Judgment no.193/2019/DS-PT dated august 26, 2019 on dispute over a loan agreement

 THE PEOPLE’S COURT OF BINH DUONG PROVINCE

JUDGMENT NO. 193/2019/DS-PT DATED AUGUST 26, 2019 ON DISPUTE OVER A LOAN AGREEMENT

On July 12, 18 and August 26, 2019, at the headquarters of the People's Court of Binh Duong province, the public appellate hearing of the case No. 145/2019/TLPT-DS is held on March 26, 2019 in the matter of "dispute over a loan agreement".

As the first instance civil judgment No. 67/2018/DS-ST dated November 14, 2018 of the People's Court of Tan Uyen town, Binh Duong province was appealed.

Pursuant to Decision to Bring the Case to Trial No. 140/2019/QDPT-DS dated April 9, 2019, the Decision to adjourn the court hearing No. 117/2019/QD-PT dated May 9, 2019, the Decision to adjourn the court hearing No. 130/2019/QD-PT dated May 31, 2019, Decision to adjourn the court hearing No. 157/2019/QD-PT dated June 25, 2019, Decision to adjourn the court hearing No. 55/2019/QD-TN dated July 18 in 2019; Decision to temporarily suspend the case No. 23/2019/QD-TCC dated August 19, 2019, between the involved parties:

- Petitioner: Ms. Tran Thuy Thien H, born in 1978; address: House No. 24/118, Neighborhood 3, Ward T, Bien Hoa City, Dong Nai Province.

Authorized representative: Mr. Tran Thanh T, born in 1980, address:  No. 163/32, Neighborhood 1, Ward T, Bien Hoa City, Dong Nai Province.  (Letter of authorization dated June 22, 2016).

- Respondent: Mr. Tran Minh N, born in 1956 and Ms. Nguyen Thi M, born in 1958; same address:  Hamlet T, Commune B, Tan Uyen Town, Binh Duong Province;

- Persons with interests and obligations related to the case:

+ Ms. Dinh Thi Thanh D, born in 1972; address:  House number 220/46, Bien Hoa City, Dong Nai Province.

Defender of Ms. D: Mr. Ha Manh T - Law Office Ha Manh T affiliated to the Bar Association of Dong Nai province.

+ Ms. Tran Thi Xuan O, born in 1978.

+ Ms. Tran Thi Diem M, born in 1980.

+ Mr. Tran Minh Quang V, born in 1980.

+ Mr. Tran Quang Th, born in 1981.

+ Ms. Tran Thi Ngoc L, born in 1986.

Same address: Hamlet T, Commune B, Tan Uyen Town, Binh Duong Province.

- Appellant:  Defendants Mr. Tran Minh N and Mrs. Nguyen Thi M appealed the entire judgment.

FACTUAL AND PROCEDURAL BACKGROUND

- Representation of petitioner, Ms. Tran Thuy Thien H:

Due to an acquaintance relationship, Ms. Tran Thuy Thien H loaned Mr. Tran Minh N and Mrs. Nguyen Thi M an amount of VND 2,000,000,000 (two billion VND).  The loan was proved by a Secured Loan Agreement No. 1874, book No. 03/2014-TP/CC-SCC/HDGD dated May 23, 2014, notarized by Uyen Hung Notary Office (now known as Tran Huu Duc Notary Office).  Under this Agreement, Mr. N and Mrs. M borrowed Ms. H an amount of VND 2,000,000,000 without interest for a period of 06 months.  When delivering the money, Mr. N and Mrs. M signed a money receipt on May 23, 2014. In order to secure the loan, Mr. N and Mrs. M mortgaged the land use rights according to the Land Use Right Certificate No. H 01518 issued to Mr. Tran Minh N by the People's Committee of Tan Uyen suburban district (district-level town) on July 14, 2008. After signing the agreement, Ms. H registered the mortgage with the competent authority. Since Mr. N and Mrs. M defaulted on the loan when it was due, Ms. H takes them to court:

- Forcing Mr. Tran Minh N and Mrs. Nguyen Thi M to jointly repay Ms. H the total amount of VND 2,000,000,000 (Two billion VND) borrowed under the Secured Loan Agreement dated May 23, 2014; no interest is required.

- In case Mr. N and Mrs. M fail to repay or fail to repay the debt in full, Ms. H is entitled to request the disposal of the security property which is the land use right of plot 121, map sheet No. 13 located in Bach Dang commune, Tan Uyen town, Binh Duong province (according to the land use right certificate No. AM 461257, book number H01518 issued by the People's Committee of Tan Uyen district (now district-level town) to Mr. Tran Minh N on August 15, 2008) in accordance with Article 8 of the Secured Loan Agreement dated May 23, 2014 between Ms. Tran Thuy Thien H and Mr. Tran Minh N, Mrs. Nguyen Thi M.

At the trial, the petitioner's legal representative still sustains the lawsuit claim and agrees on the measurement and appraisal results of the Court.

- Representation of the defendants, Tran Minh Nghia and Mrs. Nguyen Thi M:

On May 23, 2014, Mr. N and Mrs. M lent Ms. Dinh Thi Thanh D (who is the daughter-in-law of Mr. N's co-parents-in-law) a certificate of land use right.  Because Ms. D said she had financial difficulties, she borrowed Mr. N and Mrs. M's land use right certificate for a period of 06 months.  Considering Ms. D as a relative, Mr. N and Mrs. M agreed to lend Ms. D the original of the Land Use Right Certificate No. AM 461257, the book No. H01518 issued by the People's Committee of Tan Uyen district (now the district-level town) on July 14, 2008 in the name of Mr. Tran Minh N. When Mr. N and Mrs. M lent Ms. D the certificate of land use rights, Ms. D wrote to Mr. N and Mrs. M a "loan paper” dated May 23, 2014 specifying that Ms. D borrowed Mr. N and Mrs. M an amount of VND 2,000,000,000, with a term of 6 months, signed by Ms. D. But in fact, Mr. N and Mrs. M did not lend Ms. D the amount of VND 2,000,000,000 but lent Ms. D the certificate of land use right.  The reason Ms. D wrote a loan paper on May 23, 2014 for Mr. N and Mrs. M was to ensure that Ms. D would return the land use right certificate.

Mr. N, Mrs. M and Ms. H did not know each other, Mr. N and Mrs. M only lent Ms. D the certificate of land use right.  Mr. N and Mrs. M do not borrow money from Ms. H and do not lend money to Ms. D.  Because of their trust, Mr. N and Mrs. M went to the notary office and signed a mortgage contract according to the arrangement of Ms. H and Ms. D.

On the same day, May 23, 2014, Ms. D and Ms. H took Mr. N and Mrs. M to Uyen Hung Notary Office (now Tran Huu Duc Notary Office) to certify "The Secured Loan Agreement" Mr. N and Mrs. M signed a money receipt with the words "Bien Hoa, May 23, 2014" but in fact signed the Agreement was signed at Uyen Hung Notary Office, Tan Uyen town.  Mr. N and Mrs. M do not understand why Ms. H wrote that it was in Bien Hoa (Mr. N and Mrs. M don't remember who wrote the receipt, but it was possibly Ms. H).

Mr. N and Mrs. M did not receive money from Ms. H and did not lend money to Ms. D.  They know nothing about the borrowing relationship between Ms. D and Ms. H. Because Mr. N and Mrs. M did not borrow money from Ms. H, they do not agree to repay Ms. H.

Regarding the money receipt dated May 23, 2014 and the Secured Loan Agreement No. 1874, book No. 03/2014-TP/CC-SCC/HDGD dated May 23, 2014, Mr. N and Mrs. M confirmed that he and she signed these two documents, but when signing them, they did not read the contents of the documents, so they did not know the contents clearly.

- Representation of person with related rights and obligations, Ms. Dinh Thi Thanh D:

Ms. D and Ms. H have had a friend relationship. Around 2013-2014, Ms. D borrowed from Ms. H an amount of VND 2,000,000,000 (two billion VND).  Ms. H asked Mrs. D to “give something as security for the loan”. Then, Ms. D asked to borrow the certificate of land use right from Mr. N and Mrs. M to give it to Ms. H as a pledge.  . H asked Ms. D to write a paper stating that Ms. D received from Mr. N and Mrs. M 2,000,000,000 VND, at the same time, Ms. D also wrote another paper with the content that Mr. N and Mrs. M received from Ms. H the amount of 2,000,000,000 VND.  However, on May 23, 2014, Ms. D did not receive money from Mr. N and Mr. N did not receive money from Ms. H. The amount of 2,000,000,000 VND was borrowed by Ms. H many times before.

When Ms. H sued to ask Mr. N and Mrs. M to return the amount of VND 2,000,000,000, Ms. D determined that Ms. D was the borrower of Ms. H, and Mr. N and Mrs. M had nothing to do with the loan between Ms. D and Ms. H. Therefore, Ms. D proposes the Court to hold that the borrowed money will be repaid by the true borrower and the original of the land use right certificate will be returned to Mr. N and Mrs. M.

- Unanimous representation of the persons with related rights and obligations, Tran Thi Xuan O, Ms. Tran Thi Diem M, Mr. Tran Minh Quang V, Mr. Tran Quang Th and Ms. Tran Thi Ngoc L:

They are the biological children of the defendants, Mr. N, Mrs. M. They agree with the defendants’ statement.  In addition, on land plot 121, map sheet 13 in Bach Dang commune, Tan Uyen town, Binh Duong province, there is currently a level-4 house built by Mr. N, Mrs. M and their children; they are currently living a stable life.  Therefore, they request the Court to settle the case in accordance with the law to protect their interests.  Due to busy work, they have petitioned the Court to settle the case in their absence.

* The first-instance civil judgment No. 67/2018/DS-ST dated November 14, 2018 of the People's Court of Tan Uyen town declares as follows:

1. Accepting the claim of petitioner Ms. Tran Thuy Thien H against defendants Mr. Tran Minh N and Mrs. Nguyen Thi M about the dispute over the loan agreement as below:

1.1 Regarding loan payment obligations:  amount of VND 2,000,000,000 (Two billion VND) which is the loan amount under the Secured Loan Agreement certified by Uyen Hung Notary Office (now Tran Huu Duc Notary Office) No. 1874, volume No. 03/2014-TP/CC-SCC/HDGD dated May 23, 2014 between Ms. Tran Thuy Thien H and Mr. Tran Minh N, Mrs. Nguyen Thi M.

As from the time when the judgment takes legal effect and the judgment creditor files a petition for judgment enforcement, if the judgment debtor has not yet fully repaid, he/she must also pay an interest on the late payment at the interest rate quoted by the State Bank of Vietnam at the time of repayment, corresponding to the late payment period as prescribed in Clause 2, Article 468 of the Civil Code 2015 in Viet Nam until the judgment enforcement is completed.

1.2 Disposition of the collateral: In case Mr. Tran Minh N and Mrs. Nguyen Thi M default on the loan, the petitioner Ms. Tran Thuy Thien H is entitled to request the Sub-Department of Civil Judgment Enforcement of Tan Uyen town to sell the collateral by order of the court in the form agreed upon in Article 11 of the Secured Loan Agreement certified by Uyen Hung Notary Office (now Tran Huu Duc Notary Office) No. 1874, Volume 03/2014- TP/CC-SCC/HDGD dated May 23, 2014 between Ms. Tran Thuy Thien H and Mr. Tran Minh N, Mrs. Nguyen Thi M for the actual land area of 1,743.4m2 in plot No. 121, map sheet No. 13 in Bach Dang commune, Tan Uyen town, Binh Duong province according to the Certificate of land use rights No. H 01518 issued by the People's Committee of Tan Uyen district (now town) to Mr. Tran Minh N on July 14, 2008.

In addition, the first-instance judgment also declared court fees, liability for delayed judgment enforcement and the right to appeal according to regulations.

After the first-instance trial, on November 15, 2018, defendants Mr. Tran Minh N and Mrs. Nguyen Thi M appealed the entire first-instance civil judgment No. 67/2018/DS-ST dated November 14, 2018 of People's Court of Tan Uyen town, requiring cancellation of the judgment and rejecting the petitioner's petition, forcing the petitioner to return to the defendants the land use right certificate No. AM 461257, register No. H01518 issued by the People's Committee of Tan Uyen of district (now town) issued on July 14, 2008 in the name of Mr. Tran Minh N.

At the appellate court hearing, the petitioner still sustains the lawsuit claim; the defendants still sustain their appeal.  The litigants fail to agree on lawsuit settlement.

Opinions of the defender for persons with related rights and obligations, Ms. Dinh Thi Thanh D:

Regarding legal proceedings: At the time of filing the lawsuit, Ms. H was abroad, so pursuant to Clause 3, Article 35 of the Civil Procedure Code 2015 in Viet Nam, the case does not fall under the jurisdiction of the district-level People's Courts. In addition, after the first appellate trial declared an annulment of the first-instance judgment, the district court continued to settle the case. It is considered a serious procedural error. Regarding parties to the case, the Court did not bring the son-in-law and grandchildren of Mr. N and Mrs. M who also live on the land in question to the proceedings, it was an omission of parties to the case; in addition, the Court did not bring the Notary Office to participate in the case. It was a lack of objectivity. With reference to content: The petitioner's representative could not determine when, how much, and where the money was handed over; the first instance court did not clarify these matters, but concluded that the time of money handover was May 23, 2014, it was unfounded.  The first instance court did not investigate to clarify the purpose of the loan without interest; and the collateral at that time was only one third of the value of the loan amount.  It does not make sense that Ms. D acknowledged the debt, but the petitioner did not accept it and simply asked the defendant to repay the debt.  When disposing of the collateral, the efforts of Mr. N's children were not considered. Because of the above inadequacies, it is proposed to quash the first-instance civil judgment of the People's Court of Tan Uyen town.

Opinions of the representative of the People's Procuracy of Binh Duong province:

Regarding legal proceedings: Presiding officers have strictly complied with the Civil Procedure Code at the Court of Appeal. The petitioner; defendant Mr. N; persons with related interests and obligations have exercised their rights and perform their obligations in accordance with the Civil Procedure Code, and the defendant appealed within the time limit prescribed by law.

With reference to content: Pursuant to the Civil Procedure Code and items of evidence taken by the Court, the petitioner, Ms. H, was not present in Vietnam at the time of filing the lawsuit, the People's Court of Tan Uyen town’s acceptance of the case is a violation of jurisdiction rule.  Request the Trial Panel to accept the defendant's appeal, quash the first-instance judgment, and hand the case file over to the People's Court of Tan Uyen town for re-trial according to general procedures. [1] In terms of court procedures:

JUDGEMENT OF THE COURT

On April 22, 2016, the People's Court of Binh Duong province received a lawsuit petition dated April 22, 2016 (case file p.16) filed in person, showing that the petitioner is Ms. Tran Thuy Thien H, address:  24/118 Group 2, Neighborhood 3, Tan Mai Ward, Bien Hoa City, Dong Nai Province, the authorized representative of Ms. H is Mr. Tran Thanh T (letter of authorization, dated 22/02/2016, bearing consular authentication of the Embassy of the Socialist Republic of Vietnam in the United States on March 3rd, 2016 (case file p. 25-31)), signed by Mr. T at the bottom of the petition paper.  On April 26, 2016, the People's Court of Binh Duong province issued Notice No. 05/TB-TA about transferring Ms. H's petition to the Tan Uyen Town Court for settlement according to its jurisdiction (case file p.14). On May 24, 2016, the People's Court of Tan Uyen town issued Notice No. 148/TB-TA requesting Ms. Tran Thuy Thien H to make amendments to the petition. On June 15, 2016, People's Court of Tan Uyen town received a supplementary lawsuit petition dated June 4, 2016 signed by Ms. H, enclosed with a commitment letter dated June 15, 2016 with the content that the petition was signed and sent by Ms. H. from the US (case file p. 5, 6, 7). On July 28, 2016, the People's Court of Tan Uyen town issued a notice on the acceptance of the case.  On August 23, 2016, the People's Court of Tan Uyen town issued a notice on the acceptance of the case (supplementation) (case file p. 44).

In the voluntary statement dated August 11, 2016, the authorized representative of the petitioner, Mr. Tran Thanh T, states that Ms. H is currently traveling to the United States, but Mr. T could not provide a specific address where Ms. H is. (case file p.47).

On July 22, 2019, the People's Court of Binh Duong province issued Official Letter No. 328/TA-DS requesting the provision of entry and exit information of Ms. Tran Thuy Thien H from February 1, 2016 to present.

On July 27, 2019, the Immigration Department of the Ministry of Public Security issued Official Letter No. 2137/QLXNC-P5 replying that from March 26, 2004 to December 28, 2013, Ms. Tran Thuy Thien H has had 06 (six) entry and exit times.  Last exit was August 9, 2014, no entry information.

Comparing the petition, the time of acceptance of the case with the immigration information of Ms. Tran Thuy Thien H, it is grounded to determine that at the time of filing the lawsuit, Ms. H was not present in Vietnam.

Pursuant to Clause 3, Article 33 of the Criminal Procedure Code 2011: “Disputes and petitions prescribed in Clauses 1 and 2 of this Article, which involve parties or properties in foreign countries or which must be judicially entrusted to representative agencies of the Socialist Republic of Vietnam overseas or to foreign courts/competent agencies, shall not fall under the jurisdiction of people's Courts of districts” and
guidance in point d, clause 1, Article 7 of Resolution No. 03/2012/NQ-HDTP in Viet Nam dated December 3, 2012 of the Council of Justices of the Supreme People’s Court on guidelines for certain provision in Part One “General provisions” of the Civil Procedure Code “Involved parties being Vietnamese persons who settle, study or work in Vietnam and are absent from Vietnam at the time the Courts accept the civil cases". Pursuant to the foregoing provision, at the time of filing the lawsuit, Ms. H was no longer in Vietnam.  Thus, at the time of filing the lawsuit and the Court accepting the case, Ms. H was not present in Vietnam, so the case fell under the jurisdiction of the People's Court of Binh Duong province, the People's Court of Tan Uyen town’s acceptance of the case against the above-mentioned provision is deemed a serious procedural error.  Therefore, there are grounds to accept part of the defendant's appeal, quash the first-instance civil judgment of the People's Court of Tan Uyen town, and transfer the file to the People's Court of Tan Uyen town for re-trial according to general procedures.

As the judgment is quashed due to a serious procedural error, the appellate trial panel will not further consider the content of the dispute.

[2] The proposition of the defender for Ms. D is grounded for acceptance.

[3] The opinion of the representative of the Procuracy at the trial is appropriate.

[4] Regarding appellate civil fee: Defendants, Mr. Tran Minh N and Mrs. Nguyen Thi M, are senior citizens, so they are exempt from court fees.

Therefore;

DISPOSITION

Pursuant to Clause 2, Article 148; Clause 3, Article 308, Article 310 and Article 313 of the 2015 Civil Procedure Code;

Pursuant to Resolution No. 326/2016/UBTVQH14 in Viet Nam dated December 30, 2016 of the National Assembly Standing Committee, stipulating the court fees and charges, collection, exemption, reduction, management, and use thereof.

1. Accept partial appeal of the defendants, Mr. Tran Minh N and Mrs. Nguyen Thi M.

2. Quash the first instance civil judgment No. 67/2018/DS-ST dated November 14, 2018 of the People's Court of Tan Uyen town, Binh Duong province.

3. Transfer the case file to the People's Court of Tan Uyen town, Binh Duong province for re-trial of the case according to general procedures.

4. Regarding appellate civil fee: Defendants, Mr. Tran Minh N and Mrs. Nguyen Thi M are exempt from court fees. Refund Mr. N and Mrs. M the amount of VND 600,000 (six hundred thousand dong) of advanced court fee paid according to the receipt No. 0014518, register AA/2016 dated November 20, 2018 of the Sub-department of Civil Judgment Enforcement Tan Uyen town, Binh Duong province.

The appellate judgment takes legal effect from the date of pronouncement