Private Loan Default: Court Orders Joint Borrowers to Repay 300000 RMB

In a recent private lending dispute, the court issued a default judgment ordering two defendants to repay a loan principal after they failed to appear in court. The case began when a plaintiff, identified as Party A, filed a lawsuit against two individuals, Party B and Party C, seeking repayment of a borrowed sum. Because the defendants could not be located, the court converted the proceedings from a summary procedure to an ordinary procedure. A public hearing was held, and the plaintiff’s legal representative attended, but the defendants, having been properly summoned through legal channels, did not appear. As a result, the court proceeded to render a default judgment based solely on the evidence presented by the plaintiff.

The facts of the case revealed that in recent years, Party B faced financial difficulties and pressure from creditors. Party B borrowed a sum of money from Party A, and the plaintiff drafted a written acknowledgment of indebtedness, commonly known as an IOU. The IOU stated that the loan was to be repaid within three months. Because Party B was illiterate, the document noted that both Party B and another individual, Party C, would sign due to family circumstances. Party C voluntarily signed and affixed a fingerprint in the section designated for the borrower. Party B also placed a fingerprint next to the stated loan amount. A third individual, Party D, signed the document as a guarantor. The loan amount was delivered in cash. Despite repeated demands for repayment, both defendants failed to return the borrowed funds and subsequently disappeared.

The plaintiff argued that the two defendants had jointly borrowed the sum and should be ordered to repay the full amount immediately. The defendants did not respond to the claims, nor did they submit any evidence or appear in court to contest the allegations. The court carefully examined the IOU, which was presented as an original document and appeared free from defects or alterations. Although the IOU initially indicated that Party B borrowed the money to repay existing debts, the court found that Party C’s voluntary signature and fingerprint in the borrower column constituted a clear and unequivocal assumption of joint liability. The court determined that the evidence sufficiently established both a mutual agreement to lend and the actual transfer of funds. The defendants’ failure to appear in court was deemed a waiver of their right to challenge the evidence presented by the plaintiff. The court concluded that the loan had matured and that the defendants’ refusal to repay violated the plaintiff’s lawful rights.

Pursuant to relevant provisions of the Contract Law and the Civil Procedure Law, the court ordered Party B and Party C to repay Party A the principal amount within seven days of the judgment taking effect. If payment was delayed, the defendants were required to pay double the interest as stipulated by law. This case illustrates several key legal principles that are critical for practitioners and parties involved in private lending disputes. The court’s analysis underscores that joint liability can arise not only from explicit contractual language but also from conduct. Here, Party C’s voluntary signature and fingerprint in the borrower section, despite not being the primary borrower, was deemed an assumption of joint liability. This ruling serves as a reminder that individuals should carefully consider the implications of signing or affixing fingerprints to loan documents, as such actions can create binding legal obligations even if they are not the primary borrower.