Loan Dispute With Guarantor: Court Orders Repayment of 100,000 Yuan

A court in eastern China has ordered a borrower to repay 100,000 yuan and held a guarantor jointly liable after both defendants failed to appear in court.

On August 1, 2011, Ms. Lu borrowed 100,000 yuan from Mr. Zhang for business purposes and issued a promissory note. Mr. Lu signed as guarantor on the note. No repayment deadline or interest rate was specified.

Despite repeated demands from Mr. Zhang, Ms. Lu refused to repay, claiming temporary lack of funds. Mr. Lu also refused to fulfill any guarantor obligations. Mr. Zhang initiated legal proceedings in December 2011.

During the proceedings, Mr. Zhang applied for property preservation. On December 16, 2011, the court seized real estate owned by Mr. Lu. Neither defendant appeared at the March 29, 2012 hearing despite proper summons.

The court found the promissory note constituted a valid loan contract. Since no guarantee method was agreed upon, the law presumes joint and several liability for the guarantor. The court ordered Ms. Lu to repay 100,000 yuan plus 1,020 yuan in property preservation costs within seven days. Mr. Lu was held jointly liable for both amounts.

The case acceptance fee of 2,300 yuan was assessed against both defendants. The court issued a default judgment due to the defendants’ absence.

Disclaimer: This article is for informational purposes only and does not constitute legal advice.