Case Description

Company A purchased goods from Company B, and after Company B delivered the goods to Company A according to the agreement, Company A delayed in arranging payment due to capital turnover issues. After that, Company A issued a "Repayment Instructions" to Company B, specifying that Company A owed Company B the payment for goods, and Company A promised to pay Company B the payment for goods and interest in three installments within three months. The debtor of the Repayment Statement has the seal of Company A, the signature of the shareholder Mr. Wang and the handwritten ID card number. Three months later, Company A only repaid a small portion of the purchase price, and Company B filed a lawsuit against Company A and its shareholder, Mr. Wang, to the court, requesting Company A to immediately repay the outstanding purchase price and interest, and Mr. Wang to assume joint and several liability for the aforementioned debts of Company A. So does Mr. Wang bear joint liability for the debts of Company A?

Lawyer Analysis

Whether Mr. Wang bears joint and several liability depends on the determination of the nature of the act signed by Mr. Wang. Is it debt addition, guarantee liability, or debt confirmation? In response, we conduct the following analysis:

1、 Debt accession

Article 552 of the Civil Code stipulates that if a third party and the debtor agree to join the debt and notify the creditor, or if the third party expresses its willingness to join the debt to the creditor, but the creditor fails to explicitly refuse within a reasonable period of time, the creditor may request the third party to bear joint and several debts with the debtor within the scope of the debt that it is willing to bear. Article 36, paragraph 2, of the Interpretation of the Supreme People's Court on the Application of the Guarantee System in the Civil Code of the People's Republic of China stipulates: "If a commitment document provided by a third party to a creditor has an intention to join the debt or jointly assume the debt with the debtor, the people's court shall recognize it as a debt joining as stipulated in Article 552 of the Civil Code.", Debt accession refers to the fact that the original debtor has not divorced from the original debt relationship, but that a third party has joined the original debt relationship to jointly assume the debt with the original debtor, and the third party and the original debtor are jointly and severally liable for the debt.

Therefore, debt addition usually requires a clear indication of the intention of the third party to join the debt, such as the content of the third party's commitment related to the debt and indicating their willingness to assume the debt in their personal capacity. In judicial practice, a comprehensive analysis and determination should be made based on the evidence of the case as to whether the third party has a clear intention to join the debt.

2、 Warranty liability

Guarantee liability refers to the credit enhancement measures made by a third party to the creditor and the expression of intention to provide guarantee. Article 36 (3) of the Interpretation of the Supreme People's Court on the Application of the Civil Code of the People's Republic of China on the Guarantee System stipulates: "If it is difficult to determine whether the commitment document provided by a third party is a guarantee or a debt addition, the people's court should recognize it as a guarantee." Therefore, after specific analysis of the case evidence, if the court cannot determine whether the commitment document provided by the third party is a guarantee or a debt addition, The court will determine that the third party is the guarantor, and the third party shall bear the guarantee liability according to law.

3、 Debt recognition

Debt recognition is relatively simple, as a third party acts only as a witness to the existence of the debt and serves to prove the existence of the debt. The third party has no obligation to perform any of the original debt.

In this case, after hearing, the court held that the shareholder of Company A, Mr. Wang, signed as the debtor to confirm the debts of Company A in the "Repayment Description", and specified the repayment amount and interest. In combination with Mr. Wang's admission in the court trial that he was the actual controller of Company A, the court held the opinion that both Company A and Company B had handled their business transactions. However, when Company A has stamped and confirmed the creditor's rights and debts at the debtor's office, Mr. Wang's signature as a witness at the debtor's office is inconsistent with common sense. The court ultimately held that Mr. Wang's behavior had constituted a debt addition and should bear the repayment responsibility jointly with Company A.
Prompt: Whether it is the legal representative (not performing the duties of the legal representative) or the company's shareholders, management personnel, or employees, when required to sign as a natural person on documents related to the company's debts such as IOUs, repayment instructions, repayment plans, and reconciliation letters, it is necessary to clearly indicate "co repayment person", "guarantor", and "certifier" to avoid disputes.