2. The costs of appeal shall be borne by the Plaintiff.

The following facts are not disputed between the parties, or may be acknowledged by comprehensively taking into account the whole purport of arguments in the items in Gap evidence 1 through 3, Gap evidence 5, 6, Eul evidence 1 through 3, Eul evidence 4-1 through 7, Eul evidence 5-7, Eul evidence 8-1, 2, Eul evidence 9-1 through 3, Eul evidence 10-1, 2, Eul evidence 11-1 through 6, and Eul evidence 12:

A. On October 1, 2003, Nonparty 1 (the Nonparty of the judgment of the Supreme Court) entered into a contract with the Defendant to purchase KRW 216,577,00 (hereinafter “instant sales contract”) on the ground of ○○○○ (number omitted) (hereinafter “instant apartment”) (hereinafter “instant apartment”). Article 6(3) of the instant sales contract provides that the Defendant shall bear interest on loans from the bank for intermediate payment until before the date of designation of occupancy designated by the Defendant, and the purchaser shall bear the burden after the date of designation of occupancy.

B. On March 17, 2004, upon the Defendant’s approval, the purchaser status of the instant sales contract succeeded to Nonparty 1 from Nonparty 1 to Nonparty 2, and from Nonparty 2 on March 25, 2004 to the Plaintiff. The date and amount of the payment of the down payment, intermediate payment, and remainder under the instant sales contract are as follows.

The balance of the down payment of the down payment included in the main sentence (in the case of taking occupancy) at the time of two times on April 1, 003 (in the case of a contract), the 10,829,658,000 won at the time of August 1, 204 at the time of August 1, 2004 at the time of August 2, 204 at the time of two times (in the case of taking occupancy), and the 10,829,829,658,00 won at the time of 21,658,658,000 won at the time of 21,658,658,000 won KRW 21,658,000 won at the time of taking occupancy, 21,658,000 won at the time of August 1, 204, 200 won at the time of August 1, 205.

C. On April 1, 2004 and August 1, 2005, the Plaintiff concluded a loan transaction agreement with the National Bank of Korea (hereinafter “National Bank”) (hereinafter “the instant loan transaction agreement”), and provided the instant building as security to the National Bank with the land (the subsequently acquired collateral agreement). Pursuant to the instant loan transaction agreement, the Plaintiff received each of the loans from the National Bank with KRW 86,630,00,000 from the National Bank on April 1, 2004, and paid the intermediate payment to the Defendant.

D. On the other hand, prior to the loan to the buyer of the apartment in this case including the plaintiff (or the successor of the apartment in this case; hereinafter the same) the National Bank demanded the defendant to guarantee the defendant's continuing guarantee, which is the executor, to acquire the right after completion of the apartment in this case, and the defendant guaranteed the defendant's continuing loan to the National Bank with the limit of 130% of the national bank's loan to the buyer of the apartment in this case.

E. According to the instant sales contract, the Defendant paid the Plaintiff’s interest on the loan prior to the date of designation of occupancy of the instant building, which the Defendant notified after the loan under the loan transaction agreement.

F. The defendant notified the plaintiff that the date of designation of occupancy of the building of this case was until November 30, 2005 (which was designated until October 31, 2005, but later extended until November 30, 2005), and notified the plaintiff that he will bear the interest on the loan from December 1, 2005, which was after the date of designation of occupancy, but the plaintiff did not pay the interest on the loan to the national bank, and the principal was not repaid, and the defendant did not pay the remainder payment obligations under the sales contract of this case.

G. On November 14, 2005, the registration of preservation of ownership was completed on the apartment of this case including the building of this case under the name of the defendant, and the plaintiff did not pay interest on the loan even after the date of designation of occupancy, and the defendant also paid part of the interest on the loan that the plaintiff should pay. In the event that the unpaid amount of interest on the loan has increased and the outstanding amount of interest on the loan was delayed due to the outstanding balance of payment of the loan, the acquisition of the subsequent loan under the loan transaction agreement of this case was delayed five times from January 25, 2006 to July 21, 2006, the national bank urged the plaintiff to pay interest on the unpaid loan and to complete the registration of ownership transfer in the name of the plaintiff with respect to the building of this case so that the national bank may acquire the subsequent mortgage under the loan transaction agreement of this case. Nevertheless, the plaintiff did not present a notice that would lose the interest on the loan due and did not pay the remainder to the plaintiff for the purpose of the registration of ownership transfer in the name of the plaintiff.

H. As above, when the subsequent acquisition of mortgage under the loan transaction agreement of this case was delayed, the National Bank notified the Defendant, a collateral guarantor, that it would lose the benefit of time due to the reasons for the subsequent acquisition on July 26, 2006 and September 11, 2006, and demanded that the buyer of this case including the Plaintiff establish a collateral security right on each apartment building of this case, which was purchased by the buyer of this case, including the Plaintiff, to the National Bank on October 17, 2006. Accordingly, the Defendant completed the registration of establishment of a collateral security right on each apartment building of this case including the building of this case, with the Defendant’s collateral guarantee obligation on the debt of the buyer of this case including the Plaintiff as the collateral obligation, the creditor bank, the maximum debt amount of debt amount of which was 5,741,00,000,000, and the debtor’s collateral security right was completed.

I. The Plaintiff, along with other buyers of the apartment of this case, filed a lawsuit against the Defendant on the claim for the purchase price for the cancellation of the sale contract at Daejeon District Court 2006Gahap825, which caused the cancellation of the sale contract. The Defendant filed a counterclaim against the purchase price claim at Daejeon District Court 2006Gahap8508. On November 9, 2007, Daejeon District Court rendered a decision in lieu of conciliation (hereinafter “instant conciliation decision”), and the instant conciliation decision became final and conclusive between the Plaintiff and the Defendant around that time.

1. By December 31, 2007, the Defendant (Counterclaim) prepared a space in which the guards, management offices, and disaster prevention offices can be combined with the facilities and fire-fighting facilities, such as automatic re-receiving equipment, at least 4.5 square meters in the building (number omitted) ○○○○ building (number omitted) located in Seongbuk-gu, Daejeon, Daejeon, with a location of at least 4.5 square meters; Nonparty 3 (number 2 omitted); and obtained approval from the above Nonparty 3.

2. The Defendant (Counterclaim Plaintiff) paid 15,000,000 won to each of the Plaintiff (Counterclaim Defendant) by December 31, 2007, and if the Defendant (Counterclaim Plaintiff) received from the Plaintiff (Counterclaim Defendant) one time payment (in the case of the Plaintiff, 35,000,000 won per annum from the following day to the date of full payment), the Defendant (Counterclaim Plaintiff) did not pay the said money by adding an amount equivalent to 20% per annum from the following day to the date of full payment.

3. Each plaintiff (Counterclaim defendant) shall pay to the defendant (Counterclaim plaintiff) the amount in the corresponding column of the payment amount in the separate sheet three times as shown in each payment date column on the same statement (in the case of the plaintiff, 35,000,000 won until December 31, 2007, 2000 won until March 15, 2008), 31,467,936 won until May 31, 2008, 31, 15,000 won in addition to the annual payment amount until December 31, 2007 (in the case of the plaintiff, 35,00,000 won until December 31, 2007, 300,000 won in addition to the annual payment amount, each of the plaintiff (defendant) shall be paid from the defendant (Counterclaim plaintiff) by 30,000,000 won until December 31, 207, 2005.

4. Each Plaintiff (Counterclaim Defendant) shall not raise any objection against any defect subject to verification and appraisal in the Daejeon District Court Decision 2006Gahap825, 2006Gahap8928 from the time the matters of paragraphs 1 and 2 were fulfilled (excluding any defect newly arising after the completion of conciliation).

5. The Plaintiff (Counterclaim Defendant)’s remaining principal claim against the Defendant (Counterclaim Plaintiff) and the remainder of the counterclaim claim against the Defendant (Counterclaim Defendant) are waived.

6. The costs of lawsuit and mediation shall be borne by each person;

(j) In spite of the peremptory notice of the National Bank several times, when the obligation of the loan and its interest have been in arrears, the National Bank sent two times a notice to the Plaintiff that the loan in arrears would have been repaid to the Plaintiff at the time before and after the application for the auction of the building of this case, and that the auction of the building of this case would have been conducted if the loan was not repaid to the Plaintiff. On February 2008, the Defendant also urged the Plaintiff to pay in full the remainder of the building of this case and acquire ownership, extend the time limit for the loan under the loan transaction agreement of this case, and demand the repayment of the loan in arrears until February 28, 2008, and was notified by the National Bank that in the event the overdue loan was not repaid until February 28, 2008, it would have been scheduled to be conducted by auction of the building of this case. The Defendant had, without any choice, paid the interest of the loan and its interest again after the repayment of the loan by November 19, 2007, the National Bank applied for the auction of this case to the Daejeon District Court.

2. Judgment on the plaintiff's assertion

A. The plaintiff's assertion

As seen earlier, as to the building of this case, the right to ownership transfer of the building of this case was created in the future of the National Bank, and the ownership transfer registration was completed on January 20, 2009 after it was sold to a third party through a voluntary auction procedure following the execution of the right to collateral security. This is reasonable to deem that the Defendant’s obligation to transfer ownership of the building of this case was impossible, as it was caused by the Defendant’s nonperformance of the Defendant’s obligation to guarantee the right to collateral security, which is the secured obligation of the above right to collateral security, and as long as the sales contract of this case was cancelled on this ground, the Plaintiff’s obligation to pay the remainder under the sales contract of this case against the Defendant, such as Paragraph

B. Determination

1) Relevant legal principles

In order to cancel a contract for reasons of impossibility of performance, such impossibility must be caused by a cause attributable to the obligor (Article 546 of the Civil Act); where an obligation of one of the parties to a bilateral contract becomes impossible due to reasons for which neither of the parties is responsible, the obligor is unable to demand performance of the other party (Article 537 of the Civil Act); but where an obligation of one of the parties to the bilateral contract becomes impossible due to “reasons attributable to the obligee” (Article 538(1) of the Civil Act), the obligor may demand performance of the other party (Article 538(1) of the Civil Act). The term “reasons attributable to the obligee” in this context means a case where a certain act or omission by the obligee interferes with the realization of the obligor’s performance and his act or omission could be avoided by the obligee (see, e.g., Supreme Court Decision 2008Da25824, Aug. 11, 2008). In relation to the burden of proof, the obligor is liable to prove that the obligor is not liable due to the obligor’s cause.

Therefore, even though the seller's obligation to transfer ownership on the subject matter of sale has become impossible, if such impossibility is caused by the buyer's cause attributable to the buyer, the buyer cannot rescind the contract for the cause of nonperformance (see Supreme Court Decision 2008Da88207, Apr. 9, 2009, etc.). On the other hand, the seller may still claim the buyer for the performance under the contract pursuant to Article 538(1) of the Civil Act.

2) Whether the impossibility was caused by any cause attributable to anyone.

In light of the above circumstances, it is reasonable to view that the Defendant’s obligation to transfer ownership to the building of this case was impossible due to the Plaintiff’s cause attributable to the Plaintiff.

① When the Plaintiff entered into an agreement with the National Bank on the instant loan transaction with the National Bank, the Plaintiff agreed to provide the instant building to be acquired in the future with the land as security.

② Under the premise that the Plaintiff acquired ownership by paying to the Defendant the balance of sales in lots of the instant building, the National Bank’s subsequent collateral acquisition on the instant building was premised on the Plaintiff’s acquisition of ownership; however, the National Bank failed to acquire ownership by failing to pay the balance of sales in lots to the Defendant.

③ The Defendant, at least twice throughout the two occasions, notified the National Bank that the benefit of time would be lost due to the event of the subsequent acquisition of collateral, and without any choice, established a collateral on the instant apartment including the instant building to the National Bank. However, such circumstance appears to have been sufficiently known or known by the instant sales contract, the instant loan transaction agreement, and the notification from the Defendant and the National Bank several times.

④ In a case where the Plaintiff and the Defendant did not repay the debt of the instant loan, which was overdue by the notification from the Defendant and the National Bank, even after the instant mediation decision became final and conclusive, it was sufficiently known that the instant building was sold to a third party by the auction procedure that the ownership would be forfeited.

⑤ The principal cause for loss of ownership of the building of this case is that the Plaintiff, the principal obligor, was paid an intermediate payment obligation, such as interest under the loan transaction agreement of this case from the date of designation of occupancy, and did not perform the obligation. The Plaintiff’s obligation under the loan transaction agreement of this case is ultimately related to a loan for the payment of intermediate payment, which is ultimately the Plaintiff’s duty of preferential performance. The Plaintiff’s obligation based on the instant adjustment decision of this case, the Defendant’s obligation is related to the compensation for damages on the building of this case

[6] The Defendant and the National Bank urged the Plaintiff to repay the outstanding balance and overdue loan over several occasions, and notified that if not repaid, the interest on the obligation of the loan would be lost, and auction on the instant building would be conducted. The Defendant extended the period of the designation of occupancy. Moreover, the Defendant expressed externally the intent to transfer the ownership of the instant building at any time when the Plaintiff pays the outstanding balance to the National Bank, such as the payment of part of the interest on the loan to be borne by the Plaintiff after the designation date of occupancy on behalf of the National Bank. However, the Plaintiff did not pay any money to the Defendant or the National Bank.

7) The Plaintiff’s obligation to pay the remainder of KRW 35,00,000 for the first time upon the instant conciliation decision is concurrently performed with the Defendant’s obligation to pay KRW 15,00,000 for damages, but it is not necessary to fulfill each other’s obligation to pay damages (see Supreme Court Decision 2004Da54633, Jul. 28, 2006). If the amount of offset is resolved by a set-off, the Plaintiff’s obligation to pay the remainder of KRW 20,000 for the amount calculated retroactively on December 31, 2007, which is a set-off date, shall be extinguished, and the Plaintiff’s obligation to pay KRW 35,00,000 for the remainder of KRW 15,00 for the Plaintiff’s obligation to pay the remainder of KRW 15,00 for the Defendant’s building. The Plaintiff’s obligation to pay the remainder of KRW 2 is prior to the Defendant’s obligation to transfer ownership.

3) Sub-decisions

As above, as long as the Defendant’s obligation to transfer ownership on the building of this case became impossible due to the Plaintiff’s cause, the Plaintiff cannot cancel the sales contract of this case on that ground, and the Defendant still may claim to the Plaintiff for the performance of the remainder payment obligation (the remainder payment obligation was modified by the instant conciliation decision) arising from the sales contract of this case pursuant to Article 538(1) of the Civil Act.

Therefore, the plaintiff's assertion based on the premise that the defendant's obligation to transfer ownership on the building of this case was impossible due to the defendant's cause attributable to the defendant is without merit.

3. Conclusion

Therefore, the plaintiff's claim is dismissed as it is without merit, and the judgment of the court of first instance is just in conclusion, and the plaintiff's appeal is dismissed. It is so decided as per Disposition.

Judges Cho Jong-young (Presiding Judge)

Note 1) On March 15, 2007 and May 31, 2007, the decision in lieu of conciliation appears to be a clerical error on March 15, 2008 and May 31, 2008.