Where a large-sum obligor makes a partial repayment when an amount different is jointly and severally liable with each other, the part to be extinguished first by the repayment (=the part to be solely liable by the large-sum obligor)

In a case where a large-sum obligor partly pays a different amount of liability, the part which is extinguished first due to repayment ought to be deemed to be the part on which a large-sum obligor solely assumes the liability in light of the purport of the quasi-joint and several liability system that seeks to secure the parties’ intent and the full amount of obligation. This legal doctrine applies to cases where an employer’s damages amount differs from his/her own damages to an employee who directly inflicted damages on another person as a result of setting-off by taking account of the fault of the victim, and where an employee who is a large-sum obligor partly partly pays the amount of damages, and where a large-sum obligor, a large-sum obligor, partly pays the amount of damages according to different ratio of fault toward the victim of the joint and several obligors, the same applies to cases where a large-sum obligor, who is a joint and several obligors, partly pays the amount of damages. Furthermore, the amount of damages under Article 30(1) of

Articles 393, 396, 413, 756, 760, 763 of the Civil Act; Article 30(1) of the Licensed Real Estate Agents Act

Supreme Court Decision 94Da10931 delivered on February 22, 1994 (Gong1994Sang, 1078), Supreme Court Decision 94Da5731 delivered on August 9, 1995 (Gong1994Ha, 2275), Supreme Court Decision 94Da5731 delivered on March 10, 1995 (Gong1995Sang, 1571 delivered on May 12, 1995), Supreme Court Decision 94Da6246 delivered on July 14, 1995 (amended on July 24, 1995), Supreme Court Decision 94Da19600 delivered on July 14, 1995 (amended on July 24, 1995), Supreme Court Decision 209Da52979 delivered on July 24, 2019, Supreme Court Decision 209Da57969 delivered on July 24, 29059.

The Intervenor succeeding to the Plaintiff (Attorney Jeon Soo-soo et al., Counsel for the intervenor succeeding to the Plaintiff)

Defendant (Law Firm Hong, Attorneys Jeong Sung-il et al., Counsel for defendant-appellant)

Seoul High Court Decision 2011Na99728 decided July 5, 2012

The part of the lower judgment against the Plaintiff-Successor is reversed, and that part of the case is remanded to the Seoul High Court.

The grounds of appeal are examined.

1. A. The facts acknowledged by the lower court, which constituted the premise for the instant judgment, are as follows.

(1) Nonparty 1, the Plaintiff of the first instance trial, concluded a lease agreement with Nonparty 2, a practicing licensed real estate agent, to lease the instant apartment as a broker of the Defendant, and delegated Nonparty 3, a brokerage assistant of the Defendant, the right to receive the remainder of lease deposit.

(2) Accordingly, Nonparty 3 received the remainder of the lease deposit KRW 198,00,000 from Nonparty 2. Meanwhile, upon Nonparty 1’s request to pay the remainder of the lease deposit, Nonparty 3 received KRW 5,406,000 as the repayment fee for the loan upon request from Nonparty 1.

(3) However, Nonparty 3 embezzled the balance of the lease deposit and the repayment fee.

(4) After that, Nonparty 3 repaid Nonparty 1 the remainder of the lease deposit amount of KRW 97,222,343.

B. The court of first instance held that the non-party 3 is liable for damages for the total damages incurred by the plaintiff due to his own tort (the total amount of KRW 198,00,000,000 and KRW 5,406,00,000, and interest on loans additionally paid by the plaintiff since the loan was not repaid at the time, and the loan was not repaid thereafter). The defendant is liable for damages due to the non-party 3's tort pursuant to Article 30 (1) of the Licensed Real Estate Agents Act, but the non-party 1 is also liable for damages due to the non-party 1's negligence, on the ground that the non-party 1 is also negligent, the non-party 3 is liable for damages only for KRW 109,216,166, which is 50% of the total damages. Furthermore, the court held that the non-party 3's repayment of the loan was not extinguished on the ground that the non-party 3 solely bears the obligation.

However, the lower court determined otherwise, that the Defendant’s liability for damages was extinguished within the scope of the damages that the Defendant paid out of KRW 48,611,171 (i.e., KRW 97,222,343 x 0.5) equivalent to the Defendant’s fault ratio among KRW 97,222,343 repaid by Nonparty 3.

C. The key issue of the instant case is whether KRW 97,222,343, which was repaid by Nonparty 3, ceased to exist solely from the obligation owed by Nonparty 3, or whether the obligation jointly assumed with the Defendant is extinguished as much as the amount corresponding to the Defendant’s percentage of fault.

2. Where a large-sum obligor performs part of his/her obligations with different amounts of obligations when they are jointly and severally liable, there are conflicting judgments as to whether the part on which the large-sum obligor solely assumes the obligations due to such repayment is not extinguished or the part on which the obligor jointly assumes the obligations with the small-sum obligor is also extinguished as much as the amount equivalent to the ratio of the fault

A. The Supreme Court has held that the portion of the partial repayment of a large-sum obligor, which is equivalent to the ratio of a small-sum obligor’s fault, ought to be considered to have been repaid jointly with the small-sum obligor.

(1) The Supreme Court Decision 93Da53696 Decided February 22, 1994 ruled that in a case where an employer’s liability is at issue due to a tort committed by an employee, the scope of damages that an employee and an employer should compensate for may vary as a result of offsetting the amount of damages by taking account of the victim’s fault in relation to the occurrence of damages caused by the tort. The purport of offsetting the amount of damages lies in allowing an employee to fairly and fairly share the damages incurred therefrom if the employee has no ability to compensate for damages, ultimately, that employee and the employer should be deemed to have been partly repaid as part of the amount of damages that the employer should compensate for, as compared to the employer’s fault ratio.

Furthermore, Supreme Court Decision 2010Da73765 Decided June 28, 2012 (2012) rendered that, in cases where an employee or a joint tortfeasor entered into a repayment agreement with the victim after the establishment of a tort and paid some of the money in accordance therewith, if the repayment agreement was made as a means of concealing or deceiving the tort, the employer’s liability for damages is also extinguished as compared to the ratio of the employer’s fault.

(2) The Supreme Court Decision 94Da5731 Decided March 10, 1995 held that the same legal principle applies not only to employers' liability but also to joint tort liability. In other words, in a case where the scope of damages to be compensated varies depending on the degree of fault against the victim of joint tort, if a large-sum obligor partly repaid the amount of damages, the obligation of the small-sum obligor should be deemed to be extinguished.

B. On the contrary, there are precedents that a large-sum obligor’s partial repayment should be deemed to have been first repaid on the part where the obligor solely assumes the obligation.

(1) The Supreme Court Decision 99Da50521 Decided November 23, 1999 held that in a case where a third party’s loan obligation and an employer’s damage liability are in an in personam joint and several relationship, and a third party’s loan obligor and a large-sum obligor set-off is partly a large-sum obligor, the part which is extinguished due to a set-off by a large-sum obligor, in light of the purport of the quasi-joint and several liability system that seeks to secure the intent of the parties and the full amount of the obligation, the part

(2) In other words, Supreme Court Decision 2007Da49748 Decided October 25, 2007 held that in a case where the employee’s wife, who was detained by embezzlement of the customer’s money deposited in a financial institution, made an agreement to compensate for the employee’s damages and partly repaid the amount, the part extinguished due to payment was not the part of the employer’s damages liability and the part of the obligor’s damages liability, but the part of the obligor, who is the large-sum obligor, is the sole obligor.

3. As can be seen, the Supreme Court held that, on the basis of the so-called “the doctrine of negligence ratio” in cases where an employer’s liability and joint tort liability are at issue, where a large-sum obligor partly pays a different amount of debt when a large-sum obligor is jointly and severally liable with each other, the portion on which a large-sum obligor is jointly and severally liable with a small-sum obligor should not be extinguished first, but the portion on which a large-sum obligor is jointly and severally liable with a small-sum obligor ought to be extinguished

A. In tort, comparative negligence is to take into account the victim’s fault in determining the amount of damages in line with the principle of equity or good faith (see Supreme Court Decision 91Da4249, Feb. 14, 1992, etc.). Inasmuch as comparative negligence is applicable to determining the scope of liability for damages, it is achieved that recognizes comparative negligence by having the victim take responsibility for the amount equivalent to one’s fault ratio out of the amount of damages. Nevertheless, deeming comparative negligence as applicable to the apportionment of damages due to the large-sum obligor’s insolvency, which is liable for damages, would result in the overlapping application of comparative negligence.

B. The term “joint and several liability” refers to a legal relationship between multiple parties who are liable for the performance of the same content independently by one of the quasi-joint and several obligors. Of the grounds created by the quasi-joint and several obligors, the effect of the quasi-joint and several liability does not extend to any other obligor, except for the grounds such as repayment that achieves the objective of the claim. Accordingly, an obligee is able to secure the full repayment of the obligation. In this respect, the quasi-joint and several liability has the meaning of strengthening the obligee’s status compared to the joint and several liability. As an

The issue of risk burden due to the insolvency of a certain obligor after partial repayment can only be an issue in the internal recourse relationship between the obligor and the obligee. If part of the risk of insolvency of a large-sum obligor is transferred to the obligee who is the obligee, it would weaken the obligee’s status and would be contrary to the nature of quasi-joint and several liability.

C. From the perspective of the parties’ intent, it is reasonable to recognize the same effect as a quasi-joint and several liability, as the type in which the Supreme Court applied the comparative negligence doctrine and other types of quasi-joint and several liability are different. If the parties are the victims (only hereinafter “victims”), small-sum debtors, and large-sum debtors, the intent of the victims and small-sum debtors is similar to any type of quasi-joint and several liability. In other words, the victim’s sole liability portion, and the small-sum obligor’s joint liability portion should be extinguished. Generally, unless the intent of the large-sum obligor is indicated, it is difficult to view that the intent would be extinguished by the type of quasi-joint and several liability.

Rather, examining the issue of employer’s liability, deeming the solely assumed obligation to be extinguished for the following reasons accords with the intent of the large-sum obligor. The scope of the employer’s right to indemnity against an employee is limited to the extent that is deemed reasonable under the good faith principle (see, e.g., Supreme Court Decisions 86Meu1045, Sept. 8, 1987; 95Da52611, Apr. 9, 1996). Considering that an employer’s reimbursement against an employee after the partial repayment of the employee’s remainder of the obligation after the partial repayment of the employee’s remainder of the obligation, the amount ultimately borne by the employee would be reduced due to the restriction on the right to indemnity as seen earlier, and thus, would be favorable to the employee. Therefore, deeming the solely assumed obligation to be appropriated for the partial repayment would be favorable to the employee, thereby complying with the employee’s intent.

D. According to the theory of the ratio of negligence, where a large-sum obligor becomes insolvent after partial repayment, the victim is not entitled to receive the full amount of the claim. Since the part jointly assumed by a small-sum obligor is deemed extinguished as a result of partial repayment that corresponds to the ratio of the small-sum obligor’s fault, the part cannot be reimbursed from the small-sum obligor. However, if the victim receives a preferential repayment from a small-sum obligor, the full amount of the obligation owed by the small-sum obligor may be reimbursed. As can be seen, it would be difficult to obtain the difference in the amount that the victim is entitled to receive depending on who receives a preferential repayment from anyone.

Furthermore, according to the theory of comparative negligence ratio, when a victim receives a partial repayment from a large-sum obligor, the part on which a small-sum obligor jointly bears an obligation is extinguished to the extent equivalent to the ratio of fault of a small-sum obligor, and thus, the partial amount cannot be reimbursed from a small-sum obligor. Therefore, even if a small-sum obligor claims the remaining part and receives a repayment, it is ultimately necessary to re-request the large-sum obligor for an amount that cannot be reimbursed from a small-sum obligor. Whether there is any ground

E. As seen earlier, the Supreme Court Decision 2007Da49748 Decided 207 deemed that, if an employee’s wife, who is a tort, has concluded an agreement for compensation for damages and has partially repaid, the portion on which the obligor solely assumed an obligation is extinguished. On the other hand, Supreme Court Decision 2010Da73765 Decided 200 Decided that, on the other hand, if an employee, who is a tort, has agreed to repay part of the amount by means of concealing or deceiving the tort, the employer’

As can be seen, it is not clear to distinguish whether a specific case is subject to the doctrine of comparative negligence. Furthermore, it is necessary to establish standards that can be applied to all vicarious joint and several liability, because there is no predictability for a case other than the case already decided by the Supreme Court precedents.

F. The Supreme Court held that, in a case where a principal obligor partially repaid a debt with respect to a partial guarantee, the guarantor is liable to repay the remaining debt within the guarantee limit (see Supreme Court Decision 84Meu1261, Mar. 12, 1985). The Supreme Court held that, even in a case where a debt is partially repaid by a large-sum obligor, if the debt is partially repaid by another joint and several liability, the debt is preferentially appropriated for the repayment of the part that is not jointly assumed by the large-sum obligor and then the remaining joint obligation is appropriated for the repayment of the debt (see Supreme Court Decision 2012Da85281, Mar. 14, 2013). The theory of negligence ratio is inconsistent with

G. Regarding the type of employer liability, the following reasons are as follows. In other words, employer liability is recognized for the purpose of allowing a victim to receive sufficient compensation, and demanding the victim to share damages due to the insolvency of an employee who is a large-sum obligor does not coincide with the institutional purport of employer liability.

In addition, as seen earlier, the employer’s right to indemnity against an employee is recognized only within the extent deemed reasonable in light of the principle of good faith. If the employer’s right to indemnity is limited, the actual apportionment ratio of the victim’s damages due to the insolvency of the employee is higher than that scheduled in the theory of comparative negligence.

H. In relation to the type of joint tort liability, there are cases where the right to indemnity is recognized among the joint tortfeasors, and it is reasonable to view that the risk of insolvency of some joint tortfeasors should be resolved as an internal relation. This cannot be transferred to the victim.

4. Therefore, in a case where a large-sum obligor partly pays a different amount of liability when a joint and several liability exists, the part which is extinguished first due to such repayment ought to be deemed to be the part on which a large-sum obligor solely assumes the liability in light of the intent of the parties and the purport of the joint and several liability system that seeks to secure the full payment of the amount owed by the parties. This legal doctrine applies to cases where an employer’s amount of damages differs from his/her own amount of damages as a result of offsetting the amount of damages by taking account of the fault of the victim, and where an employee who is a large-sum obligor directly inflicted damages on another person as a result of offsetting the amount of damages, and where a large-sum obligor, a large-sum obligor, partially pays the amount of damages to the victims of the joint and several liability vary. In addition, the same applies where the amount of damages under Article 30(1) of the Licensed Real Estate Agent Act of a practicing licensed real estate agent

Supreme Court Decision 93Da53696 Decided February 22, 1994; Supreme Court Decision 94Da5731 Decided August 9, 1994; Supreme Court Decision 94Da6246 Decided March 10, 195; Supreme Court Decision 94Da6246 Decided May 12, 1995; Supreme Court Decision 94Da1960 Decided July 14, 1995; Supreme Court Decision 97Da5706 Decided July 24, 1998; Supreme Court Decision 200Da36525 Decided July 24, 1998; Supreme Court Decision 2005Da3645 Decided April 25, 201; Supreme Court Decision 2005Da16345 Decided 24, 205; Supreme Court Decision 206Da13654 Decided 25, 199.

5. Examining the instant case in light of the legal principles as seen earlier, Nonparty 3, a large-sum obligor, should be deemed to extinguish the amount paid by Nonparty 3 as repayment solely from the portion on which Nonparty 3 solely bears the obligation. Ultimately, Nonparty 3’s repayment does not extinguish from the Defendant’s liability for damages.

Nevertheless, the lower court determined otherwise. In so doing, it erred by misapprehending the legal doctrine on the validity of partial repayment of quasi-joint and several liability, thereby adversely affecting the conclusion of the judgment. The ground of appeal assigning this error is with merit.

6. Therefore, the part of the lower judgment against the Plaintiff-Successor is reversed, and that part of the case is remanded to the lower court for further proceedings consistent with this Opinion. It is so decided as per Disposition by the assent of all participating Justices on the bench. Each supplementary opinion by Justice Lee Ki-taik and Justice Kim Jae-

7. Opinion concurring with Justice Lee Ki-taik is as follows.

In order to supplement the grounds for the above opinion, the case where the debt amount of the joint debtor Gap and Eul among the joint debtor Gap and Eul are 10 million won, and the debt amount of Eul is 6 million won.

A. In this case, a creditor may receive reimbursement of KRW 10 million to Gap, and KRW 6 million to Eul, respectively, but the aggregate amount does not exceed KRW 10 million. A is obligated to repay the debt amount of KRW 10 million, but there is no obligation to repay the aggregate of the debt amount of KRW 10 million, in addition to the debt amount of KRW 10 million. B is obligated to repay the debt amount of KRW 6 million. B is obligated to pay the debt amount of KRW 6 million, but it is not obligated to pay the debt amount of KRW 10 million in addition to the debt amount of KRW 10 million. This is the essence of the legal relationship of other joint obligations.

The legal relationship of such a common obligation is different from the case where A and B jointly assume the joint obligation of KRW 6 million, and the case where A independently bears the obligation of KRW 4 million, and thus, the legal relationship of such a case is not applied to this case.

B. The following cases may arise as a result of the legal principles and the so-called negligence ratio theory of the above 4. precedent that decided to be changed. In order to repay a debt in the above above case, it is assumed that Party A and Party B prepared five million won each to recover a creditor. If Party B first pays five million won, Party A’s debt remains at five million won, and Party A’s debt remains at five million won, and Party A is able to receive the full amount of the claim. However, if Party A first pays five million won, Party B’s debt (5 million won x five million won x five million x one x one x one x one x one x one b million) is extinguished, and the creditor is able to request Party A to return only three million won out of the amount it prepared, and Party A’s debt is 2 million won.

These results show the situation of the distressed legal order where the time order of partial repayment of each co-debtor in a joint debt relationship would be a legal requirement that determines the amount of the obligation extinguished by the repayment.

C. In full view of the above opinion and the arguments presented by the concurring opinion, the above legal principle should be applied to all the types of common debt relationships with other common debt relationships.

8. Opinion concurring with Justice Kim Jae-hyung is as follows.

A. The key issue of this case is, in a case where a part of an obligation with a different amount is extinguished due to repayment, etc. when a part of the obligation, which is larger amount, is to be extinguished due to repayment, etc., whether the portion to be solely liable (hereinafter “joint liability”) is extinguished or the portion to be jointly liable with another obligor (hereinafter “joint liability portion”) is to be extinguished in proportion to the amount of obligation or according to the ratio of negligence. In order to resolve this issue, it is discussed that measures to resolve by analogical application of Article 477 of the Civil Act on statutory appropriation of performance are to be discussed.

B. Article 477 of the Civil Act on the satisfaction of an obligation provides that if an obligor is unable to fully perform his/her obligations to the same obligee when the obligor bears several obligations to the same obligee, it would be appropriated for the repayment of any obligation. In particular, Article 477 of the Civil Act provides for statutory appropriation of an obligation in preparation for cases where the parties

As such, statutory appropriation of performance applies to cases where several debts exist, so the statutory appropriation of performance provision does not apply to cases where a single debt is divided into the joint apportionment and the sole apportionment. However, if a single debt can be divided into the joint apportionment and the sole apportionment, it is reasonable to view that the above provision should be applied by analogy, since it is similar to cases where several debts are to be borne by several persons.

C. The application of legal norms to a matter that does not have a legal regulation is either analogically or analogically or analogically. In order to fill the gap of law, it may be deemed that the legal norm goes beyond the ordinary meaning of the text and text so as to be applied. This is not to find out the possible meaning of the text and text through interpretation, but to create the law that requires a judge to intermediate other legal norms. To such analogy, first of all, there must be a common point or similar point between a case that does not have a legal regulation and a case that has a legal regulation. However, by analogy, it is impossible to affirm by analogy. In light of the legal system, legislative intent, purpose, etc., the analogical application may only be recognized where it is deemed legitimate by analogy.

The term “joint and several liability” refers to a legal relationship between multiple parties, which independently and severally assumes the obligation to perform the entire obligation to a creditor with respect to the same content, and is not a joint and several liability under the Civil Act. The Supreme Court recognizes the concept of vicarious and several liability distinct from a joint and several liability under the previous Civil Act, and recognizes absolute effect as an absolute effect as the joint and several liability only for the performance, etc. that can be deemed to have reached the satisfaction of the obligee’s obligation. Such recognition of vicarious and several liability is to ensure the obligor’s full payment of the obligation to

When a debtor is unable to fully perform his obligations with respect to the same creditor when the performance is not extinguished, the person performing the obligations first may designate any obligation and appropriate it for the repayment. If the person performing the obligations does not designate it, the person performing the second obligation may designate any obligation and apply it for the repayment (Article 476 of the Civil Act). When the parties concerned do not designate the obligation to be appropriated for the repayment, statutory appropriation of performance is made in accordance with Article 477 of the Civil Act.

Under Article 477 of the Civil Act, the statutory appropriation of performance is set in the order of appropriation of performance, which applies to the case where the obligor bears several obligations for the same kind of obligation to the same obligee, and the offer of performance does not extinguish the entire obligation, and the parties do not designate the obligation to be appropriated for the repayment. This is mainly understood as having set the order of appropriation in consideration of the obligor's constructive intent, and having priority over the obligor's interest.

Article 477 subparag. 1 of the Civil Act provides that a statutory appropriation of performance shall give priority to the performance of an obligation which first comes due (Article 477 subparag. 1 of the Civil Act), and that a statutory appropriation of performance shall give priority to the obligor for a legal appropriation of an obligation, in the event that the entire performance of an obligation is due or is not due (Article 477 subparag. 2 of the Civil Act). In addition, Article 477 subparag. 4 of the Civil Act provides that performance of an obligation shall be appropriated for the performance of an obligation in proportion to the obligor’s performance, the arrival of the due date, or the prior and following date (Article 477).

In cases where an obligor partly performs his/her obligations with different amounts, if the obligor partly performs his/her obligations to the obligee, the issue is whether the due date is due or whether the due date is due. In such cases, whether either the joint and several liability portion or the sole liability portion is to be deemed extinct first has a significant impact on the interests of the obligee, the other obligor in the relationship between the quasi-joint and several liability and the quasi-joint and several liability. The purpose of the quasi-joint and several liability is to ensure the practical satisfaction of the obligation by strengthening the collateral of the obligation, which ought to be considered when determining the effect of the obligor’s partial performance

In a case where an amount different from that of an obligor is jointly and severally liable, it may be deemed that the solely liable portion is larger in terms of the obligee’s standard. However, depending on the obligor’s standard, the profit of repayment may vary depending on the case, and thus, it cannot be readily concluded that either the jointly liable portion or the solely liable portion has a lot of profit. Therefore, Article 477 subparag. 2 of the Civil Act, which grants priority to statutory appropriation, cannot be applied by analogy to quasi-joint and several liability.

Article 477 Subparag. 4 of the Civil Act provides for a statutory appropriation of performance based on the obligee’s interest in repayment, which conflict with the normative purpose of the quasi-joint and several liability to secure the obligee’s satisfaction. In the event that an obligor, who is in a quasi-joint and several liability relationship, partly pays a debt, the purport of recognizing the quasi-joint and several liability in order to protect the obligee if the joint and several liability and the sole liability are extinguished in proportion to that amount by analogy of the said provision is unreasonable. The conclusion does not necessarily lead to an unreasonable outcome contrary to the purpose of the system by analogying the said provision to the quasi

Therefore, even if the situation of partial performance is similar to the situation in which the statutory appropriation of performance according to the partial repayment of several obligations is applied, the legitimacy of analogical application may not be recognized from a normative perspective. In order to eliminate confusion arising from the occurrence of different conclusions between multiple types of vicarious joint and several liability and to clearly regulate legal relations, the analogical application of Article 477 of the Civil Act cannot be resolved by analogy, and the conclusion should be made by taking into account the purpose of the vicarious and several liability system.

D. Therefore, the view that statutory appropriation of obligation under Article 477 of the Civil Act ought to be applied mutatis mutandis to quasi-joint and several liability is unreasonable. In light of the purport and purpose of the quasi-joint and several liability system that seeks to ensure the full payment of obligation, where part of the obligation becomes extinct due to repayment, etc., it is reasonable to view that the portion which

Justices Kim Young-soo (Presiding Justice)