[5] An IOU altered without a date makes it difficult to recover due to inability to provide evidence.

Compiled from: Shandong High Court

In private lending, complex financial transactions may be involved, and the IOU becomes important evidence for such activities. When an IOU shows signs of trimming, it may lead to incomplete or distorted information, making key details such as the loan time and amount difficult to determine. In such cases, how should the court adjudicate?

Case Review

Liu and Han have been friends and business partners for many years. On March 2, 2023, Liu filed a lawsuit in court, claiming that Han borrowed 200,000 yuan from him on July 24, 2014, and has not repaid it to date, requesting the court to order Han to repay the principal and interest. Liu submitted to the court an IOU issued by Han, which stated: "Borrowed cash of 200,000 yuan (¥200,000) for business turnover. Han."

Han argued that the IOU was originally dated 2011 when it was written, and later the parties settled, rendering the IOU void. Han submitted to the court an IOU issued by Liu, which stated: "Owe Han a total of 220,000 yuan (Note: All accounts from the above cooperation are settled, and the above IOUs and receipts are automatically void, with this document as the standard). Liu, July 5, 2011."

To prove the date of the IOU in question, Liu submitted a bank transaction record of withdrawing 400,000 yuan on July 24, 2014, claiming that he gave 200,000 yuan in cash to Han that day. It was also found that the IOU in question had obvious signs of trimming.

The court held that Article 67 of the Civil Procedure Law of the People's Republic of China stipulates that parties have the responsibility to provide evidence for their claims. In this case, Liu filed a lawsuit requesting the court to order Han to repay the principal of 200,000 yuan and interest, so Liu bore the responsibility of providing evidence to support his claim. During the proceedings, Liu submitted an IOU issued by Han, but the IOU clearly had signs of trimming and lacked a date. Given that Han submitted an IOU containing the settlement content and date as a rebuttal, Liu should bear the burden of further proving the existence of the lending relationship in question. Although Liu submitted the withdrawal certificate from July 24, 2014, this certificate alone was insufficient to prove the connection between the withdrawal and the loan in question. In summary, when the date of the IOU in question could not be determined, the plaintiff and holder of the IOU should bear the consequences of failing to provide evidence. Considering the IOU Liu issued to Han, Liu's claim that Han should repay the 200,000 yuan loan and interest lacked sufficient evidence, and the court ultimately dismissed Liu's lawsuit. After the judgment, Liu appealed, but the second-instance court rejected the appeal and upheld the original judgment.

Civil Procedure Law of the People's Republic of China

Article 67

The parties have the responsibility to provide evidence in support of their own claims. If a party or its litigation representative is unable to collect evidence due to objective reasons, or if the people's court deems certain evidence necessary for the trial of the case, the people's court shall investigate and collect such evidence. The people's court shall examine and verify evidence comprehensively and objectively in accordance with statutory procedures.

[4] Author's Opinion

IOUs and promissory notes are private documentary evidence and serve as important creditor's rights documents in private lending relationships. Their holders should properly keep them. Specifically, the following points should be observed: First, comprehensive recording. When writing an IOU, important information such as the borrower, lender, loan amount, purpose of the loan, method of delivery, loan term, loan date, and interest should be recorded as comprehensively as possible, and a relatively complete piece of paper should be used to avoid disputes later. Second, confirmation of changes. Avoid modifying existing IOUs as much as possible. If modifications are necessary, fingerprints should be affixed to the added, deleted, or altered parts for confirmation. Third, cross-referencing. Keep other evidence formed during the lending process, such as transaction records, WeChat chat logs, and call records, to cross-reference with relevant IOUs and promissory notes, thereby forming a complete chain of evidence. Fourth, timely destruction. If the lender has not delivered the funds or the loan has been repaid, ensure that the relevant IOUs, promissory notes, and other creditor's rights documents are destroyed in a timely manner.