Question raising

After the civil dispute between Company A and Party B was resolved by an arbitration institution, Company A applied to the People's Court (hereinafter referred to as the "Enforcement Court") for enforcement due to Party B's failure to comply with the arbitration award. After the execution court filed the case, the jointly owned property of Party B and his spouse Party C was lawfully sealed. But the executing court believes that the property is jointly owned by Mr. and Mrs. B and cannot be directly auctioned off. Therefore, Company A filed a creditor's subrogation lawsuit for property division. It took more than two years to finally enter the auction process.

Lawyer Interpretation

In judicial practice, it is common to encounter situations where the person being executed and an outsider jointly own property, with the situation of jointly owning property with spouse, parents, and children being particularly common. In order to evade debt, the debtor will not divide or sell the jointly owned property for debt repayment. On the contrary, they will also jointly raise objections to the execution with the co owners on the grounds that the jointly owned property is the only residential property of the family or the debtor only has a small share. In this case, if the applicant for enforcement wants to execute the property jointly owned by the executed person and an outsider, they need to take two proactive actions.

The first step is to file a creditor's subrogation lawsuit with the people's court. According to Article 12 of the "Provisions of the Supreme People's Court on the Seizure, Seizure, and Freezing of Property in Civil Enforcement by People's Courts (Revised in 2020)", the applicant for enforcement has the right to file a creditor's subrogation lawsuit in accordance with the law, request the court to make a judgment to divide the jointly owned property between the debtor and the third party in accordance with the law, and confirm the share enjoyed by the debtor.

The second step is to apply to the executing court for auction of the jointly owned property after the civil judgment of the creditor's subrogation lawsuit made by the people's court takes effect. At this point, it should be noted that in judicial practice, there are still two disposal methods for the auction of jointly owned properties by the debtor and non parties, namely, auction by shares and retaining the corresponding auction proceeds of the co owners after the overall auction. The executing court can choose the auction method based on the specific situation of the case and the property. Due to the share based auction situation, potential bidders, considering the inconvenience in using, renting, selling, and other aspects of the property in the future, almost do not participate in the auction, which ultimately leads to the property being auctioned off and execution being hindered. To avoid this situation, the applicant for enforcement should, after receiving the effective judgment of the creditor's subrogation lawsuit, claim to the enforcement court that the shared property is difficult to divide and that the division will reduce its value, request a comprehensive auction of the shared property, and enforce the auction price corresponding to the shares enjoyed by the debtor, in order to achieve the enforcement of the shared property between the debtor and outsiders.