The meaning of Article 3(2) of the Act on Special Cases Concerning the Promotion, etc. of Legal Proceedings (hereinafter “Special Cases Concerning the Promotion, etc.”) and whether the interest rate for delay damages under Article 3(1) of the Act on Special Cases Concerning the Promotion, etc. of Legal Proceedings may be applied in cases where an appellate court rejected an appeal even though the obligor asserted the existence and scope of the obligation (negative)

Article 3(2) of the Act on Special Cases concerning Expedition etc. of Legal Proceedings

Supreme Court Decision 97Da24702 Decided September 9, 1997 (Gong1997Ha, 3066) Supreme Court Decision 2010Da21696 Decided July 8, 2010

Plaintiff (Counterclaim Defendant)

Defendant (Counterclaim Plaintiff)

Suwon District Court Decision 2016Na63118, 63125 decided August 10, 2017

The part of the lower judgment against the Defendant (Counterclaim Plaintiff) ordering payment of 50,000,000 won in excess of the annual interest rate of 5% from December 21, 2013 to August 10, 2017, and the annual interest rate of 15% from the next day to the date of full payment, is reversed, and the corresponding Plaintiff (Counterclaim Plaintiff)’s appeal is dismissed. The remaining appeal by the Defendant (Counterclaim Plaintiff) is dismissed. The total costs of the lawsuit are assessed against the Defendant (Counterclaim Plaintiff).

1. The grounds of appeal are examined.

A. For the following reasons, the lower court determined that the Defendant (Counterclaim Plaintiff; hereinafter “Defendant”) was liable to pay the remainder of KRW 50 million due to the instant share transfer agreement to the Plaintiff (Counterclaim Defendant; hereinafter “Plaintiff”) and damages for delay.

(1) On April 29, 2013, the Plaintiff and the Nonparty entered into the instant partnership agreement. The content thereof is that the Plaintiff receives 50% of the Nonparty’s equity interest in the instant factory (hereinafter “instant equity”) and the equipment, with respect to the instant ○○○ Factory (△△△), and the operating expenses shall be borne by 50 to 50.

On November 19, 2013, the Plaintiff entered into the instant share transfer agreement with the Nonparty to transfer the instant share in KRW 70 million to the Defendant with the consent of the Nonparty. On November 20, 2013, the Defendant paid the Plaintiff a down payment of KRW 10 million to the Plaintiff and paid the remainder KRW 60 million to the Plaintiff until December 20, 2013.

(2) After obtaining the consent of the Nonparty, the Plaintiff re-delivery to the Defendant all of the instant shares and the equipment transferred under the partnership agreement with the Nonparty and performed the Plaintiff’s duty.

(3) On January 20, 2014, the Defendant paid KRW 10,000 to the Plaintiff, which is reasonable to view it as part of the remainder under the instant equity transfer contract.

(4) The Defendant asserted that the Nonparty demanded additional investment of KRW 300 million, which was not mentioned in the contract after the date of the instant transfer agreement, and did not pay any balance. However, there is no evidence to acknowledge this. Rather, according to the Nonparty’s testimony, the Nonparty’s refusal of the Defendant’s request for a partnership business around December 2013 seems to be the primary reason for the Defendant’s failure to pay any balance by the payment deadline.

B. Examining the reasoning of the lower judgment in light of the record, the lower court did not err by exceeding the bounds of the principle of free evaluation of evidence against logical and empirical rules, contrary to what is alleged in the grounds

2. The decision shall be made ex officio;

A. Article 3(2) of the Act on Special Cases Concerning Expedition, etc. of Legal Proceedings (hereinafter “Special Cases Act”) provides that “Where it is deemed reasonable for an obligor to resist the existence or scope of the obligation until the adjudication of a fact-finding court declaring the existence of the obligation is rendered, the provisions of paragraph (1) shall not apply to a reasonable extent.” Here, when it is deemed reasonable for the obligor to resist the existence or scope of the obligation, the obligor’s assertion in dispute over the existence or scope of the obligation is deemed to have a reasonable ground. If the obligor’s assertion was accepted in the first instance trial, disputing the existence or scope of the obligation, even if the assertion was rejected in the appellate trial, the argument is reasonable, and in such a case, the interest rate for delay damages as provided in paragraph (1) of the same Article shall not be applied until the judgment of the appellate court is rendered pursuant to Article 3(2) of the Special Cases Act (see, e.g., Supreme Court Decisions 97Da24702, Sep. 9, 1997; 206Da106609

B. In the instant case, the first instance court accepted the Defendant’s assertion and dismissed all the Plaintiff’s claim, and the lower court subsequently accepted all the Plaintiff’s claim by following the conclusion of the first instance court. As long as the Defendant’s claim was accepted in the first instance court, it is recognized that there are reasonable grounds for the assertion. Therefore, even if the Plaintiff’s claim is accepted in entirety, the lower court should be deemed that the interest rate for delay damages as stipulated in Article 3(1) of the Act on

C. Nevertheless, the lower court erred by misapprehending the legal doctrine on the application of Article 3(2) of the Act on Special Cases concerning the Application of Article 3(1) of the same Act, thereby adversely affecting the conclusion of the judgment.

3. The part of the judgment below against the defendant ordering payment of 50,000,000 won in excess of the annual rate of 5% as stipulated in the Civil Act from December 21, 2013 to August 10, 2017, which is the date the judgment of the court below is rendered, and from the next day to the date of full payment, 15% per annum as stipulated in Article 3 (1) of the Act on Special Cases concerning the Settlement of Residents from the next day to the date of full payment. This part is reversed, but this part is sufficient to be directly decided by the court, and it is decided to self-market pursuant to Article 437 of the Civil Procedure Act. The plaintiff's appeal corresponding to the above reversed part is dismissed, and the defendant's remaining appeal is dismissed, and the total cost of the lawsuit is borne by the defendant.

Justices Kim Chang-suk (Presiding Justice)