Appeal Dismissed in Custom Work Contract Dispute Over Unpaid 18,480 Yuan Order in Eastern China

Appeal Dismissed in Custom Work Contract Dispute Over Unpaid 18,480 Yuan Order in Eastern China

CASE OVERVIEW

The Intermediate People’s Court in Eastern China upheld a lower court ruling ordering Mr. Dai to pay 18,480 yuan in unpaid processing fees plus 2,759 yuan in overdue interest to Mr. Tao. The total judgment amount was 21,239 yuan. The court found that Mr. Dai failed to prove payment of the custom work order despite claiming the amount had been settled on the spot.

CASE BACKGROUND AND FACTS

Mr. Tao and Mr. Dai, along with Mr. Shen, had an established business relationship. On August 27, 2008, Mr. Dai placed an order with a textile factory operated by Mr. Tao for 22,000 meters of warp beam processing. The agreed processing fee was 18,480 yuan. Mr. Shen collected the goods and signed the delivery receipt to confirm receipt. Mr. Dai never paid the processing fee, leading to the dispute.

Mr. Tao initiated legal proceedings seeking payment of 18,480 yuan for the processing work, plus overdue interest of 2,759 yuan calculated at a daily rate of 0.021 percent from August 28, 2008 to August 21, 2010. Mr. Tao also sought recovery of litigation costs from both Mr. Dai and Mr. Shen.

Mr. Dai and Mr. Shen argued that the payment had been made in full at the time of delivery and requested the court to dismiss Mr. Tao’s claims.

COURT PROCEEDINGS AND EVIDENCE

The primary factual dispute centered on whether Mr. Dai had paid the 18,480 yuan processing fee. Mr. Dai presented a receipt dated August 27, 2008, which he claimed proved payment. The court examined this document closely. The receipt listed Mr. Dai’s name in the payer column, but the accounting column was signed by Mr. Shen, who was not an accountant for Mr. Tao. The document was a delivery copy and did not contain any signature from Mr. Tao or his staff. The court determined that the document did not meet the formal requirements of a valid payment receipt and was actually a delivery note.

During the appeal, Mr. Dai argued the lower court had incorrectly classified the receipt as a delivery note. Mr. Tao submitted a bank transfer record during the appeal to show that Mr. Dai’s typical payment method was bank transfer rather than cash. The appellate court declined to admit this evidence, finding it did not qualify as new evidence and lacked sufficient connection to the specific transaction in dispute.

COURT FINDINGS AND JUDGMENT

The court held that Mr. Dai bore the burden of proving payment. Since Mr. Dai failed to provide credible evidence of payment and the receipt he relied on was properly characterized as a delivery note, the court rejected his defense. The court also found that Mr. Shen was not a co-customer but merely a carrier who transported the goods, as Mr. Tao could not produce evidence to support his claim that both defendants were jointly responsible.

Regarding the overdue interest, the court noted that the parties had entered into an oral agreement without specifying a payment deadline. Under applicable law, payment was due at the time of delivery, which occurred on August 27, 2008. Since Mr. Dai had not paid for over two years, the court awarded interest calculated from August 28, 2008 at the daily rate of 0.021 percent, totaling 2,759 yuan.

The appellate court affirmed the trial court’s decision in its entirety. The appeal was dismissed, and Mr. Dai was ordered to bear the appeal costs of 331 yuan.

KEY LEGAL PRINCIPLES

A party claiming that a debt has been paid bears the burden of proof. A document labeled as a receipt may be reclassified by the court based on its actual content and form. In oral contracts for work, payment is due at the time of delivery unless otherwise agreed. A carrier who merely transports goods is not liable for the customer’s payment obligations.

PRACTICAL INSIGHTS

This case illustrates the importance of maintaining clear payment records in business transactions. A receipt that lacks standard formalities, such as a seller’s signature or stamp, may not be accepted by a court as proof of payment. Business owners should ensure that payment confirmations include proper signatures from the recipient. When engaging in oral contracts, parties should document payment terms in writing to avoid disputes over deadlines and interest calculations.

LEGAL REFERENCES

Civil Procedure Law of the People’s Republic of China (2007 Revision), Article 153, Paragraph 1, Item 1.

DISCLAIMER

This article is for informational purposes only and does not constitute legal advice. Readers should consult a qualified attorney for advice regarding their specific circumstances.