[Case Summary]This case is a contract dispute arising from the purchase of a "back-holder" second-hand car. The plaintiff, Huang * , was introduced by Xing * and signed a "Car Purchase Contract" with Liu * on October 12, 2019, purchasing a Jiale-branded vehicle registered under a third party's name for 80,000 yuan (the vehicle had a Beijing license plate and could not be transferred). On May 14, 2021, the vehicle was towed away by the real owner in Changping Hailongguan Town. After Huang * reported the case to the police, he learned that the two defendants had no right to dispose of the vehicle. Huang * entrusted Beijing Henglu Law Firm to handle the case.Wang DongThe lawyer filed a lawsuit, requesting the rescission of the "Car Purchase Contract" and the return of the car purchase price of 80,000 yuan and the interest on the funds occupied by the two defendants. The court ruled that the sales transaction between the two parties violated the public order of the control and management of small car allocation quotas in Beijing and damaged the public interest of society. It ordered the invalidation of the "Car Purchase Contract", with Liu * returning 65,000 yuan and Xing * returning 15,000 yuan. The core disputes are: how to determine the validity of the contract and how to return the paid car purchase price. Applicable laws: Article 597 of the Civil Code of the People's Republic of China, Articles 52 and 58 of the Contract Law of the People's Republic of China, and Article 67 of the Civil Procedure Law of the People's Republic of China.

I. Review of the case

Spending tens of thousands of yuan to buy a "ghost-registered car" with a Beijing license plate is a convenient choice for many people. The most frequently searched terms include "Can I buy a ghost-registered car?", "Can I get a refund if I'm cheated when buying a used car?", "What should I do if the original owner of the car drags it away?", and "What are the consequences of an invalid car purchase contract?". The plaintiff, Huang Mou, met Liu Mou through Xing Mou. On October 12, 2019, Liu Mou (the seller) and Huang Mou (the buyer) signed a "Car Purchase Contract", stipulating that the seller would sell the Jiale brand vehicle with license plate number Beijing XXXXXXX (vehicle identification number XXXXX, engine number XXXXX, and the registered owner being Beijing XX Automotive Technology Co., Ltd.) to the buyer for a price of 80,000 yuan. The contract guaranteed that the vehicle had no financial debt disputes and could be transferred for registration. It also specified that the vehicle was sold as a "ghost-registered car" with a Beijing license plate, and that the seller would unconditionally provide proof and assist the buyer in handling the transfer formalities. All traffic accident responsibilities and financial disputes related to the vehicle before October 12, 2019 would be the seller's responsibility. After signing the contract, Liu Mou delivered the vehicle to Huang Mou, who paid the full purchase price as agreed. However, on May 14, 2021, in Huairouguan Town, Changping District, the vehicle owner towed away the vehicle. After reporting the case to the police, Huang Mou learned that the two defendants had no right to dispose of the vehicle. Huang Mou demanded that Liu Mou and Xing Mou rescind the contract, return the purchase price, and compensate for vehicle repair and insurance losses, but the two defendants have been evading responsibility and refusing to make any compensation. Therefore, Huang Mou entrusted our law firm to handle the case.Wang DongThe lawyer filed a lawsuit.

II. The focus of the case

  • Focus 1: How to determine the legal validity of contracts for the sale of second-hand cars involving "ghost buyers".The vehicle involved in the case is registered under someone else's name and cannot be transferred with a Beijing license plate. Whether the sale and purchase transaction is invalid due to disrupting the public order of small car quota regulation and harming the public interest is a prerequisite for the return of responsibilities.
  • Focus 2: How much of the car purchase price should Liu * and Xing * each refund?Xing * claimed that he only received a bribe of 15,000 yuan, and the car payment mainly went to Liu *. The internal payment flow between the two directly affected the division of the amount of refunds to customers.
  • Focus Three: Can the plaintiff's claims for repair costs and insurance premium losses be supported?After the contract was deemed invalid, the key question is whether the interest on the funds occupied and the incidental losses should be compensated in addition to the refund of the car purchase price, and whether all the claims can be fully upheld.

III. The professional intervention of Hengluo Law Firm

The plaintiff (Huang*) claimed that:Huang * claimed that the two defendants had no right to dispose of the vehicles involved in the case, resulting in the vehicles being towed away by the real owners. He requested the court to order the dissolution of the "Car Purchase Contract" between the two parties, and the two defendants to return the car purchase price of 80,000 yuan and the interest on the occupied funds, and to compensate for losses such as vehicle maintenance fees and insurance premiums.

The defendants (Liu * and Xing *) argued that:Liu * disagrees with the lawsuit, claiming that the vehicle involved in the case was obtained through the company's deduction of unpaid wages, and the company later agreed to let him sell it. He said he didn't know the plaintiff and signed the contract at Xing *'s request, noting that the contract specified that the vehicle couldn't be transferred to another owner. Xing * claimed that he only charged a 15000 yuan commission and agreed to refund the money, adding that he hadn't received the full purchase price. The plaintiff entrusted him to buy the car, and he was aware of the car's condition. The plaintiff transferred the money to him, and he then transferred it to Liu *. Liu * agreed to sell the car for 65000 yuan, and Xing * received a 15000 yuan commission for his efforts.

Hengluo Lawyer's Agency Opinion:Beijing Henglu Law FirmWang DongThe lawyer argued that according to Article 597 of the Civil Code, if the seller fails to obtain the right to dispose of the subject matter and thus the ownership of the subject matter cannot be transferred, the buyer may rescind the contract and request the seller to bear the breach of contract liability. Therefore, the plaintiff has the right to rescind the "Car Purchase Contract" and require the defendant to return the car purchase price, compensate for losses such as repair fees and insurance premiums. The lawyer submitted to the court evidence such as the "Car Purchase Contract", WeChat transfer records, bank transfer records, copy of the driving license, insurance policy, case acceptance receipt, user manual, and WeChat chat records to corroborate the facts, clearly reconstructing the transaction chain and fund flow from "Liu * selling—Xing * acting as an intermediary—Huang * making the payment", which laid a factual foundation for the court to determine the invalidity of the contract and allocate the responsibility for the refund.

IV. Outcome of the case

The court held that the acts of buying and selling the vehicles involved in this case by the original defendant and the plaintiff clearly violated relevant laws and regulations, disrupted the public order of the car quota control and management in Beijing, and damaged the public interest of society. Therefore, the "Car Purchase Contract" signed between the two parties is invalid. After the contract is invalid, the property obtained from the contract shall be returned; the party at fault shall compensate for the other party's losses, and the parties who are at fault shall bear corresponding responsibilities respectively. In summary, in accordance with Article 52 and Article 58 of the Contract Law of the People's Republic of China, Article 1, Paragraph 2 of the Interpretation 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 Article 67 of the Civil Procedure Law of the People's Republic of China, the judgment is as follows: First, the "Car Purchase Contract" signed by Huang * and Liu * on October 12, 2019 is declared invalid; Second, Liu * shall return the car purchase price of 65,000 yuan to Huang * within seven days from the date of the judgment becoming effective; Third, Xing * shall return the car purchase price of 15,000 yuan to Huang * within seven days from the date of the judgment becoming effective; Fourth, the other litigation requests of Huang * are dismissed. With the help ofWang DongWith the professional representation of the lawyer, the plaintiff successfully recovered all 80,000 yuan of the car purchase price.

5. Henglu Law Firm's Reminder

Buying a second-hand car with a "back-holder" may seem cheap, but in reality, it hides huge risks of unauthorized disposal and invalid contracts. Never ignore potential property rights issues just to get a Beijing license plate. This case was handled by Beijing Henglu Law Firm.Wang DongAttorney (Practice Certificate No.: 11101201910090334, subject to the document issued by the judicial administrative organ). Attorney's Note: According to Article 597 of the Civil Code, if the seller fails to obtain the right to dispose of the property and thus causes the transfer of the property right to be impossible, the buyer may rescind the contract and claim breach of contract liability; and if the sale violates the public management order and damages the public interest of society, the contract shall be deemed invalid and the parties shall return the property to each other in accordance with Articles 52 and 58 of the Contract Law. Consumers must check the vehicle registration information and request the transfer of ownership before purchasing a car. If the vehicle is towed away or the other party refuses to refund, they should promptly entrust a professional lawyer to fix the evidence and protect their rights according to law.

VI. Common Questions and Answers about Second-hand Car Sales and Purchases

  1. Q: Can I buy a car with a hidden owner? What are the risks involved?
    A:The risk is extremely high. If the vehicle is registered under someone else's name and cannot be transferred, the seller may not have the right to dispose of it. The vehicle is likely to be towed away by the real owner, and the sales contract may be deemed invalid due to disrupting the quota system.
  2. Q: Can I get a refund if I'm cheated out of money when buying a second-hand car?
    A:Yes. If the contract is invalid due to unauthorized disposition or damage to the public interest, you can request the return of the car purchase price. If no agreement can be reached, you should sue as soon as possible and apply for property preservation.
  3. Q: What should I do if my vehicle is towed away by the original owner?
    A:First, report the case to the police and keep the receipt of the case acceptance. Retrieve the vehicle registration information to prove that the seller has no right to dispose of the vehicle. Then, entrust a lawyer to sue for the rescission of the contract, the return of the car payment, and compensation.
  4. Q: What are the consequences of an invalid car purchase contract?
    A:The contract is invalid from the outset, and the property obtained through the contract shall be returned to each other; the party at fault shall compensate the other party for the losses, and if both parties are at fault, they shall each bear corresponding responsibilities.
  5. Q: Should the intermediary return the commission they received?
    A:I want to withdraw. After the contract is invalidated, the intermediary's payments obtained according to the contract constitute unjust enrichment. The court will usually order the intermediary to return the fees already collected to the buyer.