The Supreme Court rendered the 106-Tai-Shang-29 Civil Decision of January 3, 2017 (hereinafter, this “Decision”), holding that when a party to litigation has never retained an agent-ad-litem and is deceased, if the court elects to notify the parties to be present to present their arguments via service of notice by publication and grants the motion filed by the other party to render a default judgment, this process is deemed materially flawed and the judgment violates laws and regulations.
According to the facts underlying the Decision, Individual A, former Chairman of Chung Hsing Bank (who was deceased), had violated the Banking Law and credit operation rules by granting an unsecured line of credit applied by Chin Mao Hsing Co., even though he was clearly aware that he had substantive relationship of interest with it and such company did not have any actual operation performance and business turnover and did not provide any collateral. Later, since Ching Mao Hsing Co. had no asset, the loan was recognized by Chung Hsing Bank as a bad debt. However, such impairment was resulted from A’s breach of his appointment agreement with Chung Hsing Bank. Therefore, the Appellee sought damages for nonperformance.
According to the Decision, if a party is deceased, the ligation is certainly stayed before a successor, receiver or any other individual required to continue with the litigation pursuant to laws and regulations assume the litigation. During the period when the litigation is stayed, the court and the parties shall not engage in any litigation act concerning this case. If a litigation procedure is ipso facto stayed due to the death of a party, the court shall not elect to rule on this case before all the successors of the party assume the litigation pursuant to law. Otherwise, the rulings so rendered violate laws and regulations.
It was further pointed out in the Decision that Individual A in this case never retained an agent-ad-litem while the original trial court failed to stay the trial and order his successor to assume the litigation. Instead, a notice was served on Individual A by publication to present his arguments in court, and a default judgment was rendered upon motion by the other party. Since the procedure was materially flawed, the original decision should be reversed and remanded.