[Case Summary]This case involves a civil loan dispute (where the contract was rendered invalid due to the borrower obtaining a loan from a financial institution and then lending it to another party). Wang Xiaochao borrowed 250,000 yuan from a financial institution and lent it to his colleague Liu Gang, signing two promissory notes. After Liu Gang repaid 57,544 yuan, he stopped making payments. Wang Xiaochao entrusted the Beijing Henglu Law Firm to handle the case.Tian Jia YanThe lawyer filed a lawsuit. The lawyer actively cited Article 13 of the "Interpretation of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases", arguing that the private lending contract involving the withdrawal of loans from financial institutions for on-lending is invalid; the court ruled that the contract is invalid and ordered Liu Gang to return the remaining principal of 192,456 yuan and the losses caused by the occupation of funds. The core dispute is the validity of the contract when the borrowed funds come from financial loans, and the calculation of responsibilities and losses after the contract is invalidated. Applicable legal provisions: Article 13 Paragraph 1 Item 1 of the "Interpretation of Private Lending Cases", and Article 157 of the "Civil Code".

I. Review of the case facts

"Is it effective to lend money to others with one's own loan?" and "Is it invalid to fraudulently obtain bank loans and then lend them out?" are common risks in private lending. Wang Xiaochao and Liu Gang used to be colleagues. In late 2022, Liu Gang borrowed money on the grounds of "family emergency", and the two parties signed two "Loan Notes" to form a loan of 250,000 yuan: the first installment of 150,000 yuan (signed on December 29, 2022, with equal principal and interest repayment over 60 months), and the second installment of 100,000 yuan (signed on January 7, 2023, with equal principal and interest repayment over 36 months). In case of default, the borrower would pay interest at four times the one-year LPR rate on the signing date. Wang Xiaochao transferred the money in installments. Initially, Liu Gang made sporadic repayments, paying a total of 57,544 yuan in 15 installments from January 7, 2023 to February 7, 2024, after which he stopped repaying altogether. What's more troublesome is that the 250,000 yuan Wang Xiaochao lent was not his own funds, but money borrowed from financial institutions. Under this double pressure, Wang Xiaochao entrusted a lawyer to handle the case.Tian JiayanThe lawyer defends his client's rights and interests.

II. The focus of the case

  • Focus 1: The issue of contract validity.The borrowed funds come from loans from financial institutions. Does the misappropriation and re-lending of these funds render the private lending contracts invalid?
  • Focus 2: The effectiveness of the interest agreement.After the contract becomes invalid, does the agreement on interest and overdue interest also become invalid?
  • Focus 3: Liability and loss calculation.After the contract is deemed invalid, will the defendant only return the principal? How will the plaintiff's losses such as the cost of funds (loan interest) be compensated? If the defendant's whereabouts are unknown, the court will need to serve the notice of the lawsuit through public announcement and hold a trial in the defendant's absence.

III. The professional intervention of Hengluo Law Firm

The plaintiff (Wang Xiaochao) claimed that:Wang Xiaochao claimed that the loan relationship was genuine, that he had already delivered 250,000 yuan, and that Liu Gang had only repaid 57,544 yuan. He requested the return of the remaining principal and compensation for the loss of use of the funds.

The defendant's (Liu Gang's) position:Liu Gang's whereabouts are unknown. The court served the notice by public announcement and held a trial in his absence, during which he failed to appear in court to defend himself.

Hengluo Lawyer's Agency Opinion:Tian JiayanThe lawyer formulated the principle of "identifying facts with evidence and clarifying rights with law": First, comprehensively fix the evidence, submit two original "loan notes", bank transfer records (150,000 yuan and 100,000 yuan), and 15 repayment records, accurately calculating that 57,544 yuan has been repaid and the remaining principal is 192,456 yuan; Second, actively address the validity of the contract. According to Article 13 (1) (1) of the "Regulations on Private Lending", it is pointed out that the private lending contract that obtains loans from financial institutions for re-lending shall be deemed invalid; According to Article 157 of the "Civil Code", after the contract is deemed invalid, Liu Gang, who obtained 250,000 yuan from the contract, shall return the actual principal he occupied. After deducting the 57,544 yuan that has been repaid, the remaining 192,456 yuan has a basis for return, and the lawyer also claimed the reasonableness of the fund occupation fee.

  • Evidence chain locking: promissory note + transfer + repayment record. Even if the defendant does not appear in court, the facts can still be established
  • Proactively present the legal basis for declaring the contract invalid, and clarify the rights and interests to be claimed after the contract is declared invalid
  • Calculate the remaining principal of 192,456 yuan and claim the loss of funds being occupied

IV. Outcome of the case

After the trial, the court accepted the evidenceTian Jia YanAccording to the lawyer's opinion, it was determined that the funds lent by Wang Xiaochao came from financial loans and met the circumstances of withdrawing loans from financial institutions for resale. The private lending contract between the two parties was invalid. According to Article 157 of the Civil Code, Liu Gang, who obtained 250,000 yuan from the invalid contract, should return the actual principal he occupied. After deducting the 57,544 yuan he has already repaid, the remaining principal of 192,456 yuan has a clear basis for return. The court also supported the claim for losses caused by the occupation of funds. The judgment ordered Liu Gang to return the remaining principal of 192,456 yuan and the losses caused by the occupation of funds to Wang Xiaochao.

5. Henglu Law Firm's Reminder

Obtaining loans from financial institutions and lending them to others not only may result in the contract being deemed invalid, but also may subject the borrower to the dual pressure of repaying the loan to the financial institution. Borrowers should borrow money within their means and use their own funds. This case was handled by Beijing Henglu Law Firm [Tian Jia YanThe lawyer (practice license number: 11101202111381309, the document issued by the judicial administrative organ shall prevail) acts on behalf of the client, relying on Article 13 of the "Regulations on Private Lending" and Article 157 of the "Civil Code", to recover the principal and the loss of funds occupied for the client.

VI. Common Questions about Contract Disputes FAQ

  1. Q: Is it effective to lend money to others using one's own loan?
    A: For those who obtain loans from financial institutions and then lend them out, the private lending contracts shall be deemed invalid in accordance with Article 13 of the "Regulations on Private Lending".
  2. Q: After the contract is invalidated, will only the principal be refunded?
    A: After the contract is deemed invalid, the property obtained should be returned. The court may also award compensation based on the loss of funds occupied, not just the return of the principal amount.
  3. Q: How to sue a borrower who is unaccounted for?
    A: The court can serve the notice by public announcement and hold a trial in absentia. The court will clarify the facts and make a judgment based on evidence such as the voucher and the transfer record.
  4. Q: Is the interest clause in the invalid transfer loan contract still valid?
    A: The contract is invalid, and the provisions regarding interest and overdue interest are therefore invalid. However, you can claim compensation for the loss of funds being occupied by the other party.
  5. Q: How can Beijing contract lawyers assist with private lending matters?
    A: The system fixes the promissory notes, transfer records, and repayment evidence, accurately calculates the principal, and legally demands the return of the funds and compensation for losses.