CNY 50,000 Loan Dispute – Guarantors Ordered to Pay

This case involves a financial loan dispute in Eastern China City. A rural credit cooperative filed a lawsuit against a borrower and four guarantors seeking repayment of a 50,000 CNY loan plus accrued interest. The court found in favor of the lender, ordering the borrower to repay the full amount and the guarantors to assume joint liability. The defendants did not appear at trial, leading to a default judgment.

In May 2009, the borrower, Mr. Yang Hongtu, signed a loan agreement with a branch of the credit cooperative. The loan was for 50,000 CNY at a monthly interest rate of 8.85 per thousand, with a maturity date of May 2010. Four individuals, Mr. Yang Hongwu, Mr. Yang Enjie, Mr. Yang Enkuo, and Ms. Zhang Xiufeng, acted as joint guarantors under the contract. The lender disbursed the loan on time, but upon maturity the borrower did not repay either the principal or the interest.

The lender initiated legal proceedings in December 2011, and the court held a public hearing in March 2012. All five defendants were properly served with summons but failed to attend or file any response. The lender presented the loan contract, a loan voucher, and its own statements as evidence. Because the defendants did not appear, the court treated them as having waived their rights to contest the evidence or present a defense.

The court determined that the loan contract was valid and reflected the true intentions of all parties. The borrower had failed to perform his repayment obligations. Accordingly, the court ordered Mr. Yang Hongtu to repay the 50,000 CNY principal plus interest from May 13, 2009, at the agreed monthly rate until full payment. The four guarantors were directed to bear joint and several liability for the entire debt.

The court relied on relevant provisions of the Contract Law and the Guarantee Law. Under the Contract Law, a borrower must repay principal and interest as agreed, and overdue payments trigger additional interest obligations. The Guarantee Law provides that joint guarantors are liable together with the debtor. The court also noted that under civil procedure rules, a defendant who fails to appear after proper summons may be subject to a default judgment, which was applied here.

This judgment reinforces the binding nature of loan contracts and the serious consequences of default. Guarantors should understand that signing as a joint guarantor makes them equally responsible for repayment. The case also demonstrates that courts will proceed with default judgments when defendants do not participate. Lenders should maintain clear documentation and follow proper service procedures to protect their rights.

Disclaimer: This article is for informational purposes only and does not constitute legal advice.