The dispute compels the bank to fulfill its obligation to release the collateral.

I. Details of the case

In 2005, Mr. A and Mrs. N mortgaged their house and land in Tan Binh District to Commercial Bank B to guarantee a loan for Company C at Commercial Bank B. However, Company C subsequently failed to repay the loan to the bank as per the credit agreement. Therefore, in 2008, the bank sued Company C in the Ho Chi Minh City People’s Court demanding repayment. The Ho Chi Minh City People’s Court issued a judgment ordering Company C to repay the debt, and simultaneously requiring Mr. A and Mrs. N to fulfill their guarantee obligations for Company C’s loan within the scope of the guarantee contract. Failure to fulfill the guarantee obligations would result in the foreclosure of the mortgaged house to secure Company C’s repayment.

Loans are always helpful if everything goes smoothly.

After the judgment took effect, the Ho Chi Minh City Civil Enforcement Department issued a document blocking transactions involving the house and land belonging to Mr. A and Ms. N. In compliance with the judgment, in 2011, Mr. A and Ms. N went to the Tan Binh District Civil Enforcement Department to deposit over 1 billion VND as stipulated in the guarantee contract. However, the bank disagreed, arguing that the guarantee also included interest, and therefore refused to release the mortgage on the house for Mr. A and Ms. N. By 2020, when Mr. A passed away, the house was still in a state of not being released from the mortgage and was blocked from being transacted. In 2022, Ms. N sought legal advice from Inter Justice to reclaim her rights because the bank still had not released the mortgage on her property.

II. Legal provisions related to the case

• The judgment of the Ho Chi Minh City People’s Court determined the scope of the guarantee obligations under the guarantee contract of Mr. A and Ms. N regarding the loan of Company C.
• Mr. A and Ms. N have paid the money to the civil enforcement agency, fulfilling their guarantee obligations as stipulated in the contract.
• The guarantee terminates when the guarantee obligation is fulfilled.
• The mortgage terminates when the secured obligation ceases to exist.
• The bank is obligated to issue a release order for the mortgaged property.

III. Lawyers handling the case

• Following legal advice, Ms. N filed a lawsuit against Commercial Joint Stock Bank B in court, demanding that it fulfill its obligation to issue a document releasing the mortgage on her house and land, and restoring full ownership rights to Ms. N.
• Ms. N has authorized Inter Justice to represent her in the proceedings to protect her legal rights and interests.
• During the legal proceedings, mediation failed because the bank maintained its position and therefore did not issue a release of collateral document.
• At the trial, the bank maintained its position that Ms. N had not yet fulfilled her guarantee obligations, and therefore would not release the mortgage on her property.
• The lawyer cited grounds from the Civil Code regarding the termination of the guarantee obligation, stating that the mortgage was terminated because the guarantee obligation had ended; Mr. A and Ms. N had fulfilled their guarantee obligations as per the scope of the guarantee contract; therefore, the bank was obligated to release the mortgage on Mr. A and Ms. N’s property.

IV. Court Judgment

• The TB District Court accepted all of Ms. N’s claims, ordering Commercial Joint Stock Bank B to release the mortgage on Ms. N’s property.
• Commercial Bank B appealed to the Ho Chi Minh City People’s Court; however, the Ho Chi Minh City People’s Court upheld the first-instance judgment and rejected the bank’s appeal.
• Thus, after more than 10 years of suffering due to guaranteeing loans for others, falling into debt and losing loved ones, Mrs. N’s family has finally received the justice they deserve.