Appeal Dismissed in CNY 250,000 Loan Dispute Over Delivery
The appellate court upheld a lower court decision in a civil loan dispute involving a claim for repayment of 250,000 Chinese yuan. The case centered on whether the borrower had actually received the funds after signing an IOU. The plaintiff, Mr. Chen, appealed the original judgment that had rejected his claim for lack of proof of delivery. Both lower and appellate courts found the evidence insufficient to establish that the loan amount was ever handed over.
Mr. Chen alleged that in January 2011, Mr. Liu and his wife, Ms. Liu, owed him 250,000 yuan based on an IOU signed on 5 January. Mr. Chen admitted that no money changed hands on that date. He later withdrew the same amount from his bank account on 6 January at a rural cooperative bank in Eastern China City, claiming he then gave the cash to Mr. Liu. Mr. Liu denied ever receiving the funds. The lower court dismissed Mr. Chen’s lawsuit, ruling that the loan contract had not taken effect because the money was never actually delivered. Mr. Chen appealed, arguing that the lower court had misapplied the law and overlooked evidence of telephone calls that suggested the loan was real.
During the hearing, Mr. Chen presented the IOU, a bank withdrawal slip for 250,000 yuan dated 6 January, and phone records showing multiple calls between him and Mr. Liu over two months. Mr. Liu and Ms. Liu maintained that no payment was ever made and that the IOU was signed only as a record for a potential intermediary fee, not as evidence of a loan. The appellate court reviewed the same evidence and heard no new testimony or documents from either side. Both parties confirmed that the IOU was signed without any concurrent transfer of funds.
The appellate court held that the key issue was whether the 250,000 yuan had actually been delivered to Mr. Liu. Under the relevant law, a loan contract between individuals becomes valid only when the lender provides the money. The court noted that Mr. Chen had the burden to prove he had handed over the cash. The bank withdrawal slip only showed that Mr. Chen had taken money from his own account, not that it reached Mr. Liu. The phone call records, while showing contact between the parties, did not demonstrate an admission of receipt. The court found that Mr. Chen had not met his burden of proof.
The court applied the principle that the party claiming performance of an obligation must provide evidence of that performance. In this case, Mr. Chen failed to offer direct evidence such as a receipt, a witness, or a written acknowledgment of payment from Mr. Liu. The absence of any complaint to the police or demand for return of the IOU did not, in the court’s view, shift the burden to Mr. Liu. Without clear proof of actual delivery, the loan could not be deemed effective. The appellate court therefore affirmed the lower court’s reasoning that the claim must fail.
The appellate court dismissed Mr. Chen’s appeal and upheld the original judgment, ordering him to pay the second-instance litigation costs of 5,050 yuan. The decision reinforces a fundamental rule in Chinese civil loan cases: a signed IOU alone is not enough; the lender must prove that the money was actually transferred to the borrower. This ruling serves as a practical reminder that written promises of repayment must be accompanied by clear evidence of delivery to be enforceable.
Disclaimer: This article is for informational purposes only and does not constitute legal advice.