Precedent No. 16/2017/AL in Vietnam

Precedent No. 16/2017/AL on the Recognition of a Land Use Rights Transfer Contract as Inheritance Property Transferred by One of the Heirs

Approved by the Judicial Council of the Supreme People's Court of Vietnam on December 14, 2017, and announced according to Decision No. 299/QD-CA dated December 28, 2017 of the Chief Judge of the Supreme People's Court of Vietnam.

Source of the Precedent:

Supervisory decision No. 573/2013/DS-GDT dated December 16, 2013, of the Civil Division of the Supreme People's Court regarding the civil case "Inheritance Dispute" in Vinh Phuc province between the plaintiffs Phung Thi H1, Phung Thi N1, Phung Thi H2, Phung Thi P, and the defendant Phung Van T; involved parties include Phung Thi N2, Phung Thi H3.

Position of the Precedent Content:

Paragraph 2 of the "Court's Considerations" section.

Summary of the Precedent Content:

Incident in Precedent:The inheritance property is real estate that has been transferred by one of the heirs. The other heirs are aware of and do not object to the transfer. The money received from the transfer has been used for the living expenses of the heirs. The transferee has been granted a certificate of land use rights.

Legal Solution:In this situation, the Court must recognize the land use rights transfer contract as lawful, and the transferred land is no longer part of the inheritance property to be divided, but is under the right of use of the transferee.

Relevant Legal Provisions to the Precedent:

Clause 2, Article 170; Article 234; Article 634; Article 697 Civil Code 2005 (equivalent to Clause 2, Article 221; Article 223; Article 612; Article 500 Civil Code 2015).

Keywords of the Precedent:

“Establishing ownership by agreement”; “Inheritance property”; “Inheritance property as real estate”; “Co-heirs”; “Transfer of land use rights”.

CASE CONTENT:

According to the lawsuit petition dated April 2, 2011, and following statements, the plaintiffs Phung Thi H1, Phung Thi N1, Phung Thi P, and Phung Thi H2 presented:

The plaintiffs' parents, Phung Van N and Phung Thi G, had 6 children: Phung Thi N1, Phung Thi N2, Phung Thi H2, Phung Van T, Phung Thi P, and Phung Thi H1.

The shared property of Phung Van N and Phung Thi G includes a grade 4 house and auxiliary works on a land area of 398 square meters at zone L, ward M, city N, Vinh Phuc province, sourced from ancestral land. Phung Van N passed away on July 7, 1984, (without leaving a will) and Phung Thi G and Phung Van T managed and used the property. In 1991, Phung Thi G transferred 131 square meters of this land to Phung Van K, leaving 267 square meters. In 1999, Phung Thi G was granted a land use rights certificate. She intended to give part of the land to Phung Thi H1 for building a house due to her circumstances of marrying far away and becoming widowed, but since Phung Van T held the land use rights certificate, she could not separate the land for Phung Thi H1. Therefore, Phung Thi H1 filed a lawsuit demanding Phung Van T return the certificate to Phung Thi G. The court ruled that Phung Van T must return the certificate to Phung Thi G, but he did not comply. Consequently, in March 2010, Phung Thi G made a will leaving 90 square meters of land and all trees and yields on the land to Phung Thi H1. The will was witnessed, made when Phung Thi G was of sound mind and body, and certified by the People's Committee of ward M. The entire 398 square meters was considered to belong to Phung Thi G as she had full rights after Phung Van N's death.

Phung Thi G passed away on December 19, 2010. Her entire estate has since been managed by Phung Van T and his spouse. The plaintiffs now request the court to distribute the inheritance according to Phung Thi G's will, granting 90 square meters to Phung Thi H1, and dividing the remaining 177 square meters legally among the heirs, with Phung Thi N1, Phung Thi P, and Phung Thi H2 renouncing their portions in favor of Phung Thi H1. They do not request the court to resolve other assets like the trees and additional agricultural land left by Phung Thi G.

Defendant Phung Van T, represented by his wife Phung Thi H3, acknowledged the relationship and estate but contended that all construction on the land was done by his family in 1997. He disagreed with distributing the inheritance, claiming only son status and the responsibility of maintaining ancestral worship. He acknowledged additional agricultural land but did not request inheritance division for it.

Interested party Phung Thi N2 confirmed family relationships and estate details as presented by plaintiffs but opposed the inheritance division, supporting that Phung Van T should retain the land for ancestral worship.

The trial at the city court initially ruled partially in favor of Phung Thi H1, awarding her monetary compensation for a portion of the land but dismissing the rest of the plaintiffs' inheritance claims. The plaintiffs appealed.

The appellate court ruled to divide the estate among all heirs and awarded land to Phung Van T with the requirement to compensate Phung Thi H1 monetarily.

Following appeals by Phung Van T and Phung Thi H3, and further review by the Supreme People's Procuratorate, the appellate decisions were upheld, noting proper exclusion of previously sold land and partial estate distribution.

During the Supervisory trial, the Supreme People's Court concluded that inheritance from both parents was appropriately addressed, and the land managed by Phung Van T should remain under his control, dismissing claims for further division among the heirs.

The supervising decision articulated that the estate division included only valid inheritance without further review of previously settled portions.

COURT ASSESSMENT:

[1] Based on the documents in the case file, the 398m2 of land located in L Neighborhood, M Ward, N City, Vinh Phuc province  was originally the joint marital property of Phung Van N and Phung Thi G. Phung Van N and Phung Thi G had six children together: Phung Thi H1, Phung Thi N1, Phung Thi H2, Phung Van T, Phung Thi P, and Phung Thi N2. Phung Van N passed away on July 7, 1984, without leaving a will. Phung Thi G and Phung Van T managed and used the property since then.

[2] In 1991, Phung Thi G transferred 131m2 of land out of the total 398m2 of the parcel to Phung Van K. The remaining area of the parcel was 267.4m2. In 1999, Phung Thi G was issued a land use right certificate for the 267.4m2. Phung Thi G and the couple Phung Van T continued to manage and use this property. All of Phung Thi G's children were aware of her transferring the land to Phung Van K and did not express any objections. They testified that Phung Thi G sold the land to support her life and her children. Currently, Phung Van K has also been issued a state land use right certificate. Therefore, it is established that Phung Thi G's children consented to her transferring the 131m2 of land to Phung Van K. The appellate court's decision not to include the land transferred to Phung Van K in the asset division is valid. However, the lower court's determination that the total inheritance included the entire 398m2 (including the portion sold to Phung Van K) for division is incorrect.

[3] On December 19, 2010, Phung Thi G passed away, leaving a will dated March 5, 2009, bequeathing 90m2 of the 267m2 to Phung Thi H1 (G's daughter). The will was notarized by the People's Committee of Phường M on March 7, 2009. Despite the will being created and notarized on different dates, the People's Committee's opinion and testimonies of the witnesses confirmed that Phung Thi G created the will while lucid and its content reflected her wishes. Therefore, the two-level courts' acceptance of the will is logical and reasonable.

[4] However, although the 267m2 of land was under Phung Thi G's name, it was acquired during her marriage and thus must be considered joint marital property of Phung Van N and Phung Thi G, not yet divided. Therefore, Phung Thi G only had the right to dispose of 1/2 of the 267m2 of marital property. The portion of her estate left is 1/2 of the property (133.5m2), with 90m2 bequeathed to Phung Thi H1 according to the will, and the remaining 43.5m2 divided among the remaining five portions (with Phung Thi N2 ceding her share to Phung Van T, and Phung Thi H2, Phung Thi N1, and Phung Thi P ceding their shares to Phung Thi H1). As for the 1/2 of the 267m2 shared marital property portion of Phung Van N’s estate, the inheritance division term has expired, and Phung Van T, one of the heirs, does not agree to division. According to subsection 2.4, section 2, part I of Resolution No. 02/2004/NQ-HDTP dated August 10, 2004, of the Judicial Council of the Supreme People's Court, conditions do not allow for division of common property. Hence, those currently managing and using this part of the land shall continue to do so.

[5] The appellate court’s determination that the entire 267m2 of land was Phung Thi G's estate to be divided according to the will (90m2 to Phung Thi H1) and the remaining 177.4m2 to be divided equally among 5 heirs is incorrect.

[6] Additionally, although Phung Van T did not appeal, the court ordered him to bear 200,000 VND in appellate court fees. Phung Thi N1, Phung Thi H2, and Phung Thi P voluntarily ceded their shares to Phung Thi H1 and this was accepted by the court; Phung Thi H1, as a poor household, is exempt from all court fees. However, the appellate court did not order the return of the advance court fees to Phung Thi N1, Phung Thi H2, and Phung Thi P, contrary to the provisions. Therefore, the petition by the head of the Supreme People's Procuracy is grounded and should be accepted.

Based on the above reasons, under clauses 2 of Article 291, clause 3 of Article 297, and Article 299 of the Civil Procedure Code;

DECISION:

Annul the entire Appellate Civil Judgment No. 06/2012/DSPT dated February 23, 2012, of the Vinh Phuc Provincial People's Court and the First Instance Civil Judgment No. 11/2011/DS-ST dated October 4, 2011, of the Vinh Yen City People's Court, Vinh Phuc Province in the case “Inheritance dispute” between the plaintiffs Phung Thi H1, Phung Thi N1, Phung Thi H2, Phung Thi P and the defendant Phung Van T and the persons with related rights and obligations, including Phung Thi N2 and Phung Thi H3.

Transfer the case file to the Vinh Yen City People's Court, Vinh Phuc Province for retrial in accordance with the law.

PRECEDENT SUMMARY

" [2] In 1991, Phung Thi G transferred to Phung Van K 131m2 portion of the total 398m2 parcel; the remaining area of the parcel was 267.4m2. In 1999, Phung Thi G was issued a land use right certificate for 267.4m2. Phung Thi G and the couple Phung Van T continued to manage and use the property. All of Phung Thi G's children were aware of the transfer to Phung Van K and did not object. They testified that Phung Thi G sold the land to support her life and her children. Currently, Phung Van K has also been issued a state land use right certificate. Therefore, it is established that Phung Thi G's children consented to her transferring the 131m2 of land to Phung Van K. The appellate court's decision not to include the land transferred to Phung Van K in the asset division is valid. However, the lower court's determination that the total inheritance included the entire 398m2 (including the portion sold to Phung Van K) for division Is incorrect.*

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