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Copyright © International Chamber of Commerce (ICC). All rights reserved. ( Source of the document: ICC Digital Library )
2016 LC CASE SUMMARIES Civil Judgment (2014) Min Shen Zi No.964; Supreme People’s Court [China]
Abstracted by JIN Saibo and ZHAO Yingfu
Prior History: Xiamen GoldOrigin Guarantee Ltd. v. ZHANG Han, Xiamen Shunanxing Trading Company Ltd., Xiamen Yonghong Trading Company Ltd. Civil Judgment (2012) Min Min Zhong Zi No.674, Fujian High People’s Court [China]
Topics: Joint and Several Liability; Accessory Guarantee
Type of Lawsuit: Creditor sues Debtors and Guarantors.
Parties: Applicant/Appellee/Defendant – ZHANG Han
Respondent/Appellant/Plaintiff – Xiamen GoldOrigin Guarantee Ltd.
Appellee/Co-Defendant/ – Xiamen Shunanxing Trading Company Ltd.
Appellee/Co-Defendant/ – Xiamen Yonghong Trading Company Ltd.
Decision: WANG Youxiang, judge of Supreme People’s Court, rejected the petition of review requested by the applicant.
Rationale: Fujian High People’s Court ruled that the Applicant/Appellee/Defendant ZHANG Han, as a civil subject with full capacity, should have known that his signature signed on the Guaranty Contract may render future legal obligations or consequences. Further, there is no provision in the Guaranty Contract discharging the obligation of ZHANG Han formed after the signing of the Guaranty Contract. The fact that ZHANG Han gave the signed blank Guaranty Contract to GoldOrigin without instructions or later revocation authorized GoldOrigin to dispose its rights thereof. When Shunanxing failed to perform its obligation under the Loan Contract, ZHANG Han should pay one-third of the amount to the extent that Shunanxing failed to perform its obligation.
Article
Factual Summary: The defendant ZHANG Han signed a Guaranty Contract, the contents of which were left blank for future need. Later, GoldOrigin and Shunanxing entered a Loan Contract, covenanting that the former agreed to lend the latter certain sum of money as cash collateral so provided in the Guaranty Contract. GoldOrigin, ZHANG Han ,Yonghong and Shunanxing then filled out the Guaranty Contract in which Shunanxing, Yonghong ZHANG Han provided guaranty for the payment obligation of Yonghong. Then, Shunanxing could not fulfill its guaranty obligation in full amount. GoldOrigin then sued against the guarantors, including ZHANG Han. ZHANG Han claimed that the signature on the Guaranty Contract was faked, or in the alternatives, that the Guaranty Contract was intended for other purposes rather than obligation of guaranty so provided in the Loan Contract.
The trial court and the appeal court ruled in favor of GoldOrigin. ZHANG Han requested review of the case, which was rejected by the Supreme People’s Court of China.
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