CNY 220,150 Unpaid Fabric Debt Upheld on Appeal
A dispute over unpaid fabric payments led to an appellate decision that confirmed the original judgment against a buyer who claimed he was merely an intermediary. The court rejected the argument that the actual purchaser was a third party and ruled that the written receipt and the buyer’s own statements established a direct contractual obligation. The case illustrates how documentary evidence and admissions during court proceedings can determine liability in a sales contract dispute.
The case began in October 2011 when Mr. Jiang Meisheng sued Mr. Wang in a trial court. Mr. Jiang alleged that on November 29, 2005, Mr. Wang purchased 28,900 meters of grey fabric at 13.5 CNY per meter, totaling 390,150 CNY. Mr. Wang paid 170,000 CNY but left a balance of 220,150 CNY unpaid. Despite repeated demands, Mr. Wang refused to pay the remainder. Mr. Jiang sought the outstanding amount plus interest from the date of filing. Mr. Wang admitted writing the receipt but claimed the fabric was actually sold to a third party named Mr. Zhang Weixing, and that he did not know whether Mr. Zhang had paid.
During the trial, Mr. Jiang presented the receipt written by Mr. Wang, which stated: “Received today from Jiang Meisheng 30/2 x 2447 x 5863 grey fabric 66 pieces, total 28,900 meters. Wang, 05.11.29.” The trial court also conducted an investigation interview with Mr. Wang on October 27, 2011. In that interview, Mr. Wang acknowledged a business relationship with Mr. Jiang starting in autumn 2005, confirmed the quantity and unit price of the fabric, and explained that payment was incomplete because of quality issues. Mr. Wang did not provide any evidence within the court-ordered deadline to support his claim that the fabric had defects or that the true buyer was Mr. Zhang.
The trial court found that a valid sales contract existed between Mr. Jiang and Mr. Wang. The court noted that the receipt clearly identified Mr. Wang as the recipient, not an agent for another party. Because Mr. Wang failed to produce evidence of quality problems or a third-party purchaser within the prescribed period, the court rejected his defenses. Relying on the Contract Law of the People’s Republic of China, the trial court ordered Mr. Wang to pay the remaining 220,150 CNY plus interest calculated from the date of filing at the benchmark loan rate set by the People’s Bank of China, and to bear the litigation costs.
On appeal, Mr. Wang argued that the receipt he wrote was only a confirmation of receipt, not an IOU, and that he was merely acting on behalf of Mr. Zhang. He insisted that Mr. Jiang should seek payment from Mr. Zhang instead. The appellate court examined the receipt and the trial court’s interview record. It held that the receipt unambiguously showed Mr. Wang as the person who received the fabric, with no indication of an agency relationship. Moreover, in the trial court interview, Mr. Wang had admitted to a direct purchase relationship with Mr. Jiang. He provided no new evidence on appeal to prove his claim of being a mere intermediary.
The appellate court concluded that the core legal issue was whether Mr. Wang bore personal liability for payment. Under the relevant legal principles, a written receipt that names the recipient as the buyer creates a presumption of a direct contractual relationship. The burden of proof shifts to the person who asserts an agency relationship or a different buyer. Here, Mr. Wang failed to meet that burden. His admission of the transaction details further reinforced his personal liability. Accordingly, the appellate court dismissed the appeal, affirmed the original judgment, and ordered Mr. Wang to pay the second-instance case acceptance fee.
This case serves as a reminder that the language of a written receipt and a party’s own statements can decisively establish liability in a sales contract dispute. The court’s reasoning emphasizes that a party who signs a receipt as the direct recipient will be presumed the buyer unless clear evidence of an agency arrangement is presented. The judgment also underscores the importance of timely submitting evidence, as failure to do so may result in the court disregarding a defense. Parties engaging in commercial transactions should carefully document the roles of all individuals involved to avoid later disputes over who bears responsibility for payment.
Disclaimer: This article is for informational purposes only and does not constitute legal advice.