Precedent No. 07/2016/AL on Recognition of a House Sale Contract Established Before July 1, 1991 in Vietnam

Precedent No. 07/2016/AL, adopted by the Judicial Council of the Supreme People’s Court on October 17, 2016, and promulgated pursuant to Decision No. 698/QD-CA dated October 17, 2016, issued by the Chief Justice of the Supreme People’s Court.

1. Definition of a Precedent

A precedent refers to the legal reasoning and rulings contained in a legally effective judgment or decision of a court regarding a specific case, selected by the Judicial Council of the Supreme People’s Court and promulgated by the Chief Justice of the Supreme People’s Court as a precedent for courts to study and apply in adjudication. (Article 1, Resolution No. 04/2019/NQ-HDTP)

A precedent must meet the following criteria:

• It clarifies legal provisions subject to differing interpretations, provides analysis and explanation of legal issues and events, and indicates principles, guidelines for adjudication, or applicable legal norms in a specific case, or reflects fairness in matters not specifically regulated by law;
• It is normative;
• It provides guidance for the uniform application of law in adjudication.

2. Precedent No. 07/2016/AL on Recognition of a House Sale Contract Established Before July 1, 1991 in Vietnam

2.1. Source of the Precedent

Cassation Decision No. 126/2013/DS-GDT dated September 23, 2013, issued by the Judicial Council of the Supreme People’s Court regarding the civil case “Dispute over Ownership and Use of a House” in Hanoi City, between the plaintiffs, Mr. Nguyen Dinh Song, Ms. Nguyen Thi Hong, and Ms. Nguyen Thi Huong, and the defendants, Mr. Do Trong Thanh, Ms. Do Thi Nguyet, Mr. Vuong Chi Tuong, Mr. Vuong Chi Thang, Ms. Vuong Bich Van, and Ms. Vuong Bich Hop; with Ms. Nguyen Thi Lan, Ms. Nguyen Thi Hay, Ms. To Thi Lam, Mr. Nguyen Dinh Uan, Ms. Nguyen Thi Hop, Mr. Nguyen Dinh Hoa, Ms. Nguyen Thi Minh Nguyet, Ms. Tran Thi Bich, and Mr. Vu Dinh Hau as persons with related rights and obligations.

Location of the Precedent Content

Paragraph 4 of the “Findings” section of the aforementioned cassation decision.

2.2. Summary of Precedent No. 07/2016/AL

Precedent Situation:

A house sale contract was documented in writing before July 1, 1991, signed by the seller, clearly stating that the seller received full payment. The buyer, although not signing the contract, possesses the contract document and has stably managed and used the house for an extended period without the seller disputing or claiming the purchase price.

Legal Solution:

In such cases, the contract is valid in confirming that the buyer has fully paid the seller and that the buyer’s intent aligns with agreeing to the house sale contract. The house sale contract shall be recognized.

Relevant Legal Provisions:

• Articles 81, 82, and 83 of the Civil Procedure Code of Vietnam 2004 (corresponding to Articles 93, 94, and 95 of the Civil Procedure Code of Vietnam 2015);
• Resolution No. 58/1998/NQ-UBTVQH10 dated August 20, 1998, of the National Assembly Standing Committee on civil transactions involving housing established before July 1, 1991.

Keywords of the Precedent:

“House sale contract”; “One party not signing the contract”; “Determination of evidence.”

CASE DETAILS

In the lawsuit filed on March 6, 2006, and throughout the case proceedings, the plaintiff, Mr. Nguyen Dinh Song, stated: His father, Mr. Nguyen Dinh Chien (deceased 1998), and mother, Ms. Nguyen Thi Mo (deceased 2005), had four children: himself, Ms. Nguyen Thi Hong, Ms. Nguyen Thi Huong, and Ms. Nguyen Thi Lan. Previously, his family lived at No. 2, Hang Bun Street, while his uncle, Mr. Nguyen Dinh Nhuan, lived at No. 10, Hang Bun Street. After evacuation, Mr. Nhuan’s house was taken by the State and assigned to others, so Mr. Chien allowed Mr. Nhuan to use No. 2, Hang Bun Street, while Mr. Song’s family rented elsewhere. Mr. Do Trong Thanh signed a contract on February 1, 1972, renting the second floor of No. 19, Thuoc Bac Street, to Mr. Chien. The house at No. 19, Thuoc Bac Street, was owned by five siblings: Mr. Do Trong Thanh, Ms. Do Thi Nga, Ms. Do Song Toan, Ms. Do Thi Nguyet, and Mr. Do Trong Cao. As Mr. Cao needed money for medical treatment, he sold a 38 m² room on the second floor to Mr. Song’s family. The contract, signed by Mr. Cao without a date, was priced at 6,550 VND, with full payment received. When Mr. Cao sold the 38 m² room, he provided Mr. Chien with the title deed for No. 19, Thuoc Bac Street, specifying Mr. Cao’s 8/12 share and the remaining 4/12 share held by Mr. Thanh, Ms. Nga, Ms. Nguyet, and Ms. Toan. The first floor had previously been sold by the siblings to Mr. Vu Dinh Tiep and Ms. Tran Thi Bich. Mr. Cao converted a 7 m² kitchen on the second floor for his use. After Mr. Cao’s death on November 5, 1972, Mr. Thanh, Ms. Nga, and Ms. Nguyet signed a contract selling the remaining 7 m² on the second floor to Mr. Song’s family for 3,000 VND, formalized by a contract dated November 5, 1972, the date of Mr. Cao’s death. The siblings signed the deed, confirming receipt of full payment. Mr. Thanh provided Mr. Cao’s authorization letter dated September 9, 1972, stating Mr. Cao, as the owner, authorized Mr. Thanh to sell the ancillary room due to illness. Mr. Song’s family held the sale documents for both second-floor rooms, and his parents could have signed them at any time. Mr. Thanh’s claim that Mr. Song’s parents did not sign to imply non-payment was incorrect.

Mr. Nhuan (deceased 2000), his wife, Ms. To Thi Lam, and their children—Mr. Nguyen Dinh Uan, Mr. Nguyen Dinh Hoa, Ms. Nguyen Thi Hop, and Ms. Nguyen Thi Minh Nguyet—confirmed that Mr. Chien purchased the second-floor room from Mr. Cao, not Mr. Nhuan, who only acted as a nominal buyer.

Mr. Thanh’s family (residing at No. 17, Thuoc Bac Street) consistently caused difficulties for Mr. Song’s family. Mr. Thanh occupied the rooftop of the second floor, and despite Mr. Chien’s requests not to use it, Mr. Thanh refused, leading to a written agreement on December 20, 1987, allowing shared use, but conflicts escalated. When Mr. Song’s family sought to register ownership of the second floor, Mr. Thanh obstructed. Mr. Song requested the court to recognize the sale contract for the second floor of No. 19, Thuoc Bac Street.

Additionally, Mr. Song requested:

• As the first floor was sold to Mr. Tiep’s family and the second floor to his family, Mr. Thanh had no remaining rights to No. 19, Thuoc Bac Street, and should not use the second-floor rooftop or ancillary areas.
• The oral agreement allowed access through the first floor of No. 17, Thuoc Bac Street (Mr. Thanh’s house), so Mr. Thanh should not obstruct the pathway from Hang Ca Street through No. 17 and No. 19 to the second floor.
• Compensation of 540,000,000 VND for Mr. Thanh’s occupation of the rooftop and pathway obstruction from 1987 (2,500,000 VND/month × 18 years).
• Compensation of 5,000,000 VND per person for injuries to Mr. Song and his wife caused by Mr. Thanh’s son.
• Compensation of 800,000,000 VND for mental distress due to Mr. Thanh’s disputes disrupting his family’s life.
• Reimbursement of 120,000,000 VND for rooftop repairs due to damage by Mr. Thanh’s items.
• Compensation of 108,000,000 VND for lost income due to prolonged litigation caused by Mr. Thanh (12,000,000 VND/year × 9 years).

The defendant, Mr. Do Trong Thanh, stated: The house at No. 19, Thuoc Bac Street, under title deed No. 1577, Dong Xuan area, 69 m², was owned by his parents, Mr. Do Huy Ngoc and Ms. Le Thi Huu. On April 21, 1959, it was transferred to their children: Mr. Cao received 8/12, and Ms. Nga, Ms. Nguyet, Ms. Toan, and Mr. Thanh shared 4/12. In 1971, the siblings rented the second floor to Mr. Chien and Ms. Mo (Mr. Song’s parents). In 1971, Mr. Cao sold a 38 m² room to Mr. Nguyen Dinh Nhuan, but Mr. Chien signed the contract, priced at 6,550 VND, undated. On September 9, 1972, Mr. Cao authorized Mr. Thanh to sell a 7.8 m² room. On November 5, 1972, Mr. Cao died. Based on the authorization, Mr. Thanh drafted a sale deed for the 7 m² room to Mr. Chien, who requested including the 38 m² room previously bought, so Mr. Thanh drafted a deed selling the entire second floor, signed by the siblings. When presented to Mr. Chien and Ms. Mo, Mr. Nhuan, present at the time, objected and prevented their signing. Mr. Thanh opposed Mr. Song’s claims, stating Mr. Song resided at Mr. Nhuan’s house.

Mr. Thanh added: He learned of Mr. Cao’s 38 m² sale in 1998, previously believing the house was Mr. Cao’s. Mr. Cao’s authorization was invalid, as the house was co-owned. The sale deed stated the buyer received the house and the seller received payment, but payment was contingent on the buyer’s signature. Mr. Thanh held only the original 38 m² sale deed to Mr. Nhuan. He did not register No. 19, Thuoc Bac Street, due to the dispute, but registered No. 17 based on a 1992 inheritance judgment. He estimated Mr. Cao’s sale to Mr. Nhuan occurred around 1971 and provided the title deed to Mr. Nhuan.

He rejected Mr. Song’s claims, as no second-floor sale occurred, Mr. Song’s parents did not sign or pay, and the contract was invalid, so Mr. Song had no right to the rooftop. Mr. Song used the pathway through No. 17, Thuoc Bac Street, by permission. The ancillary area was not sold, so he retained usage rights. He denied compensation for lost income, as Mr. Song initiated the dispute. Both sides sustained injuries in a fight, unresolved by police, so he refused compensation.

On April 7, 2009, Mr. Thanh filed a counterclaim requesting Mr. Song’s family access the street via No. 19, Thuoc Bac Street, meaning the first floor should provide a pathway. No. 17, Thuoc Bac Street, was his, and the first-floor sale to Mr. Tiep’s family excluded the pathway.

On September 23, 2009, Mr. Thanh withdrew his counterclaim regarding the pathway.

Ms. Do Thi Nguyet and Ms. Do Thi Nga’s children—Mr. Vuong Chi Tuong, Mr. Vuong Chi Thang, Ms. Vuong Bich Van, and Ms. Vuong Bich Hop—stated: Mr. Cao’s 38 m² sale was invalid, as the house was co-owned. Ms. Nga and Ms. Nguyet signed the 7 m² sale to Mr. Chien, but the buyer did not pay, so they requested the house’s return.

Persons with related rights and obligations:

• Ms. To Thi Lam stated: Her husband, Mr. Nguyen Dinh Nhuan (deceased 2000), lived with Mr. Chien’s family at No. 10, Hang Bun Street. In 1970, Mr. Chien’s family moved to No. 19, Thuoc Bac Street. She was unaware of their purchase details but recalled Mr. Nhuan mentioning in 1972 that Mr. Chien bought the house, with Mr. Nhuan acting as a nominal buyer. Mr. Chien’s family paid, and her family had no involvement or rights to No. 19, Thuoc Bac Street.
• Mr. Nhuan’s children—Mr. Nguyen Dinh Uan, Mr. Nguyen Dinh Hoa, Ms. Nguyen Quynh Hop, and Ms. Nguyen Thi Minh Nguyet—agreed with Ms. Lam’s statement.
• Ms. Tran Thi Bich and Mr. Vu Dinh Hau stated: They reside on the first floor of No. 19, Thuoc Bac Street. Mr. Thanh had no right to demand they provide a pathway for Mr. Song’s family. As Mr. Thanh withdrew his counterclaim, they had no objections.

At First-Instance Civil Judgment No. 78/DSST dated November 21, 2007, the Hanoi City People’s Court decided:

• To reject Mr. Nguyen Dinh Song’s claims.

On November 21, 2007, Mr. Song appealed.

At Appellate Civil Judgment No. 121/2008/DSPT dated June 30, 2008, the Appellate Court of the Supreme People’s Court in Hanoi annulled the first-instance judgment and remanded the case for re-adjudication.

At First-Instance Civil Judgment No. 52/2009/DSST dated September 29, 2009, the Hanoi City People’s Court decided:

1. To reject the request to recognize the sale contract for the entire second floor of No. 19, Thuoc Bac Street.
2. To accept Mr. Song’s request to order Mr. Thanh to remove all items and plants from the second-floor rooftop to No. 17, Thuoc Bac Street, with both families using the rooftop per the December 20, 1987, agreement.
3. To reject Mr. Song’s request to prohibit Mr. Thanh’s family from using the ancillary area and courtyard of No. 19, Thuoc Bac Street.
4. To confirm the pathway from Hang Ca Street through the land of No. 17 and No. 19, Thuoc Bac Street, with no obstructions permitted.
5. To reject Mr. Song’s compensation claims against Mr. Thanh.
6. To reject other claims by the parties.
7. To suspend adjudication of Mr. Thanh’s counterclaim.

On October 1, 2009, Mr. Song appealed, disagreeing with the first-instance decision.

On October 12, 2009, Mr. Thanh appealed, contesting the pathway ruling and requesting it be deemed temporary.

At Appellate Civil Judgment No. 86/2010/DS-PT dated May 18, 2010, the Appellate Court upheld the first-instance judgment on the sale contract and other claims, annulling and remanding the pathway issue for re-adjudication.

On July 20, 2010, Mr. Song requested a cassation review to recognize the second-floor sale contract.

In Protest Decision No. 148/2013/KN-DS dated April 11, 2013, the Chief Justice of the Supreme People’s Court protested Appellate Civil Judgment No. 86/2010/DS-PT dated May 18, 2010, proposing that the Judicial Council conduct a cassation review to annul the appellate and First-Instance Judgment No. 52/2009/DS-ST dated September 29, 2009, and remand the case to the Hanoi City People’s Court for re-adjudication at first instance.

At the cassation hearing, the Supreme People’s Procuracy representative proposed accepting the Chief Justice’s protest but annulling the appellate judgment and remanding it to the appellate court.

The Judicial Council of the Supreme People’s Court determined:

Based on the parties’ statements and case documents, the house at No. 19, Thuoc Bac Street, Hang Bo Ward, Hoan Kiem District, Hanoi, was owned by Mr. Do Huy Ngoc and Ms. Le Thi Huu, transferred to their children: Mr. Do Trong Cao (deceased 1972, no spouse or children) with 8/12, and Ms. Do Thi Nga, Ms. Do Thi Nguyet, Ms. Do Song Toan (deceased 1963, no spouse or children), and Mr. Do Trong Thanh sharing 4/12. On July 1, 1971, Mr. Thanh signed a contract renting a 39.36 m² second-floor room to Mr. Nguyen Dinh Nhuan (Mr. Song’s uncle, deceased 2000) and Mr. Nguyen Dinh Chien (Mr. Song’s father, deceased 1998) for Mr. Cao’s medical expenses, receiving 2,000 VND in advance.

In an undated “Deed of Absolute Sale of a Room” (acknowledged by Mr. Thanh as drafted around 1971), Mr. Cao sold a second-floor room (area unspecified) to Mr. Nhuan for 6,550 VND, with full payment received, signed by Mr. Chien as Mr. Nhuan’s representative. Mr. Thanh claimed the sale was to Mr. Nhuan, not Mr. Chien. However, Ms. To Thi Lam and Mr. Nhuan’s children—Mr. Nguyen Dinh Uan, Mr. Nguyen Dinh Hoa, Ms. Nguyen Quynh Hop, and Ms. Nguyen Thi Minh Nguyet—confirmed Mr. Chien conducted the transaction and paid, with Mr. Nhuan as a nominal buyer, providing basis to conclude Mr. Chien was the purchaser.

On September 9, 1972, Mr. Cao authorized Mr. Thanh to sell the ancillary room he occupied. On November 5, 1972, Mr. Cao died without a will. On the same day, Mr. Thanh, Ms. Nga, and Ms. Nguyet signed a “Deed of Absolute Sale of the Second Floor of No. 19, Thuoc Bac Street,” selling to Mr. Chien and Ms. Mo a 38.07 m² main room and a 7.095 m² ancillary room (total 45.165 m²) for 3,000 VND, with full payment received and the buyer occupying the second floor. The deed was signed by Mr. Thanh, Ms. Nga, and Ms. Nguyet, listing Mr. Chien and Ms. Mo as buyers, but unsigned by them.

During the dispute, Mr. Song presented both sale deeds and Mr. Cao’s authorization letter. Mr. Chien’s family has managed both second-floor rooms since 1972, with Mr. Thanh’s family at No. 17, Thuoc Bac Street, not disputing rent or purchase payments. The “Deed of Absolute Sale of the Second Floor” confirms full payment, with no separate payment agreement, serving as the seller’s receipt. The buyer’s non-signature does not invalidate the deed, as the buyer possesses it, confirming the seller’s receipt of payment. The first-instance and appellate courts’ rejection of the sale contract for lack of the buyer’s signature and payment proof failed to protect the plaintiff’s rights.

The house sale transaction between Mr. Thanh’s siblings and Mr. Chien’s family, established before July 1, 1991, should be resolved under Resolution No. 58/1998/NQ-UBTVQH10 dated August 20, 1998. Ms. Nguyen Thi Lan (Mr. Chien and Ms. Mo’s daughter) participated as a person with related rights due to her inheritance, not the transaction. Ms. Lan settled in the Czech Republic in 1997, so the transaction did not involve overseas Vietnamese before July 1, 1991. The courts’ application of Resolution No. 1037/2006/NQ-UBTVQH11 dated July 27, 2006, was incorrect.

For the foregoing reasons, pursuant to Clause 3, Article 291, Clause 3, Article 297, and Clause 2, Article 299 of the Civil Procedure Code of Vietnam 2004 (as amended by Law No. 65/2011/QH12 dated March 29, 2011);

DECISION:

To annul in its entirety Appellate Civil Judgment No. 86/2010/DS-PT dated May 18, 2010, of the Appellate Court of the Supreme People’s Court in Hanoi regarding the “Dispute over Ownership and Use of a House” between the plaintiffs, Mr. Nguyen Dinh Song, Ms. Nguyen Thi Hong, and Ms. Nguyen Thi Huong, the defendants, Mr. Do Trong Thanh, Ms. Do Thi Nguyet, Mr. Vuong Chi Tuong, Mr. Vuong Chi Thang, Ms. Vuong Bich Van, and Ms. Vuong Bich Hop, and nine persons with related rights and obligations.

To remand the case file to the Appellate Court of the Supreme People’s Court in Hanoi for re-adjudication at the appellate level in accordance with the law.

CONTENT OF THE PRECEDENT

During the dispute, Mr. Song presented both sale deeds and Mr. Cao’s authorization letter. Mr. Chien’s family has managed both second-floor rooms of No. 19, Thuoc Bac Street, since 1972, with Mr. Thanh’s family at No. 17, Thuoc Bac Street, not disputing rent or purchase payments. The “Deed of Absolute Sale of the Second Floor” confirms full payment, with no separate payment agreement, serving as the seller’s receipt. The buyer’s non-signature does not invalidate the deed, as the buyer possesses it, confirming the seller’s receipt of payment. The first-instance and appellate courts’ rejection of the sale contract for lack of the buyer’s signature and payment proof failed to protect the plaintiff’s rights.