: Where a lender requests that the borrower pay interest at the interest rate agreed upon in the contract, the people's court shall support it, except where the interest rate agreed upon by both parties exceeds four times the one-year loan market prime interest rate at the time the contract is concluded. The term 'one-year loan market quotation rate' referred to in the preceding paragraph refers to the one-year loan market quotation rate authorized by the People's Bank of China to be published monthly by the National Interbank Lending Center from August 20, 2019."
This clause reiterates that some people's courts will not support the lender's claim that the interest exceeds four times the LPR calculation, but deletes the provision that the borrower can request the return of the interest, so after August 20, 2020, there is no direct legal basis for the borrower to claim the refund of the excess interest (Note: although it is not directly stipulated in the judicial interpretation that the refund can be requested, there is no legal basis for the interest charged in excess of the upper limit prescribed by law, which is unjust enrichment and can be refunded in accordance with the relevant provisions of the Civil Code).
35. If the borrower has paid interest in excess of the upper limit prescribed by law, but the borrower does not appear in court or make a written defense at the trial, does the court have the right to take the initiative to deduct the borrower's overpaid interest from the principal of the loan?
Answer: Generally speaking, it cannot be deducted voluntarily, and the overpaid interest is a kind of unjust enrichment, and the borrower can claim to return it separately, but in practice, the judge will often require the plaintiff to confirm whether the overpaid interest agrees to deduct the principal, and if the plaintiff is willing to deduct it, the judge can directly deal with it.
36. Where there is no interest stipulated in the private loan contract, and the borrower voluntarily pays it, but the borrower demands the lender to return the interest paid on the grounds of unjust enrichment, does the people's court support it?
A: The people's courts generally do not support such cases. Article 122 of the Civil Code of the People's Republic of China stipulates that "if another person obtains improper benefits without legal basis, the person who has suffered losses has the right to request the return of the improper benefits". According to this rule, there are four elements of unjust enrichment:
a party has an advantage;
the other party suffers losses;
There is a causal relationship between the gain and the loss;
There is no legal basis for profiting, i.e. there is no "legal cause", which is the key to unjust enrichment.
In this issue, the borrower's voluntary payment of interest is based on the establishment and effective performance of the loan contract, and is not without "legal reasons". Specifically, the loan contract does not stipulate the interest, and there are two situations:
One is that the two parties may have had an oral agreement, which is not uncommon in practice, and the borrower pays the interest according to the agreement, which is a normal performance of the loan contract and shall not be required to be returned;
On the other hand, if the two parties have indeed not agreed on the interest in writing or orally, in this case, the borrower's initiative to pay interest can be regarded as a new offer to revise the loan contract and increase the relevant content of interest payment for it, and the lender has no objection and accepts it, then it is an expression of intention to commit to the offer, and the parties have thus completed the revision of the loan contract, and the new contract has been fulfilled by the completion of the payment of interest (and principal) by the borrower, and the borrower's request for return of interest should not be supported.
37. In private lending cases, how to deal with cases where interest has not been agreed?
Answer: Article 24 of the Provisions of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases (Fa Shi [2020] No. 17) stipulates that:
"Where the borrower and the lender have not agreed on interest, and the lender claims to pay interest, the people's court will not support it.
Where the agreement on interest is unclear in a loan between natural persons, and the lender claims to pay interest, the people's court will not support it. Except for loans between natural persons, where the agreement between the borrower and the lender on the loan interest is unclear, and the lender claims the interest, the people's court shall determine the interest based on factors such as the local or the parties' transaction methods, trading habits, and market prime interest rates."
However, if the other party is late in repayment, the other party may be required to bear the default liability for overdue repayment with reference to the interest calculated with reference to the current one-year loan prime interest rate from the date of overdue repayment.
38. If the borrower and the borrower only agree on the interest rate standard orally, can the lender claim the interest? If the borrower and the borrower are not clear about the loan interest agreement, how will the court deal with the lender's claim for interest?
A: If the lender can provide relevant evidence to prove that the parties have agreed orally on a specific interest rate, the lender can claim interest.
If the agreement between the borrower and the borrower on the loan interest is not clear, according to Article 680 of the Civil Code, if the loan contract is not clear on the payment of interest, and the parties cannot reach a supplementary agreement, the interest shall be determined in accordance with the local or the parties' transaction methods, trading habits, market interest rates and other factors. However, if it is borrowed between natural persons, it is deemed to have no interest.
39. When the borrower signs the IOU, if the borrower and the borrower do not fill in the interest rate standard in the IOU, but only use a space to indicate it, can the lender fill in the interest rate standard on the IOU when suing?
A: If the lender can combine other evidence such as text messages, WeChat chat records, repayment amounts, repayment remarks and other evidence to prove that the parties have actually agreed on the borrowing interest rate, the court will generally not find that the parties have not agreed on the interest rate just because the lender has filled in the interest rate standard by itself. However, if it cannot be proved that the two parties actually have an agreed interest rate, if the borrower directly fills in the interest rate standard on the IOU when filing a lawsuit, it is suspected of the illegal act of false litigation, and once it is verified to be true, it will face the risk of being punished by the judiciary.
40. The borrower and the lender signed the Loan Contract on January 1, 2016, agreeing that the loan amount shall be RMB 1 million, the loan interest rate shall be 24% per annum, the loan term shall be 1 year, and the principal and interest shall be repaid when due. After the signing of the Loan Contract, the lender shall deliver the loan of RMB 1 million to the borrower on the day of signing the loan contract. After the expiration of the loan term, the lender repeatedly demanded the borrower to repay the loan within the statute of limitations. On March 1, 2021, the court accepted the case, how to calculate the interest on the lender's loan?
Answer: For the newly accepted first-instance private lending cases after August 20, 2020, if the loan contract is established before August 20, 2020, the interest from the establishment of the contract to August 19, 2020 shall be based on the original "second line and three districts" The interest from August 20, 2020 to the date of return of the loan shall be paid at the interest rate agreed in the contract, which shall not exceed four times the one-year LPR at the time of the conclusion of the contract, and if the loan contract is established after August 20, 2020, the interest from the date of the contract to the date of return of the loan shall be paid at the interest rate agreed in the contract, which shall not exceed four times the one-year LPR at the time of the conclusion of the contract.
The interest on the loan is calculated in stages, as follows:
From January 1, 2016 to August 19, 2020: Based on the loan principal of RMB 1 million, the interest for the period from January 1, 2016 to August 19, 2020 will be calculated at the annual interest rate of 24% agreed in the Loan Contract;
From August 20, 2020 to March 1, 2021: Based on the principal amount of the loan of RMB 1 million, the interest for the period from August 20, 2020 to March 1, 2021 will be calculated at four times the one-year loan prime rate (3, 85%).
41. Is the agreed monthly interest rate of 2% protected by law?
A: Before August 20, 2020 (excluding the 20th), according to the judicial interpretation of private lending at that time, the annual interest rate of 24%, that is, the monthly interest rate of 2%, was protected by law, and after August 20, 2020, according to Article 25 of the Provisions of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases (Fa Shi [2020] No. 17): " If the lender requests the borrower to pay interest at the interest rate agreed in the contract, the people's court shall support it, except where the interest rate agreed upon by both parties exceeds four times the one-year loan prime interest rate at the time of the conclusion of the contract", so after August 20, 2020, the maximum annual interest rate shall not exceed four times the one-year loan market prime interest rate at the time of the conclusion of the contract.
42. In the absence of an agreement in the contract, can the interest be included in the principal of the loan and the overdue interest calculated?
A: No, you cannot. The calculation base of overdue interest is still the principal of the loan, and the interest cannot be included in the principal to calculate overdue interest. However, if there is an agreement, the agreement shall be effective within the scope of Article 27 of the Provisions of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases (Fa Shi [2020] No. 17), which specifically provides: " If the interest rate of the previous period does not exceed four times the one-year loan market prime interest rate at the time of the conclusion of the contract, the amount stated in the re-issued credit certificate may be recognized as the principal of the later loan. The interest on the excess part shall not be recognized as the principal of the later loan. If, in accordance with the calculation of the preceding paragraph, the sum of the principal and interest payable by the borrower after the expiration of the loan period exceeds the sum of the principal of the initial loan and the interest for the entire loan period calculated on the basis of the initial loan principal and four times the one-year loan market prime interest rate at the time of the conclusion of the contract, the people's court shall not support it."
43. How to deal with the fact that the parties have replaced the IOU and loan contract and included the past interest in the principal?
Answer: If the interest rate of the previous period does not exceed four times of the one-year loan market prime interest rate at the time of the conclusion of the contract, the amount stated in the re-issued credit certificate can be recognized as the principal of the later loan. The interest on the excess part shall not be recognized as the principal of the later loan. Where, calculated in accordance with the preceding paragraph, the sum of the principal and interest payable by the borrower after the expiration of the loan period exceeds the sum of the principal of the initial loan and the interest for the entire loan period calculated based on the principal of the initial loan and four times the one-year loan market prime interest rate at the time of the conclusion of the contract, the people's court shall not support it.
If the IOUs and IOUs provided by the parties have been replaced during the performance of the contract, and the interest is included in the principal, in such a situation, it shall be calculated according to the above provisions first, whether the compound interest will exceed four times the LPR, and if so, it is recommended to take the initiative to adjust the amount of the lawsuit.
44. If the loan contract was established between August 20, 2019 and August 19, 2020, if the lender files a lawsuit now, should the interest rate protection standard from August 20, 2020 to the date of repayment of the loan be applied no more than four times the one-year LPR at the time of the conclusion of the contract or no more than four times the one-year LPR at the time of the lawsuit?
A: There are different views on this issue in judicial practice.
The first view is that, according to the second paragraph of Article 31 of the Provisions of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases (Fa Shi [2020] No. 17): " In a new first-instance private lending case accepted after August 20, 2020, where the loan contract was established before August 20, 2020, and the parties request that the interest part from the conclusion of the contract to August 19, 2020 be applied to the judicial interpretation at that time, the people's court shall support it, and for the interest part from August 20, 2020 to the date of return of the loan, the interest rate protection standard provided for in this article shall be applied to the calculation of the interest rate protection standard provided for in this article at the time of litigation." Therefore, if the loan contract was established between August 20, 2019 and August 19, 2020, the interest rate protection standard should be calculated at four times the one-year LPR at the time of the lawsuit, as held by the Shandong Provincial High People's Court.
The second view is that the "interest rate protection standard stipulated in this article at the time of litigation" cannot be simply interpreted literally as "four times the one-year LPR at the time of litigation", and should be interpreted systematically. According to Article 25 of the Provisions of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases (Fa Shi [2020] No. 17), "if the lender requests the borrower to pay interest at the interest rate agreed in the contract, the people's court shall support it, except where the interest rate agreed upon by both parties exceeds four times the one-year loan market prime interest rate at the time of the conclusion of the contract." The term 'one-year loan market quotation rate' referred to in the preceding paragraph refers to the one-year loan market quotation rate authorized by the People's Bank of China to be published monthly by the National Interbank Lending Center from August 20, 2019." Therefore, if the loan contract was established between August 20, 2019 and August 19, 2020, and since the LPR has been issued for reference during this period, the "calculation of the interest rate protection standard stipulated in this article at the time of litigation" should be understood as "four times the one-year LPR at the time of the conclusion of the contract" in accordance with the provisions of Article 25 above. Only if there is no LPR to refer to at the time of the conclusion of the loan contract (i.e., before August 20, 2019), it can be understood as "four times the one-year LPR at the time of litigation". The Siming District People's Court of Xiamen City holds this view.
45. How to determine the principal and interest of the loan of "cut interest" (i.e., deducting interest from the principal in advance)?
Answer: Article 670 of the Civil Code stipulates that "the interest on the loan shall not be deducted from the principal in advance. If the interest is deducted from the principal in advance, the loan shall be returned and the interest shall be calculated according to the actual amount borrowed".
Article 26 of the Provisions of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases (Fa Shi [2020] No. 17) stipulates that "the amount of the loan indicated in the proof of creditor's rights such as IOUs, receipts, and IOUs shall generally be deemed to be the principal. Where interest is deducted from the principal in advance, the people's court shall determine the amount actually lent as the principal."
46. How long does it take for the interest to be recovered after the loaned funds belong to the "cut interest"?
Answer: According to Article 670 of the Civil Code, "the interest on the loan shall not be deducted from the principal in advance. If the interest is deducted from the principal in advance, the loan shall be returned and the interest shall be calculated according to the actual amount borrowed". The interest deducted in advance from the principal amount in the above provisions is called "cut interest". However, in practice, there are also cases where the borrower pays the interest to the lender only a few days after the loan is lent, and the interest can be calculated according to the actual number of days of lending, and the part exceeding the interest payable can be treated as "cut interest".
47. If the loan contract or IOU does not stipulate the overdue interest, can the overdue interest be claimed when filing a lawsuit, and when will the overdue interest be calculated?
Answer: Article 676 of the Civil Code stipulates:
"If the borrower fails to repay the loan within the agreed time limit, it shall pay overdue interest in accordance with the agreement or the relevant provisions of the state."
According to this article, in private lending, the payment of overdue interest is not subject to the agreement between the lender and the borrower in the loan contract, and even if there is no agreement, the lender can still request the borrower who has failed to repay the loan in the past due period to pay the overdue interest. At the same time, in private lending, the payment of overdue interest is not premised on the collection of interest during the borrowing period, and even if it is an interest-free loan, the lender can still request the borrower who has overdue repayment behavior to pay overdue interest. According to Article 28 of the Provisions of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases (Fa Shi [2020] No. 17), the interest rate and starting time of overdue interest should be analyzed on a case-by-case basis:
(1) In the case that the interest rate during the loan period has been agreed but the overdue interest rate has not been agreed, the overdue interest rate may be calculated based on the interest rate during the loan period, and the starting point shall be calculated from the date of overdue repayment.
(2) In the event that neither the interest rate during the loan period nor the overdue interest rate is agreed, the overdue interest rate shall be calculated based on the standard of the one-year loan market prime interest rate at that time, and the starting point shall be calculated from the date of overdue repayment.
Paragraph 2 of the second paragraph stipulates the calculation of overdue interest when the private borrower and the borrower have agreed on the interest rate during the loan period but have not agreed on the overdue interest rate, which is divided into two meanings:
First, the lender can claim overdue repayment interest from the borrower at the interest rate during the borrowing period;
Second, the maximum annual interest rate shall not exceed "four times the one-year loan prime rate at the time of the conclusion of the contract".
48. Where the statements of the borrower and the borrower on overdue interest and liquidated damages are unclear, making it difficult to distinguish between the two, how should they be determined?
Answer: The borrower and the borrower are unclear about the civil liability for overdue repayment in the loan contract, and cannot directly determine whether it is overdue interest or liquidated damages, for example, the two parties agree that "if the borrower fails to repay the loan in time, the overdue day shall be followed by ...... to the lender to pay overdue liquidated damages", which includes both the expression of interest rate and the reference to liquidated damages. In this case, although the name is overdue liquidated damages, the interest rate is clearly agreed upon, and a certain amount is paid every day according to the number of overdue days, which is closer to overdue interest in form and nature, so it is not appropriate to determine liquidated damages. As a result of this determination, the lender can no longer claim overdue interest and liquidated damages together in accordance with Article 29 of the Provisions of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases (Fa Shi [2020] No. 17).
49. If the borrower and the borrower only agree on liquidated damages, but do not agree on the overdue interest rate, can the lender claim liquidated damages and overdue interest together?
A: There are different points of view. Referring to the viewpoint of the Understanding and Application of the Judicial Interpretation of the Supreme People's Court on Private Lending edited by Du Wanhua, it is held that if the borrower and the borrower have only agreed on liquidated damages for overdue repayment and have not agreed on overdue interest, if the lender not only claims liquidated damages, but also claims overdue interest in accordance with Article 29 of the Provisions of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases (Fa Shi [2020] No. 17), it can be supported. However, in determining the final result, the provisions of Article 29 shall be referred to, and the total amount of overdue interest and liquidated damages shall not exceed the amount calculated based on the principal of the loan and four times the one-year loan market prime interest rate at the time of the conclusion of the contract.
50. If the borrower and the borrower have agreed on both the overdue interest rate and the liquidated damages, can the two be used together?
Answer: In the case that the borrower and the borrower have agreed on both the overdue interest rate and the liquidated damages for the civil liability of overdue repayment, in fact, two kinds of liquidated damages coexist, although both are liquidated damages in nature, but the applicable conditions are different. Overdue interest focuses on "interest", which measures the cost of capital, and liquidated damages focuses on "guarantee", which aims to guarantee the performance of the contract, so both can be applied at the same time. However, in order to uphold the principle of fairness, when both are applied at the same time, the maximum amount should be limited. To this end, Article 29 of the Provisions of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases (Fa Shi [2020] No. 17) stipulates that the result of the combined use of the two shall not exceed four times the one-year loan market prime interest rate at the time of the conclusion of the contract, and the people's court will not support the excess.
51. Is the overdue interest in the loan contract a statutory liquidated damages?
Answer: The overdue interest in the loan contract is not a statutory liquidated damages. The first paragraph of Article 585 of the Civil Code provides:
"The parties may agree that when one party breaches the contract, it shall pay a certain amount of liquidated damages to the other party according to the circumstances of the breach, and may also agree on the method of calculating the amount of compensation for losses arising from the breach. ”
This shows that when one of the parties breaches the contract, whether the liability for liquidated damages is applicable depends on the agreement of the parties, and if the parties have agreed on liquidated damages, the non-breaching party can claim the liability for liquidated damages, and if there is no agreement on liquidated damages, there is no room for the liability for liquidated damages. Since the current law of the mainland has abolished the statutory liquidated damages system, according to the above provisions, if the loan is returned late in violation of the contract, there is no room for the application of liquidated damages, and the overdue interest naturally does not belong to the statutory liquidated damages.
52. In the course of enforcement of a private lending case, if the person subject to enforcement repays the arrears in installments, how to determine the specific cut-off time for calculating the interest on the general debt and the interest on the doubled part of the debt? Should the final allocation time of the court be used to determine the cut-off time for calculating the interest?
Answer: According to Article 3 of the Interpretation of the Supreme People's Court on Several Issues Concerning the Application of Law to Calculating Interest on Debts During the Period of Delayed Performance in Enforcement Proceedings, it is stipulated that:
"The interest on the doubled part of the debt shall be calculated until the date on which the performance of the person subject to enforcement is completed, and if the person subject to enforcement performs in installments, the interest on the corresponding part of the doubled part of the debt shall be calculated until the date of completion of each performance.
Where the people's court allocates or withdraws the deposits, income, dividends, bonuses, and other property of the person subject to enforcement, the interest on the corresponding part of the doubled part of the debt shall be calculated until the date of transfer or withdrawal; where the people's court auctions, sells, or repays debts in kind the property of the person subject to enforcement, it shall be calculated until the date on which the transaction ruling or the ruling on debt repayment takes effect; and where the people's court sells the property of the person subject to enforcement by other means, it shall be calculated until the date on which the property is completed.
The interest on the doubled part of the debt shall not be calculated during the period during which the enforcement is suspended or suspended during the review of the effective legal documents and the period during which the enforcement is suspended in the retrial is not due to the application of the person subject to enforcement."
Therefore, the cut-off time for interest on general debts and interest on doubled debts should be determined in accordance with the above-mentioned legal provisions, rather than the final distribution time of the court.
53. In a private lending dispute, which court has jurisdiction other than the court where the defendant is located?
Answer: Private lending disputes are essentially loan contract disputes, that is, contract disputes.
Article 24 of the Civil Procedure Law stipulates that "a lawsuit arising from a contract dispute shall be under the jurisdiction of the people's court at the place where the defendant is domiciled or where the contract is performed".
Article 35 of the Civil Procedure Law stipulates that: "The parties to a dispute over a contract or other property rights and interests may, by written agreement, choose the jurisdiction of the people's court at the place where the defendant is domiciled, the place where the contract is performed, the place where the contract is signed, the place where the plaintiff is domiciled, the place where the subject matter is located, and other places that have an actual connection with the dispute, provided that the provisions of this Law on hierarchical jurisdiction and exclusive jurisdiction are not violated."
Article 3 of the Provisions of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases (Fa Shi [2020] No. 17) stipulates that "if the borrower and the borrower have not agreed on the place of performance of the contract or the agreement is not clear, and no supplementary agreement has been reached afterwards, and it is still uncertain according to the relevant terms of the contract or transaction customs, the place where the party receiving the currency is located shall be the place of performance of the contract".
Therefore, in private lending disputes, in addition to the court where the defendant is located, the court at the place where the contract is performed may also have jurisdiction. The parties may agree in writing that the people's court has jurisdiction over the place where the defendant is domiciled, the place where the contract is performed, the place where the contract is signed, the place where the plaintiff is domiciled, the place where the subject matter is located, and other places that have an actual connection with the dispute. When the borrower and the borrower have not agreed or have not clearly agreed on the place of performance of the contract, the place of performance of the contract shall be the place where the party receiving the currency is located.
It should be noted that the subject of the lawsuit (i.e., the plaintiff) is different, and the "location of the party receiving the currency" is also different.
When the plaintiff is the lender and the lawsuit is claimed for the borrower to repay the principal and interest of the loan, the lender is the party receiving the money, so the competent court may be the location of the lender.
When the plaintiff is the borrower and the claim is for the lender to pay the loan, the borrower is the party receiving the currency, so the competent court may be the location of the borrower.
54. The plaintiff's domicile is in place A, and the defendant's domicile is in place B, but he currently lives in place C. The two parties sign a loan contract in place A, and the loan contract between the two parties stipulates that if a dispute arises in the future, the court in place D will have jurisdiction. When the loan contract was signed, the plaintiff transferred the loan to the defendant. Subsequently, the defendant repaid part of the principal and interest to the plaintiff on a monthly basis. If the plaintiff files a lawsuit against the defendant in Court A and Court B at the same time, and the two courts are in the same province, does it require the jurisdiction of the higher court?
A: No, you don't. According to the provisions of the Civil Procedure Law, "where two or more people's courts have jurisdiction, the plaintiff may file a lawsuit with one of the people's courts, and if the plaintiff files a lawsuit with two or more people's courts with jurisdiction, the people's court that files the case first shall have jurisdiction", in this case, the plaintiff's court A and the defendant's court B have jurisdiction, so the court that accepts the case first has jurisdiction.
1) If the defendant moves to E after living in place C for less than one year, but has not lived in place for more than one year, which court should the plaintiff go to to file a lawsuit against the defendant?
The suit should be brought in the court of place B, i.e. the place where the defendant is domiciled. According to Article 22 of the Civil Procedure Law, "the people's court at the place where the defendant is domiciled shall have jurisdiction over civil litigation brought against citizens; Article 4 of the Interpretation of the Supreme People's Court on the Application of the Civil Procedure Law of the People's Republic of China stipulates that "a citizen's habitual residence refers to the place where the citizen has resided continuously for more than one year from the time he leaves his or her place of residence to the time of filing a lawsuit, except for the place where the citizen is hospitalized for medical treatment".
2) If the defendant's household registration moves from place B to place F, but the household registration has not yet been settled, and the defendant has been going back and forth in places C and E respectively for less than one year, which court should the plaintiff file a lawsuit against the defendant?
You can file a lawsuit with the court of place B where your original household registration is located. Article 7 of the Interpretation of the Supreme People's Court on the Application of the Civil Procedure Law of the People's Republic of China stipulates that: "If a party has not settled down after moving out of the household registration and has a habitual place of residence, the people's court of that place shall have jurisdiction;
55. In a private lending case with a guarantor, can the court of the place where one of the defendants is domiciled have jurisdiction over the lawsuit against the borrower and the guarantor at the same time?
A: No, you cannot. According to the second paragraph of Article 21 of the Interpretation of the Supreme People's Court on the Application of the Civil Code on the Security System, the court at the place of the borrower's or lender's domicile shall determine the jurisdiction when determining the competent court according to the main contract.
56. How to distinguish and identify loans and gifts during a relationship?
Answer: Loans during the couple's relationship are generally based on the cultivation of feelings and are not perfect in terms of loan procedures, and when the defendant denies the existence of loans, there is a problem of the allocation of the burden of proof. If the plaintiff provides a transfer voucher during the relationship, and the defendant cannot reasonably explain the nature of the money and provide evidence, it shall be deemed that the defendant has not fulfilled the burden of proof, and the existence of the fact of borrowing between the two parties cannot be denied simply on the basis that the loan procedures were not completed during the relationship. When determining the nature of the money as a loan or gift, a reasonable distinction should be made between a gift and a loan based on consideration of all the facts of the case, including the degree of romantic relationship, the postscript of the transfer, the economic strength and consumption level of both parties, the special meaning of the amount, the purpose of the spending, and so forth.
Determination of the nature of the amount spent during the relationship:
(1) For a relatively small amount within a reasonable range, it shall be deemed to be an ordinary gift if it cannot be proved that it was a gift deliberately for marriage, and may include the following circumstances:
1. A small part of the value in daily life, such as buying clothes, bags, inviting guests to dinner, etc.;
2. Special dates, such as Valentine's Day, Qixi Festival, birthdays, anniversaries, etc.;
3. Special amounts, such as 520, 521, 999, 1314 and other small gifts.
All of the above can be presumed to be donated property by both parties to express their love and cultivate affection, and once the donor has delivered it, it cannot be asked to return it.
(2) For gifts of valuables between men and women, such as real estate, automobiles, or larger amounts of cash, bank cards, WeChat, Alipay transfers, etc., because the amount involved is relatively large, it is generally a gift for the purpose of marriage, and it should be found to be a bride price, and the responsibility for returning it should be borne.
(3) For some transfers that do not have obvious intent and do not show that the transfer is a loan or a conditional gift, the court will make a determination based on the circumstances of the two parties living together, and if the other party argues that the joint consumption occurred during the period of living together, the court will generally not recognize this part of the expenses and will not support the refund.
(4) Due to the termination of a romantic relationship or the dissolution of a cohabitation relationship, the parties' defense that they have cohabited is not supported to offset them with "loss of youth" or "compensation for moral damages".
(5) Where a spouse falls in love with another person during the marriage and gives away property, and requests return it because it violates public order and good customs or infringes upon the property rights and interests of the spouse, it is generally supported.
In judicial practice, the confirmation of the nature of a couple's financial transactions during a relationship is often complicated and cannot be generalized. Some property donations need to be specifically analyzed and determined based on the donor's property status, the past practice of the two parties' donations, and so on.
57. Is the agreement between the parties to pay the "break-up fee" a private loan?
Answer: Private lending should have the lending agreement of both parties, and the "break-up fee" is only a compensation gift from one party to the other party, and there is no loan agreement, which is not a private loan. At present, some courts have held that the Breakup Agreement is an expression of the true intention of both parties and does not violate public order and good customs, and should be valid because neither party has a spouse. For example, the Guangdong Provincial High People's Court (2021) Yue Min Shen No. 2596 and the Beijing Second Intermediate People's Court (2021) Jing 02 Min Zhong No. 6051.
58. How to deal with the payment made by the lender or the borrower to a third party, and if the lender transfers the money to a third party other than the person who issued the IOU, if the borrower denies that it has received the loan on this ground, how will the court determine it?
A: The court will usually make a comprehensive determination based on factors such as whether the borrower has designated the third party as the payee, whether the borrower is aware of the lender's transfer behavior, whether it has expressed objections, whether there is subsequent repayment behavior, and whether the outsider has a special status.
59. If the lender fails to pay the loan in accordance with the third-party collection account specified in the loan contract, is the loan contract established?
A: The Supreme People's Court (2019) Supreme Court Civil Supervision No. 35 Civil Ruling held that if the lender and the borrower agree that the lender will deliver the borrowed money to the account designated by the borrower in a lump sum, but the lender does not transfer the borrowed money to the designated account in accordance with the above agreement, but transfers the loan to other non-designated accounts in multiple transactions, from the performance point of view, the lender has delivered the loan to the borrower and although it has not remitted the borrowed money to the designated account in accordance with the contract, it does not mean that the lender has not fulfilled the borrowing obligations stipulated in the loan contract, and from the collection account specified in the loan contract, there is no evidence to prove that the account is special。 Whether the lender remits the loan to the designated account or other accounts agreed in the contract on one or more occasions does not affect the fact that the borrower has received the loan, nor does it affect the borrower's control over the money received, nor does it affect the realization of the purpose of the borrower's loan contract. Accordingly, in the absence of other evidence to prove the existence of other payment transactions between the borrower and the borrower, it should be deemed that the lender has delivered the loan to the borrower in accordance with the loan contract, and the borrower should bear the responsibility for repayment.
At present, the Huli District People's Court of Xiamen Municipality has determined that the lender's failure to perform its obligations in accordance with the contract is an economic relationship between the lender and the payee, but not a loan contract.
60. Does the borrower's repayment of the loan to the intermediary constitute repayment to the lender?
According to the principle of relativity of the contract, the borrower shall repay the principal and interest of the loan directly to the lender, and if there is a special agreement on the repayment method, it shall be clearly stipulated in the loan contract or IOU, and shall be performed according to the contract. If the borrower only submits a record of the transfer to a third party and there is no other evidence to support it, the lender will not accept it, and the borrower shall bear the burden of insufficient evidence and the court will find that it does not constitute repayment.
61. When accepting a private lending case, how does the handling lawyer make a good record of the case?
Answer: When accepting a private lending dispute case, the handling lawyer can make a record of the case acceptance from the following aspects:
(1) Clearly ask the lender whether there are any invalid circumstances in the private lending contract, such as false litigation, fraudulent lending, and lending by arbitraging funds from financial institutions;
(2) Ask the lender whether there is a legal relationship in which the loan is actually a transaction, financial management, investment, etc.;
(3) Ask the lender whether there is a cut interest;
(4) Ask the lender whether the interest rate standard has been agreed, and if the agreed interest rate standard exceeds the maximum interest rate limit prescribed by law, the lender should be informed of the legal consequences arising therefrom;
(5) Inquire about the source of the lender's loaned funds and how the loaned funds are paid to the borrower and evidence;
(6) Inquire about the amount of principal and interest actually repaid by the borrower, the repayment method and evidence;
(7) Ask the lender whether there is any evidence that the statute of limitations can be suspended or interrupted;
(8) Ask the lender whether there is any evidence to prove that the loan is a joint debt of the husband and wife when one of the husband and wife does not sign the loan, and inform the lender of the legal consequences arising therefrom if there is no evidence;
(9) Inquire about the borrower's property clues that the lender is aware of, and inform the lender of the legal consequences of failing to provide property clues or failing to check and control the lender's property during enforcement;
(10) Clearly inform the lender that it shall comply with the obligation to truthfully state the facts of the case and litigate in good faith.
62. What should lawyers pay attention to in private lending cases where both parties agree to mediate?
Answer: At present, when the people's court reviews the mediation agreement, the examination of the authenticity of the loan is relatively strict, and the lawyer should pay attention to preventing the risk of false litigation when representing such cases, and may require the parties to provide all the bank statements between the two parties in the past one or even two years, so as to prepare for the people's court to verify whether the loan between the two parties is true and whether there is a false litigation situation such as closed account transfer.
63. If the parties are related to each other or the amount of money is significant but both parties have a strong willingness to mediate, how should they perform the lawyer's review function and prevent the risk of false litigation?
In order to prevent the risk of false litigation and protect the lawyer's own rights and interests, it is recommended that the lawyer make a written record of the conversation with the client in the course of handling such a case and record it truthfully, or the party should issue a written statement to the law firm and the lawyer promising to litigate in good faith.
64. The lender lends money to the borrower, and the term of the loan is agreed to be one year, and the principal and interest shall be repaid when due. However, the borrower and the lender signed the Loan Contract, stipulating that the borrower would borrow RMB 1 million from the lender, and the loan term would be one year from the date of actual delivery of the loan, and the principal and interest would be repaid when due. After the signing of the Loan Contract, after the lender pays part of the amount of RMB 300,000 to the borrower, the borrower will enter bankruptcy proceedings within half a year, and the bankruptcy administrator requests the lender to deliver the remaining loan, how should the lender deal with it?
A: First, according to Article 46 of the Enterprise Bankruptcy Law, "unexpired creditor's rights shall be deemed to be due when the bankruptcy application is accepted". For the loan that the lender has delivered, the lender shall promptly declare the creditor's rights to the bankruptcy administrator.
Second, if the bankruptcy administrator's claim for the delivery of the remaining loan is met with the conditions for contract termination, the remaining loan will not be delivered; if the conditions for contract termination are not met and the lender is willing to continue to borrow, it may be handled in accordance with Article 2 of the Provisions of the Supreme People's Court on Several Issues Concerning the Application of the Enterprise Bankruptcy Law of the People's Republic of China (III).
65. If the borrower is a real estate development enterprise, and the lender lends funds to the borrower, and the borrower signs a mortgage agreement with the lender after the debt is due, and goes through the formalities of online signing and filing of the real estate, but does not actually deliver the real estate, and then the borrower enters bankruptcy proceedings, can the lender's request for the delivery of the real estate be supported by the lender's declaration to the bankruptcy administrator?
A: Not supported. The reason is that if the bankruptcy administrator supports the lender's request for delivery, it means that the lender achieves individual repayment within the corresponding property value, which violates the principle of fair repayment of creditors under the Enterprise Bankruptcy Law.
66. Party A is a real estate development enterprise, Party B is a natural person, and the two parties sign the "Housing Sales Contract", agreeing that Party B shall purchase a set of real estate developed by Party A at a price of 5 million yuan, and Party A shall pay Party B a house purchase incentive according to 2% of the amount actually received from the date of receipt of the purchase price paid by Party B every month, and Party B has the right to require Party A to repurchase the property within one year from the date of signing the "Housing Sales Contract". After the signing of the "Housing Sales Contract", Party B pays the purchase price to Party A, and Party A signs and records the property online and files it under the name of Party B but does not deliver the property, and then Party A enters bankruptcy proceedings, can Party B's request for delivery of the house be supported by Party B's declaration to the bankruptcy administrator?
A: No. The reason is that the Housing Sale and Purchase Contract is essentially a private lending contract, and according to Article 23 of the Provisions of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases (Fa Shi [2020] No. 17), the lender's request for delivery of real estate is not supported.
67. Party A is a real estate development enterprise, Party B is a natural person, the two parties sign the "Housing Sales Contract", stipulating that Party B purchases a set of real estate developed by Party A at a price of 5 million yuan, and Party A shall pay Party B a house purchase incentive according to 2% of the actual amount of the purchase price received every month from the date of receipt of the purchase price paid by Party B, and Party B has the right to require Party A to repurchase the property within one year from the date of signing the "Housing Sales Contract". After the signing of the "Housing Sale and Purchase Contract", Party B pays the purchase price to Party A, and Party A changes the registration of the property to Party B's name but does not deliver the property, and then Party A enters the bankruptcy procedure, Party B declares the private loan creditor's rights to the bankruptcy administrator and requests that the price obtained from the sale of the property be repaid in priority, is it supported?
A: Yes. According to Article 23 of the Provisions of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases (Fa Shi [2020] No. 17), the establishment of a private lending contract between Party A and Party B, and the signing of the Housing Sales Contract and the change registration of the corresponding real estate are essentially to guarantee the realization of Party B's private lending creditor's rights to Party A. Article 68 of the Interpretation on the Guarantee System stipulates that Party B has the right to claim priority for the compensation of the sale price of the property.
68. What should I do if the loan is due and the lender has not demanded or sued for more than 3 consecutive years?
Answer: The statute of limitations has theoretically expired, but the lender may, in accordance with Article 195 of the Civil Code and Article 14 of the Provisions of the Supreme People's Court on Several Issues Concerning the Application of the Statute of Limitations System in the Trial of Civil Cases (Fa Shi [2020] No. 17), require the borrower to re-sign the IOU, require the borrower to pay part of the loan, and continue to demand normally.
Attachment: Article 14 of the Provisions of the Supreme People's Court on Several Issues Concerning the Application of the Statute of Limitations System in the Trial of Civil Cases (Fa Shi [2020] No. 17) stipulates that: "Where an obligor makes a commitment or act such as performing in installments, partially performing, providing guarantees, requesting an extension of performance, or formulating a debt repayment plan, it shall be deemed to be 'the obligor agrees to perform the obligation' as provided for in Article 195 of the Civil Code."
Article 195 of the Civil Code stipulates that: "In any of the following circumstances, the statute of limitations shall be interrupted, and the limitation period shall be recalculated from the time of interruption or the conclusion of the relevant procedures: (1) the obligee submits a request for performance to the obligor, (2) the obligor agrees to perform the obligation, (3) the obligee initiates a lawsuit or applies for arbitration, and (4) other circumstances that have the same effect as the filing of a lawsuit or application for arbitration".
69. Does the imprisonment of a private loan borrower lead to the suspension of the statute of limitations?
A: The statutory reasons for the suspension of the statute of limitations must occur, including force majeure and other circumstances that hinder the right holder from exercising the right to claim. If a borrower of private loans is imprisoned and serving a prison sentence, the lender may file a lawsuit with the people's court of his or her place of residence. Therefore, the borrower's imprisonment does not prevent the lender from exercising its right to claim, so the statute of limitations does not have the effect of suspension.
70. How to determine the statute of limitations for a loan contract or IOU that stipulates the time of repayment, how to determine the date on which the borrower should repay the loan, and how to determine the date of overdue repayment?
Answer: The ordinary statute of limitations of three years applies to private lending, and the starting point of the statute of limitations is divided into two situations:
First, if the loan clearly stipulates the repayment period, the statute of limitations shall be calculated from the date of expiration of the repayment period.
Second, if the borrower and the borrower have not expressly agreed on the repayment period, the lender may request repayment at any time, and the statute of limitations shall be calculated from the date of expiration of the grace period for the lender to require the borrower to repay.
At the same time, Article 61 of the Civil Code stipulates that: "After the contract comes into effect, if the parties have not agreed on the quality, price or remuneration, place of performance, etc., or the agreement is not clear, they may supplement it by agreement; "Since there is no agreed repayment date at the time of the loan, the lender may first agree with the borrower to supplement the repayment time, and if no agreement can be reached through negotiation, the lender has the right to require the borrower to repay the money at any time, but the borrower shall be given the necessary time to prepare. The statute of limitations may be interrupted by circumstances such as the lender's request for performance to the borrower, the borrower's agreement to perform the repayment obligation, etc. Where the statute of limitations is interrupted, the statute of limitations is to be recalculated from the time of interruption. With regard to the overdue repayment date of a loan without an agreed repayment date, considering that the term of the loan is not clear, the date of filing a lawsuit is generally regarded as the date of overdue repayment in legal practice, and the overdue interest is calculated from the date of the lawsuit.
71. Is the unclear condition of the loan repayment period unspecified as the unagreed repayment period?
Answer: It is deemed that the repayment period is unclear and there is no repayment period.
72. If one of the husband and wife borrows money from a relative in the name of one of the spouses during the existence of the marital relationship to pay for the purchase of a house after marriage, and does not sign an IOU at the time of borrowing, and signs an IOU receipt many years after the loan, can it be determined that it is a joint debt of the husband and wife?
Answer: It can be determined that it is a joint debt of husband and wife, and according to the first paragraph of Article 1064 of the Civil Code, "the debts borne by the joint signature of both husband and wife or the subsequent recognition of the common intention of one of the husband and wife, as well as the debts incurred by one of the husband and wife in his or her own name for the daily needs of the family during the existence of the marital relationship, belong to the joint debts of the husband and wife." However, the premise for determining that it is a joint debt of the husband and wife is that it can be proved that the loan is used to pay for the purchase of a house after marriage, and it is an expenditure for the daily needs of the family, and the evidence requirements are relatively high. The subsequent IOU has legal effect, and the relationship between the two parties is not affected by the validity of the loan. In addition to the IOU receipt, the lawyer can also collect evidence such as the flow of the loan directly transferred to the developer, and the written documents of the other spouse confirming the payment, so as to form a complete chain of evidence.
73. If the borrower of a private loan is a husband or wife, does the lender have the right to require one of the spouses to jointly repay the loan?
A: First, if the loan relationship occurs before the marriage of one of the spouses, the lender has no right to claim rights against one of the spouses, but if the creditor can prove that the loan is used for the common life of the family after marriage, the creditor can require one of the spouses to repay it jointly.
Second, if one of the spouses borrows money from the lender in his or her own name for the daily needs of the family during the existence of the marital relationship, it is a joint debt of the husband and wife, and the lender has the right to require one of the spouses to jointly repay the debt.
Thirdly, if one of the husband and wife borrows money from the lender in his or her own name during the existence of the marital relationship beyond the needs of the family's daily life, it is not a joint debt of the husband and wife, unless the lender can prove that the loan is used for the husband and wife's common life, joint production and business, or based on the common intention of the husband and wife.
74. If the loan is used by a friend and the transfer is made through the account of the friend's wife, can the husband and wife be required to jointly bear the obligation to repay?
A: There are certain controversies in judicial practice in various places. It depends on the evidence in the case. If a court holds that one of the spouses borrowed money from the creditor in his or her own name, but the loan was made through the bank account of the other spouse, it may be determined that the other spouse was aware of and actually participated in the loan, and it should be a joint debt of the husband and wife. From the perspective of capital flow, according to the loan contract, the money was remitted to the designated account of the wife and then transferred to the borrower, so it can be seen that the wife should have been aware of and actually participated in the loan. It should be recognized as a joint debt of the husband and wife, so the wife has the obligation to repay.
Article 1064 of the Civil Code stipulates that: "Debts incurred by both husband and wife as jointly signed by the husband and wife or by one of the husband and wife as a result of the subsequent recognition of the common intention, as well as debts incurred by one of the husband and wife in his or her own name during the existence of the marital relationship for the daily needs of the family, are joint debts of the husband and wife." Debts incurred by one of the spouses in his or her own name during the marriage in excess of the daily needs of the family are not joint debts of the husband and wife, unless the creditor can prove that the debts were used for the common life of the husband and wife, joint production and business, or on the basis of the common intention of the husband and wife". The Provisions clarify that the basic principle for determining the joint debts of husband and wife is "joint debts and joint signatures", and at the same time clarify that debts incurred for the daily needs of the family are joint debts of the husband and wife. Other debts incurred by one of the spouses in his or her own name during the existence of the marital relationship are not joint debts of the husband and wife unless the creditor can prove that they have been used for the common life of the husband and wife, joint production and business, or based on the joint intention of both parties.
75. Can a loan relationship be established between husband and wife?
A: It is possible for a husband and wife to establish a loan relationship, for example, if the husband and wife have made an agreement on the marital property, then in this case, it is easier to be recognized as a loan relationship; even if the husband and wife have not agreed on the marital property, if one party has issued an IOU to the other party and has the corresponding transfer record, then the other party can also be required to return the corresponding loan at the time of divorce.
76. During the existence of the marital relationship, if one of the parents contributes to the purchase of a house by both parties, is the contribution a loan or a gift without clarifying the nature of the contribution?
Answer: At present, there are two views in judicial practice, one view is that it is a loan, and there are two reasons:
First, according to Article 16 of the Provisions of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases (Fa Shi [2020] No. 17), "if the plaintiff initiates a private lending lawsuit solely on the basis of the transfer voucher of a financial institution, and the defendant argues that the transfer is to repay the previous loans or other debts of both parties, the defendant shall provide evidence to prove its claim". If the parents provide the transfer voucher to claim that the loan relationship has been established, the burden of preliminary proof has been completed, and where one of the husband and wife claims that it is a gift but cannot provide evidence to prove it, the loan relationship shall be deemed to be established;
Second, when the child reaches adulthood, the parents have fulfilled their obligation to support the child and have no obligation to continue to provide support. The purchase of a house by a child is funded by the parents, and unless it is expressly gifted, it shall be regarded as a temporary loan of funds for the purpose of helping, and the child shall have the obligation to repay. The Beijing Municipal High People's Court held this view.
Another view is that it is a gift for four reasons:
First, based on the particularity of the personal relationship between parents and children and the relevance of interests, the two parties are not ordinary civil subjects, and it is not appropriate to directly determine the establishment of a lending relationship in accordance with Article 16 of the "Provisions on Private Lending" solely on the basis of transfer vouchers, and the parents should provide sufficient evidence to prove the existence of a loan agreement.
Second, according to the second paragraph of Article 29 of the Interpretation (1) of the Supreme People's Court on the Application of the Marriage and Family Section of the Civil Code of the People's Republic of China, "after the parties get married, if the parents contribute to the purchase of a house for both parties, it shall be handled in accordance with the agreement; That is, the provisions on the property donated by the husband and wife apply, so if there is no agreement or the agreement is unclear and one of the parents cannot provide evidence to prove the loan agreement, it should be deemed to be a gift.
Third, from the perspective of actual national conditions, children often lack financial ability when they get married, and it is difficult for them to afford the cost of buying a house on their own, while parents often voluntarily contribute to the purchase of houses for their children based on their affection for their children. The purpose of most parents' contributions is to solve or improve their children's living conditions, hoping that their children's lives will be happier, rather than to return the contributions in the future, which is also more in line with the true intention of parents when they contribute.
Fourth, in the case of a child's divorce proceedings, the parents' capital contribution will be taken into account as a factor for their children's greater contribution to the purchase of the house, and the court may, in the process of dividing the property, appropriately tilt the share of the party with the larger capital contribution to balance the interests of the parties. The Shandong Provincial High People's Court and the Fujian Provincial High People's Court are inclined to this view.
77. Is the loan contract concluded between enterprises valid?
Answer: According to Article 10 of the Provisions of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases (Fa Shi [2020] No. 17), "where private lending contracts concluded between legal persons, unincorporated organizations and between them for production and business purposes are concluded, except for the circumstances provided for in Articles 146, 153, 154 and Article 13 of the Civil Code and Article 13 of these Provisions, the people's court shall support the parties' claim that the private lending contract is valid."
In other words, if there are no special circumstances stipulated by law, then the private loan contract concluded between enterprises is valid.
78. If the legal representative of a company borrows money from the lender in the name of the company, but does not use the loan for the company's operation but for his own use, to whom should the lender claim repayment of the loan? If the legal representative borrows money from the lender in his own name, but the money is used for the company's operation, who should the lender demand to repay the loan?
Answer: Article 22 of the Provisions of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases (Fa Shi [2020] No. 17) stipulates that: "If the legal representative of a legal person or the person in charge of an unincorporated organization signs a private lending contract with the lender in the name of the unit, and there is evidence to prove that the loan is for personal use by the legal representative or the person in charge, and the lender requests that the legal representative or person in charge be listed as a co-defendant or a third party, the people's court shall approve it." Where the legal representative of a legal person or the responsible person of an unincorporated organization concludes a private lending contract with a lender in his or her own name, and the borrowed money is used for the production and operation of the unit, and the lender requests that the unit and the individual jointly bear responsibility, the people's court shall support it."
According to the provisions, in the first case, the lender may list the legal representative and the company as co-defendants or the legal representative as a third party, and in the second case, the lender may list the company and the legal representative as co-defendants and claim joint liability for repayment.
79. If the loan is not paid to the company, but is paid to the company's legal representative, person in charge or other employees, how to determine the fact of the loan?
Answer: If there is other evidence to support it, the fact of private lending can also be determined. From a practical point of view, in addition to the legal representative and person in charge of the company, it is also common for financial personnel to collect money on behalf of them, and it is very likely to be recognized as equivalent to the company's collection, and financial personnel are in a special status. As for ordinary employees, the lender needs to prove that he or she accepted the company's instructions to collect the money.
80. Are the shareholders of a one-person company jointly and severally liable for the company's loans?
Answer: According to Article 63 of the Company Law of the People's Republic of China (adjusted to Paragraph 3 of Article 23 of the Company Law as amended in 2023): "If a shareholder of a one-person limited liability company cannot prove that the company's property is independent of the shareholder's own property, he shall be jointly and severally liable for the company's debts." "If the company is unable to provide an accounting audit report to prove that the company's property is independent of the shareholder's property, a single shareholder shall be jointly and severally liable for the company's debts.
81. If the credit funds are re-loaned and the loan is obtained, but the lender quickly repays all the money to the bank and re-signs the IOU/loan contract with the borrower, is the loan contract valid?
Answer: According to practical experience, the actual examination of the source of the loaned funds is the source at the time of lending, that is, the source of funds on the day of lending is obtained through bank loans, that is, the contract is invalid. Even if the lender has self-repayment in the later stage, it does not affect the determination of the validity of the contract. Judging from the judgment in Xiamen, as long as the funds borrowed from the bank are lent, even if the lender repays the bank loan a few days later, the loan contract may still be found invalid.
82. If the money relented through credit funds is lent to others, and an IOU is signed, can I sue for the return of the principal and the agreed interest?
Answer: You can get the principal back, and the court will not support the claim. The borrowing behavior violates the normative requirement that the funds of the private lending lender should be its own funds, violates the mandatory provisions of laws and administrative regulations, and is an invalid civil legal act, and the invalid contract is not legally binding from the beginning, and the agreed terms of the borrowing interest rate based on the invalid contract between the two parties are also invalid, so the interest claim is not supported, and the property obtained because of the invalid contract should be returned.
Legal basis:
The first paragraph of Article 13 of the Provisions of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases (Fa Shi [2020] No. 17) stipulates that: "In any of the following circumstances, the people's court shall find that the private lending contract is invalid: (1) the ...... of taking loans from financial institutions and re-lending"
Article 155 of the Civil Code stipulates that "invalid or revoked civil juristic acts shall not be legally binding from the beginning". Article 157 stipulates: "After a civil juristic act is invalid, revoked, or determined to be ineffective, the property acquired by the actor as a result of the act shall be returned; The party at fault shall compensate the other party for the losses suffered thereby, and if both parties are at fault, they shall each bear the corresponding responsibility. Where the law provides otherwise, follow those provisions."
83. If 100,000 yuan of the 400,000 yuan IOU is lent after the loan, will it affect the validity of the entire IOU?
Answer: According to Article 156 of the Civil Code of the People's Republic of China, "if a civil juristic act is partially invalid and does not affect the validity of the other parts, the other parts shall remain valid". Part of the IOU is invalid because the source of the IOU is a loan, and the other parts are still valid. For the legal loan part, the loan principal and interest are supported, and the illegal re-lending part is refunded without interest.
84. In a private lending case where the lender lends to others through a bank loan, how to deal with the interest paid by the borrower after the loan contract is found to be invalid?
Answer: According to Article 157 of the Civil Code of the People's Republic of China: "After a civil juristic act is invalid, revoked, or determined not to take effect, the property acquired by the actor as a result of the act shall be returned; The party at fault shall compensate the other party for the losses suffered thereby, and if both parties are at fault, they shall each bear the corresponding responsibility. Where the law provides otherwise, follow those provisions."
A civil juristic act that is found to be invalid because of a contract, is invalid or revoked is not legally binding from the beginning. Therefore, the interest clause agreed in the contract is invalid, and the interest repaid by the borrower before is directly deducted from the principal of the loan, and the remaining outstanding principal amount is deducted after deduction.
85. Is it valid to sign a loan contract by lending a credit card to others to withdraw funds?
Answer: The credit card holder lends the credit card in his or her name to others for use, and the funds lent are not from his own funds or other economic sources that comply with the law, but from the funds in the credit card. The credit limit of a credit card is issued by a financial institution based on the creditworthiness of the cardholder, allowing the cardholder to overdraft the consumption limit within a certain period of time and within a certain limit, so credit card funds also belong to credit funds.
Therefore, the transfer of the credit card under the cardholder's name to others falls under the circumstances of "taking loans from financial institutions for on-lending" as stipulated in the first paragraph of Article 13 of the Provisions of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases (Fa Shi [2020] No. 17), so the private lending contract formed between the cardholder and the borrower is invalid.
According to Article 157 of the Civil Code, "after a civil juristic act is invalid, revoked, or determined to be ineffective, the property acquired by the actor as a result of the act shall be returned; The party at fault shall compensate the other party for the losses suffered thereby, and if both parties are at fault, they shall each bear the corresponding responsibility. Where the law provides otherwise, follow those provisions. "The borrower shall return to the cardholder the credit card funds it has withdrawn, and even if the two parties have agreed on the interest on the loan, the cardholder has no right to require the borrower to calculate the interest at the interest rate or amount agreed upon by both parties because the invalid contract is not legally binding from the beginning.
86. If the court is not informed of the funds obtained through bank loans, will the loan contract be deemed valid?
A: According to practical experience, when reviewing private lending cases, the people's court will examine the proof of the source of the loaned funds, and even if the lender does not take the initiative to provide such supporting materials, the court will require the plaintiff, i.e., the lender, to provide relevant supporting materials, such as bank statements from 2 months to 1 year forward based on the time of the first transfer of loaned funds, credit reports from the People's Bank of China, credit certificates from Alipay or Tenpay, etc., to prove the source of funds.
87. In the course of enforcement of a private lending case, if the property of the person subject to enforcement is insufficient to pay off all debts, what is the order of deduction of principal, interest and other expenses?
Answer: Interest first, principal later. According to Article 561 of the Civil Code of the People's Republic of China, "the debtor shall pay interest and expenses related to the realization of the creditor's rights in addition to the performance of the principal debt, and if the payment is insufficient to pay off the entire debt, it shall be performed in the following order, unless otherwise agreed by the parties: (1) the relevant expenses for the realization of the creditor's rights, (2) the interest, and (3) the principal debt".
However, there are differences in the enforcement process of the enforcement courts in different places. For example, the Executive Bureau of the Siming District People's Court of Xiamen City has deducted the principal first and then the interest, while the Executive Bureau of other courts has the practice of deducting the interest first and then deducting the principal.
(Note: The enforcement stage is principal before interest, but the "principal" here refers to the debt determined in the judgment document, and the interest refers to the interest on delayed performance, which is repaid in the order of fees, interest, and principal in the "principal".) ）
88. Can the spouse be directly added as the person subject to enforcement in the enforcement procedure?
Answer: According to the latest regulations of Xiamen City, it is not possible to directly apply for the addition of a spouse as the person subject to enforcement in the enforcement procedure, and it is necessary to confirm that it is a joint debt of the husband and wife through a separate lawsuit.
89. How to identify a professional money lender?
Answer: According to Article 53 of the Minutes of the National Conference on the Trial of Civil and Commercial Cases by Courts, "professional money lenders refer to legal persons engaged in private lending who have not obtained lending qualifications in accordance with the law, as well as unincorporated organizations or natural persons engaged in private lending. Where the same lender repeatedly engages in paid private lending for a certain period of time, it may generally be found to be a professional money lender. The High People's Court or the Intermediate People's Court authorized by the High People's Court in a place where private lending is more active may formulate specific criteria for determination based on the actual situation in that region."
In July 2019, the Supreme People's Court, together with the Supreme People's Procuratorate, the Ministry of Public Security, and the Ministry of Justice, jointly formulated the Opinions on Several Issues Concerning the Handling of Criminal Cases of Illegal Lending, which stipulates that "1. Where a person violates state regulations, routinely grants loans to unspecified targets in society for the purpose of making profits, disrupting the order of the financial market, and the circumstances are serious, it shall be convicted and punished as the crime of illegal business operation in accordance with the provisions of Article 225 (4) of the Criminal Law." 'Regularly issuing loans to unspecified targets in society' as used in the provisions of the preceding paragraph refers to lending funds to unspecified persons (including units and individuals) in the name of loans or other purposes more than 10 times within two years. If the repayment period is extended after the loan expires, the number of loans granted shall be counted as one time". This provision is the criterion for determining the criminal conduct of "professional money lenders".
In 2019, the Siming District People's Court of Xiamen Municipality issued three criteria for identifying professional money lenders:
1. Among the private lending cases accepted in the same year, the number of private lending cases involving the same or related plaintiffs within the jurisdiction of Siming Court is more than 10;
2. Among the private lending cases accepted in the same year, the number of private lending cases involving the same or related plaintiffs is more than 5 and the cumulative amount is more than 1 million yuan;
3. There is suspicion of fraudulent lending in the private lending cases involved. In other words, if one of the above three conditions is met, it will be recognized as a professional money lender.
In other words, if one of the above three conditions is met, it will be recognized as a professional money lender. In judicial practice, the undertaker may conduct a search through the judgment document website to confirm whether the parties have other private lending cases. If a party often lends money to others due to its own economic conditions, it is necessary to further examine whether it constitutes a "professional money lender" in light of the lender's own economic conditions and professional circumstances.
90. How to distinguish between private lending and illegally absorbing deposits from the public?
Answer: The most fundamental difference between private lending and illegally absorbing deposits from the public lies in whether or not it borrows from unspecified people. Private lending is the act of an institution or individual borrowing money from a specific natural person or other civil entity. Illegally absorbing deposits from the public refers to absorbing funds from unspecified targets in society without the approval of the People's Bank of China.
91. In a private lending case, if the judge discovers that the case may involve the crime of illegally absorbing the public, is it necessary to abide by the principle of "criminal first, then civil", and it is necessary to suspend the trial of the lending case?
A: It depends. According to Articles 6 and 7 of the Provisions of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases (Fa Shi [2020] No. 17), "after the case is filed, if the people's court finds clues or materials related to the private lending dispute case but not the same facts, the people's court shall continue to hear the private lending dispute case and transfer the clues and materials suspected of illegal fundraising and other crimes to the public security or procuratorial organs" The basic facts of a private lending dispute must be based on the outcome of the trial of the criminal case, and where the criminal case has not yet been concluded, the people's court shall rule to suspend the litigation. ”
Therefore, if the criminal leads are related to the private lending dispute case but are not the same facts, the people's court does not need to suspend the trial; if the basic facts of the private lending dispute must be based on the trial result of the criminal case, and the criminal case has not yet been concluded, the people's court shall follow the principle of "criminal first, then civil" and suspend the trial.
92. What are the legal consequences if a malicious or false private lending lawsuit is conducted?
A: According to Article 19 of the Provisions of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases (Fa Shi [2020] No. 17), "if it is found to be a false private lending lawsuit and the plaintiff applies to withdraw the lawsuit, the people's court shall not approve it, and shall make a judgment to reject the request in accordance with Article 112 of the Civil Procedure Law." Where litigation participants or other persons maliciously create or participate in false litigation, the people's courts shall impose fines or detention in accordance with the provisions of articles 111, 112, and 113 of the Civil Procedure Law; Where a unit maliciously creates or participates in a false lawsuit, the people's court shall fine the unit and may fine or detain its principal responsible person or directly responsible personnel;
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