[1] In a case where an object of sale is not equipped with the objective nature or performance expected in terms of transaction norms, or where it does not have the nature scheduled or guaranteed by a party, whether the seller bears the warranty liability pursuant to Article 580 of the Civil Code (affirmative)

[2] Whether a seller's warranty liability and liability for nonperformance are recognized concurrently where a waste is buried in the land subject to the sale and the buyer's expenses incurred in disposing of waste (affirmative)

[3] The case affirming the judgment below holding that in a case where Gap acquired a building permit to construct a new building by purchasing land from the State, and changed the land category from "B" to "B", and discovered waste of approximately 331t, such as waste synthetic resin and waste concrete, from around 1-2 meters in depth, were buried in the above land, and the expenses for disposal were paid, the court below held that the above waste of the above land constitutes a defect in the quality or condition expected to be ordinarily installed, and thus, the State is obligated to pay Gap the expenses for disposal of waste due to warranty liability

[1] Where an object of sale is not equipped with the objective nature or performance expected in terms of transaction norms, or it does not have the nature scheduled or guaranteed by the parties, the seller bears the warranty liability for the defect to the buyer pursuant to Article 580 of the Civil Code.

[2] If a defect occurs in an object of sale, the seller's warranty liability and liability for nonperformance are recognized concurrently by a separate title. In this case, barring any special circumstance, expenses for repairing the defect falls under the seller's warranty liability and damages arising from the seller's default liability. Therefore, if a waste is buried in the land subject to sale and the buyer incurs expenses for disposing of wastes, the buyer may claim such expenses as damages due to nonperformance pursuant to Article 390 of the Civil Act, and the buyer may claim damages due to warranty liability pursuant to Article 580(1) of the Civil Act.

[3] The case affirming the judgment below holding that in a case where Gap acquired a building permit from the State to build a new building, and discovered waste of approximately 331t of waste, such as waste synthetic resin and waste concrete, from around 1-2 meters of waste excavation work in the above land, and paid expenses for disposal thereof, in view of the content, quantity, location, and disposal costs of buried waste, etc., the above waste in the above land constitutes a defect in the quality or condition which is not equipped with the ordinary target for sale and purchase, and since it cannot be assessed differently in an objective condition where waste is buried due to the reason that the land category of the land was changed from "the whole site" to "the site," the State is obligated to pay the waste disposal expenses due to warranty liability to Gap.

[1] Article 580 of the Civil Act / [2] Articles 390 and 580 of the Civil Act / [3] Articles 390 and 580 of the Civil Act

[1] Supreme Court Decision 98Da18506 delivered on January 18, 200 (Gong2000Sang, 446) / [2] Supreme Court Decision 2002Da51586 delivered on July 22, 2004 (Gong2004Ha, 1431)

Plaintiff (Law Firm Woo, Attorneys Lee Jong-soo et al., Counsel for the plaintiff-appellant)

Republic of Korea (Government Law Firm Corporation, Attorneys Jeon Tae-tae et al., Counsel for the plaintiff-appellant)

Seoul Central District Court Decision 2016Na54727 Decided December 9, 2016

The appeal is dismissed. The costs of appeal are assessed against the defendant.

The grounds of appeal are examined.

1. Factual basis

The reasoning of the lower judgment and the record reveal the following facts.

On July 31, 2012, the Plaintiff purchased at KRW 57,368,00 square meters (hereinafter “instant land”) from the Korea Asset Management Corporation, an institution entrusted with the Defendant’s business, for KRW 808 square meters (hereinafter “instant land”). On September 25, 2012, the Plaintiff registered the transfer of ownership.

On March 19, 2014, the Plaintiff donated the instant land to the Nonparty, who is an son, and obtained a building permit under the name of the Nonparty to build a new building on May 9, 2014. On September 15, 2014, the Plaintiff changed the land category from the “transfer” to the “site.”

On May 2014, the Plaintiff discovered that approximately 331t wastes, such as waste synthetic resin and waste concrete, have been buried in approximately 1-2 meters in depth, while performing excavation works on the instant land. From May 2014 to September 2014, the Plaintiff spent KRW 60,925,170 to treat wastes.

2. Whether liability for damages arises (ground of appeal Nos. 1 and 2)

A. In the event that the subject matter of sale is not equipped with the objective nature or performance that can be expected in terms of transaction norms, or the subject matter of sale is not equipped with the nature scheduled or guaranteed by the parties, the seller bears the warranty liability for the defect to the buyer in accordance with Article 580 of the Civil Code (see Supreme Court Decision 98Da18506 delivered on January 18, 200).

B. The lower court determined that the liability for damages caused by the defect liability was recognized on the following grounds.

(1) Considering the content, quantity, location, and disposal cost, etc. of buried wastes, the foregoing waste contained in the instant land constitutes a defect of the quality or condition that is anticipated to be ordinarily equipped with the subject matter of sale. Therefore, the Defendant is liable to compensate the Plaintiff for the warranty liability.

(2) The Defendant asserted that the instant land does not constitute a defect even if there was a waste, since it was no problem for the Plaintiff to use it as “the land category” at the time of the sales contract, and the Defendant did not guarantee that it can be used as “site”. However, it is difficult

The instant land may be excavated to cultivate plants even under dry field. In light of the location and quantity of buried wastes, waste appears to have a significant impact on cultivating plants even when the Plaintiff uses the instant land as dry field. In light of the Plaintiff’s land category from “B” to “site,” it cannot be assessed differently in terms of objective conditions where waste is buried.

C. Examining the reasoning of the lower judgment in light of the aforementioned legal doctrine, the lower judgment did not err by exceeding the bounds of the principle of free evaluation of evidence against logical and empirical rules, or by misapprehending the legal doctrine on the concept of defects and the timing of determination, burden of proof, etc.

3. Scope of damages (Ground of appeal Nos. 3 and 4)

A. Where a defect occurs in the subject matter of sale, the seller’s warranty liability and liability for nonperformance are recognized as concurrently by a separate title (see Supreme Court Decision 2002Da51586, Jul. 22, 2004). In this case, barring any special circumstance, the expenses for repairing the defect falls under the seller’s warranty liability and liability for nonperformance. Therefore, if a waste is buried in the land subject to sale and the buyer incurs expenses for disposing of the waste, the buyer may claim the expenses due to nonperformance pursuant to Article 390 of the Civil Act, and may claim damages due to warranty liability pursuant to Article 580(1) of the Civil Act.

B. The lower court determined as follows.

(1) The Plaintiff sustained losses corresponding to the cost of waste disposal due to a defect in the instant land filled in. The Defendant is obligated to pay the Plaintiff the cost of waste disposal, 60,925,170 won, as compensation for damages, and the delay damages.

(2) The Defendant asserted that there is no proximate causal relation between the cost of the Plaintiff’s payment and the defect of the land, on the grounds that the Nonparty was aware of the fact that the Plaintiff donated the instant land to the Nonparty, and that he did not bear the liability for warranty.

The right to claim damages due to the defect liability arises when the buyer takes over the object of sale. The plaintiff's right to claim damages occurred when the land was delivered from the defendant, and thereafter the plaintiff donated the land to the non-party, the right to claim damages is extinguished or not transferred to the donee.

(3) The Defendant asserts that liability for damages should be limited. However, it cannot be deemed that the Plaintiff was negligent in knowing or not knowing the existence of a waste at the time of concluding a sales contract, and there is no evidence to deem that the damage sought by the Plaintiff was calculated excessively as the cost of waste disposal.

C. Examining the reasoning of the lower judgment in light of the aforementioned legal doctrine, the lower judgment did not err by exceeding the bounds of the principle of free evaluation of evidence against logical and empirical rules, or by misapprehending the legal doctrine on the concept of damages and the scope of damages, contrary to what

4. Conclusion

The Defendant’s appeal is dismissed as it is without merit, 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.

Justices Lee Dong-won (Presiding Justice)