Your current location >> Cases
elder sister still operates the stock ac of her younger brother after he died of illnessdeliberately caused losses
[2020-08-05]

Court: Granny Zhang Returns Property to the Legal Heir and Compensate for the Loss Incurred

[Case Review]

Grandpa Zhang fell ill and passed away after medical treatment failed. In addition to grief, his wife Granny Wu was surprised to find that from Grandpa Zhang's hospitalization to his death, there have been transactions in his stock account as usual. Moreover, a stock held in a large position by the account hit limit down for consecutive days, causing a large loss. However, Grandpa Zhang's parents passed away years ago, and he had no children during his lifetime. Who was operating this stock account?

After investigation, Granny Wu found that it was Grandpa Zhang's elder sister Granny Zhang who was buying and selling stocks. After the negotiation between the two parties failed, Granny Wu filed a suit with the Pudong New Area People's Court of Shanghai (hereinafter referred to as the "Shanghai Pudong Court") and demanded Granny Zhang to return the account property and compensate for the corresponding losses. The Shanghai Pudong Court ruled in the first instance that Granny Zhang should return Granny Wu over 37,000 yuan and the corresponding interest, and pay over 17,000 yuan for economic losses.

During the trial, Granny Wu alleged that she and Grandpa Zhang registered their marriage in 2001. Later, Grandpa Zhang suffered from rectal cancer and his condition continued to worsen after the operation. He passed away on June 7, 2018 without leaving any will. Grandpa Zhang had no children during his lifetime, and his parents died in 2008 and 2014 respectively.

However, it was strange that from May 9 to June 12, 2018, during the period of Grandpa Zhang's serious illness and even after his death, the securities account of Grandpa Zhang had multiple stock sales records. The proceeds of 47,500 yuan from the sale were all transferred to a bound commercial bank account and were withdrawn afterwards. On May 8, one day ago, Grandpa Zhang was already critically ill. Obviously, the person operating these stock transactions was not Grandpa Zhang, but someone else.

What made Granny Wu even more confused was that on June 28, all the remaining stocks in the securities account were sold, and then 2,500 shares of a certain stock were bought at a price of 18.27 yuan per share. But in fact, the stock has been hitting limit down for many days since June 22, and this state lasted until July 2. In other words, the person operating the account knew that this was a worst-performing stock and still chose to buy it in a large amount. What was the purpose of the person?

To stop loss in time, Granny Wu went to the business department of the securities company and sold all 2,500 shares in Grandpa Zhang's account at a price of 11.12 yuan per share. After deducting commissions and other expenses, the total loss was more than 17,000 yuan.

After investigation, Granny Wu learned that it was Grandpa Zhang's elder sister Granny Zhang who controlled and operated the securities account. Granny Wu urged Granny Zhang to return the relevant money, but the negotiation between the two parties failed. Then Granny Wu filed a lawsuit with the court, demanding Granny Zhang to return the property and interest and compensate for the corresponding losses.

During the trial, Granny Zhang claimed that she had no objection to the relevant facts stated by Granny Wu and that her brother's stock account was indeed operated by her. However, the initial funds of the account did not come from Grandpa Zhang, but from her mother, and she also deposited 10,100 yuan in the account on April 20, 2018. Their parents had 6 children, and now her mother, father and younger brother all passed away. Even if the funds in the account are withdrawn, they should not belong to Granny Wu, but should be handled by the other five siblings according to the Law of Succession.

[Case Study]

After trial, the Shanghai Pudong Court found that: Granny Zhang asserted that her mother's money was deposited into Grandpa Zhang's stock account and a linked bank account, and she operated the account to trade stocks, so the above-mentioned property should not belong to Grandpa Zhang. The plaintiff Granny Wu was unaware of the above-mentioned account information, and no relevant account credentials were found at her home. While Granny Zhang kept the past transaction vouchers, actually had the transaction account number and transaction password, and provided part of the ledger recorded by her during the court hearing, which basically tallied with the transaction situation of Grandpa Zhang's stock account. Therefore, it can be judged that the above account was usually controlled and operated by Granny Zhang.

However, controlling and operating this account was not sufficient to prove that the above-mentioned property does belong to her. Granny Zhang also claimed that the initial funds of the account came from her mother. However, the existing evidence was insufficient to prove that the funds in the account were directly transferred by her mother. Grandpa Zhang himself never confirmed this fact in writing, and the account was not mentioned in the will left by their mother. In previous cases of inheritance disputes, the siblings never mentioned that part of the property was their mother's inheritance, so the existing evidence alone was not enough to support her claim.

In summary, the money in Grandpa Zhang's bank account should be presumed to belong to him. The request of the plaintiff Granny Wu, who was his legal heir, demanding Granny Zhang to return 47,500 yuan withdrawn from the bank account from May 10, 2018 should be supported. But the 10,100 yuan that Granny Zhang had actually deposited must be deducted, and the corresponding interest should be paid according to the bank deposit rate.

Grandpa Zhang had never raised any objection to Granny Zhang's long-term use of his account for stock trading, showing that he had indeed commissioned Granny Zhang for that purpose. After the death of Grandpa Zhang, Granny Zhang, due to a conflict with Granny Wu, sold the stocks in his account and bought stocks with minimal trading volume and had hit limit down for many days, deliberately causing a loss in the account. The plaintiff has the right to demand compensation from her.

Therefore, the court made the above-mentioned judgment according to law.

[Relevant Laws]

1.     Tort Law of the People's Republic of China

Article 2 Those who infringe upon civil rights and interests shall be subject to the tort liability according to this Law.

"Civil rights and interests" used in this Law shall include the right to life, the right to health, the right to name, the right to reputation, the right to honor, right to self image, right of privacy, marital autonomy, guardianship, ownership, usufruct, security interest, copyright, patent right, exclusive right to use a trademark, right to discovery, equities, right of succession, and other personal and property rights and interests.

Article 15 The methods of assuming tort liabilities shall include:

1. cessation of infringement;

2. removal of obstruction;

3. elimination of danger;

4. return of property;

5. restoration to the original status;

6. compensation for losses;

7. apology; and

8. elimination of consequences and restoration of reputation.

The above methods of assuming the tort liability may be adopted individually or jointly.

Article 19 Where a tort causes any harm to the property of another person, the amount of loss to the property shall be calculated as per the market price at the time of occurrence of the loss or calculated otherwise.

2.     Contract Law of the People's Republic of China

Article 406 Under a commission contract for value, if the principal sustains any loss due to the fault of the agent, the principal may claim damages. Under a gratuitous agency appointment contract, if the principal sustains any loss due to the agent's intentional misconduct or gross negligence, the principal may claim damages. 

(Writer: Chen Weifeng of Shanghai Pudong Court)

 

>> Chinese Version
The English version of this article, which is translated from the Chinese version by CTPC, is for reference only and shall be subject to the corresponding contents on the Chinese webpage.
Copyright @2014 Shanghai High People's Court, All Rights Reserved.