CASE LAW NO. 14/2017/AL On Recognizing the Conditional Land Use Right Gift Contract When Such Conditions Are Not Recorded in the Contract

CASE LAW NO. 14/2017/AL

On Recognizing the Conditional of a Land Use Right Gift Contract When Such Conditions Are Not Recorded in the Contract

Approved by the Judicial Council of the Supreme People’s Court on December 14^th, 2017, and published under Decision No. 299/QD-CA dated December 28^th, 2017, by the Chief Justice of the Supreme People’s Court.

Source of the Case Law:

Cassation Decision No. 02/2011/DS-GĐT dated January 17^th, 2011, of the Civil Court of the Supreme People’s Court regarding the case “Petition to terminate the land use right transfer contract” in Điện Biên Province between the plaintiff Mr. Quàng Văn P1 and the defendants Mr. Quàng Văn P2 and Ms. Phan Thị V.

Location of the Case Law’s content:

Paragraphs 10, 11, and 12 of the “Court’s Opinion” section.

Summary of the Case Law:

– Case Background:

Although the land use right gift contract did not explicitly state any conditions, other relevant documents and evidence demonstrate that the parties mutually agreed upon lawful conditions for the gift.

– Legal Resolution:

In this case, the Court must recognize the existence of these conditions and determine that the gift contract is a conditional gift contract.

Relevant Legal Provisions:  

Article 125, Article 126, and Article 470 of the Civil Code of 2005 (corresponding to Article 120, Article 121, and Article 462 of the Civil Code of 2015).

Keywords:  

“Land use right gift contract”; “Conditional civil transaction”; “Conditional property gift”.

CASE DETAILS

In the complaint dated December 27^th, 2006, January 10, 2007, and during the case proceedings, the plaintiff Mr. Quàng Văn P1 and Ms. Quàng Thị N stated:

In 2003, the People’s Committee of Điện Biên Province granted Mr. Quàng Văn P1 72m² of land along National Highway 279 (according to Decision No. 1487 dated September 25^th, 2003). On December 24^th, 2003, he completed the procedure to transfer the land use right to Mr. Quàng Văn P2 (his son) and Ms. Phan Thị V (his daughter-in-law) for the above-mentioned land area. On December 6^th, 2003, he also made a contract to transfer the ownership of the land to Mr. Quàng Văn P2 and Ms. Phan Thị V, with confirmation from the People’s Committee of T Ward, P City, Điện Biên Province.

In 2005, there was a dispute over this land area between him and Ms. Quàng Thị N (his daughter), so in the Appellate Civil Judgment No. 08/DSPT dated August 24^th, 2005, the People’s Court of Điện Biên Province ordered Ms. Quàng Thị N to return the above-mentioned land area to him.

On June 12^th, 2006, the People’s Committee of P City, Điện Biên Province issued a land use right certificate to him.

On October 27^th, 2006, he made a contract to gift the land to Mr. Quàng Văn P2 (his son) with the condition that Mr. Quàng Văn P2 must build a house for him to live in.

After completing the title transfer procedures under the gift contract, Mr. Quàng Văn P2 did not build the house as promised but instead asked him to move to M Town, G District. Therefore, he requested the termination of the land gift contract because Mr. Quàng Văn P2 and Ms. Phan Thị V did not fulfill the agreed-upon condition.

The defendants, Mr. Quàng Văn P2 and Ms. Phan Thị V, stated: Mr. Quàng Văn P1 (Mr. Quàng Văn P2’s father) gifted the above-mentioned land to their couple when he was of sound mind. Now that Mr. Quàng Văn P1 is no longer of sound mind, Ms. Quàng Thị N (Mr. Quàng Văn P2’s sister) has pressured Mr. Quàng Văn P1 to file a petition to terminate the gift contract. The land gift from their father to them was unconditional and without any commitments, so they do not agree with the plaintiff’s request.

In the First-instance Civil Judgment No. 03/2007/DSST dated June 30^th, 2007, the People’s Court of Điện Biên Phủ City, Điện Biên Province ruled:

To dismiss Mr. Quàng Văn P1’s request to terminate the land use right transfer contract No. 82 dated October 6, 2006, between the transferor Mr. Quàng Văn P1 and the transferees Mr. Quàng Văn P2 and Ms. Phan Thị V.

Additionally, the First-instance Court also ruled on court fees and the parties’ right to appeal.

In the Appellate Civil Judgment No. 14/2007/DSPT dated August 28^th, 2007, the People’s Court of Điện Biên Province ruled to amend the First-instance Civil Judgment No. 03/2007/DSST dated June 30^th, 2007, of the People’s Court of Điện Biên Phủ City, Điện Biên Province.

To accept Mr. Quàng Văn P1’s appeal. To terminate the land use right transfer contract No. 82 dated October 6^th, 2006, between the transferor Mr. Quàng Văn P1 and the transferee Mr. Quàng Văn P2 regarding the land plot as per the land use right certificate No. AĐ 762/197, plot 2A, map sheet 289 IV-D-d, residential group 8, T Ward, P City, Điện Biên Province.

To recommend the Department of Natural Resources and Environment of P City, Điện Biên Province correct and restore the land use right certificate in the name of Mr. Quàng Văn P1, No. AÐ 762/197, plot 2A, map sheet 289 IV-D-d, residential group 8, T Ward, P City, Điện Biên Province.

To recommend the Department of Natural Resources and Environment of P City, Điện Biên Province revoke the land use right certificate in the name of Mr. Quàng Văn P2, registration number H 06445/QSDĐ, issued under Decision No. 822/2006/QĐ-UBND dated October 27^th, 2006, for plot 2A, map sheet 289-IV-D-d, residential group 8, T Ward, P City, Điện Biên Province.

Additionally, the Appellate Court also ruled on court fees.

After the appellate trial, Mr. Quàng Văn P2 filed a complaint requesting a review under cassation procedures against the aforementioned Appellate Civil Judgment.

In Decision No. 579/2010/KN-DS dated August 26^th, 2010, the Chief Justice of the Supreme People’s Court appealed against the Appellate Civil Judgment No. 14/2007/DSPT dated August 28^th, 2007, of the People’s Court of Điện Biên Province, requesting the Civil Court of the Supreme People’s Court to review under cassation procedures, vacate the aforementioned Appellate Civil Judgment and the First-instance Civil Judgment No. 03/2007/DSST dated June 30^th, 2007, of the People’s Court of Điện Biên Phủ City, Điện Biên Province, and remand the case file to the People’s Court of Điện Biên Phủ City, Điện Biên Province for retrial according to legal regulations, with the following findings:

Based on the documents in the case file, the origin of the 72m² of land plot 2A, map sheet 289 IV-D-d, residential group 8, T Ward, P City, Điện Biên Province belongs to Mr. Quàng Văn P1, who was allocated this land by the local government for residential purposes according to the land grant No. 1487 dated September 25^th, 2003.

On December 6^th, 2003, Mr. Quàng Văn P1 made a land ownership transfer document for the couple Mr. Quàng Văn P2, which was signed by Mr. Quàng Văn P1, the couple Mr. Quàng Văn P2, witnesses including the Party Cell Secretary, Residential Group Leader, and confirmed by the People’s Committee of the Ward.

On December 24^th, 2003, Mr. Quàng Văn P1 submitted a “Land Use Right Transfer Application” still containing the content of transferring the land use right to the couple Mr. Quàng Văn P2, signed by Mr. Quàng Văn P1 and confirmed by the Residential Group Leader.

However, the above land area was in dispute between Mr. Quàng Văn P1 and Ms. Quàng Thị N. In the Appellate Civil Judgment No. 08/DSPT, the People’s Court of Điện Biên Province ordered Quàng Thị N to return the land to Mr. Quàng Văn P1. In the “Minutes of Judgment Enforcement” dated March 22^nd, 2006, Ms. Quàng Thị N returned the land to Mr. Quàng Văn P1.

Thus, it can be established that although Mr. Quàng Văn P1 made a gift document for the couple Mr. Quàng Văn P2 in 2003, at that time, Ms. Quàng Thị N was still managing and using the land. It wasn’t until August 24^th, 2005, that Mr. Quàng Văn P1 was legally recognized as the lawful user of the land (according to a valid court decision), and on March 22^nd, 2006, he actually received the land. Therefore, the previous gift document made by Mr. Quàng Văn P1 for Mr. Quàng Văn P2 was legally invalid, and furthermore, the couple Mr. Quàng Văn P2 had not yet completed the transfer procedures nor received the land.

After receiving the land, on March 25, 2006, Mr. Quàng Văn P1 authorized Quàng Văn P2 to apply for a building permit, clear the land, and build a house for Mr. Quàng Văn P1 to live in and to take care of Mr. K (Mr. Quàng Văn P1’s father). On June 12, 2006, Mr. Quàng Văn P1 was granted a certificate of land use rights.

On June 3^rd, 2006, in Hà Nội, Mr. Quàng Văn P1 authorized Mr Nguyễn Viết H to complete the procedures for gifting the land to the couple Mr. Quàng Văn P2.

In the land use right transfer contract No. 82/HĐ-UBND (no date) at the People’s Committee of Ward T, City P, Điện Biên Province, Mr. Quàng Văn P1 transferred the above land to Mr. Quàng Văn P2. This contract was signed by Mr. Quàng Văn P1, Mr. Quàng Văn P2, and the authorized person Mr. Nguyễn Viết H. However, the People’s Committee of the ward confirmed it at 8 AM on October 6^th, 2006. Based on this contract, Mr. Quàng Văn P2 was issued a certificate of land use rights.

In fact, Mr. Quàng Văn P1 has been ill and receiving treatment in Hanoi since February 17^th, 2003, for conditions including stroke, hemiplegia, and central nervous system paralysis. Despite this, in 2006, Mr. Quàng Văn P1 signed documents disposing of the 72m² of land for which he received a certificate of use rights on June 12^th, 2006. However, at the time of signing, Mr. Quàng Văn P1 was in Hanoi, suffering from significant health issues, and had never utilized the land in question.

Therefore, it is crucial to ascertain Mr. Quàng Văn P1’s intentions regarding the disposal of the 72m² of land. Was his intention to gift it to Mr. Quàng Văn P2, or merely to allow him to build a house for Mr. Quàng Văn P1’s own use? It is also necessary to clarify the circumstances surrounding the signing of the contract, including the time and location of signing, the legal validity of the contract, and the reasons behind Mr. Quàng Văn P1’s request for termination.

If it is determined that Mr. Quàng Văn P1 only entrusted Mr. Quàng Văn P2 with building a house for his own use and still requires the land, the contract should be terminated, and Mr. Quàng Văn P1’s land use rights should be recognized. However, Mr. Quàng Văn P1 must reimburse Mr. Quàng Văn P2 for any reasonable expenses incurred in the transfer process, should such a request be made.

Conversely, if Mr. Quàng Văn P1 does not need the land and intended to gift it to Mr. Quàng Văn P2, then Mr. Quàng Văn P1’s request for termination should be denied.

Both the trial court and the appellate court failed to adequately address these critical issues. The trial court relied solely on documents signed by Mr. Quàng Văn P1 and recognized Mr. Quàng Văn P2’s land use rights in denying Mr. Quàng Văn P1’s request. The appellate court, on the other hand, focused on Mr. Quàng Văn P1’s illness and the alleged non-compliance of the gifting procedures with the law to terminate the contract and recognize Mr. Quàng Văn P1’s land use rights. Both decisions lack sufficient evidentiary basis and a comprehensive analysis of the relevant facts and circumstances.

Furthermore, the appellate court erred in recommending that the Department of Natural Resources and Environment revoke Mr. Quàng Văn P2’s land use right certificate, as only the People’s Committee holds this authority.

At the cassation hearing, the representative of the Supreme People’s Procuracy affirmed the necessity of the Chief Justice’s decision to appeal. This was due to the fact that, despite Mr. Quàng Văn P1’s 2003 land use right transfer contract and 2006 power of attorney seemingly indicating a transfer of land use rights, both documents ultimately reflected Mr. Quàng Văn P1’s intention to gift the land to Mr. Quàng Văn P2 and his wife. Therefore, it is essential to determine whether the gift was conditional to resolve this matter in accordance with the law.

COURT’S OPINION:

[1] In his complaint and during the resolution of the case, Mr. Quàng Văn P1 stated that on September 25^th, 2003, the People’s Committee of Điện Biên Province granted him 72m² of land at plot 2A, map sheet 289 IV-D-d, Residential Group 8, Ward T, City P, Điện Biên Province according to Decision No. 1487.

[2] On December 6^th, 2003, Mr. Quàng Văn P1 made a document transferring the land ownership to the couple Mr. Quàng Văn P2 and Ms. Phan Thị V, witnessed by the Secretary of the Party Cell, the Residential Group Leader, and confirmed by the People’s Committee of Ward T.

[3] On December 24^th, 2003, Mr. Quàng Văn P1 made another “Application for land use right transfer” transferring the land use rights to the couple Quàng Văn P2 and Phan Thị V, confirmed by the Residential Group Leader.

[4] However, the above land area was being managed and utilized by Ms. Quàng Thị N (Mr. Quàng Văn P1’s daughter). In 2005, Mr. Quàng Văn P1 filed a lawsuit demanding that Ms. Quàng Thị N return the land to him. In Appellate Civil Judgment No. 08/DSPT, the People’s Court of Điện Biên Province ordered Ms. Quàng Thị N to return the land to Mr. Quàng Văn P1.

[5] On June 12^th, 2006, the People’s Committee of City P, Điện Biên Province, issued a certificate of land use rights to Mr. Quàng Văn P1 for the above 72m² of land.

[6] On September 15^th, 2006, Mr. Quàng Văn P1 applied for confirmation of his authorization for Mr. Quàng Văn P2 and Ms. Phan Thị V to have full “Ownership and use of the land.”

[7] On October 3^rd, 2006, Mr. Quàng Văn P1 made a power of attorney for Mr. Nguyễn Viết H to complete the procedures to gift the above land to Mr. Quàng Văn P2, certified by the State Notary Office No. 3, Hà Nội City.

[8] On October 6^th, Mr. Quàng Văn P1 made a land use right transfer contract to Mr. Quàng Văn P2 and Ms. Phan Thị V, noting “Father gifts to son” in the transfer value section; the People’s Committee of Điện Biên Phủ City confirmed it under contract No. 82/HĐ-UBND on the same day, thus legalizing Mr. Quàng Văn P1’s gift of the land use right to Mr. Quàng Văn P2 and Ms. Phan Thị V.

[9] On October 27^th, the People’s Committee of City P issued a land use right certificate to Mr. Quàng Văn P2 and Ms. Phan Thị V.

[10] Thus, if there is evidence to confirm that the competent State authority at the local level granted the land to Mr. Quàng Văn P1 in 2003 (as the courts have not yet collected the 2003 land grant decision), Mr. Quàng Văn P1 had lawful use rights over the said land from 2003, giving him the right to dispose of his property.

[11] However, Mr. Quàng Văn P1 claims that his gift to the couple Mr. Quàng Văn P2 was conditional on them building a house for him to live in and taking care of him and his parents, but the couple did not fulfill this commitment.

Although Mr. Quàng Văn P2 denies the gift was conditional, the authorization document dated March 25^th, 2006, shows Mr. Quàng Văn P1 authorized Mr. Quàng Văn P2 to apply for a building permit and to build a house on lot 379B for Mr. Quàng Văn P1 to live in and to take care of Mr. and Mrs. K (Mr. Quàng Văn P1’s parents). In a commitment letter dated October 12^th, 2006, Mr. Quàng Văn P2 wrote, “… I was given this land by my father… I make this commitment to the local authorities to build a house for my father and not to transfer it to anyone.”

[12] While the land use right gift contract itself does not specify any conditions, the aforementioned documents suggest that Mr. Quàng Văn P2 was indeed obligated to build a house for Mr. Quàng Văn P1 and provide care for him and his parents.

[13] Therefore, it is imperative to verify whether Mr. Quàng Văn P2 has fulfilled these conditions. Specifically, it must be determined who provided care for Mr. Quàng Văn P1 during his hospitalization, and how the conditions for caring for Mr. and Mrs. K (Mr. Quàng Văn P1’s parents) are being met, given that Mr. Quàng Văn P2 and his wife currently reside in Hanoi. By establishing whether Mr. Quàng Văn P2 has fulfilled these conditions, a determination can be made regarding the completion of the gift contract between Mr. Quàng Văn P1 and Mr. Quàng Văn P2, thus enabling a lawful resolution of the case.

[14] Additionally, according to Article 44 of the Law on Land, the Department of Natural Resources and Environment does not have the authority of eminent domain, so the appellate court’s recommendation for the Department of Natural Resources and Environment to revoke Quàng Văn P2’s land use right certificate is not lawful.

[15] The Judicial Council of the Supreme People’s Court found it necessary to vacate the Appellate Civil Judgment and the First-instance Civil Judgment for first-instance retrial of the case, in accordance with the law.

[16] The Chief Justice of the Supreme People’s Court’s decision to appeal is well-founded.

[17] Pursuant to Clause 2, Article 291, Article 296, Clause 3, Article 297, and Article 299 of the Civil Procedure Code.

DECISION:

1. Vacate the Appellate Civil Judgment No. 14/2007/DSPT dated August 28^th, 2007, of the People’s Court of Điện Biên Province and the First-instance Civil Judgment No. 03/2007/DSST dated June 30^th, 2007, of the People’s Court of Điện Biên Phủ City, Điện Biên Province regarding the case “Petition to terminate the land use right transfer contract” between the plaintiff Mr. Quàng Văn P1 and the defendants Mr. Quàng Văn P2 and Ms. Phan Thị V.
2. Remand the case file to the People’s Court of Điện Biên Phủ City, Điện Biên Province for first-instance re-trial according to the law.

CONTENT OF THE CASE LAW:

“[10] Thus, if there is evidence to confirm that the competent State authority at the local level granted the land to Mr. Quàng Văn P1 in 2003 (as the courts have not yet collected the 2003 land grant decision), Mr. Quàng Văn P1 had lawful use rights over the said land from 2003, giving him the right to dispose of his property.

[11] However, Mr. Quàng Văn P1 claims that his gift to the couple Mr. Quàng Văn P2 was conditional on them building a house for him to live in and taking care of him and his parents, but the couple did not fulfill this commitment.

Although Mr. Quàng Văn P2 denies the gift was conditional, the authorization document dated March 25^th, 2006, shows Mr. Quàng Văn P1 authorized Mr. Quàng Văn P2 to apply for a building permit and to build a house on lot 379B for Mr. Quàng Văn P1 to live in and to take care of Mr. and Mrs. K (Mr. Quàng Văn P1’s parents). In a commitment letter dated October 12^th, 2006, Mr. Quàng Văn P2 wrote, “… I was given this land by my father… I make this commitment to the local authorities to build a house for my father and not to transfer it to anyone.”

[12] While the land use right gift contract itself does not specify any conditions, the aforementioned documents suggest that Mr. Quàng Văn P2 was indeed obligated to build a house for Mr. Quàng Văn P1 and provide care for him and his parents.”

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