[1] In a case where damages are claimed on the grounds of nonperformance, whether the damages can be claimed on the grounds of trust interest (affirmative with qualification)

[2] The case holding that in a case where Gap bears the duty to use the land in Eul corporation based on Gap's written consent to use the land, a written consent to sell the land, and a written consent to donate fundamental property, and Gap's refusal to use the land was finally excluded from Eul corporation's business site, and Eul corporation claims damages equivalent to Eul's expenses paid to Byung, the case holding that in light of all the circumstances, it is difficult to view that there is a proximate causal relation between Gap's refusal to use the land and losses equivalent

[1] Article 390 of the Civil Code / [2] Article 390 of the Civil Code

[1] Supreme Court Decision 2008Da87556 Decided April 23, 2009

Bolim Development Co., Ltd. (Attorney Han-won, Counsel for defendant-appellant)

Defendant (Attorney Lee Jae-soo, Counsel for defendant-appellant)

Busan High Court Decision 2009Na13347 decided January 13, 2011

The part of the lower judgment against the Defendant is reversed, and that part of the case is remanded to Busan High Court. The Plaintiff’s appeal is dismissed. The costs of appeal to the lower court are assessed against the Plaintiff.

The grounds of appeal are examined.

1. As to the Defendant’s ground of appeal

The court below acknowledged the facts as indicated in its reasoning based on its adopted evidence. The defendant continuously refused to use the land of this case against the plaintiff on or after December 2006 by violating the duty to use the land of this case based on the letter of this case and the written consent for land use, a written agreement for sale, and a written consent for donation of fundamental property, etc. prepared with the plaintiff before the letter of this case and before it. The plaintiff judged that it was no longer difficult for the plaintiff to proceed with the instant charnel facilities business without including the land of this case, and notified the Ulsan Metropolitan City Mayor on October 17, 2007 of the fact that it was excluded from the business site, and the Ulsan Metropolitan City Mayor sent a reply with the purport that if the land of this case was not purchased on October 18, 2007, the land of this case would be excluded from the business site of this case by the defendant's refusal to use the land of this case, barring any special circumstance, the defendant is obligated to compensate the plaintiff for the damage equivalent to the investment cost incurred by the time the plaintiff believeding each agreement of this case.

However, we cannot accept the above judgment of the court below for the following reasons.

In cases of claiming damages on the ground of nonperformance, in principle, an obligee is entitled to seek damages from the performance of the contract, i.e., the benefit that the obligee would incur as a result of the performance of the contract; however, the obligee may seek damages from the obligee’s belief that the contract would have been performed in lieu thereof, i.e., the expenses incurred by the obligee. However, in such cases, the damages incurred to the obligee in default would have not incurred to the obligee if there was no obligor’s default (see Supreme Court Decision 2008Da87556, Apr. 23,

However, according to the facts acknowledged by the court below, when the defendant refused to approve the use of the land of this case, the plaintiff's side (the representative director of the plaintiff was established as an incorporated foundation for the charnel facility business, the name of the foundation) submitted a proposal for the formulation of an urban management plan concerning charnel facilities and access roads to Ulsan Metropolitan City, Ulsan Metropolitan City, where the neighboring land except the land of this case is designated as a project target area, and the amount of the pelke facilities and access roads deposited on the ground is "92,000" on May 21, 2008, but the head of the Ulsan Metropolitan City, Ulsan Metropolitan City, the head of the Gun rejected the proposal on July 16, 2008 on the ground that "the 92,000 which the plaintiff applied for, exceeded the demand in the mid- and long-term supply and demand plan of the funeral facility of Ulsan Metropolitan City, and attached a written opinion of residents, etc." In addition, the plaintiff's last proposal was presented to supplement the residents' opinion, etc., and the head of Ulsan Gun returned the plaintiff's judgment.

Examining these facts in light of the legal principles as seen earlier, it is difficult to view that there was a proximate causal relationship between the Defendant’s refusal to use the instant land and the Plaintiff’s loss equivalent to the cost of the instant land, inasmuch as the head of Ulsan Metropolitan City’s Funeral Facility’s mid- to long-term supply and demand plan for funeral facilities in Ulsan Metropolitan City was not due to the exclusion of the instant land from the relevant site, but rather due to the cause of “the excess of the demand under the mid- to long-term supply and demand plan for funeral facilities in Ulsan Metropolitan City, Ulsan Metropolitan City.”

Nevertheless, the court below held that the defendant was liable to compensate for damages equivalent to the expenses paid by the plaintiff to the land in this case due to the defendant's refusal to accept the land use. In so doing, the court below erred by misapprehending the legal principles on causation between default and the occurrence of damages, which affected the conclusion of the judgment. The ground of appeal assigning this error is with merit.

2. Plaintiff’s ground of appeal

The plaintiff's ground of appeal is without merit because it erred by evidence preparation and fact-finding which belong to the exclusive jurisdiction of the court below, and it cannot be a legitimate ground of appeal, and it is not acceptable in that it is based on the premise that there exists causation between the defendant's refusal to use land and the plaintiff's damage as seen above.

3. Conclusion

Therefore, the part of the judgment below against the defendant is reversed and the case is remanded to the court below for further proceedings consistent with this Opinion. The plaintiff's appeal is dismissed and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Lee Sang-hoon (Presiding Justice)