[1] The validity of an agreement under which the contract is automatically rescinded if the purchaser of the real estate sales contract fails to pay the balance by the payment deadline

[2] In a case where a sales contract was concluded to modify some of the terms and conditions after the automatically terminated contract, whether a new agreement to restore the invalidated contract may be deemed to have been concluded (affirmative)

[1] Articles 105 and 544 of the Civil Act / [2] Articles 105 and 544 of the Civil Act

[1] Supreme Court Decision 2007Do5030 decided Dec. 27, 2007 (Gong2008Sang, 179)

Plaintiff (Counterclaim Defendant)

Defendant Counterclaim Plaintiff and one other (Law Firm Seocheon, Attorneys Yu-min et al., Counsel for the plaintiff-appellant)

Seoul High Court Decision 201Na48188, 48195 decided June 29, 2012

The judgment below is reversed and the case is remanded to Seoul High Court.

The grounds of appeal are examined.

1. As to the ground of appeal on title trust

The court below rejected the Defendants’ assertion that the contract of this case was null and void in violation of the Act on the Registration of Real Estate under Actual Titleholder’s Name, and that the Defendant (Counterclaim Plaintiff; hereinafter “Defendant”) (Counterclaim Plaintiff; hereinafter “Plaintiff”) who is a bona fide beneficiary is returned only to the Plaintiff (Counterclaim Defendant; hereinafter “Plaintiff”) with unjust enrichment, and thus, should be deducted from the amount to be refunded capital gains tax, survey expenses, and division expenses borne by the Defendants pursuant to the contract of this case. However, even if a title trust agreement was concluded between the Plaintiff and Nonparty 1, it becomes null and void by the Act on the Registration of Real Estate under Actual Titleholder’s Name is merely a title trust agreement and does not become null and void.

Examining the reasoning of the lower judgment in light of the relevant legal principles and records, the lower court is just and acceptable, and there is no error in the misapprehension of legal principles as to title trust, as otherwise alleged in the grounds of appeal.

2. As to the ground of appeal on the automatic termination clause

A. Even though an agreement is made to the effect that the buyer fails to pay any balance by the due date for the payment of the balance, the sales contract cannot be automatically terminated, unless the seller provides the buyer with the payment of the balance and causes the buyer's delay of performance. However, if the buyer again requests the extension of the due date for the payment of the balance without fulfilling his/her obligation several times, and if there are special circumstances under which the buyer provided the buyer with the promise to perform the contract by the due date for the payment of the balance and agreed to assume the obligation automatically terminated, the sales contract automatically becomes void due to the failure of the buyer to pay the balance by the due date for the payment of the balance (see Supreme Court Decision 2007Do5030, Dec. 27, 2007, etc.). If the sales contract automatically becomes void and the seller and the buyer agreed to modify some terms and conditions of the contract such as the payment of the remainder due to the delay of performance by the due date for the buyer, it cannot be deemed that the buyer automatically terminated the new terms and conditions of the sales contract.

B. Review of the reasoning of the lower judgment and the record reveals the following facts.

(1) On July 20, 2006, the Defendants entered into a contract with the Plaintiff and Nonparty 2 (hereinafter “the Plaintiff, etc.”) to sell approximately KRW 83,000 of the forest land of this case at KRW 4 billion. Since then, the Defendants had extended the payment date several times, but failed to pay the remainder of the purchase price after having paid the Plaintiff, etc. a sum of KRW 1,40,000,000 as the down payment and the intermediate payment, the Defendants rescinded the sales contract on December 7, 2006.

(2) On February 12, 2007, the Defendants agreed to sell KRW 48,00 among the forest land of this case to the Plaintiff, etc. for KRW 2.4 billion, and agreed to recognize KRW 1.4 billion as part of the purchase price of a new sales contract. The Plaintiff, etc. agreed to pay the remainder of KRW 1.1 billion until April 20, 2007 and to cancel the registration of the establishment of the instant neighboring forest land of this case. Accordingly, with respect to KRW 16,00 among the forest land of this case, the instant contract of KRW 1,76,00,000 for KRW 1.76,00,000,000 for KRW 32,00,000 was concluded, and the instant contract of KRW 2,00,000 for KRW 6,44,000,000 for the purchase price was not paid by the date agreed upon by the purchaser or the remainder of the registration of the establishment of the instant forest of this case was automatically invalidated clause (hereinafter “instant clause”).

(3) After receiving the additional payment of KRW 360 million with the purchase price, the Defendants implemented the registration procedure on February 14, 2007 regarding ownership transfer of KRW 160 million among the forest land of this case pursuant to the instant contract No. 1.

(4) In order to pay the down payment of KRW 200 million under the instant contract, the Plaintiff et al. issued a check of KRW 200 million per face value to the Defendants, but the check of the unit value was rejected on April 20, 2007. The Plaintiff et al. did not pay the remainder of the intermediate payment and the remainder by April 20, 2007, which was the remainder payment date, with only KRW 80 million paid out of the intermediate payment, and did not cancel the registration of creation of a mortgage of the instant root.

(5) On June 4, 2007, the Plaintiff et al. paid to the Defendants the delayed payment of KRW 60 million for damages for delay following the delay of the contract under Article 2 of the instant case. On June 7, 2007, the Plaintiff et al. paid KRW 200 million for cash until September 30, 2007, and agreed to immediately implement the procedure for changing the maximum debt amount of the instant mortgage creation registration from KRW 1 billion to KRW 600 million, but did not implement the agreement.

C. Examining these facts in light of the legal principles as seen earlier, the part concerning the instant contract No. 2 regarding 32,000 of the forest land of this case was invalidated pursuant to the instant automatic termination clause by failing to pay the Plaintiff, etc. the remainder of the purchase and sale and to cancel the registration of the establishment of a mortgage on April 20, 2007, and thereafter, the Plaintiff, etc. paid delayed damages to the Defendants and returned to the Defendants according to the agreement to implement the agreement by partially amending the terms and conditions of the instant contract No. 2. However, in light of the developments leading up to the conclusion of the agreement and the contents of the agreement, which can be known by the record, the Plaintiff, etc. and the Defendants may also be deemed to have restored the instant automatic termination clause contained in the previous contract. The sales contract may also be deemed to have been restored to the Plaintiff, etc. by failing to perform its duty to pay the remainder within the agreed date, and there is a lot

Nevertheless, the lower court rejected the Defendants’ assertion that the part of the instant contract No. 2 was invalidated pursuant to the instant automatic termination clause on the grounds that the Defendants were unable to immediately exercise the right of rescission without the notice of performance of opposite obligations and new performance, and thus, the lower court erred by misapprehending the legal doctrine on the validity of the automatic termination clause, thereby failing to exhaust all necessary deliberations, thereby adversely affecting the conclusion of the judgment. The allegation in the grounds of appeal assigning this error is with merit.

3. As to the ground of appeal on the scope of restitution

Based on its stated reasoning, the lower court rejected the Defendants’ assertion that the instant sales contract was a single contract for the purchase of KRW 480 million out of the instant forest in KRW 2.4 billion, and that the instant contract was separate contracts. On the basis of its stated reasoning, the lower court deemed that the Plaintiff’s total purchase price of KRW 1.84 billion out of the instant forest in which the ownership transfer registration was completed pursuant to the instant contract constituted the purchase price for KRW 160 million out of the instant forest in which the ownership transfer registration was completed pursuant to the instant contract, and calculated the amount to be returned to the Plaintiff by the Defendants following the cancellation of the sales contract for KRW 3200,000 out of the remainder of the forest in this case, based on the remaining amount of KRW 1.4 billion,000,000,

Examining the reasoning of the judgment below in light of the relevant legal principles and records, the court below is just and acceptable, and there is no error in the misapprehension of legal principles as to the calculation method of damages, as alleged in the grounds of appeal.

4. Conclusion

Therefore, the lower judgment is reversed, and 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.

Justices Kim So-young (Presiding Justice)