Chen Xiaoling (pseudonym) and Zhang Wenxin (pseudonym) got married in 1993. In March 1997, the couple purchased their own house, and the owner registered on the house ownership certificate was Chen Xiaoling. In 2001, Zhang Wenxin borrowed 70,000 yuan from a credit union for running a restaurant and could not repay it when it expired. He asked to renew the loan, and the credit union asked for a mortgage guarantee. Zhang Wenxin used his wife Chen Xiaoling's real estate certificate as a mortgage. After the loan expired, Zhang Wenxin still could not repay the loan. The credit union filed a lawsuit in the district court, requesting Zhang to repay the principal and interest of the loan and offset it with the real estate.
The district court ruled in accordance with the law on October 17, 2003: (1) The defendants Zhang Wenxin and Chen Xiaoling shall repay the plaintiff 70,000 yuan and interest before December 25, 2004. The interest shall be calculated in accordance with the relevant regulations of the People's Bank of China. (2) If the loan is overdue, the plaintiff has the right to discount or auction the property mortgaged by Chen Xiaoling, and receive priority after the sale. The case acceptance fees shall be borne jointly by the defendants Zhang Wenxin and Chen Xiaoling. After the judgment was delivered, neither party appealed.
During the execution process, Chen Xiaoling submitted a retrial application to the district court on August 20, 2005, requesting that the first-instance judgment be revoked, that the case be retried in accordance with the law, and that the real estate mortgage contract be confirmed to be invalid. After review, the district court decided to open the case for retrial.
During the retrial process, Chen Xiaoling claimed that the facts determined in the original judgment were wrong. The credit union had not seen the applicant Chen Xiaoling, nor had it seen the applicant’s authorization. The real estate certificate held by Zhang Wenxin was for husband and wife* **For the same property, a mortgage loan contract should be concluded with the consent of the applicant. A mortgage contract without his permission and consent violates the applicant's legal rights. Therefore, the mortgage contract is an invalid contract.
The credit union argued: The original trial procedure was legal, and the legal documents served by the court were signed and received by Zhang Wenxin, the applicant’s husband, as required. The original judgment found that the facts were clear and the mortgaged property was the joint property of the couple. The borrowers of the contract were also signed and sealed by Zhang Wenxin and Chen Xiaoling. The credit union had every reason to believe that Zhang Wenxin could handle the matter on behalf of the applicant. Zhang Wenxin’s behavior was an apparent agency according to the provisions of the Contract Law, and Chen Xiaoling should bear the legal consequences.
Zhang Wenxin argued that he handled the loan at the credit union in person, that he took Chen Xiaoling’s real estate certificate and ID card without Chen’s knowledge, and that the loan mortgage procedures were also handled without Chen’s knowledge. He bears all the responsibility and has nothing to do with Chen, and is required to repay the loan in installments.
After re-examination, the District Court confirmed the facts: Zhang Wenxin stole the real estate certificate and ID card without the knowledge of his wife, Chen Xiaoling, and asked the cafeteria waiter Li Hongyan (pseudonym) to impersonate his wife, Chen Xiaoling. The two went to the credit union to re-apply for a 70,000 yuan mortgage loan contract. Wherever Chen Xiaoling needed to sign, all the signatures were signed by Li Hongyan. During the entire loan mortgage process, Chen Xiaoling did not go to the credit union or the real estate department to handle any procedures at all. Then a judgment was made on September 15, 2007: (1) The defendant Zhang Wenxin should repay the credit union loan of 70,000 yuan and interest; (2) The original judgment that Chen Xiaoling should repay the plaintiff 70,000 yuan and interest was revoked; (3) The real estate mortgage was cancelled. Guarantee contract.
After the judgment was delivered, the credit union appealed, arguing that it was impossible for the appellant to prevent and judge whether the person who signed the mortgage contract was Chen Xiaoling herself. The reason for this result was that Zhang Wenxin deliberately concealed the truth and found someone to sign for him, which led to the appellant being deceived. The appellant was not at fault, and the mortgage contract signed by Zhang Wenxin fully complied with the apparent agency regulations. Therefore, the mortgage contract should be valid, and the appellees Chen Xiaoling and Zhang Wenxin should bear the responsibility for mortgage guarantee. The credit union requested that the retrial judgment be revoked in accordance with the law and the first instance judgment be upheld.
The Intermediate Court held that the appellant’s credit union, as a lender, was obliged to conduct strict examinations in accordance with the relevant loan procedures when signing the loan contract and mortgage contract. It only relied on the real estate certificate submitted by Zhang Wenxin and Chen Xiaoling’s ID card. , the appellant seriously violated the relevant provisions of the Contract Law and the Security Law by signing a loan contract and a mortgage contract with the appellee.
It argued that Zhang Wenxin’s agency was an apparent agency because Chen Xiaoling’s signature was an impersonation of someone outside the scope of the apparent agency relationship, which did not meet the requirements for apparent agency and could not be established. The loan contract signed between it and Zhang Wenxin involved Chen Xiaoling's part is invalid. The verdict was: the appeal was dismissed and the retrial judgment was upheld.