A financing guarantee company in Gansu sued a biotechnology company in Gansu and a real estate development company in Gansu over a loan contract dispute
- If a branch provides security with property registered in its name, it shall be resolved by the shareholders' meeting or the board of directors of the company
keyword
Civil loan contract external guarantee of the branch and resolution of the shareholders' meeting
Basic facts of the case
On April 14, 2017, a financing guarantee company in Gansu (hereinafter referred to as a financing guarantee company), a biotechnology company in Gansu (hereinafter referred to as a biotechnology company) and a bank Lanzhou Branch signed the "Entrusted Loan Loan Contract", stipulating that a financing guarantee company entrusted the Lanzhou branch of a bank to issue a loan of 17 million yuan to a biotechnology company.
On April 17, 2017, a financing guarantee company signed a mortgage contract with Qingyang Branch of a real estate development company in Gansu (hereinafter referred to as Qingyang Branch), which stipulated that Qingyang Branch would provide mortgage guarantee for the above-mentioned loan contract with part of its houses located in XX Club, XX District, XX City. A food company in Qingyang (hereinafter referred to as the food company), Liu, Zhang, and Liu successively provided guarantees for the above-mentioned loans.
On April 18, 2017, Qingyang Branch submitted the Resolution of the Shareholders' Meeting of the Branch that agreed to provide mortgage with the above-mentioned house to a financing guarantee company, and went through the mortgage registration in accordance with the law on April 21. On the same day, a financing guarantee company signed a guarantee contract with Qingyang Branch, stipulating that Qingyang Branch would provide a guarantee guarantee for the above-mentioned loan, and Qingyang Branch submitted a Letter of Guarantee Commitment to a financing guarantee company, stating that the maximum limit of guarantee business was 17 million yuan.
On April 26, 2017, the Lanzhou branch of a bank issued a loan of 17 million yuan to the account of a biotechnology company entrusted by a financing guarantee company, and the loan IOU stated that the annual interest rate was 13%, and the biotechnology company failed to repay the principal and interest as agreed after the loan expired.
A financing guarantee company filed a lawsuit with the court, requesting that a biotechnology company be ordered to repay the principal and interest to a financing guarantee company, that Qingyang Branch and a real estate development company in Gansu (hereinafter referred to as the real estate development company) bear joint and several liability for the above debts, and that a financing guarantee company have priority in repaying all XX clubs of the real estate development company.
On November 19, 2020, the Intermediate People's Court of Lanzhou City, Gansu Province rendered the (2020) Gan 01 Min Chu No. 454 Civil Judgment: 1. A biotechnology company shall repay the loan principal of RMB 17 million and interest of RMB 286,789.05 to a financing guarantee company within 10 days after the judgment takes effect, and pay interest at an annual interest rate of 19.05% based on the outstanding loan principal from April 27, 2020 until the date of repayment of the loan. 2. A biotechnology company paid a lawyer's fee of 100,000 yuan to a financing guarantee company within 10 days after the judgment took effect. 3. A financing guarantee company has the right to discount the house with an area of 2242.41 square meters of XX club under the name of Qingyang Branch, or to give priority to repayment within the scope of the principal of 10 million yuan and the corresponding interest and the realization of creditor's rights with the proceeds from auction and sale. Fourth, the food company, Liu Moumou and other 3 people bear joint and several liability. 5. Reject other litigation claims of a financing guarantee company. After the judgment was pronounced, a financing guarantee company, Qingyang branch, a real estate development company, and a biotechnology company appealed. On March 29, 2021, the Gansu Provincial High People's Court rendered the (2020) Gan Min Zhong No. 115 Civil Judgment: 1. Items 2 and 4 of the (2020) Gan 01 Min Chu No. 454 Civil Judgment of the Intermediate People's Court of Lanzhou City, Gansu Province are upheld; 2. Revoke items 3 and 5 of the (2020) Gan 01 Min Chu No. 454 Civil Judgment of the Intermediate People's Court of Lanzhou City, Gansu Province; 3. The first item of the civil judgment of the Intermediate People's Court of Lanzhou City, Gansu Province (2020) Gan 01 Min Chu No. 454 is modified as follows: a biotechnology company shall repay the loan principal of 17 million yuan and interest of 286,789.05 yuan to a financing guarantee company within 10 days after the judgment takes effect (the interest is as of April 26, 2020), and pay interest at an annual interest rate of 19.5% based on the outstanding loan principal from April 27, 2020 until the date of repayment of the loan; 4. Qingyang Branch bears civil liability for 1/2 of the part of the debt that a biotechnology company cannot pay off to a financing guarantee company; 5. Reject other litigation claims of a financing guarantee company.
Grounds for the Trial
According to Article 16 of the Company Law, a company is required to provide a corporate resolution to provide external guarantees. Qingyang Branch is a branch of the enterprise and does not have the status of a legal person, and its civil liability shall be borne by the company when it signs the "Mortgage Contract" for external mortgage guarantee. Therefore, in accordance with the provisions of the articles of association, the guarantee issued by the branch shall be resolved by the board of directors of the real estate development company, the shareholders' meeting and the general meeting of shareholders, and the "Resolution of the Shareholders' Meeting" and the "Letter of Guarantee Commitment" issued by the Qingyang Branch are the documents of the branch, which do not comply with the provisions of Article 16 of the Company Law, and the "Mortgage Contract" should be an invalid contract.
Summary of the trial
The legal consequences of the branch's external civil juristic acts shall be borne by the company in accordance with the law. If a branch provides security with property registered in its name, the provisions of Article 16 of the Company Law shall apply, and the shareholders' meeting or the board of directors of the company shall make a resolution.
Associate indexes
Article 16 of the Company Law of the People's Republic of China
Paragraph 1 of 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) (Article 10 of the Guarantee Law of the People's Republic of China, which came into effect on October 1, 1995, is applicable in this case)
First instance: Civil Judgment of Lanzhou Intermediate People's Court of Gansu Province (2020) Gan 01 Min Chu No. 454 (November 19, 2020)
Second instance: Gansu Provincial High People's Court (2020) Gan Min Zhong No. 115 Civil Judgment (March 29, 2021)