CASE LAW NO. 07/2016/AL Regarding the Recognition of House Sale Contracts Established Before July 1st, 1991

CASE LAW NO. 07/2016/AL

Regarding the Recognition of House Sale Contracts Established Before July 1^st, 1991

Approved by the Judicial Council of the Supreme People’s Court on October 3^rd, 2016, and published under Decision No. 698/QĐ-CA on October 17^th, 2016, by the Chief Justice of the Supreme People’s Court.

Source of the Case Law:

Cassation Decision No. 126/2013/DS-GĐT dated September 23^rd, 2013, of the Judicial Council of the Supreme People’s Court regarding the civil case of “Dispute over house ownership and use rights” in Hà Nội between the plaintiffs, Mr. Nguyễn Đình Sông, Mrs. Nguyễn Thị Hồng, Mrs. Nguyễn Thị Hương, and the defendants, Mr. Đỗ Trọng Thành, Mrs. Đỗ Thị Nguyệt, Mr. Vương Chí Tường, Mr. Vương Chí Thắng, Mrs. Vương Bích Vân, Mrs. Vương Bích Hợp; the interested parties including Mrs. Nguyễn Thị Lan, Mrs. Nguyễn Thị Hay, Mrs. Tô Thị Lâm, Mr. Nguyễn Đình Uân, Mrs. Nguyễn Thị Hợp, Mr. Nguyễn Đình Hòa, Mrs. Nguyễn Thị Minh Nguyệt, Mrs. Trần Thị Bích, Mr. Vũ Đình Hậu.

Location of the Case Law’s content:

Paragraph 4 of the “Court’s Opinion” section.

Summary of the Case Law:

– Case Background:

The house sale contract was established in writing before July 1^st, 1991, signed by the seller, indicating that the seller had received full payment. Although the buyer had not signed the contract, they held the contract and had managed and used the house stably for a long period without any disputes from the seller regarding the house purchase money.

– Legal Resolution:

In this case, the contract is considered valid as it determines that the buyer has paid the seller in full and the buyer has consented to the house sale contract. Therefore, the house sale contract is recognized.

Relevant Legal Provisions:

– Articles 81, 82, 83 of the 2004 Civil Procedure Code (corresponding to Articles 93, 94, 95 of the 2015 Civil Procedure Code);

– Resolution No. 58/1998/NQ-UBTVQH10 dated August 20^th, 1998, of the National Assembly Standing Committee on civil transactions regarding houses established before July 1^st, 1991.

Keywords:

“House sale contract”; “One party did not sign the contract”; “Determining evidence”.

CASE DETAILS

In the complaint dated March 6^th, 2006, and during the resolution of the case, the plaintiff, Mr. Nguyễn Đình Sông, stated that his father, Mr. Nguyễn Đình Chiện (deceased in 1998), and his mother, Mrs. Nguyễn Thị Mở (deceased in 2005), had four children: himself, Mrs. Nguyễn Thị Hồng, Mrs. Nguyễn Thị Hương, and Mrs. Nguyễn Thị Lan. Previously, his family resided at 2 Hàng Bún, while his uncle, Mr. Nguyễn Đình Nhuần, lived at 10 Hàng Bún.

After evacuation, his uncle’s house was seized by the State and allocated to others, so his father allowed Mr. Nhuần to stay at 2 Hàng Bún while their family rented another house. Mr. Đỗ Trọng Thành signed the rental contract with his father for the second floor of 19 Thuốc Bắc Street on February 1^st, 1972. The property at 19 Thuốc Bắc was jointly owned by Mr. Đỗ Trọng Thành and his siblings: Mrs. Đỗ Thị Ngà, Mrs. Đỗ Song Toàn, Mrs. Đỗ Thị Nguyệt, and Mr. Đỗ Trọng Cao.

Due to Mr. Cao’s need for medical funds, he sold a 38m² room on the second floor of 19 Thuốc Bắc to Mr. Sông’s family for 6550 VND, which was fully paid.

When Mr. Cao sold the 38m² room, he handed over the title deed for 19 Thuốc Bắc, which specified that Mr. Cao owned 8/12 of the house, while Mr. Thành, Ms. Ngà, Ms. Nguyệt, and Ms. Toàn shared the remaining 4/12. The first floor had previously been sold to Mr. Vũ Đình Tiệp and Ms. Trần Thị Bích. Mr. Cao later renovated a 7m² kitchen on the second floor to reside in.

After Mr. Cao’s death on November 5^th, 1972, Mr. Thành, Ms. Ngà, and Ms. Nguyệt sold the remaining 7m² on the second floor to Mr. Sông’s family for 3000 VND and formalized the sale in a complete contract dated the day of Mr. Cao’s death. The sellers confirmed full payment receipt, and Mr. Thành provided a power of attorney written by Mr. Cao on September 9^th, 1972, indicating Mr. Cao’s ownership and authorizing Mr. Thành to sell the associated room in case of his demise.

Mr. Sông’s family retained the sale documents, and his parents could sign them at any time. Mr. Thành’s claim that the absence of signatures indicated unpaid purchase was incorrect. Mr. Nhuần passed away in 2000, and his wife, Mrs. Tô Thị Lâm, along with their children Mr. Nguyễn Đình Uân, Mr. Nguyễn Đình Hòa, Mr. Nguyễn Đình Hợp, and Mrs. Nguyễn Thị Minh Nguyệt, confirmed that Mr. Chiện purchased the second-floor room from Mr. Cao, not Mr. Nhuần, who only stood in as a nominal owner.

Mr. Thành’s family, residing at 17 Thuốc Bắc, consistently created difficulties for Mr. Sông’s family. Mr. Thành occupied the roof of the second floor at 19 Thuốc Bắc, prompting Mr. Sông’s father to negotiate its usage, which Mr. Thành ignored, leading to a written agreement on December 20^th, 1987, permitting shared roof usage. However, conflicts escalated, and Mr. Sông’s family filed to transfer ownership of the second floor at 19 Thuốc Bắc, facing continuous obstruction from Mr. Thành. Mr. Sông now seeks judicial recognition of the purchase contract for the second floor of 19 Thuốc Bắc.

Additionally, Mr. Sông requests:

– Mr. Thành’s relinquishment of rights over 19 Thuốc Bắc’s first floor, sold to Mr. Tiệp, and the second floor, sold to Mr. Sông’s family, thereby prohibiting Mr. Thành from using the second-floor roof and auxiliary areas. 

– Mr. Sông’s family bought the second floor, and at that time, it was orally agreed that the access to the street would be through the passageway on the first floor of Mr. Thành’s house at 17 Thuốc Bắc Street. Therefore, they requested Mr. Thành not to place any goods in the passageway from Hàng Cá Street through houses 17 and 19 Thuốc Bắc Street up to the second floor of house 19 Thuốc Bắc Street.

– Compensation of 540,000,000 VND for roof occupation and passage obstruction from 1987 to present (2,500,000 VND/month for 18 years).

– Compensation for injuries caused by Mr. Thành’s son to Mr. Sông and his wife, totaling 5,000,000 VND each.

– Compensation for mental distress caused by Mr. Thành’s disputes, amounting to 800,000,000 VND.

– Reimbursement of 120,000,000 VND for roof repairs due to damage caused by Mr. Thành’s belongings.

– Reimbursement of 108,000,000 VND for lost income over nine years due to prolonged litigation caused by Mr. Thành (12,000,000 VND/year for nine years).

Defendant’s Statement:

Defendant Mr. Đỗ Trọng Thành states: House No. 19 Thuốc Bắc, land title deed No. 1577, Đồng Xuân area, with a total area of 69m², is owned by Mr. Đỗ Huy Ngọc and Mrs. Lê Thị Hữu (his parents). On April 21^st, 1959, it was transferred to their children as inheritance, specifically: Mr. Cao received 8/12, and the remaining 4/12 was shared among four children: Mrs. Nga, Mrs. Nguyệt, Mrs. Toàn, and Mr. Thành.

In 1971, the siblings rented the second floor of house No. 19 Thuốc Bắc to Mr. Chiện and Mrs. Mở (parents of Mr. Sông). Later in 1971, Mr. Cao sold a 38m² room on the second floor of house No. 19 Thuốc Bắc to Mr. Nguyễn Đình Nhuần, but Mr. Chiện signed the sale document instead. The selling price was 6,550 VND, and the document did not have a date.

On September 9^th, 1972, Mr. Cao authorized Mr. Thành to sell a 7.8m² room on the second floor of house No. 19 Thuốc Bắc. Mr. Cao died on November 5^th, 1972. Based on Mr. Cao’s authorization, Mr. Thành wrote the sale document for the 7m² room to Chiện, but Mr. Chiện requested that the sale include the 38m² room he had already purchased from Cao.

Consequently, Mr. Thành wrote the deed for the entire second floor, and his siblings signed it. However, when the document was presented to Mr. Chiện and Mr. Mở for signing, Mr. Nhuần was present and did not allow them to sign. Therefore, Mr. Chiện and Mrs. Mở did not sign. Mr. Thành does not agree with Mr. Sông’s request as Mr. Sông was only staying temporarily at Mr. Nhuần’s house.

Mr. Thành’s additional statements include: He only became aware of Mr. Cao selling the 38m² room in 1998 and realized he had a share in the property, previously thinking it belonged to Mr. Cao. Mr. Cao’s authorization to sell the 7m² room included the condition that the buyer would receive the house upon signing the document. Mr. Cao’s authorization was invalid as the property was jointly owned by the siblings. House No. 19 Thuốc Bắc has not been declared due to the ongoing dispute.

House No. 17 Thuốc Bắc has been declared based on the inheritance division judgment from 1992. The document Mr. Cao wrote for selling the 38m² room was estimated to be around 1971. Mr. Thành retained the original sale document from Mr. Cao to Mr. Nhuần but not other documents. When selling the house to Mr. Nhuần, Mr. Cao handed over the title deed of house No. 19 Thuốc Bắc to Mr. Nhuần.

Mr. Thành does not agree with Mr. Sông’s request as the sale of the second floor of house No. 19 Thuốc Bắc did not occur; Mr. Sông’s parents did not sign the sale document nor pay for it. The sale agreement is invalid, so Mr. Sông has no right to the second-floor roof; the path through the first floor of house No. 17 Thuốc Bắc was only for temporary access (Exhibit 586).

The shared area of house No. 19 Thuốc Bắc was not sold by his siblings, so he still has the right to use it. Mr. Thành also does not accept Mr. Sông’s demand for compensation for lost income as Sông was the one disputing, not him. Both parties were injured in the fight, and the police did not resolve the issue, so he does not agree to compensation.

On April 7^th, 2009, Mr.Thành filed a counterclaim, requesting that Mr. Sông’s family use the passageway through house No. 19 Thuốc Bắc, meaning that the first floor of house No. 19 Thuốc Bắc must open a path to the street for Mr. Sông’s family. House No. 17 Thuốc Bắc is under Mr. Thành’s ownership, and when his siblings sold the first floor of house No. 19 Thuốc Bắc to the Mr. Tiệp family, it was specified that it did not include the path.

On September 23, 2009, Thành requested to withdraw his counterclaim regarding the passageway.

– Mrs. Đỗ Thị Nguyệt and the children of Mrs. Đỗ Thị Nga, including Mr. Vương Chí Tường, Mr. Vương Chí Thắng, Mrs. Vương Bích Vân, and Mrs. Vương Bích Hợp, stated: The 38m² room was sold by Mr. Cao, but as it was jointly owned, he had no right to do so. Mrs. Ngà and Mrs. Nguyệt agreed to sell the 7m² room to Mr. Chiện, but the buyer had not paid, so they requested the house be returned.

Statements from interested parties:

– Mrs. Tô Thị Lâm stated: Her husband, Mr. Nguyễn Đình Nhuần (deceased in 2000), and she lived at No. 10 Hàng Bún Street. Mr. Chiện and his wife lived with them until 1970, when Chiện’s family moved to No. 19 Thuốc Bắc. She was not aware of the purchase details, only remembering that in 1972, Mr. Nhuần informed her that Mr. Chiện had purchased the house and asked Nhuần to have his name in the title. The house at No. 19 Thuốc Bắc was bought and paid for by Mr. Chiện’s family, and her family had no involvement in the transaction with Mr. Thành or any interest in house No. 19 Thuốc Bắc.

– Mrs. Lâm’s children, including Mr. Nguyễn Đình Uân, Mr. Nguyễn Đình Hòa, Mrs. Nguyễn Quỳnh Hợp, and Mrs. Nguyễn Thị Minh Nguyệt, agreed with Mrs. Lâm’s statements.

– Mrs. Trần Thị Bích and Mr. Vũ Đình Hậu stated: They live on the first floor of house No. 19 Thuốc Bắc. Mr. Thành had no right to demand their family to open a path for Mr. Sông’s family on the second floor. Mr. Thành had withdrawn his counterclaim regarding the passageway, so they had no further comments.

First-instance Trial Judgments:

In First-instance Civil Judgment No. 78/DSST on November 21^st, 2007, the People’s Court of Hà Nội ruled:

– Rejecting Mr. Nguyễn Đình Sông’s claim.

On November 21^st, 2007, Mr. Nguyễn Đình Sông filed an appeal.

In Appellate Civil Judgment No. 121/2008/DSPT on June 30^th, 2008, the Appellate Court of the Supreme People’s Court in Hà Nội ruled: Vacated the first-instance trial judgment, remanding the case for retrial.

In First-instance Civil Judgment No. 52/2009/DSST on September 29^th, 2009, the People’s Court of Hà Nội ruled:

1. Rejecting the plaintiff’s claim to havethe entire second floor sale contract of house No. 19 Thuốc Bắc recognized.
2. Accepting Mr. Sông’s request to compel Mr. Thành to remove all belongings and plants from the second-floor roof of house No. 19 Thuốc Bắc back to house No. 17 Thuốc Bắc.

– Both families should use the second-floor roof as per the agreement dated December 20^th, 1987.

3. Rejecting Mr. Sông’s request to prohibit Mr. Thành’s family from using the shared areas and yard of house No. 19 Thuốc Bắc.
4. Establishing the path from Hàng Cá Street through houses No. 17 and No. 19 Thuốc Bắc, prohibiting the obstruction of the path.
5. Rejecting Mr. Sông’s demand for damages from Mr. Thành.
6. Rejecting other requests from both parties.
7. Dismissing Mr. Thành’s counterclaim.

On October 1^st, 2009, Mr. Nguyễn Đình Sông appealed, disagreeing with the first-instance trial court’s decision.

On October 12^th, 2009, Mr. Đỗ Trọng Thành appealed, disagreeing with the first-instance trial court’s decision on the passageway, requesting it be recognized as temporary.

In Appellate Civil Judgment No. 86/2010/DS-PT on May 18^th, 2010, the Appellate Court of the Supreme People’s Court in Hà Nội ruled:

– Upholding the first-instance trial court’s judgment regarding the house sale contract and other requests, while vacating and remanding the part related to the passageway through house No. 17 Thuốc Bắc.

On July 20^th, 2010, Nguyễn Đình Sông filed a petition for cassation, requesting the recognition of the second-floor sale contract of house No. 19 Thuốc Bắc.

In Decision No. 148/2013/KN-DS on April 11^th, 2013, the Chief Justice of the Supreme People’s Court filed a cassation appeal against Appellate Civil Judgment No. 86/2010/DS-PT on May 18, 2010, by the Appellate Court of the Supreme People’s Court in Hà Nội; requesting the Judicial Council of the Supreme People’s Court to vacate the above appellate judgment and the trial judgment No. 52/2009/DS-ST on September 29^th, 2009, of the People’s Court of Hà Nội; and remanding the case to the People’s Court of Hà Nội for retrial in accordance with the law.

During the cassation trial, the representative of the Supreme People’s Procuracy recommended that the Judicial Council of the Supreme People’s Court accept the cassation appeal of the Chief Justice of the Supreme People’s Court, but in a manner that vacated Appellate Civil Judgment No. 86/2010/DS-PT on May 18^th, 2010, and remanding the case to the appellate court for retrial.

COURT’S OPINION:

According to the testimonies of the plaintiff, the defendant, and the documents in the case file, the house at 19 Thuốc Bắc Street, Hàng Bồ Ward, Hoàn Kiếm District, Hà Nội, belonged to the couple Đỗ Huy Ngọc and Lê Thị Hữu. The ownership was transferred as inheritance to their children: Đỗ Trọng Cao (deceased in 1972, no wife or children) who received 8/12 parts, and Đỗ Thị Ngà (also known as Nga), Đỗ Thị Nguyệt, Đỗ Thị Song Toàn (deceased in 1963, no husband or children), and Đỗ Trọng Thành who shared 4/12 parts.

On July 1^st, 1971, Mr. Thành signed a contract to rent out a room on the second floor of house No. 19, Thuốc Bắc Street, with an area of 39.36m², to Mr. Nguyễn Đình Nhuần’s family (Mr. Nguyễn Đình Sông’s paternal uncle, who died in 2000) and the couple Mr. Nguyễn Đình Chiện (Mr. Sông’s father, who died in 1998) to collect money for Mr. Cao’s medical treatment, having received 2000 dong in advance.

In the “Certificate of Sale for One Room” (undated but Mr. Thành admitted this document was written around 1971), Mr. Cao sold Mr. Nhuần one room on the second floor of house No. 19, Thuốc Bắc Street (without specifying the area) for 6550 dong. The seller received full payment, and Mr. Chiện signed on behalf of Mr. Nhuần. Mr. Thành stated that this sold room was the same rented room mentioned above and was sold to Mr. Nhuần, not to Mr. Chiện.

However, Mrs. Tô Thị Lâm and Mr. and Mrs. Nguyễn Đình Uân, Nguyễn Đình Hòa, Nguyễn Quỳnh Hợp, and Nguyễn Thị Minh Nguyệt (Mr. Nhuận’s wife and children) confirmed that Mr. Chiện directly handled the transaction and payment, while Mr. Nhuần only acted as a nameholder on the contract. Therefore, there is a basis to determine that Mr. Chiện was the purchaser of this room.

On September 9^th, 1972, Mr. Cao wrote a power of attorney authorizing Mr. Thành to sell his secondary room. On November 5^th, 1972, Mr. Cao died without leaving a will. On the same day, Mr. Thành, Mrs. Ngà, and Mrs. Nguyệt signed the “Certificate of Absolute Sale of the Second Floor of House No. 19, Thuốc Bắc Street,” selling to Mr. Chiện and his wife one main room of 38.07m² and one secondary room of 7.095m², totaling 45.165m² for 3000 dong. The seller received full payment, and the buyer had taken possession and was living in the space. The certificate was signed by the three sellers, Mr. Thành, Mrs. Ngà, and Mrs. Nguyệt, but not by the buyers, Mr. Chiện and Mrs. Mở.

During the dispute, Mr. Sông presented two house sale certificates mentioned above and Mr. Cao’s power of attorney for Mr. Thành to sell the house. In practice, Mr. Chiện’s family has managed both rooms on the second floor of house No. 19, Thuốc Bắc Street, from Mr. Thành’s family since 1972. Mr. Thành’s family lived in house No. 17, Thuốc Bắc Street, next door, without disputing rental or purchase money.

The content of the “Certificate of Absolute Sale of the Second Floor of House No. 19, Thuốc Bắc Street” clearly states that the seller received full payment and did not mention any separate payment receipt. The certificate serves as a receipt where the seller confirmed receiving payment. The buyer did not sign the sale document, but since the buyer held the document, it still holds the value of confirming the seller’s obligation to have received payment. The lower courts’ judgment that the buyer did not sign the document and could not prove payment to dismiss the plaintiff’s request to recognize the sale contract means that the plaintiff’s rights were not protected.

The housing sale transaction between Mr. Thành’s siblings and the couple Mr. Chiện and Mrs. Mở was established before July 1^st, 1991, hence the Resolution 58/1998/NQ-UBTVQH10 dated August 20^th, 1998, of the National Assembly Standing Committee had to be applied in order to resolve the case. Mrs. Nguyễn Thị Lan (Mr. Chiện’s and Mrs. Mở’s daughter) participated in the proceedings as a related party inheriting from Mr. Chiện and Mrs. Mở, but not in the transaction. Ms. Lan settled in the Czech Republic from 1997, so this transaction is not considered a pre-July 1, 1991, transaction involving an overseas Vietnamese before that date.

Hence, the lower courts’ application of Resolution 1037/2006/NQ-UBTVQH11 dated July 27^th, 2006, on civil transactions involving housing with overseas Vietnamese before July 1^st, 1991, was incorrect.

In light of the foregoing, pursuant to Clause 3, Article 291; Clause 3, Article 297; Clause 2, Article 299 of the Civil Procedure Code (amended and supplemented by Law No. 65/2011/QH12 dated March 29^th, 2011, of the National Assembly);

DECISION:

1. To vacate the entire Appellate Civil Judgment No. 86/2010/DS-PT dated May 18^th, 2010, of the High People’s Court in Hà Nội regarding the “Dispute over ownership and use of house” between the plaintiffs, Mr. Nguyễn Đình Sông, Mrs. Nguyễn Thị Hồng, Mrs. Nguyễn Thị Hương, and the defendants, Mr. Đỗ Trọng Thành, Mrs. Đỗ Thị Nguyệt, Mr. Vương Chí Tường, Mr. Vương Chí Thắng, Ms. Vương Bích Vân, and Ms. Vương Bích Hợp; and interested parties including nine people.
2. To remand the case file to the High People’s Court in Hà Nội for re-appellate trial according to the law.

CONTENT OF THE CASE LAW:

“When the dispute arose, Mr. Song presented the two house sale certificates mentioned above and Mr. Cao’s power of attorney for Mr. Thành to sell the house. In practice, Mr. Chiện‘s family has managed both rooms on the second floor of house No. 19, Thuốc Bắc Street, of Mr. Thành‘s family from 1972 until now. Mr. Thành‘s family lived in house No. 17, Thuốc Bắc Street, next door, without disputing rental or purchase money. The content of the “Certificate of Absolute Sale of the Second Floor of House No. 19, Thuốc Bắc Street” clearly states that the seller received full payment, and there was no agreement to establish a separate payment receipt.

This serves as a receipt confirming the payment. The buyer did not sign the sale document, but since the buyer held the document, it still holds value in confirming the seller’s obligation to have received payment. The lower courts’ judgment that the buyer did not sign the document and could not prove payment to dismiss the plaintiff’s request to recognize the house sale contract did not ensure the plaintiff’s rights.”

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