CNY 4 Million Loan Dispute – Couple Held Jointly Liable
In this case, Mr. Hong filed a lawsuit against Mr. Sun and his spouse, Ms. Wu, seeking repayment of a loan of CNY 4 million. The loan was made in late June 2011 and was due by July 2, 2011. Mr. Sun failed to repay on time, prompting Mr. Hong to demand payment from both Mr. Sun and Ms. Wu, arguing that the debt was a marital obligation. The court ultimately ruled in favor of Mr. Hong, ordering both defendants to repay the principal plus interest.
The facts show that Mr. Sun borrowed CNY 4 million from Mr. Hong between June 27 and June 29, 2011. He issued a single promissory note acknowledging the debt and promising repayment by July 2, 2011. At Mr. Sun’s request, Mr. Hong transferred the funds to two third parties: CNY 1 million to Mr. Wang on June 27, and CNY 2 million to Mr. Ren on June 29. Mr. Sun confirmed receipt of the funds, signed the note with two dates matching the transfers, and delivered it to Mr. Hong. Mr. Sun later failed to repay. The loan was made during the marriage of Mr. Sun and Ms. Wu, who were married on November 21, 2006.
During the hearing, Mr. Hong presented three key pieces of evidence: the original promissory note signed by Mr. Sun, five bank transfer records showing the payments to Mr. Wang and Mr. Ren, and a marriage certificate for the two defendants. Mr. Sun’s representative challenged the authenticity of the loan, claiming that the note was only a copy and that no actual delivery of funds occurred. The court, however, found Mr. Hong’s evidence to be genuine, relevant, and admissible. Ms. Wu did not appear in court and did not submit any defense, waiving her right to contest the evidence.
The court held that the loan agreement between Mr. Hong and Mr. Sun was legally valid and enforceable. Because Mr. Sun did not repay the principal by the agreed date, he was liable for the debt and for interest calculated from July 3, 2011 at a rate of 5.08 per thousand per month (as revised by Mr. Hong). The court further found that the loan was incurred during the marriage and that Mr. Sun’s work involved real estate and investment activities. Since Mr. Sun produced no evidence to show the debt was his personal obligation, the court determined the loan was used for the family’s joint business operations and therefore constituted a marital debt. As a result, Ms. Wu was jointly liable.
According to relevant law, a promissory note in a private lending arrangement serves as proof of both the existence of the loan and the delivery of funds. The court rejected Mr. Sun’s argument that the note was unenforceable because the loan was never executed. The evidence showed that Mr. Sun handed over the signed note to Mr. Hong, which confirmed his acknowledgment of receiving the borrowed amount. The bank transfer records further corroborated the actual delivery. Under the Marriage Law and its judicial interpretation, debts incurred during a marriage for the benefit of the family or joint business are presumed to be joint debts unless proven otherwise. Mr. Sun failed to rebut that presumption.
The court ordered Mr. Sun and Ms. Wu to repay the full principal of CNY 4 million, together with interest at 5.08 per thousand per month from July 3, 2011 until the date of full payment, within ten days of the judgment taking effect. If they fail to pay on time, additional interest for delayed performance applies. This case illustrates the importance of clear loan documentation and the potential for spousal liability when a debt arises during marriage in connection with family business activities. Parties should be aware that courts will enforce joint liability unless the borrower can prove the debt was solely personal.
Disclaimer: This article is for informational purposes only and does not constitute legal advice.