Plaintiff (Law Firm Seo-Gyeong, Attorneys Seo-sik et al., Counsel for the plaintiff-appellant)

Defendant 1 and one other (Attorney Kim Jong-soo, Counsel for the defendant-appellant)

March 16, 2007

Changwon District Court Decision 2005Gahap636 Decided January 20, 2006

1. Revocation of a judgment of the first instance;

The defendants pay to each plaintiff 121,50,000 won with 5% interest per annum from May 7, 2005 to April 20, 2007 and 20% interest per annum from the next day to the day of full payment.

2. The total costs of the lawsuit are borne by the Defendants.

3. The monetary payment portion under paragraph (1) may be provisionally executed.

As stated in Paragraph (1) of this Article, the plaintiff filed an application for modification of the purport of appeal and the cause of appeal by adding a preliminary claim for the payment of the amount stated in Paragraph (1) of this Article to the amount acquired at the time of the first instance while claiming the payment of KRW 24,50,000 for the original construction cost and the delay damages therefor. Unlike the title of the written claim, the purport of the claim seems to have been reduced).

1. Basic facts

① On November 21, 2003, the Plaintiff received from Defendant 1 on November 21, 2003 the payment of the construction cost of the new construction of the inn building with the total floor area of KRW 750 million (excluding value-added tax), the construction period from November 25, 2003 to June 30, 2004, the period of warranty liability of two years, and the warranty bond of five percent as the construction cost.

② At the time, the Plaintiff did not obtain a comprehensive construction license, paid a license fee to Nonparty 1 Co., Ltd. (hereinafter “Nonindicted Company 1”) and agreed to execute the said construction work by lending a comprehensive construction license. In concluding the contract with Defendant 1, the contractor’s name was Nonparty 1, but the Plaintiff was paid the construction cost through Nonparty 1 by taking the form of accepting a comprehensive subcontract for the said construction work from Nonparty 1, and the tax invoice was also issued and issued to Defendant 1 in the name of Nonparty 1.

③ Meanwhile, on July 9, 2004, the owner of the building was changed from July 9, 2004 to Defendant 2, who is his father, while the said building was not completed by June 30, 2004, which was the term of the contract. Accordingly, the Plaintiff and Defendant 2, and the contractor still made a contract for construction work (change) with Nonparty 1.

④ Thereafter, the Plaintiff completed the construction of the inn building on October 28, 2004 and delivered it to the Defendants around that time. The Defendants, after completing the registration of ownership preservation on November 5, 2004, operated the accommodation business with the trade name “Rome” from around that date (the registration of the business was completed in the name of Defendant 2 on August 25, 2004).

⑤ On December 1, 2004, when the Defendants did not pay the remainder of construction even after delivery, the Plaintiff agreed with Nonparty 4, the representative director of Nonparty 1 company, to deduct KRW 85 million from the construction cost the compensation for delay due to the delay of 103 days in completion of the construction of the inn building by the Defendants, and the amount of KRW 19 million in total, which is KRW 34 million paid by the Defendants in relation to the construction of the said inn building (the Defendants asserted that Defendant 1 agreed to pay the compensation for delay at KRW 85 million without any inevitable delay from the Plaintiff, but there is insufficient evidence to acknowledge the testimony by Nonparty 5 solely on the basis of the entries in subparagraph 22 of the same Article and Nonparty 5’s witness at the trial).

④ From December 30, 2003 to August 16, 2004, the Defendants remitted the total amount of KRW 275 million to the corporate account of Nonparty 1’s company. After the said agreement, Defendant 2 transferred the construction price of KRW 300 million to the said account on December 1, 2004.

[Evidence] Facts without dispute, Gap evidence 1-2, Gap evidence 2-5, Eul evidence 2-2, Eul evidence 2-3, Eul evidence 6-1 through 13, Eul evidence 18, non-party 3's testimony and the purport of whole pleadings

2. The parties' assertion

A. The plaintiff

The actual contractor under the contract for the inn building is the plaintiff, and both defendant 1 and defendant 2 who jointly assumed the obligations of defendant 1 under the contract for the construction of the building jointly with the plaintiff. Even if the plaintiff is not the contractor under the contract for the construction of the inn building, the defendants agreed that the plaintiff succeeded to the status of the contractor under the contract for the construction of the inn building from the non-party 1 company who leased the comprehensive construction license, and the plaintiff was transferred the claim for the construction cost of the inn building from the non-party 1 company on April 10, 2006 and notified the defendants on April 18, 2006, so the plaintiff was the legitimate transferee of the contract for the construction cost.

Therefore, the Defendants are obligated to pay to each Plaintiff the total construction cost of KRW 825 million (the total construction cost of KRW 750 million + value-added tax of KRW 750 million + value-added tax of KRW 75 million) after deducting KRW 34 million, including the purchase cost of construction materials borne by the Defendants, KRW 9.5 million, KRW 85 million, KRW 85 million, KRW 575 million for delayed payment, and KRW 125 million for delayed payment, and delay damages therefrom.

B. The Defendants

First, the defendants are merely entering into the above service building contract with the non-party 1, and they do not have any contractual relationship with the plaintiff, so they do not have any obligation to pay the construction cost to the plaintiff.

Second, the defendant 1 ordered the non-party 1 to build a new building with the consent of the non-party 1 company and changed the name of the owner to the defendant 2 and entered into a new contract for the construction work between the defendant 2 and the non-party 1. Thus, the defendant 1 should be deemed to have exceeded the status of the contractor under the contract. Thus, the defendant 1's claim against the defendant 1 is unjust.

Third, even if the Defendants are liable to pay the construction price to the Plaintiff, the Defendants completed the construction work on October 28, 200 with the completion date of 120 days or more until June 30, 2004, and even if 17 days have been delayed due to rain, compensation for delay for 23,1750,000 won for 103 days (750,000 won x 103 days x 3/1000 per day x 3/1000 per day x 3/1000), 53,105,80 won for expenses paid by the Defendants to repair defects of leisure buildings (47,025,000 won for replacement of late 19,000 won + 5610,000 won for 30,000 won for 5610,000 won for 50,0000 won for replacement of electric utility bonds for 103 days or less for replacement of new electricity, 3671,71,07,006,00,000,0,00.

Fourth, on May 24, 2005, before the Plaintiff received the claim for the construction cost of the leisure building from Nonparty 1 Company, Defendant 2 was notified by the Jinju Tax Office that he attached the claim for the construction cost of the above leisure building against Defendant 2 on the ground that he was delinquent in national taxes of KRW 229,298,760, the sum of the value-added tax of Nonparty 1 Company, including the value-added tax, of Nonparty 1 Company, and thus, the assignment of the Plaintiff’s claim cannot take effect.

[Other, the defendants asserted that the above money should be deducted from the construction cost because the non-party 1 company, the contractor, at the time of entering into the contract for the female building contract, has kept the 37.5 million won amount equivalent to the 5% of the construction cost as the defect bond to Defendant 2 until October 28, 2006, which was two years after the expiration of the warranty period from the date of completion of the female building. This part of the argument is not judged separately because it is apparent that the warranty period has already expired at the time of the closing of the argument in this case.

3. Determination

(a) A contractor under a contract;

In cases where an actor who enters into a contract performs a juristic act in another person’s name, as to whom the actor and the other party are the party to the contract, the parties to the contract shall be determined on the basis of the same intent if the actor and the other party agree with each other. In cases where the intent of the actor and the other party is not in accord, the other party shall be determined on the basis of the specific circumstances before and after the conclusion of the contract, such as the nature, content, purpose, and details of the contract, if a reasonable person is a party to the contract, either the actor and the nominal owner, who is the party to the contract (see Supreme Court Decision 2003Da4059 delivered on December 12,

First, according to the evidence Nos. 1-2, 3, 4, and 6-3 through 13 of the evidence Nos. 1-2, 6-2, it is recognized that the Plaintiff, who was not paid the construction balance after the completion of the above building, was the subcontractor of the above construction and sent to the non-party 1, who was the non-party 1, a mail claiming for the payment of the construction balance to the owner of the building or demanding the non-party 1 to pay the construction cost to the non-party 1. The fact that the defendant 1 or the non-party 2 transferred the total construction cost of KRW 50 million to the corporate account of the non-party 1 once between December 30, 203 and December 1, 204.

However, as seen above, the construction of the above female building was supplied by Defendant 1 and actually performed the above construction work. Since there was no comprehensive construction license necessary for the construction work, the construction work made a standard contract for the construction contract with Defendant 1 and Nonparty 1 with the contractor by paying a license fee to the non-party 1 and preparing a comprehensive construction license to the non-party 1 company, and then it was ordered to accept the construction work from the non-party 1 company.

Furthermore, as evidence No. 1-2, No. 2, No. 3, No. 7, and No. 8, No. 2-1, No. 7, and No. 12-2, respectively, and No. 14, No. 15-1, and No. 15-2, respectively, are considered to comprehensively consider the following facts: ① Defendant 1, who was trying to construct a building by Nonparty 3, was aware of the fact that the Defendants were the owner of the building at the time of the above construction contract, or the Defendants were the owner of the building at the time of the above construction contract at the time of the conclusion of the contract; ② the Plaintiff was aware of the fact that the Defendants were the owner of the building at the time of the above construction contract at the time of the Plaintiff’s request for the change of the construction price by Nonparty 1 and the owner of the building at the time of the above construction contract at the time of the Plaintiff’s request for the change of the construction price at the time of the above construction contract at the time of Nonparty 2’s request.

Thus, the claim for the construction cost of the above female building belongs to the plaintiff, not the non-party 1 company.

B. Liability of the Defendants

On July 9, 2004, the owner of the building was changed from Defendant 1 to Defendant 2, who is his father. Accordingly, the Plaintiff entered into a new contract with Defendant 2 for the said female building with Defendant 2, and only Defendant 2 was written as a contractor under a new contract document (Evidence A 3).

However, in full view of the evidence No. 6, evidence No. 2-2, evidence No. 3, evidence No. 14, and evidence No. 15-2, each statement No. 1, No. 2-1, and No. 14, and No. 15-2, testimony of Non-Party 6 witness and witness No. 5 of the trial court, and the whole purport of the whole pleadings, Defendant 1 continues to pay the owner the compensation for delay caused by the delay in construction and the cost of materials for the construction to be borne by the owner of the building on Dec. 1, 2004, as mentioned above, after the change of the name of the owner to Defendant No. 2, it is reasonable to conclude the contract with the owner of the building, and to conclude the contract with the owner of the building on the compensation for delay and the cost of materials for the construction to be borne by the owner of the building on the part of the non-party No. 1, No. 2, No. 14 and No. 15 (the same shall apply to the above case). 2, Defendant No. 1, and the owner of the construction work.

Therefore, the defendants are obliged to pay the construction cost to each plaintiff.

(c) Unpaid construction costs;

The total construction cost of the above female building is KRW 825 million (750 million + value-added tax of KRW 750 million + value-added tax of KRW 75 million). From December 30, 2003 to December 1, 2004, the Defendants wired the total construction cost of KRW 575 million to the corporate account of the non-party 1 company as the construction cost. The Plaintiff and the defendant 1 paid liquidated damages of KRW 85 million around December 1, 2004, KRW 35 billion paid by the Defendants + KRW 500,000,000 + KRW 950,000,000 after deducting the remainder of the construction cost from KRW 19,50,500,000,000 paid by the Plaintiff, barring any special circumstance, since they agreed to deduct the Plaintiff from the total construction cost of KRW 505,50,000,000.

(d) Offset, etc.;

(1) Penalty for delay

The defendants' assertion as to liquidated damages shall be examined, and the plaintiff completed the new construction work of the inn building late 120 days prior to the initial completion date shall be as seen earlier. According to the evidence No. 1, No. 2, and evidence No. 3, the rate of liquidated damages for delay shall be 1/1,000 of the construction cost per day in the construction contract, while the construction contract for the construction work agreed to be applied first than the construction contract shall be 3/1,000 of the construction amount per day. However, as recognized above, as long as the plaintiff and the defendant 1 agreed to pay liquidated damages at KRW 85 million around December 1, 2004, the defendants cannot claim the deduction of liquidated damages for delay inconsistent with the above agreement. Thus, this part of the defendants' assertion is without merit.

(2) Compensation for damages due to defect repairs

The defendants' assertion as to defect repair is difficult to believe that the statements of No. 21 and No. 22 as shown above and the testimony of Non-Party 5 as witness of the court of first instance in light of the statements of No. 6 and the testimony of Non-Party 6 of the court of first instance, and the testimony of Non-Party 4-1 through No. 10, No. 5, No. 10, No. 11, and No. 12-1, No. 2, No. 13, No. 14, No. 15-2, No. 14, No. 15-2, No. 1, No. 14, No. 16, No. 19, and Non-Party 3 of the court of first instance as to defect repair are insufficient to recognize it, and there is no other evidence to prove it. Thus, the above assertion by the defendants is without merit.

(3) Non-value added tax refund;

As to the Defendants’ assertion on non-value-added tax refund, the Defendants’ assertion that the non-party 1 issued a tax invoice to Defendant 1 at the latest to prevent refund of KRW 14,090,90,09 of value-added tax, it is not sufficient to accept the Defendants’ assertion on non-value-added tax, and there is no other evidence to prove this otherwise. Thus, this part of the assertion is without merit.

4. Conclusion

Therefore, the defendants are obligated to pay 120,000,000 won and damages for delay calculated at the rate of 5% per annum under the Civil Act from May 7, 2005 to April 20, 2007, which is the day following the delivery date of the copy of the complaint filed by the plaintiff, as the delivery date of the inn building after the delivery date of the inn building, and from April 20, 2007, which is the day of this decision, and 20% per annum under the Act on Special Cases Concerning the Promotion, etc. of Legal Proceedings from the next day to the day of complete payment. Thus, the plaintiff's primary claim against the defendants is justified, and the judgment of the court of first instance is unfair, and the judgment of the court of first instance is revoked and it is so decided as per Disposition

Judges Cho Sung-won (Presiding Judge)