Whether the lease deposit is naturally deducted from the lease deposit without a separate expression of intent, such as deduction of overdue rent before the termination of the lease contract (negative), and whether the lessor who transferred the lease deposit has the right to express his/her intent, such as the said deduction (negative in principle)

Even if a lease deposit is delivered to a lessor, the lessor may freely choose whether it is appropriated for the overdue rent from the lease deposit while the lease relationship continues. Thus, it is not naturally deducted from the lease deposit without any separate declaration of intention, such as deduction of overdue rent prior to the termination of the lease contract. In addition, in a case where the lessor does not have the lease claim due to the reasons such as transfer of the lease claim, etc., barring any special circumstance, it cannot be said that the lessor has the right to express his/her intention to

Article 618 of the Civil Act

Supreme Court Decision 2005Da459, 466 Decided May 12, 2005

Busan High Court Decision 201Na1010

Busan Construction Industry Co., Ltd.

Defendant 1 (Attorney Kim Jong-chul, Counsel for defendant-appellant)

Defendant 2 and four others (Attorney Kim Jong-chul, Counsel for the defendant-appellant)

Cheongju District Court Decision 2010Na3286, 3293 decided May 20, 201

The judgment of the court below is reversed, and the case is remanded to Cheongju District Court Panel Division.

The grounds of appeal are examined.

1. As to the ground of appeal on the lawsuit trust

In a case where the assignment, etc. of a claim mainly takes place with the intention of having the assignment of claim, Article 7 of the Trust Act shall apply mutatis mutandis even if the assignment of claim does not constitute a trust under the Trust Act, and thus, Article 7 of the Trust Act is null and void. However, whether it is the primary purpose of having the assignment of claim shall be determined in light of various circumstances, such as the course and method of concluding the assignment of claim, interval between the transfer contract and the filing of the lawsuit, and the status relationship between the transferor and the transferee (see Supreme Court Decision 2000Da42

According to the records, with respect to the process of concluding the contract for the assignment of the instant apartment, the Plaintiff (Counterclaim Defendant; hereinafter “Plaintiff”) received rent claims from the counterclaim Defendant on December 14, 1995 for the purpose of promoting comprehensive construction by subrogation as a joint and several surety of the counterclaim Defendant (hereinafter “promotion construction”) on the part of the lessee of the instant apartment. After that, the promotion construction collected a considerable portion of the amount of subrogated payment through the conversion of the apartment owned by the counterclaim Defendant for sale in lots, etc. of the apartment owned by the counterclaim Defendant. While carrying out the sale in lots of the instant apartment owned by the counterclaim Defendant, the Plaintiff, who subrogated for the obligation of collateral security, etc. established in the instant apartment, by consultation with the promotion construction representative director, submitted the above rent claims, etc. by explaining that he/she was transferred from the promotion construction on October 1, 2010, and no other circumstance exists to deem that the promotion construction in records was transferred to the Plaintiff to recover his/her claims through a lawsuit on the ground of the Plaintiff, it cannot be readily concluded that the assignment of claims was performed in light of legal principles as seen earlier.

In the same purport, the lower judgment did not err by failing to exhaust all necessary deliberations as to whether a lawsuit trust is held or by omitting judgment, etc., as alleged in the grounds of appeal

2. As to the grounds of appeal on exemption from liability such as rent under special Acts for the protection of lessees of insolvent public constructed rental housing

According to Article 7 (1) of the Special Act, where a housing-purchasing project implementer acquires insolvent rental housing, he/she shall pay the lessee the unpaid rental fees after deducting the unpaid rental fees of the lessee from the rental deposit of the lessee, and where the unpaid rental fees exceed three years pursuant to the proviso of Article 8 (3) of the Enforcement Guidelines of the Special Act, the court below determined that the lessee shall deduct only three (3) years retroactively from the date of the moving-out of the lessee (the date when the lessee lawfully terminates the rental contract with the rental project operator and orders the house concerned) or from the date before the house-purchasing project implementer acquires the insolvent rental housing, and that the above provision only provides for the liability to compensate the rental deposit of the housing-purchasing project implementer who newly acquired the ownership of the insolvent rental housing and is in the position of the rental project operator, it cannot be viewed as a provision restricting the scope of the rental

Examining the reasoning of the lower judgment in light of relevant statutes and records, the lower court did not err by misapprehending the legal doctrine on the interpretation of the aforementioned Special Act.

3. As to the ground of appeal on violation of the good faith principle

In order for a right holder to exercise his/her right over a long-term period of time to not be permitted as a violation of the principle of trust and good faith, there are justifiable grounds to believe that the right holder does not exercise his/her right any longer, and the exercise of his/her right against the other party’s good faith should reach an extent that it is not acceptable in light of the concept of justice (see, e.g., Supreme Court Decisions 2001Da60019, Jan. 8, 2002; 2003Da2390, 2406, Apr. 22, 2003).

The lower court rejected the Defendants’ assertion that the Plaintiff’s claim in this case contradicts the principle of good faith, on the grounds that, although it is acknowledged that the promotion construction was not actively exercising the right to the instant lease agreement against the Defendants and the Defendant (Counterclaim Plaintiff collectively referred to as “the Defendants”), there is no justifiable ground to believe that the Defendants would no longer exercise the right to rent claims and the right to return unjust enrichment, and that there is no justifiable ground to believe that the Defendants would no longer exercise the right to claim for return of unjust enrichment, and that the Defendants would not pay rent in the event that the Defendants realized substantial benefits from the use and profit of each apartment in this case, or that the Plaintiff’s claim cannot be deemed to have reached an irrecoverable state in light of the concept of justice.

Examining the reasoning of the judgment below in light of the records, the judgment of the court below is based on the above legal principles, and there is no error in the misapprehension of legal principles as to the good faith principle.

4. The grounds of appeal on the scope of overdue rent to be deducted from the lease deposit (ex officio determination on Defendant 4 who filed the appellate brief after the lapse of the period for supplemental appellate brief)

(1) (1) The lower court: (a) concluded each of the instant apartment units owned by the counterclaim Defendant with the Defendants; (b) concluded each of the instant apartment units on December 14, 1995 with the Promotion Construction; and (c) notified the Defendants of the transfer of the foregoing right around August 1996; and (b) notified the Defendants of the fact that the Defendants did not pay the rent from November 15, 1995 to November 7, 2008 on the ground that the Defendants did not pay the rent after 1995, counting from the date of 0th of July 7, 2008; (c) the Korea Land and Housing Corporation purchased each of the instant apartment units based on Article 5 of the said Special Act and completed the registration of ownership transfer on September 29, 201; and (d) the Plaintiff did not pay the Defendants the remainder of the rent and unjust enrichment from the date of 0th of July 208 to the date of termination of the lease agreement with the Defendants on behalf of the Defendants.

However, even if a lease deposit is granted to a lessor, the lessor may freely choose whether it is the overdue rent from the lease deposit while the lease relationship is in progress (see Supreme Court Decision 2005Da459, 466, May 12, 2005, etc.). Thus, it is not naturally deducted from the lease deposit without any separate declaration of intention, such as the overdue rent deduction before the termination of the lease contract. In addition, in a case where the lessor does not have the leased claim due to the reasons such as transfer of the leased claim, etc., barring any special circumstance, it cannot be said that the lessor has the right to express his/her intention to deduct the rent from the lease deposit before the termination of

In the instant case where, prior to the termination of each of the instant lease agreements, there is no evidence to prove that there was an expression of intent to deduct the instant rent from the lease deposit, and in addition, in the instant case where, from December 14, 1995 to October 1, 201, Promotion Construction acquired by transfer the instant lease claim, it cannot be deemed that the instant lease claim was deducted from each of the instant lease deposits and extinguished at least during the said period, and thus, it can be subject to extinctive prescription (the first instance court held that each of the instant lease claims against the Plaintiff was arising every month after the instant lease agreements were concluded, and that the said claim could be offset before the completion of prescription even if 3 years have elapsed since the date of the instant lawsuit, it can be viewed that the instant lease claim could not be viewed as set-off in accordance with Article 495 of the Civil Act, since the instant lease claim was transferred from the Defendant to the Plaintiff by means of the construction of the instant registered lease claim from the Defendant, and the obligor could not be deemed as possible at the time of the completion of prescription set-off claim.

Therefore, the court below determined that the overdue rent which has expired by prescription after examining whether the statute of limitations has expired among the instant rent claims should not be deducted from the respective lease deposit of the Defendants. However, without determining the Defendants’ assertion, the court below determined that all overdue rent from November 1995 should be deducted from each lease deposit of the Defendants. In such a case, the court below erred by misapprehending the legal principles on the statute of limitations on the rent claim, which led to failure to exhaust all necessary deliberation or by omitting judgment.

5. Conclusion

Therefore, the judgment of the court below is reversed, and the case is remanded to the court below for a new trial and determination. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Shin Young-chul (Presiding Justice)