Basic facts

Mr. Cheng and Ms. Zhou have been married for more than 20 years, and the couple run two companies respectively.

In 2020, Mr. Cheng's company received a big project and needed to pay the project money in advance. Due to lack of funds, Mr. Cheng turned to Ms. Zhou for turnover.

Ms. Zhou paid more than 10 million yuan to the engineering salesman for Mr. Cheng. Subsequently, Mr. Cheng's company issued a debit note to Ms. Zhou, stating the loan amount, the purpose of the loan, and agreed on the interest. He also signed the legal representative and the joint guarantor respectively.

Unexpectedly, two years later, Mr. Cheng divorced Ms. Zhou. Ms. Zhou took the IOU and sued the court, demanding that Mr. Cheng's company repay the principal and pay the interest, and demanding that Mr. Cheng bear joint and several liabilities for guarantee.

Court decision

After trial, the court held that the amount of advance payment transferred by Ms. Zhou to the engineering salesman was consistent with the amount of loan in the IOU, and the purpose of loan specified in the IOU and the engineering cost in the confirmation letter of payment issued by the engineering salesman to Ms. Zhou could also confirm each other. Mr. Cheng and his company issued an IOU after Ms. Zhou prepaid the money, which was a confirmation of the fact of borrowing afterwards.

The court found the fact that the loan between Mr. Cheng's company and Ms. Zhou really existed. When the loan occurs during the marriage relationship between Mr.  Cheng and Ms. Zhou, it shall be deemed that both parties have agreed to dispose of the joint property of husband and wife. At the same time, the money is used for the sole proprietorship enterprise of Mr. Cheng, and the divorce agreement between Mr.  Cheng and Ms. Zhou clearly stipulates that the company debts under their respective names shall be borne by himself or herself.

Judge's statement

During the marriage relationship, one spouse borrows money from the other spouse and issues an iou. When the court determines "marital loan", it takes into account the special status relationship between husband and wife, which is usually different from handling loan disputes between ordinary natural persons.

On the one hand, the people's court will comprehensively judge whether the fact of borrowing really occurs by combining the amount of borrowing, trading methods and trading habits.

On the other hand, the people's court will not only deal with it according to the loan agreement, but will properly handle it after comprehensively considering the marital property system, joint property, joint debt and other circumstances that may affect the division of property.

In judicial practice, if a husband and a wife borrow money from the other party for personal business activities or other personal affairs, if the two parties fail to handle the loan at the time of divorce, the IOU can be protected by law after divorce.

But "IOUs in marriage" may not be effective. If you encounter the following situation, the loan will not have legal effect. For example, if a husband and a wife issue an IOU for joking or making each other happy, but the fact of borrowing does not actually occur, the IOU does not have legal effect.

Law

Civil Code of People's Republic of China (PRC)

Article 679 A loan contract between natural persons is established when the lender provides the loan.

Interpretation of the Supreme People's Court on the Application of Marriage and Family in People's Republic of China (PRC) Civil Code (I)

Article 82 If a husband and a wife enter into a loan agreement and lend the common property of the husband and wife to one party for personal business activities or other personal affairs, it shall be regarded as an act of disposing of the common property of the husband and wife as agreed by both parties, and divorce may be handled in accordance with the loan agreement.

The article was transferred from the Supreme People's Court Judicial Case Research Institute.