Guaranteeing a loan to someone else
Because the borrower is unable to repay
The court ruled that he was jointly and severally liable
However, the repayment amount exceeded the agreed maximum limit
……
"We knew that we had signed a mortgage contract, and it was impossible not to take any responsibility at all, but the responsibility that we were sentenced to bear was too heavy. ......Not long ago, when the procurator of the Qiannan Buyi and Miao Autonomous Prefecture Procuratorate in Guizhou Province paid a return visit to the procuratorial supervision of a mortgage guarantee dispute, Jin Moufa and Wu Mouxiu, who provided guarantees for other people's loans, told the procurator that because the borrower was unable to repay, as a guarantor, they had repaid part of the money to the bank, and reached a settlement agreement with the bank, and would take the form of installment repayment to assume the guarantee liability.
lawsuit
Joint and several repayment of the guarantee exceeds the "maximum amount"
Wu Moufeng is a long-term tenant of Jin Moufa and Wu Mouxiu in Changshun County, Qiannan Prefecture. Because the children are not around all the year round, Wu Moufeng's cold greetings made the couple have a good impression of this tenant, and the relationship between the two parties is also very close, Wu Moufeng even called Wu Mouxiu "aunt". In June 2015, Wu Moufeng wanted to borrow 600,000 yuan from the bank for business money, and implored Jin Moufa and Wu Mouxiu to provide guarantees for him. Considering that they get along well on weekdays, the couple agreed to Wu Moufeng's request, used a property in the name of the husband and wife as a mortgage, and signed a maximum mortgage contract with a bank, guaranteeing the amount of 600,000 yuan.
In February 2016, Wu Moufeng took out another loan of 230,000 yuan from a bank. In June of the same year, due to his inability to repay the loan, after consulting with a bank staff, Wu Moufeng decided to "borrow new to repay the old" by using bridge funds. As a result, Wu Moufeng signed a personal loan contract of 1 million yuan with a bank, with a loan term of 24 months. At the request of Wu Moufeng, Jin Moufa and Wu Mouxiu signed a maximum mortgage contract with a bank to provide mortgage guarantee for Wu Moufeng's maximum loan of 1 million yuan in a bank during the loan period with the same set of real estate, and handled the mortgage registration.
After Wu Moufeng lent 1 million yuan, he repaid the bridge fee used to pay the old loan of 830,000 yuan and the corresponding interest, and kept the rest of the money for his own use. In August 2019, due to Wu Moufeng's inability to repay the due loan, a bank sued Wu Moufeng and his wife Shi Mouya, as well as Jin Moufa and Wu Mouxiu as co-defendants, and requested that Wu Moufeng be ordered to repay the loan principal of 1 million yuan and the outstanding interest of more than 350,000 yuan as of July 2019, and pay interest and penalty interest at a monthly interest rate of 14.55‰ after July 2019 until the principal and interest of the loan are paid; The court ordered Shi Mouya, Jin Moufa, and Wu Mouxiu to bear joint and several liability for the above-mentioned debts, and to enjoy the priority right to be repaid for the mortgaged property provided by Jin Moufa and Wu Mouxiu.
Jin Moufa and Wu Mouxiu filed a counterclaim, claiming that a bank failed to fully inform when signing the maximum mortgage contract, and Wu Moufeng told that it was 600,000 yuan when taking out the loan, which eventually became 1 million yuan, and the conclusion of the maximum mortgage contract was not an expression of their true intentions, and they filed a request to revoke the maximum mortgage contract.
After trial, the Changshun County Court held that the lending bank's act of handling a new loan with Wu Moufeng was actually "borrowing new to repay the old". For the original loan of 600,000 yuan, it has been repaid clearly, and the mortgage guarantee liability of Wu Mouxiu and Jin Moufa has been completed. Regarding the fact of "borrowing the new to repay the old", Wu Mouxiu and Jin Moufa did not know the truth, and this behavior increased the mortgage guarantee liability of the two and violated the principle of good faith. Therefore, it was decided that Wu Moufeng and Shi Mouya should repay the principal and interest of the loan, and the maximum mortgage contract signed by a bank with Jin Moufa and Wu Mouxiu was revoked, and the two no longer bear the mortgage guarantee liability.
Dissatisfied, a bank appealed to the Qiannan Prefecture Intermediate People's Court, requesting a change of judgment that the maximum mortgage contract signed by it with Jin Moufa and Wu Mouxiu was legal and valid, and the two should bear the mortgage guarantee liability. After trial, the Intermediate People's Court of Qiannan Prefecture held that Jin Moufa and Wu Mouxiu had full capacity for civil conduct, and that they should have known that they were providing guarantees for the loans of others, and that they should have known the possible risks, and had already handled the mortgage registration. At the same time, Wu Moufeng "borrowed new to repay the old" for the first loan of 600,000 yuan, Wu Mouxiu and Jin Moufa were the same guarantors of the two loans before and after, and the collateral was also the same real estate, and Wu Mouxiu and Jin Moufa should bear the guarantee liability for 600,000 yuan of the 1 million yuan involved in the loan. The 230,000 yuan that Wu Moufeng later lent separately was not included in the first loan of 600,000 yuan, nor was it within the scope of the creditor's rights guaranteed by Wu Mouxiu and Jin's mortgage, and the two did not bear the guarantee liability for the 230,000 yuan loan. In February 2022, the Qiannan Prefecture Intermediate People's Court made a second-instance judgment, reordering a bank to have a priority right to be compensated within the scope of the principal of 770,000 yuan and the corresponding interest on the discounted or auctioned or sold properties involved in the case of Jin Moufa and Wu Mouxiu.
survey
The scope of the "maximum" limit is disputed
"Our old couple used their life savings to buy this suite, and we provided a guarantee for Wu Moufeng out of kindness, but we didn't expect to be burdened with such a high amount of debt." In November 2022, Jin Moufa and Wu Mouxiu came to the Qiannan Prefecture Procuratorate to apply for supervision.
After review, the Qiannan Prefecture Procuratorate held that a bank had signed a maximum mortgage contract with Jin Moufa and Wu Mouxiu, and the guarantee liability that the two of them ultimately assumed should not exceed the maximum limit of 1 million yuan. In April 2023, the Qiannan Prefecture Procuratorate filed a protest with the Guizhou Provincial Procuratorate.
The prosecutor of the Guizhou Provincial Procuratorate carefully reviewed the entire case file, communicated with the borrower Wu Moufeng, and listened to the opinions of Jin Moufa, Wu Mouxiu and a bank.
Wu Moufeng admitted to borrowing money and also said that he was willing to repay it, but said that he was unable to repay it now. The lender, a bank, asserted that Jin Moufa and Wu Mouxiu should bear the mortgage guarantee liability. The prosecutor who undertook the case said that although Jin Moufa and Wu Mouxiu had always claimed to have been deceived by Wu Moufeng and a bank, and did not know the content of the mortgage contract, both of them had a certain level of education and signed the contract, and it was difficult to obtain support for the appeal of revoking the mortgage contract. According to the relevant judicial interpretations, in the case of "borrowing new to repay the old", the guarantor of the old loan and the new loan are the same person, and the guarantor is not exempted from liability. The court of second instance ruled that Wu Moufeng had been used to repay the loan deduction of 230,000 yuan that Jin Moufa and Wu Mouxiu did not know.
The prosecutor conducted a careful study of the maximum mortgage contract and mortgage registration signed by the two parties, and found that the mortgage contract stipulated that Jin Moufa and Wu Mouxiu voluntarily provided mortgage guarantee for the maximum balance of 1 million yuan of the actual creditor's rights formed by Wu Moufeng from June 2016 to June 2019 when he handled various types of business in a bank. The certificate of other rights issued by the Changshun County Housing and Urban-Rural Development Bureau records, "Other types of rights: maximum mortgage; The amount of the creditor's right is one million yuan. At the same time, it was ascertained that upon the bank's application, the court enforced the effective judgment in this case. As of September 2022, the total principal and interest of the debts involved in the case to be repaid by Jin Moufa and Wu Mouxiu have been more than 1.47 million yuan, and the interest is still increasing.
In practice, there is controversy over the scope of the "maximum amount" in the maximum mortgage, with some views that the maximum limit is limited to the principal, while others believe that the principal, interest, penalty interest, etc. should all be included in the maximum limit, depending on the agreement of the parties. Judging from the maximum mortgage contract signed in this case, it is to provide mortgage guarantee for the maximum amount of 1 million yuan of the actual creditor's rights. Moreover, the contract is a standard contract provided by the bank, and even if there are differences in understanding between the two parties, an interpretation that is unfavorable to the party providing the standard clauses should be made.
"The reason why the court determined that the maximum limit includes principal and interest is mainly because another clause in the mortgage contract stipulates that the scope of the mortgage is the principal of the creditor's right of 1 million yuan, interest, liquidated damages, compensation, etc." In the opinion of the Prosecutor, the total amount of priority for repayment of debts should still be subject to the maximum total amount of claims.
supervise
The protest on the grounds of "contractual agreement" was accepted
In July 2023, the Guizhou Provincial Procuratorate filed a protest with the Guizhou Provincial High Court. The procuratorate believes that according to the agreement on the maximum mortgage contract signed by Jin Moufa and Wu Mouxiu with a certain bank and the circumstances contained in the mortgage registration, the scope of the maximum guarantee in this case includes principal, interest, penalty interest, compound interest, etc., and once it exceeds the agreed maximum limit of 1 million yuan, it should be restrained and must not be breached. The second-instance judgment confused the maximum mortgage claim limit and the scope of the guarantee, and ordered the bank to enjoy the priority right to be repaid within the scope of the principal amount of 770,000 yuan and the corresponding interest on the price obtained from the discount, auction or sale of the guaranteed real estate provided by Jin Moufa and Wu Mouxiu, but did not make a limit of the maximum amount of 1 million yuan, which was an error in the application of law, and the judgment was obviously unfair to the mortgagor and met the circumstances that should be retried.
In December 2023, after a retrial, the Guizhou Provincial High Court held that the maximum amount of claims involved in the maximum mortgage guarantee contract and the scope of the mortgage guarantee are two different legal concepts. The significance of determining the maximum limit of claims is that the mortgagee can only enjoy the priority right of repayment of the mortgaged property within the maximum limit of claims, regardless of the actual increase in claims. If the mortgagee is allowed to exceed the maximum creditor's right to enjoy the priority of repayment of the mortgage, it is not only contrary to the statutory principle of property rights, but also affects the security of the transaction, and may even cause damage to the legitimate rights and interests of third parties. Therefore, the extent to which a bank can be repaid preferentially for the proceeds from the lawful disposal of the mortgaged real estate involved in the case depends on the maximum amount of the mortgage contract and the maximum amount of creditor's rights as stated in the real estate mortgage registration. The scope of mortgage security determines which areas of debts can be repaid in priority, but the cumulative total amount of debts within this scope that can be repaid in priority is still subject to the maximum debt limit. The second-instance judgment that Jin Moufa and Wu Mouxiu were liable for the principal and interest of the 770,000 yuan loan, but did not limit the maximum amount of creditor's rights, was an error in the application of law. Therefore, the Guizhou Provincial High People's Court reversed the judgment that a bank had the priority right to be repaid within the limit of the loan principal of 770,000 yuan and the corresponding interest and the maximum limit of 1 million yuan for the discount, auction and sale of the mortgaged real estate of Jin Moufa and Wu Mouxiu.
According to the prosecutor
When the agreement is unclear
An explanation should be given in favor of the counterpart
The maximum mortgage is of a special nature, and the limit and scope of the secured claim should be clearly agreed. The first paragraph of Article 420 of the Civil Code stipulates that: "In order to guarantee the performance of the debt, the debtor or a third party provides security property for the creditor's rights that will continue to occur within a certain period of time, and the debtor fails to perform the due debts or the mortgage rights are realized as agreed by the parties, the mortgagee shall have the right to be repaid in priority for the secured property within the maximum limit of the creditor's rights." ”
The claims secured by the maximum mortgage are claims that will be incurred continuously in the future and have not yet been determined at the time of signing the mortgage contract, so it is particularly important to clearly stipulate the maximum amount and scope of the secured claims. In this case, the contract between the parties stipulated that a mortgage guarantee would be provided for the maximum balance of the actual creditor's rights of RMB 1 million, including the principal of the creditor's rights, interest, liquidated damages, etc. The two sides have different understandings of this. The mortgagor argues that the maximum amount of the secured claim is $1 million, regardless of the scope of principal, interest or others. The mortgagee believes that the maximum limit only refers to the principal amount of 1 million yuan, and the interest and liquidated damages are not subject to this restriction. The principal amount of the actual creditor's rights in this case is 770,000 yuan. Judging from the content of the agreement between the two parties, although the scope of the guarantee includes the principal and interest, it cannot be concluded that the maximum limit only refers to the principal of 1 million yuan. Considering that the contract was a standard contract provided by the lender, and the registration with the competent authority also stated that the mortgage amount was $1 million. Therefore, in the case of unclear contractual provisions, an interpretation favorable to the counterparty of the contract should be made, that is, the maximum limit of the secured claim in this case is 1 million yuan, including the principal and interest, which is more in line with the principle of fairness.
The prosecutor reminded that the establishment of the mortgage right is conducive to ensuring the realization of the creditor's rights, but the burden of priority repayment is set for the mortgaged property, and the parties should carefully read the content of the contract, be clear about their respective rights and obligations, and act cautiously when signing the contract.
(Source: Procuratorate Daily, Minsheng Weekly Author: Ding Yanhong, Ouyang Dasu, Xiao Jiayun Comics: Yao Wen)