Summary of the Trial:
In the pledge of due creditor's rights, if the debtor undertakes to bear the liability for compensation, it shall be deemed to have joined the debt secured by the pledge, and its status is equivalent to that of the pledgor.
Debt accession, also known as "concurrent debt assuming", refers to the debt assumption method in which a third party promises to perform the debtor's debt, but at the same time does not exempt the debtor from performing its obligations.
In practice, if the performance of the debt by a third party is not premised on the debtor's failure to perform within the time limit, but directly indicates that the third party performs on behalf of the debtor, it can be directly determined that the debt has joined.
1. Understanding and Application of the Cause of Action
II. Governing Law
Associate indexes
Article 215 of the Civil Code of the People's Republic of China (Article 15 of the Property Law of the People's Republic of China is applicable in this case)
Article 36 of the Interpretation of the Supreme People's Court on the Application of <中华人民共和国民法典>the Relevant Guarantee System
Paragraph 1 of Article 16 of the Company Law of the People's Republic of China
III. Basic Facts of the Case
The plaintiff, a microfinance company in Jilin, alleged:
1. Confirm the validity of the "Rights Pledge Contract" signed between a microfinance company in Jilin and Wu;
2. Order Wu and a company in Jilin Province to compensate a microfinance company in Jilin for the principal amount of RMB 9,000,000 and interest losses (of which the interest is based on RMB 9,000,000 and at a monthly interest rate of 1.5%, from June 21, 2016 to the date of actual payment);
3. Order Wu to bear liquidated damages of RMB 450,000;
4. The case acceptance fee, preservation fee, preservation guarantee fee, and lawyer fee are all borne by Mr. Wu and a company in Jilin Province.
On August 14, 2015, a microfinance company in Jilin signed a loan contract with Wu Moujia, stipulating that a microfinance company in Jilin would issue a loan of 9 million yuan (nine hundred thousand yuan) to Wu Moujia, and the loan period would be from August 17, 2015 to August 10, 2016, with a monthly interest rate of 1.5%.
In order to ensure the performance of the aforesaid Loan Contract, on August 14, 2015, Mr. Wu, as the pledgee, signed the "Rights Pledge Contract" with the pledgee, a small loan company in Jilin, which stated that Mr. Wu provided a pledge guarantee for the claims of a small loan company in Jilin with his outstanding accounts receivable of RMB 154,092,631 with a company in Jilin Province, and the principal amount of the main claim was 9 million yuan (nine million yuan), and the scope of the pledge guarantee was the principal of the main claim, interest, penalty interest, compound interest, liquidated damages, and damagesOther payments payable by the debtor to the pledgee (including but not limited to handling fees, telecommunications fees, miscellaneous charges, relevant bank charges, etc.), and all expenses incurred by the pledgee in realizing the creditor's rights and security rights (including but not limited to litigation fees, arbitration fees, property preservation fees, travel expenses, execution fees, appraisal fees, auction fees, notary fees, service fees, announcement fees, attorney fees, property transfer taxes, etc.).
Article 4 of the right pledge contract stipulates that the pledgee undertakes,"
1. The pledgor has obtained the authorization required for the guarantee of this contract in accordance with the relevant provisions and procedures;
2. The pledgor has full and undisputed ownership or disposition of the pledged right ......".
Article 12 of the right pledge contract stipulates that "1. If the pledgor commits any of the following acts, it shall pay liquidated damages to the pledgee at the rate of 5% of the principal amount of the principal claim secured by this contract;
If the loss of the pledgee is caused, full compensation shall be given at the same time;
(1) Failure to obtain the legal authorization required for the guarantee of this contract;
(2) Failure to truthfully inform the existence of co-ownership, disputes, or applications for revocation, application for invalidation, objections, seizure, freezing, supervision, litigation, arbitration, loss reporting, and payment suspension of ......the pledged rights.
The right pledge contract is consistent with the content of the "Right Pledge Contract" template in the Jinqiao Small Loan Business Guide.
On August 19, 2015, Mr. Wu and a microfinance company in Jilin registered accounts receivable pledge at the Credit Information Center of the People's Bank of China.
In response to the above-mentioned "Rights Pledge Contract", the Xinwei Notary Office of Changchun City, Jilin Province made a notarial certificate of creditor's rights document with enforceable effect.
Subsequently, because after the expiration of the loan involved in the case, Wu Moujia failed to perform the repayment obligation according to the agreement, and upon the application of a small loan company in Jilin, on March 20, 2017, the Xinwei Notary Office of Changchun City, Jilin Province issued an execution certificate, the applicant for execution was a small loan company in Jilin, and the persons subject to enforcement were Wu Moujia, Wu Mou, and a company in Tianjin, and the subject matter of the application for enforcement was the principal of the loan of RMB 90,000 yuan plus interest, liquidated damages, penalty interest, compound interest and related expenses for realizing the creditor's rights.
On April 13, 2017, a microfinance company in Jilin Province, the applicant for enforcement, applied to the People's Court of Nanguan District, Changchun City for enforcement, and on April 18, 2017, the Nanguan Court made an enforcement ruling, ruling to freeze and deduct the bank deposits of RMB 9,072,400 and interest on the persons subject to enforcement, Wu X A, Wu X and a company in Tianjin, or to seal and seize their equivalent property.
Later, Wu filed an enforcement objection with the Nanguan Court, requesting that the enforcement of the enforcement ruling against Wu be revoked, and that Wu not be enforced.
On January 20, 2021, the Nanguan Court issued an enforcement ruling, ruling to revoke the enforcement ruling made by the Nanguan Court on April 18, 2018 and terminate the enforcement of the notarial deed of the obligatory instrument with enforcement effect.
Later, a microfinance company in Jilin filed an application for enforcement reconsideration with this court.
On April 28, 2021, this court issued an enforcement ruling, ruling to uphold item 2 of the Nanguan Court's enforcement ruling;
The first item of the enforcement ruling of the Nanguan Court is changed as follows:
The civil ruling made by this court on April 18, 2017 was changed to "freeze and detain the bank deposits of RMB 9,072,400 and interest from the judgment debtor Wu Moujia and a company in Tianjin, or seal and seize their equivalent property".
A microfinance company in Jilin claimed that in the enforcement case, the property of Wu Moujia and a company in Tianjin was not enforced.
It was further ascertained that on May 8, 2013, a company in Jilin Province, as the employer, signed the "General Contract for Construction of Construction Projects" with the construction group, and contracted the "construction project of the automobile and high-speed rail interior carpet construction project with an annual output of 30 million square meters" with a total construction area of 150,000 square meters located in the Changchang Economic Development Zone to a construction group, with a total project cost of 196,000,000 yuan.
On November 1, 2013, the two parties signed the Construction Contract again, stipulating that a company in Jilin Province would contract the office building and plant project to the construction group for construction.
On May 20, 2013, Qixin Branch of a construction group (Party A) and Wu (Party B) signed the "Internal Contracting Agreement", the main contents of which are as follows:
1. Scope of Party B's contracted project:
An office building, manual workshop, 1#-6# production workshop, 1#-4# processing workshop, 1#-2# equipment room, opening and closing station, 1#-2 guard, basement, air machine room project, 1#-3# shift window dormitory, staff canteen project.
2. Implement the fixed-cost contracting method, and Party B shall operate independently, bear its own profits and losses, and bear relevant economic responsibilities in the construction of the project.
3. Management fee and payment method, Party B pays Party A 6.47% of the total construction output value (including 5.47% of the total construction tax and enterprise income tax), and the fee paid does not include contract stamp duty, project manager certificate usage fee, and security deposit.
Surrender method and time:
It will be deducted proportionally from the project payment allocated by the construction unit.
4. Party A's responsibilities and obligations: Party A has the responsibility and obligation to provide Party B with construction management, construction technology, and coordination with relevant management units;
Party A guarantees that Party B's funds will not be misappropriated...;
In view of Party A's responsibility for the general contracting of the project, Party A has the right to supervise and inspect Party B in project management and the use of funds, and Party A has the right to appoint management personnel to enrich Party B's management work... 5. Party B's responsibilities and obligations: During the construction, production and operation, Party B must organize the construction in accordance with the relevant provisions of the operation and management of the construction group, and accept the management of Party A's functional departments.
On December 11, 2016, a construction group filed an arbitration with the Changchun Arbitration Commission because a company in Jilin Province owed a construction group a project payment, requesting that:
1. The ruling to terminate the "General Contract for Construction of Construction Projects" signed on May 8, 2013 and the "Construction Contract for Construction Projects" signed on November 1, 2013 between a company in Jilin Province and a construction group;
2. A company in Jilin Province was awarded RMB 94,496,500 and interest to a construction group;
3. Ruling that a construction group has the priority right to be compensated for the construction project;
4. The arbitration fee and preservation fee shall be borne by a company in Jilin Province.
On 18 January 2018, the Changchun Arbitration Commission rendered an arbitral award, ruling that:
1. Terminate the "General Contract for Construction of Construction Projects" signed on May 8, 2013 and the "Construction Contract for Construction Projects" signed on November 1, 2013 between a company in Jilin Province and a construction group;
2. A company in Jilin Province paid a construction group 93,396,932 yuan and interest;
3. The arbitration fee of RMB 391,280 and the preservation fee of RMB 5,000 shall be borne by a company in Jilin Province;
4. Other arbitration claims of a construction group are not supported.
After the arbitral award came into effect, a company in Jilin Province failed to perform the content determined in the effective legal documents, so a construction group applied to this court for compulsory enforcement on February 12, 2018, requesting a company in Jilin Province to pay the project price of RMB 93,396,932 and interest, interest on the debt during the period of delayed performance, arbitration fees, preservation fees, and enforcement fees to be borne by a company in Jilin Province.
On 2 August 2018, the Court issued a Notice of Case Closure, which stated:
In the course of enforcement, this court executed a case, and the main boiler of the house and land located on X Road in the Changchang Economic Development Zone in the name of a company in Jilin Province was evaluated, auctioned, and unauctioned.
On July 2, 2018, a construction group submitted a written application for repayment of debts, with a total amount of 10,058,8687 yuan.
At present, a company in Jilin Province has completed all the performance of the arbitration award of the Changchun Arbitration Commission.
In accordance with the provisions of Article 108 (1) of the Provisions of the Supreme People's Court on Several Issues Concerning the Enforcement Work of the People's Courts (for Trial Implementation), the notice:
The contents determined in the arbitral award of the chairman of the Changchun Arbitration Commission have been fully executed, and the case is closed.
It was also ascertained that a microfinance company in Jilin filed a lawsuit with this court against Wu, a company in Jilin Province, Han and a construction group as defendants, requesting that Wu and a company in Jilin Province immediately repay the loan of RMB 9 million, as well as interest and liquidated damages (interest and liquidated damages are calculated at an annual rate of 24% until the date of actual repayment) within the scope of the pledge guarantee of accounts receivable.
In this case, a construction group made it clear at the trial that it would not recognize the agreement signed between a microfinance company in Jilin and a company in Jilin Province with Wu and Jilin Province.
The subject of the construction contract relationship with a company in Jilin Province is a construction group rather than a certain person Wu, so a construction group is the legal creditor of a company in Jilin Province that owes the project payment.
With regard to the issue of whether a microfinance company in Jilin Province had a pledge right over the project money involved in the case, the judgment held that a certain company in Jilin Province signed a "General Contracting Contract for Construction of Construction Projects" and a "Construction Project Construction Contract" with a certain construction group, and a certain company in Jilin Province contracted the project involved in the case to a certain construction group for construction, so a construction contract relationship was formed between a certain construction group and a certain company in Jilin Province.
After a construction group carries out construction according to the contract, a company in Jilin Province should also pay the project money to the construction group according to the contract.
In other words, a construction group is the legal owner of the project money involved in the case.
Although Mr. Wu signed a "Rights Pledge Contract" with a microfinance company in Jilin and a company in Jilin Province, and provided a guarantee to a microfinance company in Jilin Province for the construction money owed by a company in Jilin Province as pledged property, a microfinance company in Jilin did not provide evidence to prove that Wu's act of guaranteeing the project money at the time of the conclusion of the aforesaid contract had obtained the consent of the construction group, nor did it provide evidence to prove that the construction group recognized it after the conclusion of the aforesaid agreement. Therefore, Wu's act of establishing a pledge for the project money involved in the case constituted a disposition without authority.
As to the question of whether a microfinance company in Jilin is in good faith, it has been stated in the "Agreement":
Wu provided pledge guarantee for the above-mentioned loan based on the accounts receivable formed by a company in Jilin Province in accordance with the relevant contract of the "Office and Plant Project Project of a Company in Jilin Province" and the "Agreement on Project Progress and Payment Plan", and the "Certificate" submitted by a small loan company in Jilin and issued by a company in Jilin Province also stated the construction contract number involved in the plant project involved in the case. It is subjectively not in good faith and without negligence.
As a result, the pledge involved in the case was not validly established, so all the claims of a microfinance company in Jilin were dismissed.
It was also ascertained that on August 2, 2015, a company in Jilin Province issued a "Certificate" for Wu, which stated:
Regarding the plant project of a company in Jilin Province, the construction contract signed on November 1, 2013 was followed.
The contract amount is RMB 200 million, Wu Qianqi, Bai Lingjiu, 10,000 Yuan, 10,000 Lu Bai, 1 Yuan (¥257092631).
As of July 5, 2015, a company in Jilin Province had paid the actual constructor Wu 100 million yuan (103,000,000 yuan) for the project, and still owed the actual constructor Wu 100 million yuan (154,092,631 yuan) for the project.
The certificate was stamped with the official seal of a company in Jilin Province.
On August 14, 2015, Mr. Wu (Party A) signed the Agreement with a company in Jilin Province (Party B), a microfinance company in Jilin Province (Party C), and Mr. Wu (Party D), stipulating that:
1. Party A is the actual contractor of Party B's "Plant Engineering Project of a Company in Jilin Province", and Party B shall pay the project payment to Party A according to the agreement between the two parties, and as of the date of signing this contract, Party B still owes Party A RMB 154,092,631 for the project;
2. Party D borrows RMB 9,000,000 (RMB 9,000,000) from Party C, and Party D signs a loan contract with Party C;
3. Party A shall provide pledge guarantee for the above-mentioned loan in accordance with the relevant contract of the project of "Office and Plant Project of a Company in Jilin Province" and the "Agreement on Project Progress and Payment Collection Plan" to Party B, and sign the "Right Pledge Contract" with Party C.
In view of this, in order to ensure that Party A performs the loan contract according to the contract, the three parties agree on the payment method of the above-mentioned project payment as follows:
1. In the event that Party A shall pay, repay, bear the liability for breach of contract, bear the liability for compensation, etc., Party A shall bear the contractual obligations of Party D according to the loan contract, Party A and Party B shall use the above-mentioned project funds to repay the loan and perform the relevant contractual obligations.
2. From the date of signing this Agreement, Party B shall notify Party C of the payment of the project payment to Party A seven days in advance, and pay the project payment to Party C's account according to the requirements of Party C, and Party B shall be liable for compensation if Party C is damaged due to Party B's payment of the project money to Party A without permission.
3. In the event of any circumstance in Article 1 of this Agreement, Party B shall directly pay the project payment payable to the account designated by Party C upon receipt of the notice from Party C.
If Party B fails to pay in a timely manner and causes losses to Party C, Party B shall be liable for compensation.
On December 31, 2021, the Intermediate People's Court of Changchun City, Jilin Province, rendered a civil judgment:
1. Within 10 days after this judgment takes effect, the defendant Wu shall compensate the plaintiff a microfinance company in Jilin for 20% of the losses (the losses include:
the principal amount of RMB 9,000,000, the attorney's fee of RMB 100,000, the preservation guarantee fee of RMB 17,235 and interest, the interest is based on RMB 9,000,000 at a monthly interest rate of 1.5%, calculated from June 21, 2016 to the date of actual payment);
2. Within 10 days after this judgment came into effect, the defendant Jilin Province Company compensated 40% of the losses to the plaintiff Jilin Microfinance Company (the losses include:
the principal amount of RMB 9,000,000, the attorney's fee of RMB 100,000, the preservation guarantee fee of RMB 17,235 and interest, the interest is based on RMB 9,000,000 at a monthly interest rate of 1.5%, calculated from June 21, 2016 to the date of actual payment);
3. Reject the plaintiff's other litigation claims of a microfinance company in Jilin.
A microfinance company in Jilin appealed against the first-instance judgment.
On May 6, 2023, the Jilin Provincial High People's Court rendered a civil judgment:
1. Revoke the civil judgment of the Intermediate People's Court of Changchun City, Jilin Province;
2. Within 10 days after this judgment came into effect, the appellee Wu compensated 60% of the losses to the appellant a microfinance company in Jilin, of which 20% was borne by the appellee Wu and 40% was jointly borne by the appellee Wu and a company in Jilin Province (losses include:
the principal amount of RMB 9,000,000, the attorney's fee of RMB 100,000, the preservation guarantee fee of RMB 17,235 and interest, the interest is based on RMB 9,000,000 at a monthly interest rate of 1.5%, calculated from June 21, 2016 to the date of actual payment);
3. The appellant's other litigation claims of a microfinance company in Jilin are rejected.
IV. Grounds for the Trial
The effective judgment of the court held that:
1. On the issue of whether a microfinance company in Jilin should be held liable.
A microfinance company in Jilin claimed that Mr. Wu had violated the provisions of the "Rights Pledge Contract" and failed to set up a pledge of accounts receivable for a microfinance company in Jilin, and should bear all the liabilities for breach of contract, and that a microfinance company in Jilin had fulfilled its obligation of strict review and was not at fault, and Mr. Wu should compensate a microfinance company in Jilin for all its losses.
After investigation, a microfinance company in Jilin Province filed a lawsuit against Wu, a company in Jilin Province, Han, and a construction group as defendants, requesting Wu and a company in Jilin Province to immediately repay the loan of RMB 9 million, interest, and liquidated damages within the scope of the pledge guarantee of accounts receivable.
The court of first instance made a civil judgment, in which it was determined that a certain construction group was the legal owner of the project money involved in the case, and that Wu had signed a "right pledge contract" with a microfinance company in Jilin and a company in Jilin Province, and that the act of establishing a pledge for the project money involved in the case constituted a disposition without authority, and that a small loan company in Jilin should have known that Wu was the direct right holder of the project money not recognized in the legal sense, and that it was not subjectively bona fide and not negligent, so the pledge right involved in the case was not effectively established. All the litigation claims of a microfinance company in Jilin were rejected.
Through the above determination, it can be seen that a microfinance company in Jilin was at fault for not establishing the pledge.
That is, although Wu was at fault for establishing a pledge for the construction money that he did not have the right to directly claim, a microfinance company in Jilin was also at fault, and a microfinance company in Jilin, as the injured party, was at fault for the occurrence of the loss and should reduce the amount of compensation for Wu's losses, so the court of first instance found that Wu's liability for compensation should be reduced by 40% accordingly, which was not improper.
2. On the issue of how Wu and a company in Jilin Province should bear responsibility.
A microfinance company in Jilin claimed that a company in Jilin Province violated the agreement by paying the project money to a construction group, causing losses to a microfinance company in Jilin, and should bear joint responsibility for repayment with Wu.
In this case, Mr. Wu, as the counterparty of a microfinance company in Jilin, should bear the liability for breach of contract to a microfinance company in Jilin in accordance with the "Rights Pledge Contract", that is, bear 60% of the compensation liability, if the pledge right is not established.
The court of first instance's determination of Wu's liability ratio at 20% has no basis in law and should be corrected.
A company in Jilin Province signed Article 1 of the Agreement with a microfinance company in Jilin, Wu and Wu Moujia, stipulating that:
"In the event that Party A (Wu) shall pay, repay, bear the liability for breach of contract, bear the liability for compensation, and other contractual obligations that Party D (Wu Moujia) shall bear to Party C (a microfinance company in Jilin) according to the loan contract, Party A (Wu) and Party B (a company in Jilin Province) agree to use the above-mentioned project funds to repay the loan and perform relevant contractual obligations."
Article 3 provides:
"In the event of the occurrence of Article 1 of this Agreement, Party B (a company in Jilin Province) shall directly pay the project payment payable to the account designated by Party C (a microfinance company in Jilin) when it receives the notice from Party C (a microfinance company in Jilin).
If Party B (a company in Jilin Province) fails to pay in a timely manner, resulting in the loss of Party C (a microfinance company in Jilin), Party B (a company in Jilin Province) shall be liable for compensation. ”
According to the above agreement, when Wu is required to bear the responsibility of the pledgor, a company in Jilin Province shall pay the project money to a small loan company in Jilin, and shall bear the liability for compensation if it fails to pay in time.
The loan involved in the case has entered the execution stage because Wu Moujia has not repaid it in a timely manner, and there is no property available for enforcement, so this case satisfies the above-mentioned agreed circumstances, and a company in Jilin Province should be liable for compensation to a small loan company in Jilin.
Since the basis of a company's liability in Jilin Province is that Wu needs to bear responsibility, and the content of the agreement is that when the pledge of a microfinance company in Jilin is not realized in a timely manner, it bears the same liability as Wu for the failure to establish the pledge in the "Rights Pledge Contract", and there is no distinction between priority and priority, that is, it is independent of whether Wu is liable or not, so according to the above agreement, a company in Jilin Province constitutes a debt to join the "Rights Pledge Contract" between Wu and a small loan company in Jilin. When Wu needs to bear the liability for breach of contract due to the failure of the pledge, he should jointly bear it with Wu.
According to the first paragraph of Article 16 of the Company Law of the People's Republic of China, "if a company invests in other enterprises or provides guarantees for others, it shall be resolved by the board of directors or the shareholders' meeting or the general meeting of shareholders in accordance with the provisions of the articles of association;
If the articles of association of the company have a limit on the total amount of investment or guarantee and the amount of a single investment or guarantee, it shall not exceed the prescribed limit", a company in Jilin Province joined the "Rights Pledge Contract" signed by Wu and a small loan company in Jilin, which is a guarantee for Wu and should be resolved by the board of directors or shareholders' meeting, and is not a matter that the legal representative can decide alone.
Article 50 of the Contract Law of the People's Republic of China provides:
"Where the legally-designated representative or responsible person of a legal person or other organization concludes a contract beyond his authority, the representative's conduct is valid unless the counterpart knows or should know that he has exceeded his authority."
When a microfinance company in Jilin Province signed the Agreement with a company in Jilin Province, it did not examine whether the company in Jilin Province had passed the resolution of the above-mentioned corporate authority, and a microfinance company in Jilin, as a professional loan company, should find that a microfinance company in Jilin knew that Mr. Han exceeded its authority, so the Agreement was invalid.
However, the court of first instance did not appeal against the order of a company in Jilin Province to bear 40% of the liability for compensation, and it should be determined that a company in Jilin Province recognized the assumption of this part of the liability.
3. On the issue of whether Wu and a certain company in Jilin Province should pay liquidated damages to a certain microfinance company in Jilin.
A microfinance company in Jilin claimed that Mr. Wu and a company in Jilin Province should pay liquidated damages to him in accordance with the "Rights Pledge Contract".
In this case, the "Rights Pledge Contract" signed between Mr. Wu and a microfinance company in Jilin was a subordinate contract of the "Loan Contract" signed between Mr. Wu and a microfinance company in Jilin.
The scope of guarantee liability borne by Wu as a guarantor should not be greater than the main debt that Wu X A should bear, which is an inevitable requirement of the subordination of the guarantee, and Wu X and a small loan company in Jilin separately agreed on liquidated damages for Wu X in the Rights Pledge Contract, and the scope of the guarantee liability to be borne by Wu X X is already greater than the main debt of Wu X A, so the agreement on liquidated damages in the Rights Pledge Contract should be found to be invalid, and this court does not support this claim of a small loan company in Jilin.
In addition, a microfinance company in Jilin had no objection to the principal amount of RMB 9,000,000, attorney's fees of RMB 100,000, preservation guarantee fee of RMB 17,235 and the method of calculating interest determined by the court of first instance, while Wu and a company in Jilin Province did not appeal, so this court affirmed the amount of losses determined in the first instance.
5. Source of the case: A microfinance company in Jilin Province v. a company in Jilin Province and a contract dispute between Wu
The Constitution is an endless flow of discourse in which generations of people in a country are engaged in dialogue.
—Lauren Chober