What should I do if I save my life to buy an unfinished building and the developer fails to deliver the house within the agreed deadline! Buyers can exercise the right of rescission to terminate the "Commercial Housing Pre-sale Contract" signed with the developer, and in the case of a mortgage loan to buy a house, how to deal with the loan contract and mortgage contract signed with the bank, the case of the Supreme People's Court gives the answer, which is worth referencing!
The Supreme People's Court rendered its judgment on December 3, 2020, and released it on February 19, 2021. The judgment of this case is of strong guiding significance for handling disputes arising from mortgage loans between home buyers, lending banks and developers.
The gist of the adjudication: 1. Because the seller (developer) failed to deliver the house within the agreed time limit, resulting in the termination of the "Commercial Housing Pre-sale Contract" involved in the case, and the "Loan Contract" and "Mortgage Contract" were also terminated due to the failure to realize the purpose of the contract, the seller should return the principal and interest of the housing loan collected to the guarantor (lending bank) and the buyer (the buyer), and the buyer shall not have the obligation to return.
2. The relevant standard clauses of the Loan Contract involved in the case require the purchaser to repay the loan without obtaining the purchased house nor actually taking possession of the purchase loan, which obviously unreasonably increases the buyer's liability, and the standard clause is invalid and not binding on the buyer.
3. This case involves the dual legal relationship of the commercial housing sales contract and the commercial housing guarantee loan contract, and the contract between the parties is terminated due to the developer's breach of contract and inability to deliver the house, but the actual possession and use of the down payment paid by the buyer and the mortgage loan of the bank; According to the contract, the bank has both the mortgage right and the creditor's rights against the developer and the buyer. The buyer did not acquire the home, but both paid the down payment and had to repay the mortgage. If the relationship of rights and obligations agreed in the contract is handled, the buyer is still required to bear the repayment responsibility for the remaining loan even though he is not at fault for the termination of the contract, which obviously unreasonably increases his burden, and the rights and obligations of all parties are unbalanced, which violates the principle of fairness.
People's Republic of China Supreme People's Court
Civil Judgments
(2019) Supreme Law Min Zai No. 245
Applicant for retrial (defendant of first instance, appellee of second instance): Wang Zhongzhong, male, Han nationality, born on September 11, 1971, living in Cheng**, Xining City, Qinghai Province.
Applicant for retrial (defendant of first instance, appellee of second instance): Wang Qibo, male, Han nationality, born on January 11, 1989, living in Ledu District, Haidong City, Qinghai Province.
Applicant for retrial (defendant of first instance, appellee of second instance): Wang Qibao, male, Han nationality, born on March 24, 1994, living in Ledu District, Haidong City, Qinghai Province.
Respondent (plaintiff of first instance, appellant of second instance): Qinghai Branch of China Construction Bank Corporation. Residence: West Street, Xining City, Qinghai Province**.
Person in charge: Liang Shibin, president of the branch.
The third party of the first instance and the appellee of the second instance: Qinghai Yuezhou Real Estate Development Co., Ltd. Residence: Chuangye Road, Xining City, Qinghai Province**
Legal representative: Han Zhiming, chairman of the company.
The retrial applicants, Wang Zhongzhong, Wang Qibo, and Wang Qibao (hereinafter referred to as Wang Zhongzhong and others), were dissatisfied with the civil judgment of the Qinghai Provincial High People's Court (2018) Qing Min Zhong No. 199 and applied to this court for a retrial due to a dispute over a financial loan contract with the respondent China Construction Bank Corporation Qinghai Branch (hereinafter referred to as CCB Qinghai Branch) and the third party of first instance, Qinghai Yuezhou Real Estate Development Co., Ltd. (hereinafter referred to as Yuezhou Company). On May 10, 2019, this court rendered the (2019) Zui Gao Fa Min Shen No. 527 Civil Ruling, arraigning the case. After the arraignment, this court formed a collegial panel in accordance with law and tried the case in open court. The retrial applicant Wang Zhongzhong and other three persons jointly entrusted Zhang Xiaodong, the respondent CCB Qinghai Branch, and the respondent CCB Qinghai Branch entrusted the agent ad litem Huang Xiaowei and Xu Jing, and the third party of the first instance, Yuezhou Company, entrusted the agent ad litem Qi Xiaoqian to participate in the litigation. The case is now closed.
Wang Zhongzhong et al.'s retrial requests: 1. Revoke the civil judgment of Qinghai Provincial High People's Court (2018) Qing Min Zhong No. 199, 2. Change the judgment to reject the litigation claims of CCB Qinghai Branch, and 3. Order CCB Qinghai Branch to bear the litigation costs of the first and second instance acceptance fees of this case. Facts and reasons: The second-instance judgment that Wang Zhongzhong and the others were liable for the repayment of the principal and interest of the remaining loan of CCB Qinghai Branch was erroneous. First of all, according to the Interpretation of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Cases Involving Disputes over Contracts for the Sale and Purchase of Commodity Housing (hereinafter referred to as the "Judicial Interpretations on Contracts for the Sale and Purchase of Commodity Housing"), the principal and interest of the loan for the purchase of housing shall be returned by the seller when the contract for the sale and purchase of commercial housing and the secured loan contract are terminated. The effective judgment of another case has determined that Yuezhou Company shall be liable for repayment of the remaining principal and interest of the loan at the time of termination of the contract to CCB Qinghai Branch, and the determination of this liability should no longer be disputed. Secondly, during the performance of the Personal Housing (Commercial Housing) Loan Contract (hereinafter referred to as the "Loan Contract") involved in the case, Wang Zhongzhong and the other three persons objectively neither controlled nor used the loan, and all the money was directly transferred to Yuezhou Company by CCB Qinghai Branch in accordance with the mortgage loan model process. Under the circumstance that the Yuezhou Company defaulted and the purchase contract and the loan contract were terminated, and Wang Zhongzhong and the others were not at fault, they had to become the debtor of CCB Qinghai Branch while not being able to purchase the house, which did not conform to the legal characteristics and policy background of the mortgage loan, nor the value arrangement of the mortgage loan business model. The second-instance judgment seriously infringed upon the lawful rights and interests of Wang Zhongzhong and the others.
CCB Qinghai Branch argued that, firstly, the loan contract relationship occurred between CCB Qinghai Branch and Wang Zhongzhong and the other three people. Article 19 of the Loan Contract involved in the case stipulates that: "If the loan relationship between the lender and the borrower is terminated, the borrower shall immediately return the principal, interest, penalty interest and expenses for realizing the creditor's rights owed by the borrower, or entrust the seller to directly return the above-mentioned money to the lender." The termination of the Loan Contract does not affect the validity of the clause, and Wang Zhongzhong and the other three should bear the responsibility of repaying the remaining principal and interest of the loan to CCB Qinghai Branch in accordance with the Treaty. Secondly, the second paragraph of Article 25 of the Judicial Interpretation on the Contract for the Sale and Purchase of Commodity Housing stipulates that after the termination of the contract for the sale and purchase of commercial housing and the secured loan contract, the seller shall repay the loan to the bank on behalf of the buyer. In this case, Yuezhou Company failed to repay the loan to CCB Qinghai Branch as entrusted by Wang Zhongzhong and the others, and the corresponding repayment liability should still be borne by Wang Zhongzhong and the others. Thirdly, as a party to the Commercial Housing Pre-sale Contract, Wang Zhongzhong exercised his right to choose the seller and the subject matter, and should bear the commercial risk of breach of contract by the seller, Yuezhou Company, instead of transferring his own legal risk to CCB Qinghai Branch. In summary, the second-instance judgment found that the facts were clear and the law was correctly applied, and requested that the retrial request of Wang Zhongzhong and the others be rejected.
Yuezhou Company stated that although the Loan Contract had been terminated, it did not lead to a change in the parties to the contract, and Wang Zhongzhong and the other three should bear corresponding liabilities according to the borrower's status as the subject of the contract. The second-instance judgment found that the facts were clear and the law was correctly applied, and should be upheld.
CCB Qinghai Branch filed a lawsuit with the court of first instance, requesting that: 1. order Wang Zhongzhong and the others to jointly repay the loan principal of RMB 58,546,649.55 with Yuezhou Company, and calculate the loss of capital occupation at an annual interest rate (RMB 10,107.43 per day) from March 21, 2018 until the date of actual repayment, 2. Order Wang Zhongzhong and the others to bear the lawyer's fees of RMB 466,876.20, and 3. Order Wang Zhongzhong and the others to bear all the litigation costs of the case.
The court of first instance found the facts: on August 12, 2015, Wang Zhongzhong signed the Commercial Housing Pre-sale Contract with Yuezhou Company to purchase the commercial building No. 66-16, Building 3, No. 66, Jianshe South Road, Chengdong District, Xining City, developed by Yuezhou Company at a price of 147953124 yuan, with a construction area of 3,736.19 square meters, and the delivery time was before October 30, 2015. Wang Zhongzhong made a down payment of 73983124 yuan, and the remaining mortgage loan was 73.97 million yuan.
On August 14, 2015, Wang Zhongzhong, Wang Qibo and Wang Qibao signed the Loan Contract with CCB Qinghai Branch and Yuezhou Company, stipulating that: Wang Zhongzhong and the other three would borrow 73.97 million yuan from CCB Qinghai Branch, with the loan period from August 25, 2015 to August 25, 2025; The interest rate of the loan is 6.215% per annum; The borrower shall repay the principal and interest of RMB 829,227.74 per month by the method of equal principal and interest, and the guarantee shall be a mortgage plus a phased guarantee, and the guarantee period shall be from the effective date of the guarantee clause of this contract to the date when the mortgage registration is completed and the other rights certificates, mortgage registration certificates and other rights certificates of the mortgaged property are handed over to the lender for verification and receipt, and the mortgaged property is a commercial building No. 66-16, Building 3, No. 66, Jianguo South Road, Chengdong District, Xining City. The construction area is 3736.19 square meters, and the value of the mortgaged property is 147953124 yuan. On the same day, Wang Zhongzhong signed the Real Estate Mortgage Contract (Construction in Progress/Pre-purchase Contract) (hereinafter referred to as the "Mortgage Contract") with CCB Qinghai Branch and Yuezhou Company, stipulating that: Wang Zhongzhong will provide mortgage guarantee for the aforesaid loan with the house he purchased in Chengdong District, Xining City (construction area of 3,736.19 square meters, land use right area of 16,459.85 square meters), the mortgage loan term will be from August 25, 2015 to August 25, 2025, and the annual interest rate of the loan will be 6.215%; Yuezhou Company shall deliver the house to Wang Zhongzhong within the time limit agreed in the pre-sale contract, and the written consent of CCB Qinghai Branch shall be obtained when handing over the house; In the event that Yuezhou Company fails to deliver the house on time and indirectly affects the interests of CCB Qinghai Branch, Yuezhou Company shall be liable for compensating CCB Qinghai Branch for losses on behalf of Wang Zhongzhong. On August 18, 2015, CCB Qinghai Branch obtained the certificate of other rights of the housing involved in the case.
On May 9, May 11, May 26, June 11, June 25, July 3 and August 13, 2015, Wang Zhongzhong paid 7 million yuan, 1 million yuan, 5 million yuan, 10 million yuan, 20 million yuan and 30983124 yuan to Yuezhou Company respectively, totaling 73983124 yuan. On August 21, 2015, CCB Qinghai Branch paid RMB 73.97 million to Yuezhou Company in eight tranches.
According to the (2017) Qing Min Chu No. 13 Civil Judgment and the (2017) Zui Gao Fa Min Zhong No. 683 Civil Judgment, the aforesaid Commercial Housing Pre-sale Contract, Loan Contract and Mortgage Contract have all been terminated, and as of March 21, 2017, Wang Zhongzhong has repaid the loan principal of RMB 9,170,995.81 and interest of RMB 6,095,047.89, and still owes CCB Qinghai Branch the loan principal of RMB 64,799,004.19.
The court of first instance ruled that the claim of CCB Qinghai Branch was rejected. The first-instance case acceptance fee of 336867 yuan shall be borne by CCB Qinghai Branch.
CCB Qinghai Branch was dissatisfied with the first-instance judgment and appealed: revoke the first-instance judgment and change the judgment to support all the claims of CCB Qinghai Branch in the first instance; The litigation costs of this case were borne by Wang Zhongzhong and the others.
Second, the facts ascertained in the examination are consistent with the facts ascertained in the first examination.
The court of second instance held that the focus of the dispute in this case was whether the claim of CCB Qinghai Branch that Wang Zhongzhong and the others jointly repaid the loan principal of RMB 58,546,629.55 with Yuezhou Company, as well as the loss of capital occupation and attorney's fees, could be established.
On August 12, 2015, Wang Zhongzhong signed the Commercial Housing Pre-sale Contract with Yuezhou Company, and on August 14, 2015, Wang Zhongzhong and the other three signed the Loan Contract with CCB Qinghai Branch. CCB Qinghai Branch and Wang Zhongzhong and the other three formed a civil legal relationship for the sale of commercial housing due to the signing of the Loan Contract, and Wang Zhongzhong and Yuezhou Company formed a civil legal relationship for the sale and purchase of commercial housing due to the signing of the Pre-sale Contract for Commercial Housing. Rights and obligations should be determined from the analysis of the civil legal relationship formed by the parties involved in the case. According to the second paragraph of Article 25 of the Judicial Interpretation of the Commodity Housing Sales Contract, Yuezhou Company, as the seller of commercial housing, returned the principal and interest of Wang Zhongzhong's housing loan received by it to CCB Qinghai Branch, and from the perspective of legal relationship, the buyer Wang Zhongzhong entrusted Yuezhou Company to repay the principal and interest of the loan to CCB Qinghai Branch, and the repayment by Yuezhou Company was the repayment of Wang Zhongzhong, the buyer, so Wang Zhongzhong, as the principal debtor of the Loan Contract, was not exempted from the repayment liability. Since the loan contract involved in the case was terminated by the effective judgment of another case, Yuezhou Company did not return the principal and interest of the loan to CCB Qinghai Branch in accordance with the effective judgment, and the debts owed by Wang Zhongzhong and the other three to CCB Qinghai Branch were not repaid, so the civil legal relationship between the two parties was not eliminated. Wang Zhongzhong, as the claimant of Yuezhou Company's creditor's rights and the consignor of the return of the principal and interest of the loan, did not actively assert his rights in accordance with the effective judgment, and his negligence in exercising his rights caused damage to the creditor's rights of CCB Qinghai Branch. CCB Qinghai Branch weighed its interests and asserted that Wang Zhongzhong and the others should repay the principal and interest of the loan based on the principle of relativity of contract, which did not violate the provisions of the law, nor did it conflict with or cause ambiguity with the effective judgment, and was in line with the contract between the two parties. After Wang Zhongzhong and the other three assumed the responsibility of repaying the loan, it did not affect their right to claim the return from Yuezhou Company. Since the effective judgment had ordered Yuezhou Company to return the principal and interest of the loan to CCB Qinghai Branch, its claim that Yuezhou Company, Wang Zhongzhong and the other three persons jointly bear the repayment liability was a duplicate lawsuit, and the court of second instance did not support it. The court of second instance affirmed the claim of Wang Zhongzhong and the others on the amount of the remaining loan principal, interest and attorney's fees claimed by CCB Qinghai Branch.
The court of second instance decided: 1. Revoke the civil judgment of Xining Intermediate People's Court (2018) Qing 01 Min Chu No. 151; 2. Within 30 days after the judgment took effect, Wang Zhongzhong and the others repaid the loan principal of 58,546,649.55 yuan and the lawyer's agency fee of 466,876.2 yuan to CCB Qinghai Branch, and paid the loss of capital occupation at an annual interest rate (10,107.43 yuan per day) based on the loan principal of 58,546,649.55 yuan until the date of actual repayment; The first-instance litigation fee is 336867 yuan, and the second-instance litigation fee is 336867 yuan, which is borne by Wang Zhongzhong and the other three.
The facts ascertained by this court in the re-examination are consistent with the facts ascertained in the first and second examinations.
This court held that, according to the arguments of the parties, the focus of the dispute in the retrial of this case was whether Wang Zhongzhong and the other three should bear the repayment responsibility for the remaining loan after the termination of the Loan Contract. In this regard, the court commented as follows:
First, on the issue of the subject of responsibility for the repayment of the loan after the termination of the Loan Contract. Paragraph 2 of Article 25 of the Judicial Interpretation of the Contract for the Sale and Purchase of Commodity Housing stipulates that: "If the contract for the sale and purchase of commercial housing is confirmed to be invalid, revoked or dissolved, and the loan contract secured by the commercial housing is also dissolved, the seller shall return the principal and interest of the loan and the purchase price received to the guarantor and the buyer respectively." "In this case, the "Commercial Housing Pre-sale Contract" involved in the case was terminated because the Yuezhou Company failed to deliver the house within the agreed time limit, and the "Loan Contract" and "Mortgage Contract" were also terminated because the purpose of the contract could not be realized. According to the aforesaid provisions, the seller, Yuezhou Company, should return the principal and interest of the housing loan collected to CCB Qinghai Branch, and Wang Zhongzhong and the others were not obliged to return them.
Second, on the application of the relevant standard clauses in the Loan Contract. Article 19 of the Loan Contract involved in the case stipulates that: "If the loan relationship between the lender and the borrower is terminated, the borrower shall immediately return the principal, interest, penalty interest and expenses for realizing the creditor's rights owed by the borrower, or entrust the seller to directly return the above-mentioned money to the lender." This clause is a standard clause drafted in advance by CCB Qinghai Branch for repeated use. In the case that the Judicial Interpretation on the Contract for the Sale and Purchase of Commercial Housing has clearly stipulated that after the contract for the sale and purchase of commercial housing and the loan contract secured by the commercial housing are terminated, the seller will directly return the principal and interest of the purchased housing loan to the lender instead of the buyer (borrower), the Qinghai Branch of CCB drafted this article, which means that Wang Zhongzhong and the other three are required to return the loan without obtaining the purchased house or actually taking possession of the housing loan, which obviously unreasonably increases the liability of Wang Zhongzhong and the other three, according to the Contract Law of the People's Republic of China Article 40 "...... If the party providing the standard clause exempts its liability, increases the liability of the other party, or excludes the main rights of the other party, the clause shall be invalid", and the clause is not binding on Wang Zhongzhong and the others.
Third, on the rights and obligations of all parties under the commercial housing mortgage loan business model. This case involves the dual legal relationship of the commercial housing sales contract and the commercial housing guarantee loan contract. Judging from the content of the contract, in the contract for the sale and purchase of commercial housing, Wang Zhongzhong and other three people paid for the house, and Yuezhou Company delivered the house; In the commercial housing guarantee loan contract, CCB Qinghai Branch paid the loan money directly to Yuezhou Company by Wang Zhongzhong and the others, and Yuezhou Company actually used the money. Wang Zhongzhong and the other three do not control the housing loan, but they need to repay the principal and interest of the loan. If the contract involved in the case is performed normally and Wang Zhongzhong and the other three obtain the house, the rights and obligations of all parties can also be balanced. However, in this case, the contract was terminated due to the failure of Yuezhou Company to deliver the house, resulting in a serious imbalance in the rights and obligations of the parties stipulated in the contract. Specifically, the Yuezhou Company breached the contract and could not deliver the house, resulting in the termination of the contract between the parties, but it actually took possession of the down payment paid by Wang Zhongzhong and the mortgage loan of the Qinghai Branch of the Construction Bank; According to the contract, CCB Qinghai Branch not only enjoys the mortgage right, but also enjoys the creditor's rights against Yuezhou Company and Wang Zhongzhong; Wang Zhongzhong and the other three did not get the house, but they paid the down payment and had to repay the mortgage loan. If the relationship of rights and obligations agreed in the contract is handled, Wang Zhongzhong and the others are still required to bear the responsibility for repayment of the remaining loans even though they are not at fault for the termination of the contract, which obviously unreasonably increases their burden, and the rights and obligations of all parties are unbalanced, which violates the principle of fairness. Therefore, when adjudicating the case, it is necessary to fully consider the close connection between the various contracts and the balance of the rights and obligations of the parties under the commercial housing mortgage loan business model, so as to avoid the imbalance of the rights and obligations of the three parties due to the emphasis on the relativity of a single contract.
In summary, CCB Qinghai Branch's request for Wang Zhongzhong and the others to repay the remaining loan and pay interest cannot be sustained, and the lawyer's fees incurred for this lawsuit should not be borne by Wang Zhongzhong and the others. Wang Zhongzhong and the other three's request for retrial is sustained and should be supported. The second-instance judgment erred in this determination, and this court corrected it. After discussion and decision by the adjudication committee of this court, in accordance with Articles 97 and 40 of the Contract Law of the People's Republic of China, Article 25, Paragraph 2 of the Interpretation of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Disputes over Commercial Housing Sales Contracts, and Article 207, Paragraph 1 and Article 170, Paragraph 1, Paragraph 2 of the Civil Procedure Law of the People's Republic of China, the judgment is as follows:
1. Revoke the (2018) Qing Min Zhong No. 199 Civil Judgment of the Qinghai Provincial High People's Court;
2. The civil judgment of Xining Intermediate People's Court (2018) Qing 01 Min Chu No. 151 is upheld.
The first-instance case acceptance fee is 336867 yuan, and the second-instance case acceptance fee is 336867 yuan, totaling 673734 yuan, which shall be borne by the Qinghai Branch of China Construction Bank Corporation.
This judgment is final.
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