Appeal Dismissed in CNY 300,000 Private Lending Dispute
The appeals court has upheld a lower court ruling ordering two borrowers to repay 150,000 yuan plus interest in a long-running private lending dispute. Ms. Cheng and Mr. Song, the appellants, had challenged a judgment that required them to pay 150,000 yuan in principal and monthly interest at 2 percent from January 2004. The court found their arguments lacked merit and affirmed the original decision, which also imposed joint liability on the two appellants.
In 2003, Ms. Cheng and Mr. Cheng Weiguo borrowed a total of 300,000 yuan from Mr. Han. Ms. Cheng borrowed 200,000 yuan in March, and Mr. Cheng Weiguo borrowed 100,000 yuan later that month. In September 2003, Mr. Han signed a tripartite agreement with Mr. Song and Mr. Cheng Weiguo, under which Mr. Song assumed the 300,000 yuan debt due by December 31, 2003. Mr. Song did not comply. A later agreement in April 2009 split the debt equally between two pairs: Ms. Cheng and Mr. Song as one side, and Mr. Cheng Weiguo and his wife Ms. Cui as the other. Mr. Cheng Weiguo and Ms. Cui paid their share (150,000 yuan principal plus interest). Ms. Cheng and Mr. Song did not, prompting Mr. Han to sue.
During the trial, the court examined several pieces of evidence. Prior court rulings had already confirmed the existence of the loan relationship. A written agreement from April 23, 2009, clearly stated that Ms. Cheng and Mr. Song would be responsible for 150,000 yuan in principal and half the interest. Mr. Song had made an interest payment of 24,000 yuan in March 2004 through a third party, Mr. Wang, covering the period from September to December 2003. Mr. Cheng Weiguo testified that the agreed monthly interest rate was 2 percent, and his payments to Mr. Han reflected that rate. The court also noted that Ms. Cui, though properly notified, did not appear at the hearing.
The court held that the debts must be repaid. The evidence from the 2009 agreement and prior court rulings established that Ms. Cheng and Mr. Song were obligated to pay the remaining 150,000 yuan and interest. The court rejected Mr. Song’s argument that he was not the original borrower, noting that he had voluntarily assumed the debt under the tripartite agreement and later confirmed that obligation in the 2009 agreement. It also dismissed Ms. Cheng’s claim that the loan lacked an agreed interest rate, pointing to the consistent 2 percent monthly interest demonstrated by actual payments and testimony.
According to relevant law, debts are enforceable and interest on private loans may exceed bank rates as long as they do not exceed four times the benchmark rate. The court applied the principle that parties are bound by their contractual agreements. The 2009 agreement was a valid modification of the original debts, and all parties, including the creditor Mr. Han, accepted it. Mr. Cheng Weiguo and Ms. Cui had performed their part, so the remaining liability fell squarely on Ms. Cheng and Mr. Song. The court also noted that the 2 percent monthly interest was within the legal ceiling at the time.
This case underscores the binding nature of settlement agreements in private lending disputes, even when the original borrower is not the same as the party assuming the debt. The appeals court found no error in the trial court’s factual findings or legal reasoning. The judgment is now final, and the appellants must pay the principal, interest, and costs. The ruling serves as a reminder that parties who agree to take on another’s debt cannot later disclaim liability based on their original role in the transaction.
Disclaimer: This article is for informational purposes only and does not constitute legal advice.