Court Orders Repayment of CNY 50,000 Loan Plus Legal Fees
In a recent civil dispute heard in an Eastern China City court, a plaintiff successfully obtained a judgment ordering the repayment of a CNY 50,000 loan along with legal costs. The case involved a claim for unpaid principal and attorney fees against the borrower and a demand that the guarantor fulfill the连带 (joint and several) liability. The court ruled in favor of the plaintiff, holding both the borrower and the guarantor responsible for the debt.
The plaintiff, Ms. Lin, filed the lawsuit against two defendants: Mr. Zhang, the borrower, and Mr. Yang, the guarantor. According to the complaint, on August 31, 2011, Mr. Zhang borrowed CNY 50,000 from Ms. Lin and issued a promissory note. The note specified that the loan was due by September 9, 2011, and that if Mr. Zhang defaulted, he would bear all costs incurred by Ms. Lin to recover the debt, including legal fees. Mr. Yang signed the same note as a guarantor, agreeing to assume joint and several liability for the loan. After the deadline passed, Mr. Zhang failed to repay the principal, and Mr. Yang did not honor the guarantee despite Ms. Lin’s demands. Ms. Lin sought a court order requiring Mr. Zhang to repay the CNY 50,000 plus CNY 3,000 in attorney fees, and requesting that Mr. Yang be held jointly liable for those amounts.
The court held a public hearing on March 23, 2012. Ms. Lin attended with her legal representative, but both defendants failed to appear despite having been properly served with summonses. The plaintiff submitted the original promissory note as evidence. The court examined the document and found it to be authentic, lawful, and relevant to the case. Because the defendants did not file any written defense or present any evidence, the court proceeded to decide the matter based on the plaintiff’s submissions and applicable law.
The court found that a valid and legally enforceable loan relationship existed between Ms. Lin and Mr. Zhang. The promissory note clearly set out the loan amount, repayment period, and the borrower’s obligation to cover recovery costs. The court also determined that the guarantee agreement between Ms. Lin and Mr. Yang was legally binding. Since Mr. Zhang did not repay the loan by the agreed date and Mr. Yang did not fulfill his guarantee obligations, both defendants had violated the plaintiff’s rights. Accordingly, the court ordered Mr. Zhang to repay the CNY 50,000 principal and pay the CNY 3,000 attorney fee within seven days of the judgment taking effect. It further ordered Mr. Yang to assume joint and several liability for that amount.
The court based its decision on several legal provisions. Under the Contract Law, a borrower must repay the loan on the agreed date. The Guaranty Law stipulates that a guarantor who agrees to joint and several liability can be held directly responsible for the debt if the borrower defaults. Additionally, the Civil Procedure Code permits a default judgment when a defendant, after being lawfully summoned, fails to appear without justification. In this case, the court applied these principles, noting that the plaintiff’s claims were reasonable and supported by the evidence presented.
This judgment reinforces the enforceability of written loan agreements and guarantees in Chinese civil litigation. Borrowers are reminded that failure to repay on time can lead to court orders for both principal and associated costs, such as legal fees. Guarantors should be aware that signing as a joint and several surety exposes them to full liability if the borrower defaults. The court’s decision also highlights that absent defendants cannot prevent a case from proceeding; a default judgment may still be entered. Parties should note that if the judgment is not voluntarily paid within the specified period, the plaintiff may seek enforcement through the court, subject to a two-year statute of limitations.
Disclaimer: This article is for informational purposes only and does not constitute legal advice.