[Case Summary]This case involves a civil loan dispute (arising from a decoration contract). Yang Xiaohua paid over 600,000 yuan to the decoration supervisor, Liu Gang, for the decoration work. However, the project was not completed. Liu Gang issued two promissory notes to convert part of the outstanding debt into a loan totaling 66,300 yuan, which was not repaid when due. Yang Xiaohua entrusted the Beijing Henglu Law Firm to handle the case.Zhi Chao LiThe lawyer sued the defendant in Haidian Court, but the defendant failed to appear. The lawyer built a complete chain of evidence to prove the existence of the loan. The court ruled that Liu Gang should repay 66,300 yuan and bear the litigation fees and announcement fees. The core disputes include the legality of the transformation of the decoration payment into a loan and the relevance of the evidence; the application of the Civil Code and the Judicial Interpretation on Private Lending.

I. Review of the Case Facts

The renovation hasn't been completed, and the contractor turned the unpaid debt into a promissory note and refused to repay it. Can I sue to get it back? Many people search for questions like "Is it valid to convert renovation payments into loans?" and "What should I do if the promissory note doesn't match the transfer records?" Yang Xiaohua had a house in Hainan that needed renovation. From 2022 to 2023, he paid over 600,000 yuan to the contractor, Liu Gang, for the renovation. When the project was not completed, he terminated the contract and demanded a refund. Liu Gang claimed that he was facing financial difficulties and issued two promissory notes to convert part of the unpaid debt into loans, totaling 66,300 yuan, promising to repay some of it before December 31, 2023. After the due date, Liu Gang failed to repay the money, so Yang Xiaohua entrusted the Beijing Henglu Law Firm to handle the case for him.Zhai Chao LiThe lawyer filed a lawsuit with the Haidian District Court.

II. The focus of the case

  • Focus 1: Is it legal and valid to convert the decoration payment into a loan?After the settlement and clearing, the parties converted the project payment into a private loan. Is this transaction genuine and legally binding?
  • Focus II: The correspondence between multiple transfers and the amount of the promissory note.How to prove the nature of the transferred funds and their connection to the loan.
  • Focus 3: The allocation of the burden of proof in the absence of the defendant.The plaintiff must present a comprehensive chain of evidence to support their case.

III. Professional intervention by Hengluo Lawyers

The original plaintiff claimed that:Yang Xiaohua claimed that Liu Gang issued two "Promissory Notes" confirming the loan of 66,300 yuan, which was not repaid on the due date. He requested the court to order Liu Gang to repay the principal of 66,300 yuan and bear the litigation costs.

The defendant argued that:Liu Gang was legally summoned but failed to appear in court without a valid reason and did not present a defense.

Hengluo Lawyer's Agency Opinion:Zhi Chao LiThe lawyer sorted out the multiple transfers from Yang Xiaohua's accounts ending with 6522 and 6789 to Liu Gang's account, and prepared a transfer list; reviewed the amounts, purposes, and terms of the two promissory notes; extracted the content of Liu Gang's confirmation of the loan and his commitment to repay the loan from WeChat records; and argued that the parties' true intention was to convert the decoration payment into a loan after the settlement, and that a private lending relationship had been established between them.

  • Arrange multiple transfers in chronological order and correspond them with the amounts on the IOUs one by one
  • Extract the key conversations on WeChat to corroborate the facts of the loan and the repayment commitment
  • Citing the Judicial Interpretation of Private Lending, it proves that the liquidation and transformation are legal and effective

IV. Outcome of the case

The court found that the bank transfer receipts, two promissory notes, and WeChat chat records submitted by the plaintiff corroborate each other, proving that the civil lending legal relationship formed through liquidation and settlement between the two parties is established and effective; Liu Gang's failure to repay the loan as promised constitutes a breach of contract. In accordance with the Civil Code of the People's Republic of China and the Interpretation of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trials of Civil Lending Cases, the court ruled that Liu Gang shall repay Yang Xiaohua 66,300 yuan within ten days from the effective date of this judgment and bear the case acceptance fee and announcement fee; if overdue, he shall pay double interest on the delay in performance.

5. Henglu Law Firm's Advice

This case is handled by Beijing Henglu Law FirmZhi Chao LiThe attorney (practice license number: 11101202311629788, subject to the certificate issued by the judicial administrative organ) acts as the agent. Attorney's advice: If the decoration payment is settled between the two parties and converted into a loan with a promissory note issued, the private lending relationship is legal and effective. For large-amount loans, it is necessary to transfer the money through the bank, specify the loan purpose in the transfer remarks, and keep the chat records and the original promissory note. In case of default, promptly file a lawsuit.

VI. Common Questions and Answers (FAQ) about Civil Loans and Disputes over Decoration Payments

  1. Q: Is it valid to convert the renovation payment into a promissory note?
    A:It is valid. After the liquidation and settlement, the project payment was converted into a loan and a promissory note was issued, which constitutes a true expression of the parties' intention and establishes a private lending relationship between them.
  2. Q: What should I do if the amount on the IOU doesn't match the transfer amount?
    A:Based on the WeChat records and transfer lists, the promissory note serves as a summary and settlement of multiple transfers, and the court will make a comprehensive determination of the case.
  3. Q: Can the defendant be sentenced even if they don't appear in court?
    A:Yes. If the defendant fails to appear without a valid reason after being legally summoned, the court may proceed with the trial and make a judgment based on the evidence provided by the plaintiff in the defendant's absence.
  4. Q: Can I sue someone if I borrowed money without signing a contract?
    A:Yes. Promissory notes, transfer receipts, and chat records can form a chain of evidence to prove the lending relationship.
  5. Q: How to protect your rights if the renovation project is left unfinished?
    A:You can terminate the contract, request a refund, and negotiate to retain the promissory note for the loan transfer. If no agreement can be reached, you should promptly file a lawsuit and preserve the evidence.