Lawyers, law popularization, mortgage contract, without mortgage registration, should the mortgagor

Lawyers, law popularization, mortgage contract, without mortgage registration, should the mortgagor bear responsibility?

Basic Case

Mr. Zhang and Mr. Bai issued a loan slip to Mr. Wen on June 12, 2012, which stated: "The amount of cash borrowed from Mr. Wen today is one hundred thousand yuan, and the loan period is one month. The borrower: Mr. Zhang and Mr. Bai, June 12, 2012", borrowed 100000 yuan. At the same time, Zhang noted on the IOU that "this amount is guaranteed by my friend Zhu in XX Town No. X, X County". Zhu signed "Agree to guarantee, Zhu June 12, 2012" below the note, but the two parties did not handle the registration of real estate mortgage, and Zhu delivered his real estate certificate to Wen.

After the loan was due, Zhang and Bai failed to repay the loan, and Wen repeatedly demanded payment without success. On March 22, 2014, Mr. Zhu signed on the IOU "Agree to continue to guarantee. Mr. Zhu signed on March 22, 2014". Since then, Zhang and Bai have repeatedly urged for the loan, and only paid the interest of 2000 yuan at the monthly interest rate of 2 cents agreed by both parties orally. Therefore, the plaintiff filed a lawsuit and requested the people's court to order the defendants Zhang and Bai to repay the principal of the loan of 100,000 yuan and the interest of 32,000 yuan (calculated according to the monthly interest of 2 cents agreed orally by both parties at the time of borrowing until November 12, 2013), and the defendant Zhu was jointly and severally liable for the repayment of the above principal and interest.

[Court mediation]

After mediation by the people's court, both parties reached a mediation agreement voluntarily:

1、 The defendant Zhang and Bai returned the loan principal of 30000 yuan to the notice before January 31, 2015; Before June 30, 2015, the principal of a loan of RMB 70000 and its interest (calculated at the rate of 2 cents per month from July 13, 2012 to the date of actual repayment) will be returned to the original loan.

2、 Zhu, the defendant, shall be jointly and severally liable to pay off the above loan principal of 100000 yuan for Zhang and Bai, the defendants.

Case Analysis

The focus of the dispute in this case is whether there is a mortgage legal relationship between the plaintiff Wen and the defendant Zhu?

（1） Establishment of mortgage contract

According to Article 185 of China's Property Law, "To establish a mortgage, the parties concerned shall conclude a mortgage contract in writing." In this case, although the plaintiff Wen and the defendant Zhu did not sign a separate written mortgage contract, the borrower Zhang noted on the IOU that "this amount is guaranteed by my friend Zhu in the No. X property of XX Town, X County" The defendant Zhu, as the owner of the property right of the house, signed "Agree to Guarantee, Zhu June 12, 2012" below its notes, and delivered the house property certificate to Wen, the plaintiff, for safekeeping. From the analysis of the written content and signature of the defendant on the loan slip, and the behavior of Wen, the plaintiff, in collecting the house property certificate and providing loans, the two parties have reached an agreement on loan mortgage, and the mortgage complies with the provisions of Article 185 of the Property Law. A mortgage contract generally includes the following clauses: (1) the type and amount of the secured creditor's right; （2） The time limit for the debtor to perform its obligations; （3） The name, quantity, quality, status, location, ownership or scope of use right of the mortgaged property; （4） Scope of guarantee. Therefore, both parties have formed a clear written mortgage contract.

（2） The scope of mortgage guarantee is RMB 100000

According to Article 15 of the Property Law, "unless otherwise provided by law or agreed by the contract, a contract on the establishment, change, transfer and termination of real estate property rights between the parties shall come into force upon the establishment of the contract; if the property rights are not registered, the validity of the contract shall not be affected." Although the parties to this case have not gone through the registration of real estate mortgage, and the mortgage right has not been established according to law, the mortgage contract has taken effect since its establishment. From the contents of the loan slip, the plaintiff Wen and the defendant Zhang and Bai formed a regular interest free loan, and the defendant Zhu provided mortgage guarantee for the loan with his own property, so the scope of mortgage guarantee was only 100000 yuan.

（3） Oral agreement 2 cents interest valid

The plaintiff, Wen, said in his lawsuit that "the two parties agreed orally on a monthly interest rate of 2 cents when borrowing money". According to Article 10 of the Contract Law, "The parties enter into a contract in written, oral and other forms." The Plaintiff and the Defendant have the right to orally agree on the loan interest within the scope of legal provisions as a supplementary agreement to the loan slip when negotiating the loan, and as long as the oral interest agreement can be proved by the plaintiff or admitted by the borrower, its claim for the borrower to return the loan interest can be supported by law.

（4） Zhu has to bear joint and several liability

After the loan was due, the defendant and his wife failed to repay the loan. As the defendant Zhu failed to register the mortgage of the mortgaged property, the plaintiff Wen could not directly exercise the mortgage right. According to Article 107 of the Contract Law, "If one party fails to perform its contractual obligations or fails to perform its contractual obligations as agreed, it shall bear the liability for breach of contract by continuing to perform, taking remedial measures or compensating for losses.", The plaintiff Wen has the right to require the defendant Zhu to continue to perform the guarantee liability, or can exercise the guarantee right in the mortgage contract, and require the mortgagor Zhu to assume joint and several liability for repayment to the extent of the value of the mortgaged property; Or it may exercise the right of claim for damages for breach of contract and require Zhu, the mortgagor, to assume the liability for supplementary repayment within the limit of the value of the mortgaged property. Therefore, the plaintiff Wen requested the defendant Zhu to bear joint and several liability for the loan principal of 100000 yuan (if within the value range of the mortgaged property), which should be supported according to law.

To sum up, if the mortgagor has not gone through the mortgage registration, the creditor has the right to request the mortgagor to continue to perform the contract, or to exercise the security right in the mortgage contract, and require the mortgagor to bear joint and several liability for repayment to the extent of the value of the mortgaged property; Or the mortgagor may exercise the right to claim damages for breach of contract, and require the mortgagor to assume the liability for supplementary repayment to the extent of the value of the mortgaged property.