Where a person placing an order pays a subcontract price directly to a subcontractor with a false knowledge that he/she is liable to pay the contract price to the contractor, etc., whether the person placing an order may request the subcontractor to return unjust enrichment (negative)

Article 741 of the Civil Act, Article 35(1) of the Framework Act on the Construction Industry, Article 14 of the former Fair Transactions in Subcontracting Act (amended by Act No. 5816, Feb. 5, 199) (see current Article 14)

Korea

Defendant 1 and 51 others (Attorney Ansan-soo, Counsel for the defendant-appellant)

Seoul High Court Decision 2005Na96926 decided September 1, 2006

All appeals are dismissed. The costs of appeal are assessed against the Plaintiff.

The grounds of appeal are examined.

Article 35 (1) of the Framework Act on the Construction Industry provides that "the ordering person may directly pay the subcontract price corresponding to the portion executed by the subcontractor if the subcontractor falls under any of the following subparagraphs. In this case, the obligation to pay the subcontract price to the subcontractor shall be deemed extinguished within the limit of the payment made to the subcontractor." Article 14 of the former Fair Transactions in Subcontracting Act (amended by Act No. 5816, Feb. 5, 199; hereinafter the same shall apply) provides that "the ordering person may directly pay the subcontract price corresponding to the portion manufactured, repaired or constructed by the subcontractor to the subcontractor under the conditions as prescribed by Presidential Decree. In this case, the obligation to pay the subcontract price to the subcontractor by the ordering person and the obligation to pay the subcontractor to the subcontractor shall be deemed extinguished within the limit of the payment made by the ordering person, even if the ordering person receives the subcontract price from the subcontractor or the subcontractor (hereinafter referred to as "contractor, etc.") in accordance with the above provisions, it shall not be deemed that the subcontractor has any obligation to request the return of the subcontract price, etc.

The court below acknowledged the facts based on the adopted evidence, and found that the plaintiff paid the balance of the construction cost to be paid to fixed construction companies (hereinafter "fixed construction companies") which have a relation with the construction contract with the plaintiff, in direct payment to the defendants and their predecessor under a contractual relationship different from fixed construction. In such a case, the plaintiff's payment is not only the payment of the construction cost for fixed construction but also the payment of the subcontract price to the defendants and their predecessors. Thus, even if the construction cost that the plaintiff is to pay for fixed construction has already been transferred to a third party and the payment for fixed construction has already been made erroneously, the court below determined that the plaintiff cannot seek a return of unjust enrichment against fixed construction, as long as the fixed construction had been paid to the defendants and their predecessors, and that the plaintiff cannot seek a return of unjust enrichment against the defendants.

According to the facts established by the court below, the plaintiff paid the subcontract price directly to the defendants, the subcontractor, and his predecessor is deemed to have been paid by Article 35(1) of the Framework Act on the Construction Industry or Article 14 of the former Fair Transactions in Subcontracting Act. Thus, even if the plaintiff paid the subcontract price to the defendants and their predecessor by mistake even though the plaintiff did not pay the subcontract price to the construction, the plaintiff can seek a return of unjust enrichment against the construction of the regular construction and could not seek a return of unjust enrichment against the defendants. Although the above reasoning of the court below is somewhat inappropriate, it is just in the conclusion that the plaintiff rejected the plaintiff's assertion, and therefore, this part of the ground of appeal

The assertion in the grounds of appeal on the premise that the Defendants, the creditors of fixed construction, or the inheritee, exercised the subrogation right against the Plaintiff, who is the debtor of fixed construction, and received a payment for fixed construction from the Plaintiff by exercising the subrogation right against the Plaintiff, in order to preserve the claim for the subcontract price for fixed construction, is a new fact that had not been asserted up to the original judgment, and therefore, it cannot be a legitimate ground of appeal against the lower

Therefore, all appeals are 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 Kim Ji-hyung (Presiding Justice)