The law does not prohibit private borrowers and borrowers from including the interest on the previous loan into the principal of the later period and re-issuing IOUs

Gist of the Adjudication: What affects the validity of a contract is a violation of the mandatory provisions on the validity of laws and administrative regulations. The Individual Income Tax Law of the People's Republic of China does not prohibit private lenders from re-issuing credit vouchers by including the interest on the previous loan into the later principal, nor does it stipulate that a contract that violates the relevant provisions of the law is invalid.

Supreme People's Court of the People's Republic

Civil Judgments

(2019) Supreme Law Min Zhong No. 2021

Appellant (plaintiff of first instance and defendant in counterclaim): Xu Chengyu, male, born on April 16, 1970, lives in Room 301, Unit 1, Building 3, Huating Apartment, Xiacheng District, Hangzhou City, Zhejiang Province.

Entrusted litigation agent: Yang Bin, lawyer of Zhejiang Jingheng Law Firm.

Entrusted litigation agent: Huang Fang, lawyer of Zhejiang Jingheng Law Firm.

Appellant (plaintiff of first instance and defendant in counterclaim): Shen Suli, female, born on March 28, 1972, lives in Room 301, Unit 1, Building 3, Huating Apartment, Xiacheng District, Hangzhou City, Zhejiang Province.

Entrusted litigation agent: Yang Bin, lawyer of Zhejiang Jingheng Law Firm.

Entrusted litigation agent: Huang Fang, lawyer of Zhejiang Jingheng Law Firm.

Appellant (defendant of first instance, plaintiff in counterclaim): Wu Chaoying, female, born on December 18, 1975, resident of the Macao Special Administrative Region, living in Block A, 13th Floor, Yee On Court, Guangzhou Street, Macao Special Administrative Region.

Entrusted litigation agent: Feng Jiwei, lawyer of Beijing Weiheng (Hangzhou) Law Firm.

Entrusted litigation agent: Zhang Xiongwei, lawyer of Beijing Weiheng (Hangzhou) Law Firm.

Appellee (defendant of first instance): Zhejiang Haoanju Industrial Co., Ltd. Residence: No. 2-37, 16th Street, Beiyuan Business District, Yiwu City, Zhejiang Province.

Legal representative: Wang Xiulan, executive director of the company.

Entrusted litigation agent: Feng Jiwei, lawyer of Beijing Weiheng (Hangzhou) Law Firm.

Entrusted litigation agent: Zhang Xiongwei, lawyer of Beijing Weiheng (Hangzhou) Law Firm.

Appellee (defendant of first instance): Chen Zhen, male, born on September 5, 1972, lives at No. 248, Xiangshan Road, Choujiang Street, Yiwu City, Zhejiang Province.

Appellants Xu Chengyu, Shen Suli and Wu Chaoying appealed to this court against the civil judgment of the Zhejiang Provincial High People's Court (2018) Zhe Min Chu No. 47 due to a private loan dispute with the appellees Chen Zhen and Zhejiang Haoanju Industrial Co., Ltd. (hereinafter referred to as Haoanju Company). This court formed a collegial panel in accordance with the law and heard the case in open court on July 20, 2020. Appellants Xu Chengyu and Shen Suli's entrusted agents ad litem Yang Bin and Huang Fang, appellant Wu Chaoying's entrusted agents ad litem Feng Jiwei and Zhang Xiongwei, and appellee Hao'anju Company's entrusted agents ad litem Feng Jiwei and Zhang Xiongwei appeared in court to participate in the litigation. Appellee Chen Zhen was lawfully summoned by this court but did not appear in court to participate in the proceedings, and this court tried the case in absentia in accordance with law. The case is now closed.

Xu Chengyu and Shen Suli filed a lawsuit with the court of first instance, requesting: 1. Order Wu Chaoying and Chen Zhen to immediately and jointly repay Xu Chengyu and Shen Suli's loan of 86.66 million yuan, and pay overdue interest of 94611976 7951976 yuan (at an annual interest rate of 20%, temporarily calculated from November 1, 2017 to November 2, 2018, and finally calculated until the date when Chen Zhen and Wu Chaoying actually repay it); 2. Order Haoju Company to bear joint and several liability for the first claim. 3. Order Chen Zhen, Wu Chaoying, and Haoanju Company to bear all the litigation costs of this case.

Wu Chaoying's counterclaim requests: 1. Revoke the Agreement and the Supplementary Agreement signed on August 15, 2017; 2. Shen Suli and Xu Chengyu return 19,741,413.67 yuan to Wu Chaoying; 3. The acceptance fees for the present lawsuit and the counterclaim in this case are borne by Shen Suli and Xu Chengyu.

The court of first instance found that:

From October 2011 to August 2017, Wu Chaoying successively borrowed money from Xu Chengyu and Shen Suli due to the business needs of Haoanju Company, and nearly 600 payments were exchanged between the two parties. During the trial of this case, as confirmed by all parties in this case, Xu Chengyu, Shen Suli and their related accounts transferred a total of 792,259,561.33 yuan to Wu Chaoying and his related accounts. Wu Chaoying and his associated accounts transferred a total of 796184127 yuan to Xu Chengyu, Shen Suli and their related accounts. In addition, in early August 2017, Zhang Yuzhou represented Xu Chengyu and Shen Suli, and Huang Zhaoping negotiated on Wu Chaoying's repayment on behalf of Wu Chaoying. On August 15, Xu Chengyu and Shen Suli signed the "Agreement" and the "Supplementary Agreement" with Wu Chaoying and Haoanju Company in Wu Chaoying's Company Academy. The main content of the agreement: in view of the fact that Wu Chaoying has been borrowing money from Xu Chengyu and Shen Suli since 2012, in order to properly solve the repayment matters, the parties have reached the following agreement on the basis of equality, voluntariness and good faith. One Wu Chaoying repaid the loan of RMB 50 million in monetary terms, to be paid in 9 installments, as follows: RMB 5 million by September 30, 2017, RMB 5 million by October 31, 2017, RMB 5 million by November 31, 2017 (sic), RMB 5 million by January 31, 2018, RMB 7.5 million by April 30, 2018, RMB 7.5 million by May 31, 2018, RMB 5 million by June 30, 2018, and RMB 5 million by July 31, 20185 million yuan will be returned before August 31, 2018. If Wu Chaoying is overdue for more than 60 days, it will be deemed that Wu Chaoying is in breach of contract, and Xu Chengyu and Shen Suli may require Wu Chaoying to pay all the money immediately (including the part of the debt with the house). and pay Xu Chengyu and Shen Suli overdue interest from the date of overdue (calculated at an annual interest rate of 20% to the date of actual performance). Xu Chengyu and Shen Suli shall issue corresponding receipts to Wu Chaoying after receiving any amount of money, and if Xu Chengyu and Shen Suli do not issue receipts to Wu Chaoying, Wu Chaoying has the right to postpone the payment accordingly. Wu Chaoying voluntarily transferred the real estate owned by him or a third party to Xu Chengyu and Shen Suli (5 sets of West Lake Greentown Liuzhuang Senior Apartment; Xiaoshan Wenyan Goya Apartment Xiagangyuan; Greentown Taohuayuan Huanxi Village) for the purpose of repaying the loan other than the above-mentioned monetary repayment. Wu Chaoying guaranteed that the property would be transferred by August 31, 2018 at the latest, and that the property transfer procedures would be no later than October 31, 2018. 2. Haoanju Company shall be jointly and severally liable for all debts of Wu Chaoying under this Agreement. The guarantee period is two years from the date of expiration of Wu Chaoying's repayment period. If there is a grace period, two years from the date of expiration of the grace period. The scope of the guarantee is the principal and interest of the creditor's rights under this agreement and the expenses incurred by Xu Chengyu and Shen Suli to realize the creditor's rights (including but not limited to litigation fees, preservation fees, notary fees, lawyer fees, investigation fees, etc.). 3. This Agreement shall come into force upon the signature of all parties to the Agreement. All loan agreements previously signed by Xu Chengyu, Shen Suli and Wu Chaoying (including all loan agreements and documents issued by Xu Chengyu, Shen Suli and Wu Chaoying to Xu Chengyu (Xu Hongyu), Gu Minghai, Zhejiang Qida Garment Co., Ltd., Hangzhou Dibo Garment Co., Ltd., Hangzhou Xinchen Garment Co., Ltd., etc., as well as the housing purchase agreement and commercial housing subscription agreement between Zhejiang Hao'an Haoju Real Estate Co., Ltd. and Zhejiang Xinchangfeng Garment Co., Ltd., Hangzhou Xinchen Garment Co., Ltd. and Xu Chengyu) are all invalid. Xu Chengyu and Shen Suli shall return all the originals to Wu Chaoying, and if any loss is caused to Wu Chaoying by the above-mentioned personnel or companies, Xu Chengyu and Shen Suli shall bear full responsibility. Since then, Xu Chengyu, Shen Suli and Wu Chaoying, Hao'anju Company, Zhejiang Hao'an's Haoju Real Estate Co., Ltd., Yiwu Hao'anju Furniture Co., Ltd., Yiwu Dezhou Trading Co., Ltd. and the above-mentioned persons have no other creditor's rights and debts, and Wu Chaoying has paid off the loan interest and transferred the property in accordance with this agreement, and all creditor's rights and debts have been extinguished. 4. This Agreement shall be governed by the laws of the People's Republic of China. All disputes arising out of or in connection with this Agreement shall be resolved through negotiation between the parties, and if no agreement can be reached through negotiation, they shall be resolved by litigation in the people's court where Xu Chengyu and Shen Suli are located.

The main content of the "Supplemental Agreement" is that there are matters to be amended and supplemented in the "Agreement" signed by Xu Chengyu, Shen Suli and Wu Chaoying on August 12, 2017, and Xu Chengyu, Shen Suli, Wu Chaoying and Haoanju Company hereby agree on the following supplementary agreements: 1. Xu Chengyu, Shen Suli and Wu Chaoying shall supplement the basic information and corresponding mortgage amounts of the 7 properties agreed in the "Agreement". If Wu Chaoying fails to perform in accordance with the Agreement, Xu Chengyu and Shen Suli may claim that Wu Chaoying make a lump sum payment according to the amount corresponding to the unfulfilled property, and from the time of overdue, the amount corresponding to the unfulfilled property shall be subject to an annual interest rate of 20% Calculate the interest (Room 303, Building 10, Liuzhuang Senior Apartment, amount of 1.88 million yuan; Room 110, Building 13, Liuzhuang Senior Apartment, amount of 1.58 million yuan; Room 112, Building 13, Liuzhuang Senior Apartment, amount of 1.58 million yuan; Room 214, Building 11 of Liuzhuang Senior Apartment, amount of 1.58 million yuan; Room 102, Building 11 of Liuzhuang Senior Apartment, amount of 1.58 million yuan; Goya Apartment, Wenyan Town, Xiaoshan District, 8.78 million yuan; No. 75, Huanxi Village, Zhonghao Taohuayuan, Yuhang District, Hangzhou, 23.68 million yuan). 2. Wu Chaoying paid a total of 6.6 million yuan to Xu Chengyu and Shen Suli before September 15, 2017 to deal with the Great Wall Tourism and all other loan sharks, and paid Zhang Hongxi 1.5 million yuan of the loan principal before October 15, 2017, and the interest part was paid by Xu Chengyu and Shen Suli to Zhang Hongxi. Since then, there has been no other creditor-debtor relationship between the parties other than the Agreement. Within 7 days of Wu Chaoying returning Zhang Hongxi's money, Xu Chengyu and Shen Suli returned the 2-4-1905 room and parking spaces C456 and 457 located in Blue Diamond Tiancheng to Zhejiang Hao'an Haoju Real Estate Co., Ltd., and cooperated with the relevant procedures. If Wu Chaoying fails to pay the amount within the agreed time, Wu Chaoying voluntarily bears the overdue interest of 20% per annum to Xu Chengyu and Shen Suli. If Xu Chengyu and Shen Suli fail to return the house or parking space within the agreed time, Xu Chengyu and Shen Suli will voluntarily bear the overdue interest of 20% annualized interest rate to Wu Chaoying based on the market value of the real estate and parking space that needs to be transferred to Wu Chaoying. 3. Xu Chengyu and Shen Suli's existing real estate of Zhejiang Haoanju Real Estate Co., Ltd. located in Room 2-4-1903 of Blue Diamond Tiancheng (the actual house price of the property should be 3 million, of which Wu Chaoying paid the down payment and mortgage on behalf of a total of 1,938,122,999 yuan, which was used to offset the last 5 million part of Wu Chaoying's repayment to Xu Chengyu and Shen Suli, and the monthly mortgage was borne by Xu Chengyu and Shen Suli from October 2017). Haoanju Company bears joint and several liability for Wu Chaoying, and the guarantee time and liability are consistent with the original agreement.

On August 22, 2017, Wu Quantong, Wu Tieying and Wu Chaoying respectively issued the "Declaration and Guarantee" to Xu Chengyu and Shen Suli, the main content: I know and recognize the contents of the "Agreement" and "Supplementary Agreement" signed by Wu Chaoying and Haoanju Company with Xu Chengyu and Shen Suli, and fully agree to transfer all the real estate I own to Xu Chengyu and Shen Suli as a loan for Wu Chaoying's repayment. I fully agree and acknowledge all the terms and conditions of the Agreement and the Supplemental Agreement concerning the repayment of the loan with real estate, and guarantee to fulfill the corresponding obligations in accordance with the terms of the Agreement.

Between August 16, 2017 and March 21, 2018, Wu Chaoying paid 10096049 yuan to Xu Chengyu and Shen Suli. Among them, 4.6 million yuan was paid before November 30, 2017, and then 5496049 yuan was paid as of March 21, 2018. During the trial of this case, Xu Chengyu, Shen Suli and Wu Chaoying all made it clear that Wu Chaoying should pay Xu Chengyu and Shen Suli an additional 6.6 million yuan and 1.5 million yuan in accordance with the Supplemental Agreement. Wu Chaoying claimed that he had paid 4.3 million yuan of the 1.5 million yuan and 6.6 million yuan, and Xu Chengyu and Shen Suli claimed that Wu Chaoying had paid all of the aforementioned amounts. At the same time, Xu Chengyu and Shen Suli said that Wu Chaoying's additional payment of 4 million yuan could be deducted from the principal of Wu Chaoying's payable. During the trial, Wu Chaoying made it clear that there was interest on the loan between the two parties.

On November 30, 2017, Xu Chengyu, Shen Suli, Wu Chaoying, Chen Zhen, and Haoanju Company reached a settlement through mediation by Hangzhou Harmony Mediation Center, and Xu Chengyu and Shen Suli voluntarily withdrew their lawsuits.

It was also ascertained that Chen Zhen and Wu Chaoying registered their marriage on 20 June 2001. Chen Zhen is a shareholder of Hao'anju Company, which is a shareholder of Zhejiang Hao'an's Real Estate Company.

The court of first instance held that: 1. The application of law in the dispute in this case. Wu Chaoying is a resident of the Macao Administrative Region, and this case is a contract dispute case involving Macao. The Agreement stipulates that the laws of the mainland shall apply, and in the course of the trial of this case, all parties involved in the case have expressly applied the laws of the mainland as the applicable law to determine the rights and obligations of the parties in this case, and according to Article 3 of the Law of the People's Republic of China on the Application of Laws to Foreign-Related Civil Relations, the laws of the mainland shall be the applicable law for the trial of this case.

2. The trial of the specific amount of money exchanged between the borrower and the borrower in this case. During the trial of this case, after the court of first instance organized the parties to check the current accounts, the parties in this case transferred a total of 792,259,561.33 yuan to Wu Chaoying and their related accounts from October 2011 to August 2017. Wu Chaoying and his associated accounts transferred a total of 796184127 yuan to Xu Chengyu, Shen Suli and their related accounts without objection. In addition to the above-mentioned account transactions, Xu Chengyu and Shen Suli believed that the 3 million yuan they remitted to Xuan Lifang, and the 1.75 million yuan and 1.5 million yuan remitted to Zhejiang Hao'an Haoju Real Estate Co., Ltd. on January 13 and March 24, 2015, respectively, should be deducted from the money remitted by Wu Chaoying to Xu Chengyu and Shen Suli. Regarding the 3 million yuan remitted to Xuan Lifang, Xu Chengyu and Shen Suli claimed that it was based on Wu Chaoying's instructions, but during the trial of this case, Xu Chengyu and Shen Suli failed to provide evidence in this regard, and the 3 million yuan should not be deducted in this case if Wu Chaoying did not recognize the money. For the 1.75 million yuan and 1.5 million yuan remitted to Zhejiang Hao'an Haoju Real Estate Co., Ltd., after review, Shen Suli remitted the money paid to Zhejiang Hao'an Haoju Real Estate Co., Ltd. in addition to the 1.75 million yuan and 1.5 million yuan, and Wu Chaoying clearly deducted the more than 420 yuan from his repayment amount. Moreover, Wu Chaoying is a shareholder of Hao'anju Company, and Hao'anju Company is a shareholder of Zhejiang Hao'anhaoju Real Estate Co., Ltd. Accordingly, the 3.25 million yuan should also be deducted from Wu Chaoying's repayment amount. To sum up, from October 2011 to August 2017, it should be determined that Xu Chengyu, Shen Suli and their related accounts transferred a total of 792,259,561.33 yuan to Wu Chaoying and his related accounts. Wu Chaoying and his associated accounts transferred a total of 792934127 yuan to Xu Chengyu, Shen Suli and their related accounts.

3. The trial of whether the loan in this case is suspected of fraudulent loans. In the first trial, Wu Chaoying filed a counterclaim on the grounds that the case constituted fraudulent loans and that there was fraud, coercion and obvious unfairness. At the second subsequent hearing, Wu Chaoying changed the litigation claim and clearly withdrew his claim that this case constituted fraudulent loans and that there was fraud and coercion, but Chen Zhen and Haoanju Company still clearly adhered to the previous defense opinions that this case constituted fraudulent loans and that there was fraud and coercion. The "Opinions of the Supreme People's Court, the Supreme People's Procuratorate, the Ministry of Public Security, and the Ministry of Justice on Several Issues Concerning the Handling of Criminal Cases of 'Routine Loans'" clearly states that "routine loans" are used for the purpose of illegal possession, in the name of private lending, to induce or compel victims to sign "loans" or disguised "loans", "mortgages", "guarantees" and other related agreements, and form false claims and debts by inflating the loan amount, maliciously creating a breach of contract, arbitrarily determining a breach of contract, destroying evidence of repayment, etc., and using litigation, arbitration, notarization, or the use of violence, A general term for illegal and criminal activities related to threats and other means of illegally taking possession of the victim's property. Common criminal methods and steps of "routine lending" include creating a false appearance of private lending, creating false payment facts such as fund account flows, deliberately creating a breach of contract or arbitrarily determining a breach of contract, maliciously inflating the amount of the loan, and using both soft and hard methods to "collect debts". Judging from the circumstances ascertained during the trial of this case, it is difficult to determine that there are fraudulent lending situations in this case: 1. Wu Chaoying has no objection to the existence of a private lending relationship between him and Xu Chengyu and Shen Suli. 2. Judging from the exchange of funds between the two parties, there is no so-called situation of creating bank flows. 3. Judging from the available evidence, there is no circumstance in this case that Xu Chengyu and Shen Suli set default traps and created obstacles to repayment, deliberately causing Wu Chaoying to breach the contract, as well as maliciously raising the amount of loans, and using both soft and hard methods to "collect debts". This court noted that in response to Wu Chaoying's claim at the first trial that there was a fraudulent loan in this case, this court clearly gave Wu Chaoying 15 days and asked him to report to the relevant departments, but Wu Chaoying did not report the case to the relevant departments before the second trial, but instead changed the counterclaim and no longer claimed that the loan in this case was suspected of fraudulent loans. Based on the trial of the whole case, it is difficult to determine that the loan in this case is suspected of fraudulent lending in the civil litigation procedures of this case.

4. Trial on whether there is fraud, coercion, or obvious unfairness in the Agreement and Supplemental Agreement in this case. 1. Article 68 of the Opinions of the Supreme People's Court on Several Issues Concerning the Implementation of the General Principles of the Civil Law of the People's Republic of China (for Trial Implementation) provides: "Where a party intentionally informs the other party of false information, or deliberately conceals the true situation, and induces the other party to make a false expression of intent, it may be found to be fraudulent." Article 69 of the Interpretation stipulates: "Where a person compels the other party to make an expression contrary to his or her true intentions by threatening to cause damage to the life, health, honor, reputation, or property of a citizen, his relatives and friends, or to cause damage to the honor, reputation, or property of a legal person, it may be found to be an act of coercion." "Chen Zhen and Haoanju Company did not provide evidence to prove that the aforesaid circumstances existed in the process of signing the Agreement and the Supplementary Agreement. On the contrary, the "Agreement" and the "Supplementary Agreement" were signed at Wu Chaoying's Company Academy; during the signing of the "Agreement" and the "Supplementary Agreement", Wu Chaoying had professional personnel participate in and provide legal services; Shen Suli and Wu Chaoying repeatedly considered and changed drafts of the "Agreement" and "Supplementary Agreement" over a period of time. Therefore, the Agreement and the Supplemental Agreement were signed when Shen Suli and Wu Chaoying were aware of the text of the Agreement and the legal consequences that both parties should bear, and there was no circumstance that the Agreement and the Supplemental Agreement were Wu Chaoying's erroneous expression of intention or contrary to Wu Chaoying's true intention. 2. Article 72 of the Opinions of the Supreme People's Court on Several Issues Concerning the Implementation of the General Principles of the Civil Law of the People's Republic of China (for Trial Implementation) provides: "Where one party takes advantage of its advantages or takes advantage of the other party's inexperience, causing the rights and obligations of both parties to clearly violate the principles of fairness and equivalent compensation, it may be found to be obviously unfair." "Wu Chaoying has been in business for many years, and it cannot be determined that he has no corresponding business experience, and Shen Suli, as the lender, is difficult to determine that Shen Suli is in an advantageous position compared to Wu Chaoying as the borrower. What's more, after the agreement was signed, Wu Chaoying also provided Shen Suli with the "Declaration and Guarantee" signed by Wu Chaoying, Wu Tieying, Wu Quantong, etc., and fulfilled part of the repayment obligations. Therefore, there is insufficient basis for determining that the Agreement and the Supplemental Agreement were manifestly unfair at the time of their conclusion.

5. On the trial of the amount of arrears confirmed in the Agreement and the Supplementary Agreement.

(1) Article 6 of the Notice of the Supreme People's Court on Promoting Economic Development and Maintaining Social Stability in the Proper Trial of Private Lending Dispute Cases in accordance with the Law issued in 2011 clearly states: "Legitimate loan interest shall be protected in accordance with the law. When the people's courts hear cases of disputes over private lending, they should protect the lawful interest on loans in accordance with the law and curb the tendency of usury in accordance with the law." The Several Opinions of the Supreme People's Court on Further Strengthening Financial Adjudication Work issued in 2017 require people's courts at all levels to take serving the real economy as the starting point and end point in financial adjudication, and guide and regulate financial transactions. Article 2.2 of the Circular also clarifies that "it regulates and guides the order of private financing, and denies the validity of contract clauses in cases of private lending disputes, such as withholding principal or interest, disguised high interest, and other contractual clauses that circumvent the upper limit of judicial protection of private lending interest rates". Article 3 of the Notice of the Supreme People's Court on the Proper Trial of Private Lending Dispute Cases in accordance with the Law, issued in 2018, specifically emphasizes that "the Provisions of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases establish a judicial red line for the statutory interest rate in accordance with the law, which should be strictly grasped." In the course of adjudicating private lending disputes, the people's courts shall not support any use of 'interest', 'liquidated damages', 'service fees', 'intermediary fees', 'security deposits', 'extension fees', etc., that break or covertly break the red line of the statutory interest rate. In the case of 'the lender asserts that the principal of the loan is paid in cash' and 'the borrower argues that the so-called cash payment of the principal is a high interest deducted by the lender in advance', it is necessary to strengthen the examination of evidence such as the source and delivery of the cash payment claimed by the lender, and determine the amount of the loan principal and the fact of the deduction of high interest in accordance with the law." The people's courts hearing private lending dispute cases in accordance with the law should also correctly understand and reasonably grasp the aforesaid judicial policies. Specific to this case: 1. In the absence of finding that the Agreement and the Supplemental Agreement were obviously unfair, the Agreement and the Supplemental Agreement were expressions of Wu Chaoying's true intention at the time of signing. 2. The composition of the repayment confirmed in the agreement is inconsistent with the statements of both parties. Wu Chaoying countersued that there was no agreed interest on the loan between the two parties, and requested Xu Chengyu and Shen Suli to return the overpaid amount of more than 1,900 yuan. However, in the second trial, Wu Chaoying himself appeared in court, and it was clear that there was interest on the loan between the two parties, but the two parties had not yet negotiated the amount of interest. Wu Chaoying further said that it is natural to borrow money to repay the money and pay interest, and he is willing to bear the legal maximum interest. Wu Chaoying's statement on the interest on the loan in this case is inconsistent. Combined with the provisions of the Agreement and the Supplemental Agreement and the payment transactions between the two parties, it should be determined that Wu Chaoying's repayment includes interest. Therefore, Wu Chaoying's counterclaim for the return of the overpayment on the basis of an agreement between the two parties to repay the overpayment could not be sustained. 3. On the premise that the repayment includes interest, the basis for calculating interest in the Agreement and the Supplementary Agreement is an important issue in this case. During the trial, Xu Chengyu and Shen Suli asserted that the Agreement and the Supplementary Agreement were calculated at an annual interest rate of 36%, which had a certain degree of credibility. 4. 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 stipulates that: "If the interest rate of the previous period does not exceed 24% per annum, the amount stated in the re-issued credit certificate may be recognized as the principal of the later loan, and the interest on the excess part cannot be included in the principal of the later loan. Where the agreed interest rate exceeds 24% per annum, and the parties claim that the excess interest cannot be included in the principal of the later loan, the people's court shall support it." The Agreement and the Supplemental Agreement are settlements of past transactions between Xu Chengyu, Shen Suli and Wu Chaoying, and are more in line with the behavioral characteristics regulated by 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, which stipulates that "after the principal and interest of the loan in the previous period are settled, the borrower and the borrower shall include the interest in the principal of the later loan and re-issue the credit certificate". The Agreement and the Supplemental Agreement are the true expressions of the intentions of Xu Chengyu, Shen Suli and Wu Chaoying, but the determination of the specific interest rate should be in line with the spirit of the aforesaid judicial policy. Based on the circumstances of this case, the court of first instance determined that the loan between Xu Chengyu, Shen Suli and Wu Chaoying should be settled at an annual interest rate of 24%.

(2) During the trial of this case, the court of first instance required both parties to calculate the principal and interest of both parties from October 2011 to August 15, 2017 at an annual interest rate of 24%, and at the same time Wu Chaoying's repayment at the standard of paying interest first and then repaying the principal. Among them, the amount of money provided by Wu Chaoying is: the outstanding principal is 33,207,815.92 yuan, the interest is 2,110,534.69 yuan, and the total amount owed is 35,318,350.61 yuan; the amount of money provided by Xu Chengyu and Shen Suli is: the outstanding principal is 45,396,187.26 yuan, and the interest is 3,256,241.60 yuan. When the repayment amount exceeds the accumulated principal, Xu Chengyu and Shen Suli's calculation method is to temporarily deposit the balance in the debit account, which does not offset the next loan and does not calculate the deposit interest, while according to Wu Chaoying's algorithm, the balance is directly deducted from the next loan, but does not calculate the deposit interest. Article 21 of the Interpretation (II) of the Supreme People's Court on Several Issues Concerning the Application of the Contract Law of the People's Republic of China stipulates that the debtor shall pay interest and expenses in addition to the principal debt, and when the payment is insufficient to pay off all the debts, and the parties have not agreed, the people's court shall offset the interest first, and then the principal debt. Wu Chaoying's settlement method of the loan conformed to the provisions of the above-mentioned judicial interpretation, and the court adopted it. To sum up, the court determined that as of August 15, 2017, Wu Chaoying should return the principal and interest of Xu Chengyu and Shen Suli's loan of 35,318,350.61 yuan.

(3) After the signing of the "Agreement" and the "Supplementary Agreement", Xu Chengyu and Shen Suli admitted that they had received a payment of 12.1 million yuan from Wu Chaoying. Since the payment included 6.6 million yuan and 1.5 million yuan separately agreed in the Supplemental Agreement, only 4 million yuan was Wu Chaoying's performance of his obligations under the Agreement and the Supplemental Agreement. At the same time, according to Article 3 of the Supplemental Agreement, the down payment of RMB 1,938,122.99 should also be deducted from the principal amount owed by Xu Chengyu and Shen Suli. Therefore, Wu Chaoying has not returned Xu Chengyu and Shen Suli 29,380,227.62 yuan.

(4) The Agreement stipulates the payment date for each installment. At the same time, it is clarified that if Wu Chaoying is overdue for more than 60 days, it will be deemed that Wu Chaoying is in breach of contract, and Xu Chengyu and Shen Suli can require Wu Chaoying to immediately pay all the money (including the part of the debt with the house). and pay Xu Chengyu and Shen Suli overdue interest from the date of overdue. Wu Chaoying failed to perform the payment obligation in accordance with the Agreement and the Supplementary Agreement, which constituted a breach of contract, and should pay the principal of RMB 29,380,227.62 to Xu Chengyu and Shen Suli from December 1, 2017 as agreed in the Agreement, and the interest rate of 20% per annum until the actual repayment date of Wu Chaoying.

(5) The loan involved in the case occurred during the existence of the relationship between Wu Chaoying and Chen Zhen, and although the amount of the loan was huge, the purpose of the money was used for the operation of the Hao'anju Company in which Chen Zhen held shares, and the debt involved in the case should be determined to be Chen Zhen and Wu Chaoying's borrowing from Xu Chengyu and Shen Suli for joint operation, and should be found to be a joint debt of Chen Zhen and Wu Chaoying, and Chen Zhen and Wu Chaoying should jointly bear the responsibility for repayment. Hao'anju Company confirmed in the Agreement and the Supplementary Agreement that it was willing to bear joint and several guarantee liability for Wu Chaoying's aforesaid debts, so Xu Chengyu and Shen Suli's request for Hao'anju Company to bear joint and several guarantee liability was based on the law, and the court of first instance supported it.

In summary, in accordance with Article 3 of the Law of the People's Republic of China on the Application of Laws to Foreign-Related Civil Relations, Articles 54, 60 and 211 of the Contract Law of the People's Republic of China, Article 41 of the Marriage Law of the People's Republic of China, Article 18 of the Guarantee Law of the People's Republic of China, Article 21 of the Interpretation (II) of the Supreme People's Court on Several Issues Concerning the Application of the Contract Law of the People's Republic of China, Article 259 of the Civil Procedure Law of the People's Republic of China, and Article 259 of the Civil Procedure Law of the People's Republic of China. The provisions of Article 91 of the Interpretation of the Supreme People's Court on the Application of the Civil Procedure Law of the People's Republic of China, after discussion and decision by the adjudication committee of the Supreme People's Court, ruled that: 1. Wu Chaoying and Chen Zhen shall return the loan of 29,380,227.62 yuan to Xu Chengyu and Shen Suli within 20 days after the judgment takes effect, and the aforesaid amount shall be calculated at an annual interest rate of 20% from December 1, 2017 until the actual repayment date of Chen Zhen and Wu Chaoying. 2. Haoanju Company shall be jointly and severally liable for the principal and interest of the above-mentioned arrears. If Hao's housing company assumes the guarantee liability first, it has the right to recover from Chen Zhen and Wu Chaoying. 3. Reject Xu Chengyu and Shen Suli's other litigation claims. 4. Reject Wu Chaoying's counterclaim.

Xu Chengyu and Shen Suli were dissatisfied with the first-instance judgment and appealed to this court, requesting: 1. to revoke item 1 of the first-instance judgment, and to sentence Wu Chaoying and Chen Zhen to jointly repay Xu Chengyu and Shen Suli's loan of 86.66 million yuan, and to pay overdue interest of 7951796 yuan (at an annual interest rate of 20%, temporarily calculated from October 1, 2017 to March 12, 2018, and finally calculated until the date of actual repayment); The facts and reasons are: (1) The first-instance judgment did not deduct the 3 million yuan paid by Wu Chaoying to Shen Suli on October 24, 2014 and the 3 million yuan paid by Shen Suli to Xuan Lifang on the same day, and the facts were found to be unclear. Among the evidence submitted by Wu Chaoying to the court of first instance and withdrawn at the second trial, at least 42 transfer records were between Wu Chaoying and his related accounts and Xuan Lifang, proving that Wu Chaoying and Xuan Lifang's money transactions did exist, and it was reasonable for Wu Chaoying to make money transactions with Xuan Lifang through Shen Suli's account. Combined with the signing of the Agreement and the Supplementary Agreement, the 3 million yuan transferred by Wu Tieying to Shen Suli and the 3 million yuan transferred by Shen Suli to Xuan Lifang on the same day should be offset. (2) The first-instance judgment improperly applied the law by determining that the loan interest paid by Wu Chaoying at an annual interest rate of 36% was settled at an annual interest rate of 24%. In this case, the interest on the loan had already been paid, and the dispute was only over whether the interest rate paid by Wu Chaoying was calculated at 36% per annum or 24% per annum. The results of the accounting reports provided by the two parties are highly similar to the repayment amount set out in the Agreement and the Supplemental Agreement, which proves that Wu Chaoying has paid interest at an annual interest rate of 36%. Wu Chaoying has paid interest at an annual interest rate of 36%, which is in accordance with the law. The first-instance judgment adjusted the annual interest rate of the interest paid by Wu Chaoying to 24%, which in essence converted the interest on the part of the debt of nature that Wu Chaoying had already paid into the principal.

Wu Chaoying replied: (1) The "Agreement" and the "Supplemental Agreement" are the settlement of the principal and interest of the previous loans between Wu Chaoying, Shen Suli and Xu Chengyu. The 90.66 million yuan included both principal and interest, which made it impossible for the state to collect income tax on the interest part, resulting in a tax loss for the state. According to Article 52 of the Contract Law of the People's Republic of China, the Agreement and the Supplementary Agreement are invalid because they violate the mandatory provisions of the law. (2) Regardless of whether the annual interest rate of 36% is legal for the time being, if Shen Suli and Xu Chengyu advocate an annual interest rate of 36%, they shall provide evidence to prove the actual interest rate of each loan or prove it by applying for judicial audit. (3) Shen Suli and Xu Chengyu did not provide evidence that the 3 million yuan they remitted to Xuan Lifang should be deducted in this case, and the judgment of the court of first instance that did not support their claims was not wrong. The appeal requests of Shen Suli and Xu Chengyu were dismissed.

Wu Chaoying's appeal request is: 1. Revoke the first item of the first-instance judgment and change the judgment that Wu Chaoying and Chen Zhen should return the loan of 22,944,278.05 yuan to Xu Chengyu and Shen Suli, and calculate the interest at an annual interest rate of 6% from the effective date of the judgment until the date of Wu Chaoying's actual repayment; The facts and reasons are as follows: (1) The total amount of 90.66 million yuan in arrears determined in the Agreement and the Supplementary Agreement includes both principal and interest, which makes it impossible for the state to collect income tax on the interest part, resulting in tax losses, and violating the mandatory provisions of the Individual Income Tax Law of the People's Republic of China and other laws and administrative regulations, and shall be invalid. The first-instance judgment erred in applying the law in finding that the Agreement and the Supplemental Agreement were valid. (2) The first-instance judgment found that Wu Chaoying and his affiliated accounts transferred a total of 792934127 yuan to Xu Chengyu, Shen Suli and the related accounts, and on this basis, 1.75 million and 1.5 million yuan should be added, that is, Wu Chaoying's repayment should be 796184127 yuan in total. The nature of the RMB 1.75 million transferred by Shen Suli to Zhejiang Hao'an Haoju Real Estate Co., Ltd. on 13 January 2015 was the purchase price. On the same day, Wu Chaoying transferred 1.75 million yuan to Shen Suli through Wu Quantong as a repayment. The subject matter of the legal relationship between the two and the nature of the payment are different and should not be set-off. Hangzhou Xinchen Garment Co., Ltd. transferred 1.5 million yuan to Zhejiang Hao'an Haoju Real Estate Co., Ltd. on March 24, 2015 for the purpose of purchasing a deposit. On the same day, the nature of the 1.5 million yuan transferred by Yiwu Hao'an Haoju Furniture Co., Ltd. to Xu Chengyu was repayment, and the two subjects and natures were different and should not be offset. (3) The mortgage payment of 687,598.96 yuan for the Blue Diamond Tiancheng 2-4-1903 house paid by Wu Chaoying on behalf of Shen Suli and Xu Chengyu should also be deducted from the total amount that should be returned. (4) The first-instance judgment found that the date of default and the interest rate were improper in calculating overdue interest in accordance with the Agreement. The Agreement and the Supplemental Agreement are invalid, and the terms of the two invalid agreements should not be invoked as the basis for adjudication. Xu Chengyu and Shen Suli can claim overdue interest at an annual interest rate of 6%.

Xu Chengyu and Shen Suli replied: (1) The Agreement and the Supplementary Agreement are valid. 1. During the first instance, Wu Chaoying claimed to revoke the contract on the grounds of fraud and coercion, and then claimed that the contract was invalid on the grounds of violating the mandatory provisions of the law in the second instance, and the litigation was not in good faith, and his second-instance claim should not be reviewed. 2. The amounts determined in the Agreement and the Supplementary Agreement are all principals, and there is no situation where the interest in the previous period is included in the principal in the later period, and it does not violate the relevant provisions of the Individual Income Tax Law of the People's Republic of China. (2) The 1.75 million yuan and 1.5 million yuan paid by Shen Suli to Zhejiang Hao'an Haoju Real Estate Co., Ltd. should be deducted from Wu Chaoying's repayment amount. 1. This case is not a loan relationship between Wu Chaoying, as a single entity, with Xu Chengyu and Shen Suli, and the two parties have multiple related parties. Article 3 of the Agreement also describes these related parties. Wu Chaoying's argument that the subject matter is inconsistent, that the two cannot be mixed, and that it has nothing to do with this case is not valid. 2. Wu Chaoying clearly recognized in the first instance that the 4.2 million yuan paid by Shen Suli to Zhejiang Hao'an Haoju Real Estate Co., Ltd. should be deducted from its repayment amount. Wu Chaoying is a shareholder of Hao'an Housing Company, and Hao'an Housing Company is a shareholder of Zhejiang Hao'an Haoju Real Estate Co., Ltd., and the first-instance judgment found that the 1.75 million yuan and 1.5 million yuan paid by Shen Suli to Zhejiang Hao'an Haoju Real Estate Co., Ltd. were deducted from Wu Chaoying's repayment amount, which was not improper. (3) Article 3 of the Supplementary Agreement stipulates that the amount of the real estate in Room 2-4-1903 of Blue Diamond Tiancheng is 1,938,122.99 yuan, which includes the down payment and mortgage payment, and the first-instance judgment has deducted all the amount, and there is no fact that Wu Chaoying will deduct another 687598 yuan mortgage as stated. Wu Chaoying did not raise the content of the 687598 yuan mortgage in the counterclaim and defense in the first instance, and it should not be supported to raise it again as a new claim in the second instance. (4) Wu Chaoying admits that there is interest on the loan. Calculated at an annual interest rate of 36%, the results of the accounting reports provided by the two parties are highly similar to the amount of repayment amount specified in the Agreement and the Supplementary Agreement, which is sufficient to show that Wu Chaoying has paid interest at an annual interest rate of 36%. The Agreement and the Supplemental Agreement clearly stipulate that the overdue interest shall be 20% per annum, and Wu Chaoying shall pay the overdue interest at an annual interest rate of 20% if Wu Chaoying fails to perform the payment obligation as agreed. In summary, it is requested that Wu Chaoying's appeal request be dismissed.

During the second instance, Wu Chaoying submitted 34 copies of CITIC Bank's business vouchers/customer receipts to prove that Wu Chaoying paid the mortgage of 687,598.96 yuan for Blue Diamond Tiancheng Room 2-4-1903 on behalf of Xu Chengyu and Shen Suli.

Xu Chengyu and Shen Suli cross-examined the opinions and had no objection to the authenticity of the evidence, but the payment was the mortgage payment of Blue Diamond Tiancheng Room 2-4-1903, which had nothing to do with this case.

This court's opinion on the determination of the 34 CITIC Bank business vouchers/customer receipts submitted by Wu Chaoying during the second instance trial is as follows: Xu Chengyu and Shen Suli recognize the authenticity of the evidence, and this court confirms its authenticity. Since the parties have already settled the down payment and mortgage payment of Blue Diamond Tiancheng Room 2-4-1903 in the Agreement and the Supplemental Agreement, this court does not confirm the relevance and probative force of this group of evidence.

Regarding the facts ascertained in the original judgment, Wu Chaoying raised the following objections at the second-instance trial: 1. The first-instance judgment found that on November 30, 2017, Xu Chengyu, Shen Suli, Wu Chaoying, Chen Zhen, and Haoanju Company reached a settlement through mediation by the Hangzhou Legal Harmony Mediation Center, and that Shen Suli and Xu Chengyu voluntarily withdrew the lawsuit. In the mediation procedure, Wu Chaoying did not entrust lawyer Guo Junjun to mediate at the Law Settlement Center.

After review, this court held that whether Guo Junjun obtained Wu Chaoying's authorization in the above-mentioned mediation procedure was not directly related to the trial of this case, so this court did not review and determine this fact.

This court affirms that all parties have no objection to the other facts ascertained in the first-instance judgment, and there is relevant evidence to prove them.

This court held that the focus of the dispute in this case was the basis for calculating the amount owed by Wu Chaoying to Xu Chengyu and Shen Suli.

1. The Agreement and the Supplemental Agreement are valid. According to Article 52, Paragraph 5 of the Contract Law of the People's Republic of China, Article 4 of the Interpretation (I) of the Supreme People's Court on Several Issues Concerning the Application of the Contract Law of the People's Republic of China, and Article 14 of the Interpretation (II) of the Supreme People's Court on Several Issues Concerning the Application of the Contract Law of the People's Republic of China, the violation of the mandatory provisions on the validity of laws and administrative regulations affects the validity of the contract. The Individual Income Tax Law of the People's Republic of China does not prohibit private lenders from re-issuing credit vouchers by including the interest on the previous loan into the later principal, nor does it stipulate that a contract that violates the relevant provisions of the law is invalid. The Agreement and the Supplementary Agreement are the true expression of the intention of the parties and do not violate the mandatory provisions of laws and administrative regulations, and shall be valid contracts. Wu Chaoying's claim that the Agreement and the Supplemental Agreement violated the mandatory provisions of the Individual Income Tax Law of the People's Republic of China and other laws and administrative regulations, and that they should be found invalid cannot be established, and this court does not support it.

2. The amount of repayment to be repaid by Wu Chaoying as determined by the first-instance judgment is correct. Xu Chengyu and Shen Suli asserted that they should remit 3 million yuan to Xuan Lifang according to Wu Chaoying's instructions, but they did not provide evidence, and their claim that the 3 million yuan paid by Wu Chaoying to Shen Suli should be deducted accordingly is not based on sufficient grounds, and this court does not support it. In the first instance, Wu Chaoying recognized that the 4.2 million yuan paid by Shen Suli to Zhejiang Hao'an Haoju Real Estate Co., Ltd. should be deducted from its repayment amount, and that Wu Chaoying was a shareholder of Hao'an Haoju Company, and Hao'anju Company was a shareholder of Zhejiang Hao'an Haoju Real Estate Co., Ltd., and the first-instance judgment found that the 1.75 million yuan and 1.5 million yuan paid by Shen Suli to Zhejiang Hao'an Haoju Real Estate Co., Ltd. should be deducted from Wu Chaoying's repayment amount, which was not improper.

3. The determination of the borrowing interest rate of 36% per annum is in line with the true intention of the parties. During the first instance, the court of first instance required the two parties to calculate the interest at an annual rate of 24% and 36% respectively on the basis of Xu Chengyu and Shen Suli's transfer of 792,259,561.33 yuan to Wu Chaoying, and Wu Chaoying's transfer of 792934127 yuan to Xu Chengyu and Shen Suli (specifically according to the date of remittance). At the same time, Wu Chaoying's repayment is calculated according to the standard of paying interest first and then repaying the principal, and the principal and interest of both parties from October 2011 to August 15, 2017 are calculated. Among them, the two groups of funds provided by Wu Chaoying are: the outstanding principal is 3320781592 yuan, the interest is 2110534.69 yuan, and the total amount owed is 35318350.61 yuan (calculated at an annual interest rate of 24%), and the principal is 79440550.59 yuan, the interest is 10190117 yuan, and the total amount owed is 89630668.21 yuan (36% annual interest). The two groups of payments provided by Xu Chengyu and Shen Suli were: the outstanding principal amount was 45,396,187.26 yuan and the interest was 3,256,241.60 yuan (calculated at an annual interest rate of 24%), and the outstanding principal was 83,144,971.13 yuan and the interest was 10,712,440.93 yuan (calculated at an annual interest rate of 36%). When the repayment amount exceeds the accumulated principal, Xu Chengyu and Shen Suli's calculation method is to temporarily deposit the balance in the debit account, which does not offset the next loan and does not calculate the deposit interest, while according to Wu Chaoying's algorithm, the balance is directly deducted from the next loan, but does not calculate the deposit interest.

From the above payment data, it can be seen that the two parties have reached a consensus on the calculation of the loan interest at an annual interest rate of 36%, at least when the Agreement and the Supplemental Agreement were signed on August 15, 2017. Wu Chaoying's assertion that the two parties had borrowed money with interest but had not yet determined it was not only contrary to common sense, but also inconsistent with the amount of money determined in the Agreement and the Supplemental Agreement. Based on Wu Chaoying's transfer of 792934127 yuan to Xu Chengyu and Shen Suli, the two parties calculated the sum of principal and interest from October 2011 to August 15, 2017 according to the standard of interest rate of 36% and interest payment first and then principal repayment, which is more consistent with the amount of money that Wu Chaoying should repay Xu Chengyu and Shen Suli in the Agreement and the Supplementary Agreement, including 50 million yuan to be repaid in monetary form and 40.66 million yuan to repay debts with housing, totaling 90.66 million yuan. It should be determined that the interest on the loan between the two parties is agreed to be 36% per annum. The first-instance judgment determined that the loan between Xu Chengyu, Shen Suli and Wu Chaoying was improperly settled at an annual interest rate of 24% and should be corrected.

4. The amount of arrears of 90.66 million yuan determined in the Agreement and the Supplementary Agreement shall be adjusted. 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 stipulates that: "If the interest rate agreed between 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. Article 28 of the Interpretation stipulates that: "If the interest rate of the previous period does not exceed 24% per annum, the amount stated in the re-issued credit certificate may be recognized as the principal of the later loan, and the interest on the excess part shall not be included in the principal of the later loan." Where the agreed interest rate exceeds 24% per annum, and the parties claim that the excess interest cannot be included in the principal of the later loan, the people's court shall support it. According to the calculation of the preceding paragraph, the sum of the principal and interest payable by the borrower after the expiration of the loan period shall not exceed the sum of the initial loan principal and the interest calculated at an annual interest rate of 24% for the entire loan period based on the initial loan principal. Where the lender requests that the borrower pay the excess amount, the people's court will not support it. "The part of the interest that Wu Chaoying has already paid at the agreed annual interest rate of 36% will not be adjusted. From October 2011 to August 15, 2017, calculated at an annual interest rate of 36%, Wu Chaoying owed Xu Chengyu and Shen Suli 79,440,550.59 yuan in principal and 10190117 yuan in interest, with a total amount of 89,630,668.21 yuan. The arrears owed by Wu Chaoying to Xu Chengyu and Shen Suli as determined in the Agreement and the Supplementary Agreement include 50 million yuan repaid in monetary form and 40.66 million yuan in mortgage debts, totaling 90.66 million yuan, the amount obviously includes the principal and interest of the previous loan, and the interest is higher than 24%, and the interest on the part exceeding 24% per annum should not be included in the principal of the later loan. This court adjusted the amount of arrears determined by the Agreement and the Supplementary Agreement according to the principal owed by Wu Chaoying of 79,440,550.59 yuan.

After the signing of the Agreement and the Supplemental Agreement, Xu Chengyu and Shen Suli admitted that they had received a payment of 12.1 million yuan from Wu Chaoying, which included 6.6 million yuan and 1.5 million yuan separately agreed in the Supplemental Agreement, and only 4 million yuan was Wu Chaoying's performance of obligations under the Agreement and the Supplemental Agreement. Because Xu Chengyu and Shen Suli confirmed that the 4 million yuan was deducted from the principal owed by Wu Chaoying, the 4 million yuan was deducted from the principal owed by Wu Chaoying. According to Article 3 of the Supplemental Agreement, Xu Chengyu and Shen Suli's existing Blue Diamond Tiancheng Room 2-4-1903 property was paid by Wu Chaoying on behalf of Wu Chaoying, and the down payment of RMB 1,938,122.99 should also be deducted from the principal. Therefore, Wu Chaoying has not returned the principal of Xu Chengyu and Shen Suli of 73,502,427.6 yuan.

Article 206 of the Contract Law of the People's Republic of China stipulates that "the borrower shall return the loan within the agreed time limit." Where there is no agreement on the term of the loan or the agreement is not clear, and it is still uncertain in accordance with the provisions of Article 61 of this Law, the borrower may return it at any time, and the lender may urge the borrower to return it within a reasonable period of time. Article 207 of the Law stipulates: "If the borrower fails to return 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 the agreement, Wu Chaoying repaid the loan of 50 million yuan in monetary terms, paid in 9 installments, and agreed on the specific repayment date of each period, if Wu Chaoying was overdue for more than 60 days, it would be regarded as a breach of contract, and Xu Chengyu and Shen Suli could require Wu Chaoying to pay all the money immediately, including the part of the debt with the house. and pay Xu Chengyu and Shen Suli overdue interest from the date of overdue, calculated at an annual interest rate of 20% until the date of actual performance. If Wu Chaoying fails to repay the loan in accordance with the agreement, he shall pay the principal of all arrears of 73,502,427.6 yuan from the date of overdue, and calculate the overdue interest at an annual interest rate of 20% until the date of actual performance.

In summary, Wu Chaoying's appeal request cannot be sustained, and this court does not support it. Xu Chengyu and Shen Suli's appeal requests were sustained, and the first-instance judgment erred in determining the facts and should be reversed. In accordance with Articles 206 and 207 of the Contract Law of the People's Republic of China, Articles 26 and 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, and Article 170, Paragraph 1, Item 1 of the Civil Procedure Law of the People's Republic of China, the judgment is as follows:

1. Revoke item 1 of the Zhejiang Provincial High People's Court's (2018) Zhe Min Chu No. 47 Civil Judgment;

2. Wu Chaoying and Chen Zhen repaid the loan of RMB 73,502,427.6 to Xu Chengyu and Shen Suli within 15 days from the effective date of the judgment and the overdue interest calculated at an annual interest rate of 20% from December 1, 2017 to the date of actual repayment.

3. Items 2, 3, and 4 of the Zhejiang Provincial High People's Court's (2018) Zhe Min Chu No. 47 Civil Judgment are upheld.

If the obligation to pay money is not fulfilled within the time limit specified in this judgment, the interest on the debt for the period of delayed performance shall be doubled in accordance with the provisions of Article 253 of the Civil Procedure Law of the People's Republic of China.

The first-instance case acceptance fee is RMB 445,100, of which Xu Chengyu and Shen Suli bear RMB 116,150, and Chen Zhen, Wu Chaoying, and Zhejiang Haoanju Industrial Co., Ltd. bear RMB 328,950. The counterclaim case acceptance fee is RMB 140248, which is halved to RMB 70,124, which is borne by Wu Chaoying. The second-instance case acceptance fee is RMB 445,100, of which Xu Chengyu and Shen Suli bear RMB 116,150, and Chen Zhen, Wu Chaoying, and Zhejiang Haoanju Industrial Co., Ltd. bear RMB 328,950.

This judgment is final.

Presiding Judge Xi Xiangyang

Adjudicator: Yang Xingye

Adjudicator: Chen Hongyu

December 22, 2020

Assistant Judge Xu Yinglin

Clerk Fang Jianyi

转自 Supreme Court Guidance