"It is now up to the Prosecutor to speak." The presiding judge said.

"This court holds that the appellant Cao Yueshan's conduct constitutes the crime of contract fraud. Here's why:

1. Honghai Company failed to pay the start-up capital of 50 million yuan for the new residential project in Gaojiazhuang Village on time, and the project development rights were in a state of uncertainty.

2. According to the investigation, Honghai Company is small in scale, its own funds are seriously insufficient, and there is no funds in its account after paying Gaojiazhuang's deposit of 3 million yuan in advance.

Although it is relatively common for real estate development to be financed while constructing, the ability to perform the contract should be comprehensively considered in light of the financing ability of the appellant Cao Yueshan and Honghai Company, and it is obvious that in the field of real estate development, a real estate development enterprise of the scale of Honghai has a very weak ability to raise funds in the society.

Red Sea lacked reliable financing channels, and objectively it had not raised any funds at the time of the case, so it can basically be determined that it lacked the ability to perform the contract.

3. Under these circumstances, the use of part of the security deposit collected from the construction unit to return the security deposit paid by other companies and the company's daily expenses can be determined that Cao Yueshan had the purpose of illegal possession, so the appellant's conduct constituted the crime of contract fraud. The female prosecutor said.

"The prosecutor may respond to the defender's arguments." The presiding judge said.

"Okay, in response to the defender's defense, we make the following arguments:

1. Although the new residential project does exist, because the Red Sea Company failed to pay the start-up funds for the project, Gaojiazhuang Village has the right to choose other partners according to the contract, so the project rights of the Red Sea Company are in a state of instability. It can also be said that the project has been out of the control of the Red Sea Company.

2. Although there is a situation in the real estate field where you get on the bus first and then buy a ticket, it cannot be said that such acts are legal, if you can't buy a ticket, or you don't have the qualifications to buy a ticket at all, then the subsequent behavior will be suspected of fraud. Such is the case with the Red Sea Company.

3. Lianda Company repeatedly came to the door to demand the return of the security deposit, but the appellant was unable to pay, and in this case, the appellant fled to Beijing under the pretext of financing in an attempt to avoid the debt, which shows that the appellant subjectively had intention and his act was fraudulent......

Over!" The female prosecutor said.

"The defender may respond to the prosecutor's opinion." The presiding judge said.

Fang Yi stopped the signature pen that was writing quickly, and responded to the female prosecutor's opinion: "Okay, presiding judge."

1. The real estate project of the Red Sea Company exists.

It is a fact that Honghai Company signed a letter of intent with the Gaojiazhuang Village Committee for the new residential project and paid a deposit. Although it failed to pay the follow-up start-up capital of 50 million yuan on time, the Red Sea Company carried out land leveling, road construction, and construction of workers' housing on the temporary construction land, and made preliminary preparations.

The Gaojiazhuang Village Committee did not stop the above-mentioned actions of the Red Sea Company, nor did it terminate the contract with the Red Sea Company or discuss the development of the project with others.

Therefore, we believe that the cooperation agreement between the two parties has in fact been performed, and even if Red Sea did not inform the owner of Lian Da's right to terminate the agreement, it cannot be inferred that Red Sea has concealed the truth.

Although Honghai Company only provided renderings of the project, because the situation of "doing and approving, getting on the bus first and then buying tickets" is common in the real estate industry, and the evidence provided by the prosecutor shows that Cao Yueshan had informed the other party that the project was a new residential construction when he signed the contract with Lianda Company, and the project procedures were being handled, and he would come down immediately. As a professional unit engaged in construction engineering, Lianda should have been aware of the failure or incomplete procedures of the project at the time of signing the contract.

2. There is insufficient evidence to determine that Cao Yueshan illegally occupied Lianda Company's 3 million security deposit.

Judging from the evidence provided by the prosecutor at the first instance, Honghai Company made an initial investment in the new residential project, and most of the security deposit obtained from Lianda Company was used for the normal expenses of the project (the deposit returned to the subsidiary of the Urban Construction Group was also for the normal development of the project).

The deposit received by Red Sea was used to repay the arrears of the project, the construction costs and the company's daily expenses, and Cao Yueshan did not take the deposit for himself or squande, but subjectively wanted to make the project run successfully and make a profit through the project.

Although the financing behavior is an important reference for judging Cao Yueshan's willingness to perform the contract, the evidence about Cao Yueshan's financing behavior in this case is limited and cannot distinguish the authenticity and cannot be determined.

Judging from the whole case, Cao Yueshan has been working hard to do the new residential project, although there were some concealment behaviors when signing the contract with Lianda, but the real estate development industry is a capital-intensive industry, with large capital investment and high operating risks, although the Red Sea Company itself is not strong, but if the financing is appropriate, the possibility of its final profit cannot be ruled out.

Therefore, the defender believes that this case should comprehensively consider various factors such as the background of the project, Cao Yueshan's efforts for the development of the project, the whereabouts and uses of the security deposit, and other factors to determine whether Cao Yueshan has the purpose of illegal possession, rather than simply concluding that Cao Yueshan is suspected of deception and directly determining that he subjectively has the purpose of illegal possession.

3. In this case, Lianda's losses can be remedied through civil means. At the material time, Honghai Company still had a deposit of 3 million yuan in the account of the Gaojiazhuang Village Committee, and had also formed relevant property rights and interests in the temporary construction project.

This case is different from the common crime of contract fraud, in that the security deposits collected by Cao Yueshan from the subsidiaries of the Urban Construction Group and Lianda Company were all used for the temporary construction facilities of the new residential project, the company's normal expenses, or the return of the security deposits previously collected, and there was no squandering.

At the material time, Honghai Company was unable to repay Lianda Company's deposit, but Xinhai Company still had certain property rights and interests in the temporary facilities it had completed on the new residential project, and together with the 3 million yuan deposit it paid to the Gaojiazhuang Village Committee, the company's overall asset and liability problems were not very prominent. If properly handled, the $3 million loss of Lianda could be remedied.

The defender argued that although Cao Yueshan had a certain amount of deception in the process of signing the agreement, it did not affect the victim's Lianda Company's relief through civil channels, so the first-instance judgment held that Cao Yueshan constituted the crime of contract fraud, which did not conform to the principle of modesty in the criminal law.

In summary, Cao Yueshan did not constitute the crime of contract fraud. Complete. Fang Yi said.

(The principle of modesty, also known as the principle of necessity.) refers to the fact that the legislature can establish a violation of the legal order as a criminal act only if the norm is truly indispensable - there is no other appropriate alternative to criminal punishment)

(End of chapter)