Lufa Case [2024] No. 415
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Brief facts of the case
The plaintiff Guo and the defendant Yue signed the Vehicle Transfer Contract, which stipulated that the defendant Yue would transfer a Toyota Corolla car to the plaintiff Guo, and the defendant would deliver the vehicle to the plaintiff after the plaintiff paid the purchase price. In the process of vehicle maintenance, the odometer of the detected vehicle is transferred, and the actual kilometers of the vehicle are inconsistent with the displayed kilometers and there are many differences. It was also ascertained that the vehicle involved in the case was purchased by the defendant Yue from a certain place in the luggage of a second-hand car, and the purchase price was 49,800 yuan. For this reason, the plaintiff sued the court to request: 1. The judgment was made to terminate the sales contract between the plaintiff and the defendant, and the defendant refunded the purchase price of 55,000 yuan to the plaintiff; 2. The defendant was ordered to compensate the plaintiff three times the amount of compensation of 165,000 yuan; 3. The litigation costs of this case shall be borne by the defendant.
Heard by the courts
After trial, the court held that the focus of the dispute in this case was whether the defendant Yue's sale of second-hand cars constituted fraud.
According to Article 148 of the Civil Code of People's Republic of China and the first paragraph of Article 55 of the Law on the Protection of the Rights and Interests of People's Republic of China Consumers, the circumstances of constituting fraud shall be consistent with: the actor is subjectively intentional, that is, the actor clearly knows that the information he has informed the other party is false or that he has concealed the true situation, and has carried out relevant civil juristic acts, causing the other party to fall into a misunderstanding and make corresponding expressions of intent, the subjective state of the actor shall be determined through his external conduct. In this case, the plaintiff Guo asserted that the defendant Yue's transfer of the vehicle involved in the case constituted fraud, and provided evidence such as call recordings, vehicle odometers, and appraisal reports to prove that the defendant Yue deliberately concealed the true mileage of the vehicle when he transferred the vehicle, but the defendant Yue applied for witness Li to testify in court, confirming that the mileage displayed by the defendant Yue was more than 50,000 kilometers when he bought and sold from a second-hand car dealership, and at the same time, the price of the vehicle transferred by the defendant Yue was not much different from the price of the vehicle he transferred, that is, there was no big difference in Yue's perception of the condition of the vehicle corresponding to the selling price. Therefore, based on the testimony of witnesses, the third-party mileage readings at the time of the second-hand car transaction in this case, the actual selling price of the vehicle, etc., it can be determined that the odometer data of the defendant Yue had been changed to more than 50,000 kilometers when he purchased the second-hand car from the luggage of the second-hand car, that is, the vehicle odometer adjustment occurred before the defendant purchased the vehicle involved in the case, and the available evidence cannot prove that the defendant Yue knew that the vehicle had been altered by the odometer data when he sold the second-hand car to the plaintiff, and it cannot be proved that the defendant Yue had the subjective intent to defraud. In summary, the evidence submitted by the plaintiff Guo could not effectively prove that the defendant Yue had fraudulent intent, and the evidence provided by the defendant Yue was sufficient to refute the plaintiff Guo's claim that Yue had fraudulent intent, so the court did not support the plaintiff's claim that the defendant should bear three times the liability for compensation.
According to Article 563 of the Civil Code of the People's Republic of China, if one of the parties delays the performance of its debts or has other breaches of contract that makes it impossible to achieve the purpose of the contract, the party has the right to rescind the contract. According to the general habits of second-hand car trading, the mileage of second-hand cars is an important factor in determining the service life, safety performance and transaction price of the vehicle, and it will also have a significant impact on whether consumers make purchase decisions. Therefore, the mileage of the vehicle is the main content of the used car sales contract. In this case, Yue, as the seller of the vehicle involved in the case and the long-term operator of the second-hand car dealership, was obliged to conduct a comprehensive verification of the important information affecting the buyer's right to choose, such as the mileage and maintenance records of the vehicles sold. At the same time, according to the plaintiff Guo's claim for the return of the car purchase price and the relevant facts ascertained, the purpose of the vehicle transfer contract involved in the case could not be realized, so the court confirmed that the sales contract between the plaintiff and the defendant was terminated in accordance with the law on August 10, 2023 (the date when the copy of the complaint was served on the defendant Yue). After the contract is terminated, the property acquired by both parties as a result of the contract shall be returned. Therefore, the court supported the plaintiff Guo's claim that the defendant Yue should return the purchase price of 55,000 yuan, and the corresponding vehicle involved in the case should be returned to the defendant Yue.
The court ruled that: 1. The "Vehicle Transfer Contract" signed by the plaintiff Guo and the defendant Yue was terminated on August 10, 2023; 2. The defendant Yue returned 55,000 yuan to the plaintiff Guo within five days of the effective date of this judgment, and at the same time, the plaintiff Guo returned the vehicle to the defendant Yue; 3. Reject plaintiff Guo's other litigation claims.
After the first-instance judgment, the plaintiff Guo was dissatisfied with the judgment and appealed, and the second-instance court rejected the appeal and upheld the original judgment.
What the judge said
With the economic and social development and the improvement of people's income level, cars have become family necessities, and the second-hand car buying and selling industry has also risen, but the sources of vehicles in the second-hand car market are complex and the condition of the vehicles is uneven, which poses great risks to the second-hand car trading.
The plaintiff in this case, Guo, asserted that the key to the defendant Yue's "refund of one and compensation of three" was whether the defendant Yue had committed fraud. Fraud refers to the act of one party deliberately informing the other party of false information, or deliberately concealing the true situation, and inducing the other party to make a false expression of intent, which should meet the following constituent elements: first, the fraudulent party has the intention to defraud; second, the fraudulent party has committed fraud; Third, the defrauded party falls into a misunderstanding due to fraud; Fourth, the defrauded person made an expression of intent and carried out a legal act due to a misunderstanding.
Based on the above-mentioned constituent elements, the primary premise for constituting fraud should be that the fraudulent party had the intent to defraud, and in this case, whether the defendant Yue had maliciously adjusted the vehicle odometer when selling the second-hand car. In this case, based on the testimony of witnesses, the third-party mileage readings at the time of the second-hand car transaction, the actual selling price of the vehicle, etc., it can be determined that the odometer data of the defendant Yue had changed when he purchased the second-hand car luggage, that is, it cannot be proved that Yue had the intention of fraud when he transferred the vehicle to the plaintiff Guo. Therefore, the defendant Yue in this case did not constitute fraud, and the application of punitive damages was excluded.
It is worth mentioning that the current fraud of second-hand car trading operators may be positive actions, such as tampering with vehicle odometer data or failing to truthfully inform consumers of vehicle modifications; It can also be a passive omission, such as deliberately concealing the fact that the vehicle has been involved in a major accident, that a vehicle's safety structural components have been damaged, or that major repairs have been made due to flooding, for example. Therefore, consumers should choose to be vigilant and carefully inspect vehicles when buying and selling second-hand cars, and operators should also follow the principle of good faith and fulfill their due obligation to inform.
Links to legal provisions
Article 148 of the Civil Code of the People's Republic of China stipulates: "Where one party uses fraudulent means to cause the other party to carry out a civil juristic act contrary to its true intentions, the defrauded party has the right to request the people's court or arbitration institution to revoke it." ”
Article 563 of the Civil Code of the People's Republic of China stipulates: "The parties may rescind the contract under any of the following circumstances: (1) the purpose of the contract cannot be achieved due to force majeure; (2) Before the expiration of the performance period, one of the parties clearly indicates or shows by its own conduct that it will not perform the main debt; (3) One of the parties delays the performance of the main debt and fails to perform it within a reasonable period of time after being reminded; (4) One of the parties delays the performance of its obligations or has other breaches of contract, resulting in the inability to achieve the purpose of the contract; (5) Other circumstances provided for by law. In the case of an indefinite contract with the content of a continuously performed debt, the parties may terminate the contract at any time, provided that they notify the other party before a reasonable period of time. ”
Paragraph 2 of Article 565 of the Civil Code of the People's Republic of China stipulates: "If one of the parties directly claims to rescind the contract by filing a lawsuit or applying for arbitration without notifying the other party, and the people's court or arbitration institution confirms the claim, the contract shall be terminated when a copy of the complaint or a copy of the arbitration application is served on the other party." ”
Article 157 of the Civil Code of the People's Republic of China 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; where it cannot be returned or there is no need to return it, compensation shall be made at a discounted price. The party at fault shall compensate the other party for the losses suffered thereby; Where all parties are at fault, they shall each bear corresponding responsibility. Where the law provides otherwise, follow those provisions. ”
The first paragraph of Article 55 of the Law of the People's Republic of China on the Protection of the Rights and Interests of People's Republic of China Consumers stipulates that: "Where a business operator commits fraud in providing goods or services, it shall, at the request of the consumer, increase the compensation for the losses suffered, and the amount of the increased compensation shall be three times the price of the goods purchased by the consumer or the cost of the service received by the consumer; Where the amount of increased compensation is less than 500 RMB, it is 500 RMB. Where the law provides otherwise, follow those provisions. ”
Source: Shandong High Court, Gaoqing Court
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