Cassation judgment No. 17/2008/DS-GDT dated July 28, 2008 on the case of request for cancellation of house purchase contract

THE SUPREME PEOPLE’S COURT

CASSATION JUDGMENT NO. 17/2008/DS-GDT DATED July 28, 2008 ON THE CASE OF REQUEST FOR CANCELLATION OF HOUSE PURCHASE CONTRACT 

On July 28, 2008, at the office of the Supreme People's Court, the cassation review trial was opened to hear the case "Request for cancellation of house purchase contract" between the litigants:

Plaintiff:  Mrs. Huynh Thi Le, born in 1929; residing at No. 23 Tan Vien Street, Phuoc Hoa Ward, Nha Trang City, Khanh Hoa Province, represented by Mrs. Do Thi Ngoc Mai, born in 1973; residing at 47B Nguyen Thien Thuat Street, Nha Trang City, Khanh Hoa Province.

Respondent:  Mr. Dang Huu Tron, born in 1958 and his wife Mrs. Nguyen Thi My Nga, born in 1958; both residing at 23 Tan Vien Street, Phuoc Hoa Ward, Nha Trang City, Khanh Hoa Province.

Persons with related interests and obligations:

1. Mr. Tu Kim Phong, born in 1958;

2. Mrs. Tu Thi Mong Lanh, born in 1961;

Both residing at 23 Tan Vien Street, Phuoc Hoa Ward, Nha Trang City, Khanh Hoa Province.

3. Mr. Tu Ngoc Hiep;

4. Mr. Tu Huu Tam;

5. Mrs. Tu Thi My Van;

6. Mrs. Tu Thi Thanh Thien;

7. Mrs. Tu Thi Thanh Phuc.

all residing in Australia; presented by Mr. Nguyen Noi, residing at 8 Ngo Duc Ke, Nha Trang City, Khanh Hoa Province.

FINDING THAT

Representation of the plaintiff Mrs. Huynh Thi Le (represented by Ms. Do Thi Ngoc Mai as authorized representative) in the petition filed on May 5, 2004 and in the course of proceedings:

Mr. Tu Ngoc Diem (died in 1969) and Mrs. Huynh Thi Le built a house number 23 Tan Vien Street, Phuoc Hoa Ward, Nha Trang City, Khanh Hoa Province (area of ​​115.50 m², land area 185, 60m²); they have seven children: Tu Kim Phong, Tu Thi Mong Lanh (both in Vietnam); Tu Ngoc Hiep, Tu Huu Tam, Tu Thi My Van, Tu Thi Thanh Thien, Tu Thi Thanh Phuc (all settling in Australia).

On August 22 1996, Mr Le and his two children in Vietnam: Mr. Long and Mrs Lanh, sold a part of the house 23 Tan Vien (89.02 m² of house area and ​​129.05 m² of land area) to the married couple Mr. Dang Huu Tron and Mrs. Nguyen Thi My Nga for 264 maces of gold; Mr. Le received 214 maces gold and borrowed extra 10 maces of gold from the couple, now, Mr.  Le wishes to cancel the house purchase contract because her five children abroad do not agree to sell the house but keep it for worship and she would like to be fined twice the amount of gold that she received from Mr. Tron and Mrs. Nga.

Representation of Mr. Dang Huu Tron and Mrs. Nguyen Thi My Nga:

On August 22, 1996, they bought a part of the house 23 Tan Vien from Mrs. Le, Mr Phong and Mrs. Lanh 23 for 264 maces of gold; they paid Mrs. Le 214 maces of gold and Mrs. Le used that amount of gold to buy another house; at the beginning of 1997, she paid Mrs. Le an extra 10 maces of gold; thus Mrs. Le received 224/264 maces of gold, not only 214 maces of gold as Mrs. Le presented; they received the house and then have had it repaired and have stayed there since then. Now, Mrs. Le wishes to cancel the house purchase contract and would like to be fined twice the amount of gold received, they refuse it; they request Mrs. Le and Mr. Phong, Mrs. Lanh to keep abiding by the house purchase contract.

The persons with related rights and obligations: Mr. Tu Kim Phong and Mrs. Tu Thi Mong Lanh (two children of Mrs. Le in Vietnam) recognize that Mrs. Le and they signed a contract to sell the house at 23 Tan Vien to Mr. Tron and Mrs. Nga on August 22, 1996; now if Mrs. Le does not agree to sell anymore and cancel the house purchase contract, they mutually agree with such request of Mrs. Le.

Persons with related rights and obligations: Mr./Mrs. Tu Ngoc Hiep, Tu Huu Tam, Tu Thi My Van, Tu Thi Thanh Thien, Tu Thi Thanh Phuc (all settling in Australia, represented by Mr. Nguyen Noi) indicate that the purchase is unlawful because the property is an inheritance property that has not been distributed; and request the cancellation of the above contract.

In the First Instance Civil Judgment No. 11/DSST dated August 31, 2004, the People’s Court of Khanh Hoa province judged:

1. Reject the plaintiff’s request, compelling Mrs. Huynh Thi Le, Mrs. Tu Thi Mong Lanh and Mr. Tu Kim Phong to continue to fulfill the obligations committed in "the agreement on the giving of money and sale of the house 23 Tan Vien, Phuoc Hoa", made on August 22, 1996 and notarized and to transfer partial ownership of the house 23 Tan Vien, Phuoc Hoa, Nha Trang to the married couple: Mr. Dang Huu and Mrs. Nguyen Thi My Nga in accordance with the law (with attached diagram).

2. Compel Mr. Dang Huu Tron and Mrs. Nguyen Thi My Nga to pay the outstanding amount of VND 195,640,000 to Mrs. Huynh Thi Le, Tu Thi Mong Lanh and Mr. Tu Kim Phong.

Temporarily leave the part of the house and land at 23 Tan Vien-Phuoc Hoa-Nha Trang to Mr. Trong and Mrs. Nga for continued management. including a construction area of ​​89.02m² and land area of ​​129.05m² until the competent authority grants the certificate of land use right and property on land.

3. The litigants shall complete paperwork to transfer the ownership concerning their part of house and land as per the law.

In addition, the Court of First Instance decided the court fee.

On September 6, 2004, Mr. Le, Mr. Phong and Mrs. Lanh filed an appeal, requesting the cancellation of the house sale contract between Mrs. Le and the married couple Mr. Tron and Mrs Nga.

On September 7, 2004, Mr. Nguyen Noi (representing Mr. Hiep, Mr. Tam, Mrs. Van, Mrs. Thien and Mrs. Phuc) filed an appeal, requesting the cancellation of the house purchase agreement between Mr. Le and the married couple Mr. Tron and Mrs. Nga.

On September 12, 2004, Mr. Tron and Mrs. Nga filed an appeal claiming that since 1996, they had paid nearly enough money to buy the house, so they only agree to pay the outstanding amount of VND 195,640,000 under the contract with Mrs. Le, Mr. Phong and Mrs. Lanh but they do not agree to return the house and ask for a reduction in court fees.

In the Appellate Civil Judgment No. 15/2005/DSPT dated March 17, 2005, the Appellate Court of the Supreme People’s Court in Da Nang judged:

I/ Pursuant to Clause 1 Article 276 of the Civil Procedure Code

Wholly revise the First Instance Judgment.

II/ Pursuant to Clause 2 of Article 379; Clauses 3 and 4 of Article 419; Article 445 of the Civil Code.

Declare: canceling the agreement on sale of a part of the house at 23 Tan Vien, Phuoc Hoa, Nha Trang City between Mrs. Huynh Thi Le, Mrs. Tu Thi Mong Lanh and Mr. Tu Kim Phong and Mr. Dang Huu Tron and Mrs. Nguyen Thi My Nga, established on August 22, 1996.

Judges:

1. Compelling Mrs. Huynh Thi Le, Mrs. Tu Thi Mong Lanh, Mr. Tu Kim Phong to reimburse the amount of VND 499,352,000 to the married couple Mr. Dang Huu Tron and Mrs. Nguyen Thi Nga.2. Compelling Mr. Dang Huu Tron and Mrs. Nguyen Thi My Nga to return the whole area of ​​the house and land (​​89.02 m2 of house area, ​​129.05 m2 of land area) under management and use of Mr. Tron and Mrs. Nga at 23 Tan Vien, Phuoc Hoa, Nha Trang City to Mrs. Huynh Thi Le, Mrs. Tu Thi Mong Lanh and Mr. Tu Kim Phong.

In addition, the Court of Appeal also decided the court fee.

After the appellate trial, Mr. Tron and Mrs Nga filed a complaint, claiming that the Court of Appeal did not adjudicate the case as per the law causing damage to them; therefore, they request the Chief Justice of the Supreme People's Court to lodge an appeal to quash the above-mentioned Appellate Judgment and uphold the First Instance Judgment No. 11/DSST dated August 31, 2004 of the People's Court of Khanh Hoa Province.

In the Decision No. 47/2008/KN-DS dated March 17, 2008, the Chief Justice of the Supreme People’s Court appealed the above Appellate Civil Judgment and requested the Council of Judges of the Supreme People’s Court to hear the case under cassation review, quash the above Appellate Judgment and quash the First Instance Judgment No. 11/DSST dated August 31, 2004 of People’s Court of Khanh Hoa province; refer the case file to the People’s Court of Khanh Hoa province for first instance re-trial as per the law, with the following judgment:

“"Based on the documents and evidence in the case file, there are sufficient grounds to determine that Mr. Tu Ngoc Diem and Mrs. Huynh Thi Le are the owner of the house at 23 Tan Vien with ​​115.50 m2 of house area and 185, 60m2 of land area.  Mr. Diem died in 1969 leaving no will.  On August 22, 1996, Mrs. Le and Le's two children in Vietnam (Mr. Phong and Mrs. Lanh) agreed to sell a part of house and land at 23 Tan Vien to Mr. Tron and Mrs. Nga for 264 maces of gold; both sides agreed that the seller must collect the signatures of Mrs. Le’s five children as their consent to sell the house; if there is a change in opinion or any dispute that affect the sale paperwork or failure to collect the signatures of the above five persons as their consent to sell the house, the seller will be fined 3 times of the amount of gold received (The written agreement was notarized by the Public Notary).  Thus, Mrs. Le and two children in Vietnam sold the house without the consent of five other children overseas.

However, the property is the common property of Mrs. Le and Mr. Diem; because Mr. Diem died, a half of the property belongs to Mrs. Le; the other half of the property is the inheritance of Mr. Diem; 7 children of Mrs. Le and Mr. Diem will inherit the half of the property (each inherits 1/16 of house and land).  Thus, Mrs. Le and Mrs. Le's two children in Vietnam are entitled to ownership and inheritance for 11/16 of the house and land and only sold a part of the house and land to Mr. Tron and Mrs. Nga. The house and land has been sold since 1996, the seller has received 22.4 taels of gold (224 maces of gold) and handed over the house to the buyer, the buyer also has had the house repaired and stayed there for nearly 10 years.  The Court of First Instance determined that Mrs. Le and two children have the right to dispose of is 79,406 m2 of house area and 127,60 m2 of land area, but they disposed of 89.02 m2 of house area and 129.05 m2 of land area (only exceeding the disposal right to 9.62m2 of land area and 1.45m2 of land area), from which the Court decided that the seller has to continue executing the contract. This determination has insufficient grounds; because:  The Court of First Instance did not take evidence to clarify if the sale of a part of the house or land affects the use of the remaining part of the house as the inheritance of the five children of Mrs. Le abroad.  The Court of Appeal also did not clarify above issue but determine that the contract of house and land purchase between Mrs. Le and Mrs. Le's two children in Vietnam with Mr. Tron and Mrs. Nga is null and void. This determination also has insufficient grounds.

Only in the case of Mrs. Le and two children in Vietnam disposal of the part of the property affects the interests and the remaining use of the rest five children of Mrs. Le abroad, the house purchase contract is considered null and void.  In this case, because the seller, bound to the contract, committed to pay a fine of 3 times the amount of gold received if they fails to collect the signatures of the five children of Mrs. Le abroad as their consent to sell the house, and in fact the buyer has paid in gold so the seller has to return to the buyer three times the amount of gold received (cannot convert this amount of gold into cash when resolving the case)”.

At the cassation trial, the representative of the People’s Supreme Procuracy requested the Council of Judges of the Supreme People’s Court to accept the appeal made by the Chief Justice of the Supreme People’s Court, quash the Appellate Judgment No. 15 dated March 17, 2005 of Appellate Court of Supreme People’s Court of Da Nang; refer the case file to the Appellate Court of People’s Court of Da Nang Province for appellate re-trial as per the law.

CONSIDERING THAT

According to the documents and evidence in the case file, there are sufficient grounds to determine that the house number 23 Tan Vien Street, Phuoc Hoa ward, Nha Trang City, Khanh Hoa Province with 115, 50 m2 of house area and 185.60 m2 of land area is under ownership of Mr. Tu Ngoc Diem and Mrs. Huynh Thi Le.  In 1969, Diem died leaving no testament, so Mrs. Le and seven children are entitled to inherit the legacy of Mr. Diem.

On August 22, 1996, Mrs. Le and Le's two children in Vietnam (Mr. Phong and Mrs. Lanh) agreed to sell a part of house and land at 23 Tan Vien to Mr. Dang Huu Tron and Mrs. Nguyen Thi My Nga for 264 maces of gold, Mrs. Le received 214 maces of gold; both sides agreed that the seller must collect the signatures of Mrs. Le’s five children as their consent to sell the house; if there is a change in opinion or any dispute that affect the sale paperwork or failure to collect the signatures of the above five persons as their consent to sell the house, the seller will be fined 3 times of the amount of gold received (The written agreement was notarized by the Public Notary on August 22, 1996). On January 16, 1997 Mrs. Le received extra 10 maces of gold and handed over the house to Mr. Tron and his wife. Thus, this is a conditional contract.  In fact, Mrs. Le and his children did not get the signatures of five overseas heirs as their consent to sell the house, so the house sale contract cannot be executed because the seller (Mr. Mrs. Le, Mr. Phong, Ms. Lanh) broke the contract.

The Court of First Instance should have cancelled the house purchase contract, have forced the seller to comply with the agreement to compensate for three times the amount of gold received to the buyer (22.4 taels x 3 = 67.2 taels of gold) and pay for repair expense to the buyer; however, the Court of First Instance recognized the sale contract and forced Mr. Tron and Mrs. Nga to pay the outstanding amount of VND 195,640,000 to Mrs. Le, Mr. Phong and Mrs. Lanh. This judgment has no substantial grounds because the part of inheritance has not been distributed and the 5 heirs overseas do not agree to sell the house.  The Court of Appeal was right when canceling the house purchase contract and forcing the seller to pay for repairs expense and compensating for 3 times of the amount of gold received, but it was wrong when determining that the amount of gold received is 21.4 taels of gold (while in fact Mrs. Le received 22.4 taels of gold from the buyer) and converting this amount of gold in cash during the first instance hearing to force the seller to pay cash to the buyer is contrary to the sale contract entered into by two parties on August 22, 1996.

Therefore, it is necessary to cancel the Appellate Judgment for appellate re-trial in the direction of canceling the house purchase contract; forcing the seller to compensate the buyer for three times the amount of gold received (22.4 taels of gold x 3 = 67.2 taels),  and payment for house repair and consider the court fees as per the law.

According to facts and matters, pursuant to Clause 3 Article 291 and Clause 3 of Article 297 of the Civil Procedure Code;

HEREBY DECIDES

1. Quash the Appellate Civil Judgment No. 15 dated March 17, 2005 of the Court of Appeal of the Supreme People's Court in Da Nang regarding the case "Request for cancellation of house purchase contract" between the plaintiff Mrs. Huynh Thi Le and the defendant Mr. Dang Huu Tron, Mrs. Nguyen Thi My Nga; the persons with related rights and obligations Mr. Tu Kim Phong, Tu Thi Mong Lanh, Tu Ngoc Hiep, Tu Huu Tam, Tu Thi My Van, Tu Thi Thanh Thien, Tu Thi Thanh Phuc.

2. Transfer the case file to the Court of Appeal of the Supreme People's Court in Da Nang for appellate re-trial in accordance with the provisions of law.

The reasons for the appeal being quashed:

The Court of Appeal is right when canceling the house purchase contract but it has determined the amount of compensation for the buyer incorrectly.