2010Na61368 All proceeds

○ Construction Corporation

Suwon-si O2 OOOO -O 000 to ○○ Center floor.

○○○

Attorney Go Young-young, Counsel for the defendant-appellant

OOOOO Corporation

Daejeon ○○○○ Dong ○○ ○○

representative chief director ○○○

Law Firm Na, Attorney Seo-soo, Counsel for the plaintiff-appellant-appellant

○ Mutual Aid Association

Seoul ○○-gu 00 Dong 00 - 0

Representative President Song ○○

Attorney Lee In-bok, Counsel for the defendant-appellant

Suwon District Court Decision 2010Gahap180 Decided June 3, 2010

November 2, 2010

November 30, 2010

1. Revocation of a judgment of the first instance;

2. The plaintiff's claim is dismissed.

3. The total cost of the lawsuit shall be borne by the Plaintiff, including the cost of supplementary participation.

1. Purport of claim

The defendant shall serve 100,490,000 won on the plaintiff and a copy of the complaint in this case from the next day.

C. It shall pay 20% interest per annum from the date of full payment.

2. Purport of appeal

The judgment of the first instance is revoked. The plaintiff's claim is dismissed.

1. Basic facts

The court's explanation on this part is the same as the corresponding part of the reasoning of the judgment of the court of first instance, and thus, this part is cited in accordance with the main sentence of Article 420 of the Civil Procedure Act.

2. The parties' assertion

A. The plaintiff;

Before the Defendant terminates the contract between ○○ General Construction, the Plaintiff was subject to seizure and in full, KRW 100,490,000, out of the construction cost claims against the Defendant of ○○ General Construction. Therefore, the Defendant cannot set up against the Plaintiff the validity of the advance payment appropriation. Accordingly, the Defendant is obliged to pay the Plaintiff the full payment.

B. The advance payment that the Defendant paid to ○○ General Construction was terminated by the contract between the Defendant and the ○ General Construction, so long as the contract was terminated, the Defendant’s claim for construction payment against the Defendant of ○ General Construction was automatically appropriated, and the entire claim was extinguished. Even if such appropriation was not acknowledged, the Defendant’s claim for construction payment against the Defendant of ○○ General Construction was extinguished by an offset against the Defendant’s claim for return of advance payment for ○ General Construction with automatic claim.

3. Determination

A. Nature of the advance payment

The so-called advance payment received in a contract for construction works is part of the contract price that the contractor pays to the contractor in advance for the smooth progress of construction works, not for the specific period of work, but for the whole construction works. However, in light of the nature of advance payment, if a contractor has a reason to return advance payment due to the cancellation or termination of a contract after the advance payment or the violation of the terms and conditions of advance payment, barring special circumstances, the unpaid amount of the contract price shall be appropriated as advance payment, and the contractor shall be liable to pay the remainder of the contract price (see Supreme Court Decision 9Da5519 delivered on December 7, 199).

B. The effect of the attachment and assignment order is merely the seizure of a claim which is bound by the garnishee's defense or the existence of opposite claim, etc., and if the assignment order has become final and conclusive, it cannot be the execution obligor's position or status. Therefore, a third obligor may oppose against the execution obligee by defense or limitation attached to the original claim, with the former legal status that he/she held against the execution obligor, and by defense or limitation attached to the original claim.

C. In light of the nature of advance payment as explained above as the opposing power of the application of the instant case (1) and the validity of attachment and assignment order, the claim for construction price of ○○ General Construction, a whole bond, in the instant case, is a kind of limited right that is expected to be automatically appropriated pursuant to advance payment (an advance payment not yet settled if it is accurately stated), at the time of the occurrence of the cause such as the termination of the contract, etc., and the Plaintiff is merely a transfer of the right of such restricted portion from ○○ General Construction as it is, and the Defendant is in the position to oppose the Plaintiff with the limitation attached to the entire claim.

However, according to the above facts of recognition, since the contract was actually terminated after the attachment and assignment order of this case was issued and the requirements for the reasonable appropriation of advance payment were met, the defendant, who is the third debtor of the assignment order, can set up against the plaintiff, who is the entire creditor.

Furthermore, with respect to the scope of the counterclaim, the Defendant’s claim for return of advance payment from November 19, 2009, when the contract was terminated, is KRW 298,50,000 ( = 363,00,000, KRW 64,50,000 in advance payment - KRW 64,50,00 in advance payment), and around that time, the amount reduced to the unpaid amount out of the construction cost corresponding to the already completed construction executed by ○○ General Construction was KRW 160,596,30 inasmuch as the amount reduced to the unpaid amount is KRW 160,596,30 in advance, the Plaintiff’s claim for the construction payment against the Defendant of ○ General Construction was entirely appropriated and extinguished.

Therefore, the defendant's argument pointing this out is with merit. (2) Set-off based on the obligation to return advance payments.

The defendant's assistant intervenor argues that the set-off defense with the automatic claim is set-off. Therefore, the defendant's assistant intervenor will look at this preliminary claim.

In that a claim for advance payment is subject to the termination of the original contract, etc., the time when the defendant acquired the claim for advance payment can be said to be after the seizure and completion of the claim for payment by the plaintiff. However, the purport of the precedent that in the event the maturity of the automatic claim is simultaneously or comes first with the passive claim, the obligee who received the entire claim may oppose the creditor who received the claim prior to the offset. This is derived from the point of view that the expectation for future offset based on the opposite claim of the third obligor should be protected. Such expectation is that the opposite claim is actually created, or that there is no or there is no reason to form the basis, and that prior to the maturity of the maturity period in the granting of the offset is only an objective standard, and it is reasonable to approach the two claims in terms of the protection of reasonable expectations in accordance with the closeness of both claims and the function of set-off as a security for set-off (the position of the so-called "reasonable expectation interest theory").

As to the instant case, it can be evaluated that the cause of the occurrence of an automatic claim has already been established and existed before the claim for construction cost was seized and entirely attached. Furthermore, the claim for advance return and the claim for construction cost incurred under the same contract, which is highly advanced, and there is a strong security expectation relationship between both claims, i.e., the return of claim for the instant construction cost, i.e., the return of claim for offset, without relation to when the due date for the instant claim for construction cost comes, the Defendant’s claim for advance return does not fall under “a third-party debtor who was ordered to prohibit the payment under Article 498 of the Civil Act, by its nature,” and thus, does not fall under “a claim acquired thereafter.”

Therefore, the defendant can oppose the plaintiff by offsetting the claim for advance payment. Accordingly, the defendant's claim for advance payment return and the plaintiff's declaration of intent to offset the whole amount of the claim that the plaintiff received by equal amount shall be set off on October 21, 2010 of the defendant's assistant intervenor's written brief on October 21, 2010.

26. The record reveals that the Plaintiff was served, and as seen earlier, the total amount of the claim for construction cost that the Plaintiff received falls far short of the Defendant’s advance return claim, and thus, the entire claim for construction cost that the Plaintiff received is extinguished by set-off.

Therefore, the argument of the defendant assistant intervenor is reasonable, and in this respect, the plaintiff's assertion is without merit.

4. Conclusion

Therefore, the plaintiff's claim is dismissed as it is without merit, and since the judgment of the court of first instance is unfair with different conclusions, it is accepted by the defendant's appeal and revoked it and dismissed the plaintiff's claim. It is so decided as per Disposition.

Judges of the presiding judge;

Judges Park Tae-ok

Judges Hong Sung-sung

1) The restrictions on the appropriation of an inevitable appropriation are what will be clearly expected to arise in the future and has the nature similar to the indefinite time limit.

2) Supreme Court Decision 99Da18039 Decided August 20, 1999

Even if not yet listed in the offset, if there occurs any subsequent offset, the debtor may oppose against the transferee.

In this case, it is thought that this legal principle can be applied mutatis mutandis to the case of seizure and whole.

3) On the other hand, the Defendant who made an advance payment is offset against the contractor’s claim for the construction cost in the future even before the offset is made.

It is clear that there is a reasonable expectation that the obligation for construction cost may be exempted, and this expectation right is worth protecting.