Sam Young General Machinery Co., Ltd. (Attorney Shin Young-chul, Counsel for the defendant-appellant)

Defendant-Counterclaim (Attorney Han Sung-young, Counsel for defendant-Counterclaim)

September 26, 2013

Incheon District Court Decision 201Da32442 decided August 1, 2012 (main office), 2012Kadan18368 (Counterclaim) decided August 1, 2012

1. Of the part regarding the principal lawsuit in the judgment of the first instance, the part against the Defendant (Counterclaim Plaintiff) ordering the Plaintiff (Counterclaim Plaintiff) to pay 135,000 won and the amount of 6% per annum from April 19, 201 to January 16, 201, and 20% per annum from the next day to the day of full payment, in excess of the amount of 135,000 won, and 20% per annum from the next day to the day of full payment, shall be revoked, and the Plaintiff (Counterclaim Defendant)’s claim on the principal lawsuit regarding

2. All appeals as to the remainder of the principal lawsuit by the Defendant (Counterclaim Plaintiff) and appeals as to the counterclaim, and the claims by the Plaintiff (Counterclaim Defendant) expanded in the trial of the first instance are dismissed.

3. The total cost of a lawsuit shall be borne individually by each party.

1. Purport of claim

The principal lawsuit: The Defendant (Counterclaim Plaintiff; hereinafter “Defendant”) shall pay to the Plaintiff (Counterclaim Defendant; hereinafter “Plaintiff”) 28,740,011 won with interest of 6% per annum from May 6, 2010 to August 1, 2012; and 20% per annum from the next day to the date of complete payment (the Plaintiff extended its purport in the trial).

Counterclaim: The plaintiff shall pay to the defendant 7 million won with 5% interest per annum from May 26, 2011 to the day of complete payment.

2. Purport of appeal

The principal lawsuit: The part against the defendant in the judgment of the court of first instance shall be revoked, and the plaintiff's claim against the revocation shall be dismissed.

Counterclaim: Revocation of the judgment of the first instance court. This decision is identical to the purport of the counterclaim.

A principal lawsuit and a counterclaim shall be deemed simultaneously.

1. Basic facts

The reasoning for this part of this Court’s explanation is as follows: (a) except that the Court stated “ May 24, 2011” in Part 3 of the Decision of the First Instance 4 as “ May 25, 2011.” is the same as the corresponding part of the reasoning of the Decision of the First Instance; and (b) therefore, it is acceptable in accordance with the main sentence of Article 420 of the Civil Procedure Act.

2. The parties' assertion

The Plaintiff asserts that: (a) the Defendant is obligated to return KRW 27,247,435, which remains after deducting KRW 49,752,565 (including surtax) from the supply price of the gold-type 2 of KRW 77,000,00 paid by the Plaintiff; (b) the penalty for delay in the supply of the instant gold-type 2 of KRW 1,492,576 [45,229,605 x 1/1,000 x 333 days (including April 17, 201)]; (c) the penalty for delay in the supply of the instant gold-type 2 of KRW 1,492,576].

As to this, the Defendant asserts that the Plaintiff’s declaration of the rescission of the contract regarding the gold-type No. 1 of this case is unlawful, and thus, it is not effective. Rather, on May 25, 2011, the Defendant provided the Plaintiff with the production of the gold-type No. 1 of this case after completing the production of the instant gold-type No. 1 of this case. As a counterclaim, the Defendant sought payment of the remainder of KRW 70,000

3. Determination

A. Determination on the claim for restitution of unjust enrichment under the main claim

1) Whether the contract for the gold punishment 1 of this case was lawfully rescinded

A) recognised facts

In full view of the purport of the arguments in Gap's evidence Nos. 3, 8, 10, 11, and 14 (including the paper numbers), the plaintiff was planned to produce the frozen parts of the vehicle and deliver them to the multi-user corporation using each of the gold in this case. However, on May 4, 2011, when the water supply of this case was delayed, the plaintiff notified the defendant of the cancellation of the contract for the gold type No. 1 in this case on the ground that he reported considerable damage to the defendant's continuous failure to perform the contract. On May 6, 2011, the plaintiff concluded a contract to supply the same gold type No. 95,00,000 won as the gold type No. 1 in this case from non-party 2, who received the above gold type on June 18, 201, and paid the price to non-party 2 around that time, and the plaintiff could not separately claim for the manufacture of the contract in this case, and the plaintiff could not recover the contract.

B) Whether Article 6 of the instant contract reservation the right to rescind a separate contract

According to the facts found above, Article 6 of the contract of this case appears to stipulate two cases, such as where the defendant is unable to complete the production within the period in violation of the contract and where the plaintiff suffered losses because of the occurrence of a serious managerial situation. The grounds for cancellation can be seen as a special contract with the reservation of a separate right of rescission other than the right of statutory rescission. However, in substance, the grounds for cancellation of the former is the provision that the plaintiff has the right of rescission in the event of the defendant's default, not a special contract with the reservation of a separate right of rescission other than the right of rescission in the event of the debtor's default, but the right of statutory rescission takes place due to the non-performance. The overall meaning of the plaintiff's notice of cancellation on May 4, 2011 is that the plaintiff's refusal of contract of this case is to cancel the contract of this case. Thus, the plaintiff's expression of intent to cancel the contract of this case is not an exercise of the right of statutory rescission on the ground of the defendant's default.

C) Whether the Plaintiff’s declaration of intent to cancel was legitimate

Therefore, in order for the Plaintiff to lawful express his/her intent of rescission, the requirements, such as the peremptory notice of performance, should be met. However, there is no evidence to acknowledge that the Plaintiff, on May 4, 201, issued a special agreement to the Defendant that he/she may either notify the Defendant of the performance of the obligation within a reasonable period of time, or rescind the said contract without giving a peremptory notice. Thus, the declaration of intent of rescission made by the Plaintiff is unlawful.

2) The Plaintiff asserts that the Plaintiff’s exercise of the Plaintiff’s right of rescission is lawful since the Plaintiff notified the Defendant of the rescission of the contract on May 4, 201 due to the Defendant’s delay of performance. However, as acknowledged earlier, on May 6, 2011, the Plaintiff entered into a contract with Nonparty 2 on the same gold-type as the instant gold-type one, after which the Defendant notified the Defendant of the rescission of the contract, and objectively expressed its intention not to receive the instant gold-type from the Defendant, and actually refused to receive the instant gold-type 1, which the Defendant intended to deliver to the Plaintiff on May 25, 2011, in light of the fact that the Plaintiff’s refusal to receive the instant gold-type 1, which is based on the premise that the Plaintiff would receive the performance of the obligation to cancel the contract within a reasonable period of time, and thus, the Plaintiff’s assertion is unreasonable from the time when the notification of the rescission was made.

3) Sub-determination

Therefore, the Plaintiff’s expression of intent to cancel the contract on May 4, 201 is inappropriate. Therefore, the Plaintiff’s claim for restitution of unjust enrichment on the premise that the part concerning the gold penalty No. 1 of the instant contract was lawfully rescinded is without merit, without further examining.

B. Determination on the claim for liquidated damages among the main claim

As seen earlier, the gold penalty of this case 2 was delivered on April 18, 201 with the delivery date set forth in the instant contract, which was March 15, 201, to the Plaintiff on March 15, 2011. According to the evidence evidence No. 3 (Contract), if the Defendant fails to complete the delivery within the delivery date, it can be acknowledged that the Plaintiff agreed to pay to the Plaintiff the amount equivalent to 1/1,000 of the daily contract amount per the number of days delayed as liquidated damages (Article 7).

However, since the down payment of the instant contract exceeds 140,00,000 won of the total supply price of KRW 140,000,000,00,000, the said down payment is deemed to have the nature of advance payment that was paid in advance prior to the payment deadline, the Defendant may refuse to commence one day until the payment of the down payment is made. As seen earlier, as the Plaintiff paid the down payment at all on December 2, 2010, one month after the contract date, it is reasonable to view that the Defendant’s delivery date was extended from March 15, 2011 to April 15, 201. Ultimately, the number of days for which the Defendant delayed the delivery of the instant 2 advance payment period is three days.

Therefore, the defendant is obligated to pay to the plaintiff 135,00 won [the contract amount of 45,00,000 won (the fact that there is no dispute) x 3 days x 1/1,000] with compensation for delay arising from the delay in the supply of the gold-type 2 of this case x the defendant's delivery of the gold-type 2 of this case x 1/1,000] and to pay damages for delay calculated at each rate of 6% per annum under the Commercial Act from April 19, 2011 until January 16, 2014, which is the date of the decision of the court of the first instance, as determined by the Special Act on the Promotion, etc. of Legal Proceedings from the following day to the date of full payment.

C. Determination on the counterclaim

In the contract for work, the burden of assertion and proof on the completion of work is against the contractor who requests the payment of remuneration for the result of work, and in order to complete the date of the contract for the supply of the product, the fact that the contract for the supply of the product ends once the last stage of the original scheduled work is insufficient, and the main structure of the product must be constructed as agreed and have the performance generally required by social norms. Thus, the contractor who requests the payment of remuneration for the manufacture of the product must assert and prove not only that the last process stipulated in the contract for the production of the product ends, but also that the main structure of the product is constructed as agreed and has the performance generally required by social norms (see Supreme Court Decision 2004Da21862 delivered on October 13, 206).

Therefore, the defendant asserting that he completed the production of the gold punishment No. 1 pursuant to the instant contract and seeking the payment of the price therefor shall assert and prove that not only the last process prescribed in the instant contract for the production of the gold punishment No. 1 has been completed, but also the main structure of the gold punishment No. 15-1 through No. 8, and the main structure of the gold punishment No. 5-1 through No. 5-5, and the testimony of Non-Party 3 of the trial witness of the trial court in light of the video products No. 15-1 through No. 15-5, and the testimony of Non-Party 1 to Non-Party 1 of the trial witness of the trial court, it is difficult to recognize that the testimony of Non-Party 3 of the trial court to deliver on May 25, 201 has the function generally required by social norms as agreed and there is no other evidence to acknowledge it otherwise.

4. Conclusion

Therefore, the plaintiff's claim of the principal lawsuit shall be accepted within the extent of the above recognition, and the remaining principal lawsuit and the defendant's counterclaim shall be dismissed in all of the grounds. Since the part against the defendant who ordered payment in excess of the above recognized amount among the part against the principal lawsuit of the judgment of the court of first instance which partially different conclusion is unfair, it shall be revoked, and the plaintiff's claim of the principal lawsuit shall be dismissed, and the appeal as to the remaining appeal and counterclaim of the defendant as to the principal lawsuit, and the plaintiff's claim extended in the trial of the court of first instance shall be dismissed in all of them as

Judges Lee Jin-tae (Presiding Judge)