Brief of the case

    On October 8, 2020, Fan purchased a second-hand BMW BMW525L car from Du, and the two sides did not sign a written sale contract, agreeing on a price of 135,000 yuan, after the delivery of the car, Du delivered the vehicle to Fan. Fan recognized that the vehicle is a mortgage car, and said that Du promised to assist in the transfer. Du said that when the car was delivered, the involved vehicle was seized and mortgaged to Fan Mou, and according to the used car market, the BMW 5 series sale price in 2014 should be about 250,000-300,000 yuan, when Fan Mou only spent more than 100,000 yuan to buy the vehicle. On December 6, 2022, the original owner Li Mou entrusted a third party to drive away the involved vehicle, and Fan Mou then filed a lawsuit with the Tancheng Court, requesting an order to terminate the vehicle sale contract with Du mou, and asked for the return of 135,000 yuan for the purchase of the car.

Court hearing

    After hearing, the Tancheng County People's Court held that the focus of the dispute in this case was whether the sale contract involved should be terminated. Article 191 of the Property Law of the People's Republic of China provides that "During the mortgage period, if the mortgagor agrees to transfer the mortgaged property, the mortgagor shall pay off the debts or deposit the proceeds of the transfer to the mortgagee in advance. The part of the transfer price exceeding the amount of the creditor's right shall belong to the mortgagor, and the insufficient part shall be paid off by the debtor. During the mortgage period, the mortgagor may not transfer the mortgaged property without the consent of the mortgagee, except where the assignee extinguishes the mortgage on behalf of the mortgagee." Article 3, paragraph 1, of the Interpretation of the Supreme People's Court on Issues relating to the Application of Law in the Trial of Disputes over Sales Contracts (before amendment) stipulates that "Where a party claims that the contract is invalid on the ground that the seller has no ownership or right to dispose of the subject matter at the time of signing the contract, the people's court shall not support it." Article 406 of the Civil Code of the People's Republic of China stipulates that "During the mortgage period, the mortgagor may transfer the mortgaged property. If the parties agree otherwise, such agreement shall prevail. Where the mortgaged property is transferred, the mortgage right shall not be affected."

    Therefore, whether in accordance with the provisions of the Interpretation of the Supreme People's Court on the Application of Law in the Trial of Sales Contract Disputes, or in accordance with the provisions of Article 8 of the Supreme People's Court on the Application of the Time Effect of the Civil Code of the People's Republic of China and the provisions of Article 406 of the Civil Code of the People's Republic of China, The vehicle sale contract involved in the case is a genuine expression of intent between the two parties, does not violate the mandatory provisions of laws and administrative regulations, and the sale contract is legally established and valid. Although the change of the above ownership does not have the effect against a bona fide third party because the registration is not completed, it does not affect the fact that the sale contract involved has been performed. Article 150 of the Contract Law of the People's Republic of China stipulates that "the seller shall have the obligation to ensure that no third party shall claim any rights against the buyer in respect of the subject matter delivered, except as otherwise provided by law." Article 151 states that "Where the buyer knew or should have known at the time of conclusion of the contract that a third party had rights in respect of the subject matter sold, The seller shall not assume the obligations provided for in Article 150 of this Law. "In this case, Fan recognized that Du was aware of the ownership defects of the vehicle when he delivered the vehicle, and Fan's family also said that he was not the owner of the vehicle but was a mortgaged vehicle when they alerted the police to the vehicle involved, which can also prove that Fan knew the ownership defects of the vehicle involved, taking into account the price of the vehicle involved and other factors. Du's defect guarantee obligation should be exempted according to law. The first instance judgment was made, rejecting Fan's claim. After the first instance verdict, Fan refused to accept, filed an appeal, Linyi City Intermediate People's Court made a second instance judgment, rejected the appeal, and upheld the original verdict.

Judge's statement

    The buyer knows that the vehicle is tied up with the vehicle and the ownership is defective, but still agrees to the sale. After the buyer makes the payment, the seller delivers the vehicle involved to the buyer and completes the change of the ownership of the vehicle involved. Although the above change of ownership is not effective against a bona fide third party because the registration is not completed, it does not affect the fact that the sale contract involved has been performed. Article 150 of the Contract Law of the People's Republic of China stipulates that "the seller shall have the obligation to ensure that no third party shall claim any rights against the buyer in respect of the subject matter delivered, except as otherwise provided by law." Article 151 states that "Where the buyer knew or should have known at the time of conclusion of the contract that a third party had rights in respect of the subject matter sold, The seller shall not undertake the obligations provided for in Article 150 of this Law." The buyer still pays for the goods and accepts the vehicles even though he knows that the ownership of the vehicles is defective, so the seller's warranty obligation for defects shall be waived according to law. When the contract is concluded, the buyer fails to require a written contract to fix the rights and obligations, and shall also bear the adverse consequences.

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