Where a real estate purchaser has agreed to take over a burden attached to the real estate, such as collateral debts, and to deduct the amount of the debt from the purchase price, the standard for determining whether the agreement is the performance acquisition or the assumption of the obligation jointly;

Articles 105, 454, and 539 of the Civil Act

Supreme Court Decision 97Da28698 Decided October 24, 1997 (Gong1997Ha, 3602) Supreme Court Decision 2007Da54627 Decided March 13, 2008 (Gong2008Sang, 523)

Plaintiff (Law Firm Barun, Attorneys Park Jae-sik et al., Counsel for the plaintiff-appellant)

Defendant 1 and one other (Attorneys Kim Jong-won et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2008Na100093 decided August 28, 2009

The part of the lower judgment against Defendant 1 is reversed, and that part of the case is remanded to Seoul High Court. The appeal against Defendant 2 is dismissed. The costs of appeal against Defendant 2 are assessed against the Plaintiff.

We examine the grounds of appeal.

1. As to Defendant 1’s ground of appeal

A. According to the reasoning of the lower judgment, the lower court rejected the Plaintiff’s claim that Defendant 1 assumed the obligation of this case against the Plaintiff on the ground that it would be consistent with the first instance court’s joint Defendant 3 or Defendant 2’s acquisition of the obligation of this case on the ground that the joint Defendant 1 and the joint Defendant 2’s acquisition of the obligation of this case on the ground that the joint Defendant 1 and the joint Defendant 3 did not jointly assume the obligation of this case on the ground that the joint Defendant 1 and the joint Defendant 2 did not acquire the obligation of this case on the ground that the joint Defendant 2 and the joint Defendant 3 did not jointly assume the obligation of this case on the ground that the joint Defendant 1 and the joint Defendant 2 did not have any obligation of this case on the ground that the joint Defendant 3 and the joint Defendant 1 and the joint Defendant 2 did not acquire the obligation of this case on the ground that the joint Defendant 4 and the joint Defendant 1 and the joint Defendant 3 did not acquire the obligation of this case on the ground that the joint Defendant 1 and the joint Defendant 3 were jointly assumed.

B. The above judgment of the court below is hard to accept.

In a case where a person who purchases real estate agrees to take over an associated burden on the real estate, such as a collateral security obligation, and deducts the amount of the debt as much as the amount of the debt, the buyer’s agreement to bear such obligation cannot be deemed as a so-called "liability assumption" which discharges the seller from liability unless the creditor gives his/her consent. However, in distinguishing whether such agreement is merely a performance acceptance or a contract for a third party, i.e. a joint assumption of obligation, the criteria for determining whether the contracting party or creditor wishes to acquire a claim directly against either the contracting party or the third party. Specifically, the intent should be interpreted by comprehensively taking into account the motive, circumstance and purpose of the conclusion of the contract, status and purpose of the contracting party, interest between the parties and the third party, transaction practice, etc. (see Supreme Court Decision 97Da28698, Oct. 24, 1997; 207Da28698, Oct. 24, 200, 207).

According to the facts acknowledged by the court below, the co-defendant 3 and defendant 2 of the court of first instance agreed to transfer their shares to Defendant 1 in order to escape from the debt related to each share of the real estate of this case until they renounced their own amount of KRW 400 million, and Defendant 1 agreed to take over all the debt related to each share of the real estate of this case without paying the price in cash, and Defendant 1 did not receive any money in addition to taking over the debt related to each share of the real estate of this case under the name of the purchase price. In conclusion, Defendant 1 was transferred the shares of this case in return for the above debt of this case, and it is sufficient to view that it is a concurrently assumed obligation in light of the above legal principles. The above reasons stated by the court below are merely an acceptance of the execution.

Nevertheless, the lower court rejected the Plaintiff’s assertion as to Defendant 1 on the ground that the instant assumption of obligation is merely a mere performance acceptance. In so doing, the lower court erred by failing to exhaust all necessary deliberations or by misapprehending the legal doctrine on the distinction between performance acceptance and joint assumption of obligation. The allegation in the grounds of appeal assigning this error is with merit.

2. As to the ground of appeal against Defendant 2

In light of the relevant legal principles and records, the court below is just in holding that the co-defendant 4 of the court of first instance did not have the right to borrow or to secure KRW 200 million from the plaintiff on behalf of the defendant 2 and that the defendant 2 shall not be deemed to have ratified the above act of unauthorized Representation. There is no violation of the rules of evidence, such as misconception of facts in violation of the rules of evidence, or misunderstanding of the legal principles as to the scope of the power of representation and ratification of unauthorized Representation. The expression agency assertion was first asserted in the final appeal and cannot be a legitimate ground for appeal, and there is no violation of law as otherwise alleged in the ground for appeal in light

3. Conclusion

Therefore, the part of the lower judgment against Defendant 1 is reversed, and that part of the case is remanded to the lower court. The appeal against Defendant 2 is dismissed, and the costs of appeal against Defendant 2 are assessed against the Plaintiff who is the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Jeon Soo-ahn (Presiding Justice)