Case Law No. 14/2017/AL on the recognition of conditions in a contract for the gift of land use rights where such conditions are not recorded in the contract

SOURCE OF THE PRECEDENT:

Cassation Decision No. 02/2011/DS-GDT dated January 17, 2011, of the Civil Court of the Supreme People’s Court regarding the case “Request for annulment of a land use right transfer contract” in Dien Bien Province between the plaintiff, Mr. Quang Van P1, and the defendants, Mr. Quang Van P2 and Ms. Phan Thi V.

LOCATION OF THE PRECEDENT’S CONTENT:

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

SUMMARY OF THE PRECEDENT:

• Case Scenario: A contract for the gift of land use rights does not state the conditions for the gift, but other relevant documents and materials demonstrate that the parties had reached an agreement and consensus on the gift's conditions, and such conditions are lawful.

• Legal Solution: In this case, the Court must recognize the conditions of the land use right gift contract and determine that the land use right gift contract is a conditional gift of property contract.

LEGAL PROVISIONS RELATED TO THE PRECEDENT:

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

KEYWORDS OF THE PRECEDENT:

"Land use right gift contract"; "Conditional civil transaction"; "Conditional gift of property".

CASE FACTS:

In the petition dated December 27, 2006, and January 10, 2007, and throughout the proceedings, the plaintiff, Mr. Quang Van P1, and Ms. Quang Thi N stated:

In 2003, the People's Committee of Dien Bien Province granted him 72m² of land along National Highway 279 (under Decision No. 1487 dated September 25, 2003). On December 24, 2003, he completed procedures to transfer the land use rights of the aforementioned area to the couple Mr. Quang Van P2 (his son) and Ms. Phan Thi V (his daughter-in-law). On December 6, 2003, he again executed a contract to transfer residential land use rights to Mr. Quang Van P2 and Ms. Phan Thi V for the same area, certified by the People's Committee of T Ward, P City, Dien Bien Province.

In 2005, a dispute over this land area arose between him and Ms. Quang Thi N (his daughter); thus, in Appellate Civil Judgment No. 08/DSPT dated August 24, 2005, the People's Court of Dien Bien Province ordered Ms. Quang Thi N to return the land area to him.

On June 12, 2006, the People's Committee of P City, Dien Bien Province, issued a land use right certificate to him.

On October 27, 2006, he executed a gift contract to Mr. Quang Van P2 (his son) on the condition that Mr. Quang Van P2 must build a house for him to live in.

After he completed the name transfer procedures under the gift contract, Mr. Quang Van P2 failed to build the house as promised and even requested him to move to M Town, G District. Therefore, he requested the annulment of the land gift contract because Mr. Quang Van P2 and Ms. Phan Thi V failed to fulfill the committed conditions.

The defendants, Mr. Quang Van P2 and Ms. Phan Thi V, stated: Mr. Quang Van P1 (his father) gifted the couple the land area while he was still lucid and alert. Now that Mr. Quang Van P1 is no longer lucid, Ms. Quang Thị N (his elder sister) pressured Mr. Quang Van P1 to file a petition to annul the gift contract. The fact that his father gave him the land was without any conditions or commitments; therefore, they did not accept the plaintiff's request.

In First Instance Civil Judgment No. 03/2007/DSST dated June 30, 2007, the People's Court of Dien Bien Phu City, Dien Bien Province, decided: To reject Mr. Quang Van P1’s request to annul the land use right transfer contract No. 82 dated October 6, 2006, between the transferor Mr. Quang Van P1 and the transferees Mr. Quang Van P2 and Ms. Phan Thi V. Additionally, the first instance court ruled on court fees and the parties' right to appeal.

In Appellate Civil Judgment No. 14/2007/DSPT dated August 28, 2007, the People's Court of Dien Bien Province decided: To amend First Instance Judgment No. 03/2007/DSST. To accept Mr. Quang Van P1’s appeal. To annul land use right transfer contract No. 82 dated October 6, 2006, between the transferor Mr. Quang Van P1 and the transferee Mr. Quang Van P2 for the land plot under land use right certificate No. AD 762/197, plot 2A, map sheet 289 IV-D-d, residential group 8, T Ward, P City, Dien Bien Province. To recommend the Department of Natural Resources and Environment of P City to correct and restore the land use right certificate in the name of Mr. Quang Van P1. To recommend the Department of Natural Resources and Environment to revoke the land use right certificate issued to Mr. Quang Van P2.

After the appellate trial, Mr. Quang Van P2 filed a complaint requesting a review under cassation procedures.

In Decision No. 579/2010/KN-DS dated August 26, 2010, the Chief Justice of the Supreme People's Court protested against the Appellate Judgment, requesting the Civil Court of the Supreme People's Court to conduct a cassation trial to annul both the appellate and first instance judgments, and remit the case file to the People's Court of Dien Bien Phu City for a retrial with the following assessment:

Based on documents in the case file, the 72m² of land originated from Mr. Quang Van P1, granted by local authorities for residential purposes under land grant document No. 1487 dated September 25, 2003. In 2003, Mr. Quang Van P1 executed several documents to transfer the land to Mr. Quang Van P2. However, at that time, the land was under dispute with Ms. Quang Thi N. Not until March 22, 2006, did Mr. Quang Van P1 actually receive the land back from Ms. N following a court judgment. Therefore, the previous transfer documents were legally invalid as Mr. P1 did not yet have the legal right to use the land at that time.

On March 25, 2006, Mr. P1 authorized Mr. P2 to apply for construction permits and build a house for Mr. P1 and to care for Mr. K (Mr. P1's father). In 2006, while Mr. P1 was undergoing medical treatment in Hanoi (suffering from a stroke and hemiplegia), he signed various documents regarding the land. The courts should have clarified Mr. P1’s true intent: did he intend to gift the land to Mr. P2, or merely authorize Mr. P2 to build a house for him to live in? If the gift was conditional on Mr. P2 building a house for Mr. P1 and caring for him, and Mr. P2 failed to do so, the contract should be annulled.

The representative of the Supreme People’s Procuracy at the cassation hearing also stated that it was necessary to clarify whether the gift from Mr. P1 was conditional to resolve the case according to the law.

COURT’S OPINION:

[1] - [9] (Summarizing the history of land grant, disputes, and the execution of various transfer and authorization documents between 2003 and 2006).

[10] Thus, if there are grounds to determine that the competent local State authority granted the land to Mr. Quang Van P1 since 2003, then Mr. Quang Van P1 had the legal right to use the land and the right to dispose of his property.

[11] However, Mr. Quang Van P1 claimed that the gift to Mr. Quang Van P2’s couple was conditional—specifically, that they must build a house for him and care for him and his parents—but they failed to perform. Although Mr. Quang Van P2 denied this, the authorization letter dated March 25, 2006, and a Commitment dated October 12, 2006, signed by Mr. P2, explicitly mentioned the responsibility to build a house for his father and not to transfer the land to anyone else.

[12] Although the land use right gift contract did not record the conditions, the aforementioned documents showed that Mr. Quang Van P2 was required to build a house for Mr. Quang Van P1 and care for him and his parents.

[13] Therefore, it is necessary to verify whether Mr. Quang Van P2 fully performed these conditions. Based on this, it can be determined whether the gift contract is completed or uncompleted to resolve the case.

[14] Furthermore, the Appellate Court’s recommendation for the Department of Natural Resources and Environment to revoke the certificate was unlawful as that department lacks the authority to revoke land.

[15] - [17] (The Council of Justices decided to annul both lower judgments for a retrial).

DECISION:

1. Annul Appellate Civil Judgment No. 14/2007/DSPT and First Instance Civil Judgment No. 03/2007/DSST regarding the case "Request for annulment of a land use right transfer contract."

2. Remit the case file to the People's Court of Dien Bien Phu City for a first-instance retrial.

CASE LAW CONTENT:

“[10] Thus, if there are grounds to determine that the competent local State authority granted the land to Mr. Quang Van P1 since 2003 (as the courts at all levels had not yet collected the 2003 land grant decision), then Mr. Quang Van P1 had the legal right to use the aforementioned land area since 2003; therefore, Mr. Quang Van P1 had the right to dispose of his property.

[11] However, Mr. Quang Van P1 claimed that his gift to the couple Mr. Quang Van P2 was conditional—that Mr. Quang Van P2 and his wife must build a house for him to live in and care for him and his parents—but they failed to fulfill the commitment. Although Mr. Quang Van P2 did not acknowledge that Mr. Quang Van P1’s gift was conditional, the authorization letter dated March 25, 2006, showed that Mr. Quang Van P1 authorized Mr. Quang Van P2 to apply for a construction permit... with the responsibility to build a house on plot 379B for Mr. Quang Van P1 to live in, and the responsibility to care for the couple Mr. K (who are Mr. Quang Van P1’s parents). In the Commitment dated October 12, 2006, Mr. Quang Van P2 wrote: “... I was given a piece of land by my father... I make this commitment to the local government that I will proceed to build a house for my father and shall not transfer it to anyone else.”

[12] Although the land use right gift contract did not record the conditions, the aforementioned documents demonstrated that Mr. Quang Van P2 must build a house for Mr. Quang Van P1 to live in and care for Mr. Quang Van P1 and his parents.”

The full text of the Precedent can be viewed here.

Note: The English translation is for reference only.