Plaintiff

Defendant (Law Firm Chungcheong, Attorneys Cho Jong-chul et al., Counsel for the defendant-appellant)

September 23, 2009

Seoul Northern District Court Decision 2008Gadan65898 Decided April 17, 2009

1. The plaintiff's appeal is dismissed.

2. The costs of appeal shall be borne by the Plaintiff.

The judgment of the first instance shall be revoked. The defendant shall pay to the plaintiff 23 million won with 20% interest per annum from the day after the delivery of the complaint of this case to the day of complete payment.

1. Basic facts

The following facts are not disputed between the parties, or can be acknowledged in full view of the purport of the entire pleadings in Gap evidence Nos. 2, 4, and 1 and 2.

A. On June 10, 200, Nonparty 1 paid KRW 4,000,00 for down payment, intermediate payment of KRW 1,000,00,00 for each of the following items: (a) the remainder of KRW 13,00,00,00 for each of the following items shall be paid in installments from July 2006 to Nonparty 2, who operates ○○○○ Construction Co., Ltd. (hereinafter “○○○”); (b) the ownership of the instant machinery is reserved to Nonparty 2; and (c) the ownership is transferred to Nonparty 1 when the purchase amount was paid in full; and (d) the Plaintiff received the instant machinery from Nonparty 2 at that time.

B. On June 28, 2006, Nonparty 1 agreed to pay the remainder of KRW 10,000,000 each month in five installments each month between Nonparty 2 and Nonparty 2, and confirmed that the ownership of the instant machinery was reserved against Nonparty 2 for the said installment period once again.

C. However, upon the lapse of the above installment period, Nonparty 1 was unable to pay KRW 5,710,000 to Nonparty 2 without paying KRW 5,710,000 to the Plaintiff who operated “○○ Industrial Complex”, and the Plaintiff requested the sale of the instant machinery and delivered it on June 21, 2007.

D. On November 24, 2007, the Defendant, who is the fraud of Nonparty 2, did not notify the Plaintiff on November 24, 2007, moved the instant machinery in question to the Daegu Construction Co., Ltd. factory.

2. Judgment on the assertion

A. The plaintiff's assertion

The Plaintiff has ownership of the instant machinery for the following reasons. Since the Defendant violated the Plaintiff’s ownership by relocating the instant machinery, the Defendant’s obligation to pay KRW 23,000,000 to the Plaintiff as compensation for damages shall be examined in turn.

B. Determination

1) Whether ownership due to payment in kind is acquired

The plaintiff asserts that the machinery of this case owned by the non-party 1 was paid in lieu of the claim amounting to KRW 13,000,000 against the non-party 1.

However, while entering into a contract of sale and purchase of movable property, in case where the seller delivers the object to the buyer before the price is paid, but until the price is paid in full, the ownership of the object is reserved to the seller and the special agreement for the so-called ownership reservation that the ownership is transferred to the buyer at the time when the price is paid in full, the agreement between the parties to transfer the ownership of the object is a condition that the sale and purchase contract is concluded and the price is paid in full at the time when the object is delivered. Thus, even if the object is delivered to the buyer, barring special circumstances, the seller may claim the ownership of the reserved object against the buyer and the third party until the price is paid in full, and this legal principle does not differ even if the special agreement for the ownership reservation was not disclosed to the third party (see Supreme Court Decision 9Da30534 delivered on September 7, 199). Thus, the non-party 1 and the defendant concluded the sale and purchase contract for the machinery of this case and made a special agreement for the ownership reservation. Thus, the plaintiff's assertion is without merit.

2) Whether to acquire in good faith or not

The plaintiff asserts that even if the ownership of the instant machinery was reserved to the defendant, the Plaintiff acquired the instant machinery in a peaceful and public performance by Nonparty 1, and did not know the fact that Nonparty 1 did not have the right to dispose of it, and that the Plaintiff acquired the instant machinery in good faith without any negligence.

As seen earlier, the Plaintiff acquired the instant machinery in a peaceful and public performance by Nonparty 1. However, in full view of the purport of the entire pleadings on June 21, 2007, the Plaintiff was aware of the circumstances that Nonparty 1 purchased the instant machinery from Nonparty 1 to pay KRW 5,00,000, out of the installment payments, at the time of delivery of the machinery from Nonparty 1 as part of Nonparty 1, on June 21, 2007. The Plaintiff had a duty of care to ask the Defendant whether the ownership of the instant machinery was owned by Nonparty 1 when taking over the instant machinery. If the Plaintiff asked, he was negligent in believing that the ownership of the instant machinery was owned by Nonparty 1 because he did not ask the Defendant even though he could have easily known that the ownership of the instant machinery was reserved by Nonparty 1. Therefore, the Plaintiff’s aforementioned assertion is without merit.

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and the judgment of the court of first instance is just in conclusion, and the plaintiff's appeal is dismissed.

Judges Sick Modle (Presiding Judge)