The standard for determining whether there exists “justifiable cause” to believe that the other party has a right of representation as a requisite for establishing an expression representation as prescribed in Article 126 of the Civil Act; and whether it can be readily concluded that the other party has a justifiable reason to believe that the other party has a right of representation solely on the basis that the certificate of seal impression and power of attorney was delivered to the other party at the stage

Article 126 of the Civil Act

Supreme Court Decision 81Da322 Decided December 8, 1981 (Gong1982, 169) Supreme Court Decision 201Da99617 Decided April 26, 2013

Plaintiff (Law Firm Identity, Attorneys Lee Dong-on et al., Counsel for the plaintiff-appellant)

Defendant (Law Firm Gyeong & Yang, Attorneys Ansan-hwan et al., Counsel for defendant-appellant)

Seoul High Court Decision 2015Na26117 decided December 16, 2016

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

The grounds of appeal are examined.

1. In order to assert the effect of an expression agent under Article 126 of the Civil Act, the other party requires that the other party has the right of representation and there is a justifiable reason to believe that the other party has the right of representation. The existence of such a justifiable reason must be objectively observed and determined when the act of an agent by an agent by an agent by an agent by an agent by an agent by an agent by an agent is conducted (see Supreme Court Decision 2012Da9617, Apr. 26, 2013). Whether there exists a justifiable reason to believe that an agent by an agent is authorized to act by an agent under Article 126 of the Civil Act shall be determined at the time of the formation of the contract, and the circumstances after the formation of the contract shall not be considered. Thus, the mere fact that an agent by an agent by an agent has delivered the certificate of the personal seal impression and the power of attorney to the other party after the contract was concluded cannot be readily concluded that the other party had a justifiable reason to believe that he/she was authorized to act by an agent by an agent by an agent.

2. In light of the following circumstances, the lower court determined that there was a justifiable reason to believe that the Plaintiff was entitled to represent the Defendant with respect to the conclusion of the instant sales contract to Nonparty 1 and Nonparty 2 (hereinafter “Nonindicted 1, etc.”)

A. Nonparty 1, etc. managed the instant real estate upon delegation by the Defendant, and the Defendant did not interfere with it for a long time. Nonparty 1, etc. explained to the effect that they were the nominal owner of the Plaintiff, but they had the right to dispose of the instant real estate.

B. Nonparty 1 was aware that the Defendant disposed of the instant real estate according to her mother’s intent and distributed the price to his/her parents, etc., and around 2003, his/her mother agreed to dispose of the instant real estate and had the purchaser enter into a sales contract with the Plaintiff. Such circumstance appears to have been explained to the Plaintiff at the time of the conclusion of the contract.

C. After entering into the instant sales contract, the Plaintiff received a certificate of personal seal impression issued by Nonparty 1, etc. and a power of attorney pertaining to land transaction application with the Defendant’s seal impression affixed.

D. Around September 2013, the Plaintiff visited the Defendant’s house and talked about the progress of the instant sales contract with the Defendant, and at the time, the Defendant said that he would be able to consult with Nonparty 1, etc. as he is well aware of the content of the instant sales contract.

3. However, the above determination by the court below is difficult to accept in the following respect.

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

1) At the time of the conclusion of the instant sales contract, Nonparty 1, a female student of the Defendant, was managing the instant real estate, and Nonparty 1, etc. explained to them as if they were authorized to dispose of the instant real estate, but did not possess a registration right certificate, a seal imprint, a certificate of personal seal impression, and a power of attorney, etc.

2) At the time of entering into the instant sales contract, Nonparty 1, etc. demanded to deposit the sales price in the account in the name of Nonparty 1, not the Defendant, and the Plaintiff paid the sales price to Nonparty 1, etc.

3) The instant sales contract does not contain the Defendant’s contact address, and there is no evidence to prove the fact that the Plaintiff contacted the Defendant at the time of entering into the sales contract and confirmed the intention of sale. The Plaintiff merely paid KRW 324,00,000 to Nonparty 1, etc. from September 30, 2006, and it does not seem to be a trace that the Plaintiff urged the Defendant to perform the instant sales contract before September 2013, or demanded the return of the purchase price.

4) The Plaintiff purchased the instant real estate in KRW 1.2 billion, and at the time of concluding the instant sales contract, the officially announced value of the instant real estate exceeded KRW 1.7 billion.

5) On September 2013, the Plaintiff visited the Defendant’s home and talked about the progress of the instant sales contract with the Defendant, and at the time, the Defendant told the Plaintiff that “finites with Nonparty 2” was “finites with Nonparty 2.” The Defendant asserts that such remarks did not recognize his responsibility, but did not result in Nonparty 2’s responsibility.

B. According to this, the Plaintiff purchased the instant real estate at a price higher than the officially announced price by Nonparty 1, etc., who is the Defendant’s agent. At the time, Nonparty 1, etc. did not retain all necessary documents to dispose of the instant real estate, but did not verify whether the Defendant intended to sell it, and paid the sales price to Nonparty 1, etc., who is not the Defendant. In light of the fact that the Plaintiff appears to have considerable experience in real estate transactions as a licensed real estate agent, it is difficult to recognize that there was a justifiable reason to believe that the Plaintiff had the authority to sell the instant real estate on behalf

C. The certificate of personal seal impression and power of attorney offered to the Plaintiff by Nonparty 1, etc. cannot be ruled out that the possibility was prepared to sell the forest land in the land transaction permission zone ( Address omitted) sold in 2006, as in the instant real estate. Even based on the facts found by the court below, the time when the above certificate of personal seal impression and power of attorney were offered was concluded after the instant sales contract was concluded. Thus, it is not reasonable to consider in determining whether there was a justifiable reason.

D. Furthermore, the fact that the Defendant said to the Plaintiff that she was her friend with Nonparty 2 in relation to the instant sales contract on September 2013 is also a situation that occurred after the conclusion of the instant sales contract, and thus, cannot be the grounds for recognizing the aforementioned justifiable reasons.

E. Nevertheless, based on its stated reasoning, the lower court determined that there was a reasonable ground to believe that the Plaintiff had the authority to conclude the instant sales contract on behalf of the Defendant. In so doing, the lower court erred by misapprehending the legal doctrine on justifiable grounds in the representation of expression under Article 126 of the Civil Act, or by misapprehending the rules of evidence, thereby adversely affecting the conclusion of the judgment. The allegation contained in the grounds of appeal on

4. As to the instant real estate, the Plaintiff sought implementation of the procedure for ownership transfer registration at the same time with the payment of KRW 576,000,000 around the instant real estate, and sought performance of the procedure for ownership transfer registration at the same time with the payment of KRW 876,00,00 in preliminary. However, the said preliminary claim is merely a claim for partial reduction of the primary claim, and the subject matter and the cause of the claim cannot be seen as a preliminary claim in a lawsuit, as the primary claim is identical to the primary claim.

5. Therefore, without examining the remaining grounds of appeal, the part against the defendant among the judgment below against the defendant is reversed, and that part of 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 Kim Shin (Presiding Justice)