Court Orders Repayment of CNY 400,000 Loan with Interest
A civil dispute over an unpaid personal loan of CNY 400,000 has been decided by a court in Eastern China City. The plaintiff, Mr. Li, claimed that the defendant, Mr. Wang, borrowed the money for business purposes and then failed to repay it despite repeated demands. The court ruled in favor of Mr. Li, ordering Mr. Wang to return the full principal plus interest calculated from the date the lawsuit was filed. The defendant did not appear in court or present any defense.
The parties were longtime friends. According to Mr. Li, Mr. Wang had borrowed money from him on several occasions over many years, with individual amounts ranging from CNY 50,000 to CNY 100,000. The oldest loan dated back about ten years before the lawsuit. On January 1, 2011, at Mr. Li’s request, Mr. Wang signed and sealed a formal promissory note acknowledging a total debt of CNY 400,000. The note stated that Mr. Wang had received that sum and promised to repay it soon. After issuing the note, Mr. Wang made no payments and avoided contact. Mr. Li then filed a lawsuit asking the court to order repayment of the principal and interest at the bank lending rate from the filing date until full payment, plus legal costs.
The case was accepted by the court on November 24, 2011. Upon the plaintiff’s application, the court issued an order to preserve the defendant’s assets, which was executed. Because the defendant could not be located, the court published a summons and formed a panel of judges. A public hearing was held on March 19, 2012. Mr. Li’s legal representatives attended, but Mr. Wang did not appear and offered no excuse. The plaintiff presented two pieces of evidence: the original promissory note dated January 1, 2011, bearing Mr. Wang’s signature and personal seal, and a household registration certificate from the local police authority confirming Mr. Wang’s identity and address. The defendant’s absence was treated as a waiver of the right to challenge the evidence.
The court found that the evidence was lawfully obtained, complete in form, and relevant to the facts. It accepted the promissory note as proof of the loan. The court determined that the facts asserted by Mr. Li were consistent with the documentary evidence. Under Chinese civil law, lawful loan agreements are protected. The court held that the defendant had borrowed CNY 400,000 and had not repaid it, which was clearly supported by the promissory note. The loan relationship did not violate any legal prohibitions and was therefore valid and enforceable. The defendant’s failure to appear was treated as a voluntary waiver of the right to present a defense, and he was to bear the legal consequences.
The court applied Article 90 and Article 108 of the General Principles of Civil Law, along with relevant judicial interpretations on lending disputes and procedural rules. The key legal point was that a written promissory note containing the borrower’s signature and seal constitutes prima facie evidence of a debt. When the borrower does not contest the document or appear in court, the court may accept the lender’s version of events as true. Interest on the loan was awarded from the date the lawsuit was filed, at the benchmark lending rate set by the People’s Bank of China, because the parties had not agreed on interest terms. The court also imposed a penalty for delayed payment if the defendant failed to comply within the specified period.
The judgment requires Mr. Wang to repay the CNY 400,000 principal to Mr. Li, together with interest calculated from November 24, 2011, to the date of actual payment at the central bank’s benchmark rate. The defendant must complete payment within ten days of the judgment taking effect. Court costs of CNY 9,920 were also assigned to Mr. Wang. The case illustrates how courts in China handle default judgments when a borrower disappears after issuing a promissory note. Lenders are advised to obtain clear written documentation of loans and to act promptly when repayment is not made.
Disclaimer: This article is for informational purposes only and does not constitute legal advice.