Zhao Mouyi’s lawsuit against Wang Mou and Zhao Mouer regarding a private loan.

Keywords: Private Lending; Agreement on Loan; Evidence Examination; Attorney’s Investigation Order; Divorce Litigation

Counseling Attorney: Liu Qinqun

Basic Facts of the Case:

The client and his spouse have broken up emotionally and have filed for divorce. During the divorce proceedings, the client’s maternal uncle has filed a lawsuit claiming that the house purchased by the couple after marriage was entirely financed by a loan of 1.917 million yuan from him. The client has since repaid only 27,000 yuan. The uncle provided bank statements showing that funds were directly transferred from his account to the developer as payment for the property. He also submitted a promissory note signed solely by the client’s spouse and dated in the third year after the property purchase, asserting that the outstanding debt of 1.89 million yuan constitutes a joint loan taken out by both spouses and demanding that the client assume joint repayment responsibility.

After accepting the mandate in this case, Attorney Liu Qinqun noted that all parties involved had familial relationships with one another. Given the sensitive nature of the client’s divorce proceedings, Attorney Liu focused on the most critical element of a private loan relationship—the mutual agreement to lend—and carefully examined whether the evidence provided by the opposing party could substantiate the existence of a genuine lending agreement. After analyzing the evidence submitted by the plaintiff, Attorney Liu discovered that the alleged loans were, in fact, pieced together from various sources and then re-lent by the plaintiff. Among these loans was one transferred by the client’s spouse’s father. As a result, both the validity of the alleged lending agreement and the lawful origin of the funds lent by the plaintiff raised serious doubts. Consequently, Attorney Liu applied for a lawyer’s investigation order to probe the lawful origins of the funds. Ultimately, based on the evidence gathered through the investigation, combined with an analysis of the family backgrounds of both the client and their spouse, Attorney Liu convincingly demonstrated to the court that there was no genuine lending agreement between the client’s spouse’s uncle and the client’s married couple; that the spouse’s uncle lacked a legitimate source of funds sufficient to lend such large sums; and that the practice of borrowing the full amount to purchase a home, spending lavishly on renovations, and conducting the entire lending and repayment process in cash was highly unusual and lacked sufficient evidence to support its authenticity. In the end, the court dismissed all of the plaintiff’s claims.

Case Highlights:  

From legal relationships to transactional practices, we systematically break through the other party’s evidence at each critical stage of lending, relieving our clients of unnecessary burdens and helping them avoid both emotional distress and financial loss.

Typical significance:

The agreement on the loan is decisive in determining whether a legal relationship of private lending exists; thus, it is the focal point of the court’s review in private-lending cases. In this case, the unique background of the alleged “loan” underscores the importance of examining and scrutinizing the loan agreement itself—and of breaking through the case precisely by focusing on that agreement. The principal amount of the “loan” claimed by the plaintiff in this case originated from parties outside the litigation. Therefore, the agent promptly filed a request with the court for an attorney’s investigative order to thoroughly examine the relevant financial records, transaction ledgers, and repayment vouchers. Upon examination, it was discovered that 420,000 yuan of the plaintiff’s claimed 1.91 million yuan loan came from the father of the client’s spouse; other sources of the loans and the repayment details also revealed inconsistencies. Moreover, the plaintiff’s assertion that all repayments to the third-party lenders were made in cash is neither reasonable nor consistent with common business practices. Considering the family backgrounds of both the client and their spouse, as well as the plaintiff’s financial situation, there was absolutely no need for the client and their spouse to borrow the full amount from the plaintiff to purchase a home. Furthermore, for the six-year period following the alleged “loan,” the plaintiff never once demanded repayment from the client and their spouse, and the client had never even heard of such a “loan.” Ultimately, through meticulous evidence gathering and argumentation, we successfully presented the true facts to the court, resulting in the dismissal of all claims brought by the opposing party. This outcome spared the client from nearly one million yuan in debt, significantly reduced their burden in the divorce proceedings, and maximized the protection of their legitimate rights and interests.