Elderly Seller Wins Unpaid RMB 169,000 House Payment in Dispute Over Missing Contract and Suspicious Will

Elderly Seller Wins Unpaid RMB 169,000 House Payment in Dispute Over Missing Contract and Suspicious Will

Case Overview

An elderly man who sold his only home to a former real estate agent won an appeal when the court ordered the buyer to pay the outstanding purchase price of RMB 169,000. The buyer argued he had already paid in full and produced a handwritten document he claimed was the seller’s will acknowledging receipt, but the court found the document unreliable and the buyer’s evidence insufficient.

Case Background and Facts

In April 2001, an unmarried man with no children, identified as Mr. Lu, purchased an apartment in Eastern China through a real estate agency. He met the defendant, Mr. Liu, who worked as an agent at that agency. In April 2003, Mr. Lu executed a notarized will leaving the apartment to a third party. Later that month, Mr. Liu accompanied Mr. Lu to revoke that notarized will.

On November 7, 2006, Mr. Lu and Mr. Liu went to the local property transaction center. Mr. Liu filled out a written contract under which Mr. Lu agreed to sell the apartment to Mr. Liu for RMB 169,000. The contract called for three installment payments: 30 percent by November 6, 2006, another 30 percent by December 6, 2006, and the final 40 percent by December 31, 2006. Mr. Lu was to deliver the property by December 31, 2006. The contract included a penalty clause requiring the buyer to pay 100 percent of the total price for late payment. The parties completed the property transfer on the same day, and Mr. Liu obtained the title certificate and land use certificate later that month.

Court Proceedings and Evidence

In December 2009, Mr. Lu filed a lawsuit seeking to cancel the contract, initially claiming he had never signed any agreement. Mr. Liu requested fingerprint testing, which confirmed Mr. Lu’s fingerprint was on the contract. Mr. Lu then changed his claim, demanding payment of the RMB 169,000 purchase price plus RMB 71,000 in penalties.

During the first trial, Mr. Liu argued he had paid all amounts in cash but provided no receipts, bank records, or witness testimony. The trial court found the contract valid but concluded Mr. Liu failed to prove payment. The court also rejected the statute of limitations defense, noting Mr. Lu continued living in the apartment and could demand payment at any time.

Mr. Liu appealed. In the appeal, he produced a document dated November 17, 2008, which he called a “will,” stating: “I sold my house to Mr. Liu, the purchase price has been fully collected, no one else should come to share it.” The document bore a signature and fingerprint purportedly from Mr. Lu. Mr. Liu also called a witness who claimed to have seen a final payment of RMB 64,000 in late 2006.

The appellate court ordered forensic examination of the document. Two expert reports concluded the signature and fingerprint belonged to Mr. Lu. Despite this, the court found the document unreliable due to its unusual format, inconsistent handwriting, and lack of corroborating evidence. The court also discounted the witness testimony due to the witness’s relationship with Mr. Liu.

Court Findings and Judgment

The appellate court affirmed the trial court’s decision. It held that the contract was valid and binding on both parties. Because Mr. Liu could not produce credible evidence of payment, he remained obligated to pay the full purchase price. The court found the so-called “will” suspicious: it was written on a small, oddly-sized piece of paper, the content did not match the form of a proper will, the text appeared to have been written after the signature, and the handwriting of the body differed from the signature. The court also noted Mr. Liu could not identify who wrote the document or locate the purported witness.

The court rejected Mr. Liu’s appeal and ordered him to pay Mr. Lu RMB 169,000. It declined to award the RMB 71,000 penalty because the parties had effectively modified the payment deadline by allowing Mr. Lu to remain in the apartment. The court assigned appellate court fees of RMB 4,900 to Mr. Liu and forensic examination fees of RMB 3,500 to Mr. Lu.

Key Legal Principles

The court applied the principle that a party who asserts payment bears the burden of proof. Without receipts, bank records, or credible witnesses, a buyer’s claim of cash payment will not be accepted. The court also recognized that parties may implicitly modify contract terms through their conduct, such as when a seller remains in possession of the property after the scheduled delivery date. Additionally, the court demonstrated that forensic evidence alone does not guarantee a document’s validity when other circumstances raise doubts about authenticity.

Practical Insights

This case highlights the critical importance of documenting payments in real estate transactions. Buyers who pay in cash should obtain signed receipts from the seller and maintain bank records or witness statements. A handwritten note, even one bearing a verified signature and fingerprint, may be insufficient if its format, content, or creation circumstances appear suspicious. Sellers should also be cautious when dealing with former agents or acquaintances who have access to their personal documents and signatures. Finally, parties should be aware that continuing to occupy a property after the contractual delivery date can alter payment obligations and waive penalty claims.

Legal References

General Principles of Civil Law of the People’s Republic of China, Articles 108 and 137. Contract Law of the People’s Republic of China, Articles 44(1) and 77(1). Civil Procedure Law of the People’s Republic of China, Article 64(1) and Article 153(1)(1).

Disclaimer

This article is for informational purposes only and does not constitute legal advice. Consult a qualified attorney for specific legal matters.