CASE LAW NO. 16/2017/AL On the Recognition of Land Use Rights Transfer Contract as an Inheritance by One of the Co-Heirs

CASE LAW NO. 16/2017/AL

On the Recognition of Land Use Rights Transfer Contract (Land Transfer) as an Inheritance by One of the Co-Heirs

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:

The Cassation Decision No. 573/2013/DS-GĐT dated December 16^th, 2013, of the Civil Court of the Supreme People’s Court regarding the civil case “Inheritance Dispute” in Vĩnh Phúc Province between the plaintiffs Ms. Phùng Thị H1, Ms. Phùng Thị N1, Ms. Phùng Thị H2, Ms. Phùng Thị P and the defendant Mr. Phùng Văn T; interested parties include Ms. Phùng Thị N2 and Ms. Phùng Thị H3.

Location of the Case Law’s Content:

Paragraphs 2 of the “Court’s Opinion” section.

Summary of the Case Law:

– Case Background:

One co-heir transferred a portion of the inherited real estate with the knowledge and consent of the other co-heirs. The proceeds from this transfer were used to support the living expenses of all co-heirs. The transferee was subsequently granted a land use rights certificate for the transferred property.

– Legal Resolution:

In light of these circumstances, the court should recognize the land use rights transfer contract as valid and legally binding. Consequently, the transferred land area is no longer considered part of the estate subject to division among the heirs, but rather belongs exclusively to the transferee as evidenced by the land use rights certificate.

Relevant Legal Provisions:

Clause 2, Article 170, Article 234, Article 634, Article 697 of the 2005 Civil Code (equivalent to Clause 2, Article 221, Article 223, Article 612, Article 500 of the 2015 Civil Code).

Keywords:

“Establishment of ownership by agreement”; “Estate”; “Inheritance as real estate”; “Co-heirs”; “Transfer of land use rights”.

CASE DETAILS

According to the lawsuit filed on April 2^nd, 2011, and subsequent statements by the plaintiffs Ms. Phùng Thị H1, Ms. Phùng Thị N1, Ms. Phùng Thị P, Ms. Phùng Thị H2:

The plaintiffs’ parents, Mr. Phùng Văn N and Mrs. Phùng Thị G, had six children: Ms. Phùng Thị N1, Ms. Phùng Thị N2, Ms. Phùng Thị H2, Mr. Phùng Văn T, Ms. Phùng Thị P, and Ms. Phùng Thị H1.

The common property of Mr. Phùng Văn N and Mrs. Phùng Thị G consisted of a single-story house and ancillary works on a 398m² plot of land in Area L, Ward M, City N, Vĩnh Phúc Province, originally inherited from their ancestors. On July 7^th, 1984, Mr. Phùng Văn N passed away without leaving a will. Mrs. Phùng Thị G and Mr. Phùng Văn T managed and used the house and land.

In 1991, Mrs. Phùng Thị G transferred a portion of the land, 131m², to Mr. Phùng Văn K, leaving 267m² reamaining. In 1999, Mrs. Phùng Thị G was granted a land use rights certificate. Mrs. Phùng Thị G intended to give her daughter, Ms. Phùng Thị H1, a portion of the land for housing due to Ms. Phùng Thị H1’s difficult situation (she had married far away, her husband passed away, and Mrs. Phùng Thị G wanted her to return home).

However, Mr. Phùng Văn T held the land use rights certificate, preventing Mrs. Phùng Thị G from subdividing the land for Ms. Phùng Thị H1. Consequently, Ms. Phùng Thị H1 filed a lawsuit to compel Mr. Phùng Văn T to return the land use rights certificate to Mrs. Phùng Thị G. The court ruled that Mr. Phùng Văn T must return the certificate to Mrs. Phùng Thị G, but he did not comply.

Therefore, in March 2010, Mrs. Phùng Thị G made a will bequeathing 90m² of land and all vegetation on the land to Ms. Phùng Thị H1, specifying the boundaries: The East borders Ms. Phùng Thị G’s land area, the West borders Mr. N’s house, the South borders T Street, the North borders Mr. C’s house. Mrs. Phùng Thị G was healthy and of sound mind when making the will, which was witnessed and certified by the People’s Committee of Ward M. The entire 398m² plot was considered to be under Mrs. Phùng Thị G’s ownership since she had full control over it after Mr. Phùng Văn N’s death.

On December 19^th, 2010, Mrs. Phùng Thị G passed away, and her property was still managed by Mr. Phùng Văn T and his spouse. The plaintiffs now request the court to divide the inheritance according to Mrs. Phùng Thị G’s will, granting Ms. Phùng Thị H1 the 90m² portion and dividing the remaining 177m² according to the law, with the shares of Ms. Phùng Thị N1, Ms. Phùng Thị P, and Ms. Phùng Thị H2 to be given to Ms. Phùng Thị H1. Additionally, they do not seek to settle the division of the agricultural land and the vegetation on it.

The defendant, Mr. Phùng Văn T, represented by his wife Ms. Phùng Thị H3, who is also a interested party, presented: she confirmed the family relations and the inheritance of the 398m² land in Area L, Ward M, City N, as stated by the plaintiffs. She also confirmed the timing of the parents’ deaths. However, she claimed that all the constructions on the land were built by her and her husband in 1997. In 1991, Mrs. Phùng Thị G sold 131m² to Mr. Phùng Văn K without consulting Mr. Phùng Văn T, and he did not know how much money was received or how it was used.

In 1999, Mrs. Phùng Thị G was issued a land use rights certificate for the remaining 267.4m², and Mr. Phùng Văn K was also granted a certificate for the purchased land. Whether Mrs. Phùng Thị G made a will during her lifetime was unknown to them. Now, the siblings’ demand for inheritance division based on the will and law is opposed by Mr. Phùng Văn T because he is the only son and believes he should retain the land for residence and ancestral worship. He does not request the division of the agricultural land.

Ms. Phùng Thị N2, a interested party, presented: she confirmed the family relationships and the inheritance details of the 398m² land in Area L, Ward M, City N, as stated by the plaintiffs. In 1991, her mother transferred 131m² to Mr. Phùng Văn K with the knowledge of all siblings, but she did not know the amount received, only that it was used to pay off debts and support the children.

The remaining 267.4m² was issued a land use rights certificate in 1999 in Mrs. Phùng Thị G’s name, currently managed by Mr. Phùng Văn T. Whether her mother made a will during her lifetime was unknown to her. She opposes the siblings’ request for inheritance division, believing that the land should remain with the only son, Mr. Phùng Văn T, for ancestral worship. If the court decides to divide the inheritance according to the law, she will renounce her share in favor of Mr. Phùng Văn T.

With the facts of the case as stated above;

In the First-instance Civil Judgment No. 11/2011/DSST, the People’s Court of Vĩnh Yên City ruled:

– Accept part of Ms. Phùng Thị H1’s claim, ordering Mr. Phùng Văn T to pay Ms. Phùng Thị H1 a total of VND 340,000,000 (value of 68m² of land). Mr. Phùng Văn T is granted the right to use the 68m² of land on the map sheet No. 32, Plot No. 81 in Area L, Ward M, City N, Vĩnh Phúc Province (with specific boundaries).

– Rejecting the claim of Ms. Phùng Thị N1, Ms. Phùng Thị H2, and Ms. Phùng Thị P regarding the division of Mrs. Phùng Thị G’s estate according to the law.

Additionally, the court ruled on court fees and the right of the parties to appeal.

After the First-instance trial, on January 18^th, 2011, the plaintiffs Ms. Phùng Thị N1, Ms. Phùng Thị H2, Ms. Phùng Thị P, and Ms. Phùng Thị H1 appealed, disagreeing with the First-instance Judgment, requesting the court to divide the inheritance according to the will and the law.

In the Appellate Civil Judgment No. 06/2012/DSPT, the People’s Court of Vĩnh Phúc Province ruled to amend the First-instance Civil Judgment No. 11/2011/DSST:

– Accepting the request for the division of inheritance by Ms. Phùng Thị N1, Ms. Phùng Thị H2, Ms. Phùng Thị H1, and Ms. Phùng Thị P.

– Granting Mr. Phùng Văn T and his legal representative, Ms. Phùng Thị H3, the right to use the 267.4m² of land, valued at VND 1,337,000,000, Plot No. 81, Map Sheet No. 32 in Area L, Ward M, City N.

– Ordering Mr. Phùng Văn T and his legal representative, Ms. Phùng Thị H3, to pay Ms. Phùng Thị H1 the value of her inheritance share, which is VND 982,200,000.

From the date Ms. Phùng Thị H1 files an enforcement request, if Mr. Phùng Văn T and his legal representative, Ms. Phùng Thị H3, do not pay the above amount, they must also pay interest at the basic interest rate prescribed by the State Bank of Vietnam, corresponding to the delay period.

The appellate court also ruled on court fees.

After the appellate trial, Ms. Phùng Thị H3 and Mr. Phùng Văn T requested a review of the Appellate Civil Judgment mentioned above by the People’s Court of Vĩnh Phúc Province.

In Decision No. 131/QĐ-KNGĐT-V5, dated November 12^th, 2013, by the Chief Prosecutor of the Supreme People’s Procuracy regarding the Appellate Civil Judgment No. 06/2012/DSPT; it was determined:

The appellate court’s exclusion of the land area sold by Mrs. Phùng Thị G to Mr. Phùng Văn K from the inheritance estate is justified. The First-instance court’s inclusion of the total land area of 398m² (including the portion sold to Mr. Phùng Văn K) in the inheritance estate was incorrect.

However, the remaining 267m² of land under Mrs. Phùng Thị G’s name should be recognized as the joint property of Mr. Phùng Văn N and Mrs. Phùng Thị G that has not been divided. Mrs. Phùng Thị G only had the right to dispose of ½ of the total 267m² joint property, equating to 133.5m² – 90m² (already given to Ms. Phùng Thị H1), leaving 43.5m² to be divided among 5 heirs.

For the remaining ½ of the 267m² of joint property, as it was the inheritance of Mr. Phùng Văn N, the statute of limitations for inheritance division has expired, and Mr. Phùng Văn T, who has been managing it, is entitled to continue managing it. The appellate court’s determination that the entire 267m² land was the inheritance of Mrs. Phùng Thị G and its division according to the will (90m² to Ms. Phùng Thị H1) and the remaining 177.4m² according to the law among 5 heirs was incorrect.

At the cassation trial, the representative of the Supreme People’s Procuracy maintained the appeal by the Chief Prosecutor and recommended the trial panel accept the appeal.

COURT’S OPINION:

[1] Based on the case documents, the 398m² of land located at Area L, Ward M, City N, Vĩnh Phúc Province, originated from the joint property of Mr. Phùng Văn N and Mrs. Phùng Thị G. Mr. Phùng Văn N and Mrs. Phùng Thị G had six children together: Ms. Phùng Thị H1, Ms. Phùng Thị N1, Ms. Phùng Thị H2, Mr. Phùng Văn T, Ms. Phùng Thị P, and Ms. Phùng Thị N2. Mr. Phùng Văn N died on July 7^th, 1984 without leaving a will, and Mrs. Phùng Thị G and Mr. Phùng Văn T managed and used the land and house.

[2] In 1991, Mrs. Phùng Thị G transferred 131m² of the total 398m² land to Mr. Phùng Văn K; the remaining area was 267.4m². In 1999, Mrs. Phùng Thị G was granted the land use right certificate for 267.4m², and she and Mr. Phùng Văn T’s family managed and used this land. The children of Mrs. Phùng Thị G were aware of the land transfer to Mr. Phùng Văn K but did not object. They testified that the money from the sale was used for her and her children’s living expenses.

Now, Mr. Phùng Văn K has been issued the land use right certificate by the state authority. Therefore, it is reasonable to conclude that Mrs. Phùng Thị G’s children agreed to the transfer of the 131m² to Mr. Phùng Văn K. The appellate court’s exclusion of the land sold to Mr. Phùng Văn K from the inheritance estate is justified, whereas the First-instance court’s inclusion of the total 398m² was incorrect.

[3] On December 19^th, 2010, Mrs. Phùng Thị G died, having left a will dated March 5^th, 2009, bequeathing 90m² of the total 267m² to Ms. Phùng Thị H1, witnessed and notarized by the People’s Committee of Ward M on March 7^th, 2009. Although the will was made and notarized on different days, the People’s Committee’s opinion and the witnesses’ testimonies confirmed that Mrs. Phùng Thị G made the will while still of sound mind, and the will’s content was her genuine intention. Thus, the acceptance of the will by the two levels of the court was reasonable and fair.

[4] However, the 267m² of land under Mrs. Phùng Thị G’s name was acquired during the marriage and must be recognized as the undivided joint property of Mr. Phùng Văn N and Mrs. Phùng Thị G. Mrs. Phùng Thị G only had the right to dispose of ½ of the 267m² joint property.

Therefore, the inheritance from Mrs. Phùng Thị G is ½ of the joint property (133.5m²), which is to be divided according to the will: 90m² to Ms. Phùng Thị H1 (Mrs. Phùng Thị G’s daughter), and the remaining 43.5m² to be divided among the 5 remaining heirs (in which Ms. N2 waived her inheritance share for Mr. Phùng Văn T; Ms. Phùng Thị H2, Ms. Phùng Thị N1, and Ms. Phùng Thị P waived their shares for Ms. Phùng Thị H1).

As for the remaining ½ of the 267m² of joint property, which is the estate of Mr. Phùng Văn N, the statute of limitations for division has expired, and since Mr. Phùng Văn T, one of the heirs, does not agree to divide it, under Subsection 2.4, Section 2, Part I of Resolution No. 02/2004/NQ-HĐTP of the Judicial Council of the Supreme People’s Court, the conditions for dividing the joint property are not met, so whoever is currently managing and using this land can continue to do so.

[5] The appellate court’s determination that the entire 267m² of land was Mrs. Phùng Thị G’s inheritance to be divided according to the will (90m² to Ms. Phùng Thị H1) and the remaining 177.4m² according to the law among 5 heirs was incorrect.

[6] Additionally, Mr. Phùng Văn T did not appeal, but the court ordered him to pay VND 200,000 in appellate court fees. Ms. Phùng Thị N1, Ms. Phùng Thị H2, and Ms. Phùng Thị P voluntarily waived their shares for Ms. Phùng Thị H1, and the court accepted this. Ms. Phùng Thị H1, being a poor household, was exempt from all court fees, but the appellate court did not refund the advance court fees to Ms. Phùng Thị N1, Ms. Phùng Thị H2, and Ms. Phùng Thị P, which was incorrect. Therefore, the appeal by the Chief Prosecutor of the Supreme People’s Procuracy is justified.

In light of the foregoing, pursuant to Clause 2 of Article 291, Clause 3 of Article 297, and Article 299 of the Civil Procedure Code;

DECISION:

To vacate the entire Appellate Civil Judgment No. 06/2012/DSPT and the First-instance Civil Judgment No. 11/2011/DS-ST regarding the “Inheritance Dispute” case between plaintiffs Ms. Phùng Thị H1, Ms. Phùng Thị N1, Ms. Phùng Thị H2, and Ms. Phùng Thị P, and defendant Mr. Phùng Văn T, and related parties Ms. Phùng Thị N2 and Ms. Phùng Thị H3.

The case is remanded to the People’s Court of Vĩnh Yên City, Vĩnh Phúc Province for a first-instance retrial according to legal procedures.

CONTENT OF THE CASE LAW:

“[2] In 1991, Mrs. Phùng Thị G transferred 131m² of the total 398m² land to Mr. Phùng Văn K; the remaining area was 267.4m². In 1999, Mrs. Phùng Thị G was granted the land use right certificate for 267.4m², and she and Mr. Phùng Văn T‘s family managed and used this land. The children of Mrs. Phùng Thị G were aware of the land transfer to Mr. Phùng Văn K but did not object.

They testified that the money from the sale was used for her and her children’s living expenses. Now, Mr. Phùng Văn K has been issued the land use right certificate by the state authority. Therefore, it is reasonable to conclude that Mrs. Phùng Thị G‘s children agreed to the transfer of the 131m² to Mr. Phùng Văn K. The appellate court’s exclusion of the land sold to Mr. Phùng Văn K from the inheritance estate is justified, whereas the First-instance court’s inclusion of the total 398m² was incorrect.”

If you need more consulting, please Contact Us at TNHH NT International Law Firm (ntpartnerlawfirm.com)

You can also download the .docx version here.