The meaning of "third party in good faith" under Article 26 (1) of the Public Notice of Values and Appraisal of Lands, etc. Act

Article 26 (1) of the Public Notice of Values and Appraisal of Lands, etc. Act provides that when an appraisal business operator causes damage to an appraisal requester or a bona fide third party by making an appraisal of a substantial difference from the reasonable price at the time of appraisal or by making a false statement on the appraisal document intentionally or by negligence in making an appraisal at the request of a third party, the third party is liable to compensate for such damage. The third party in good faith refers to not only the appraisal content is not known to have a substantial difference from the reasonable price at the time of appraisal but also the appraisal report itself is used for the purpose other than the appraisal request or it is not possible for the appraisal business operator to use the appraisal document for the purpose

Article 26 (1) of the Public Notice of Values and Appraisal of Lands Act

[Plaintiff-Appellant-Appellee] Plaintiff 1 and 17 others (Law Firm Gyeong, Attorneys Park Dong-young et al., Counsel for plaintiff-appellant-appellant-appellee)

Sejong Health Co., Ltd. (Attorney Cho Jong-chul, Counsel for the defendant-appellant)

Dong-A certified public appraisal corporation and one other (Defendant-Appellee, Counsel for the defendant-appellant)

Seoul High Court Decision 98Na60134 delivered on April 28, 1999

The appeal is dismissed. The costs of appeal are assessed against the plaintiff.

We examine the grounds of appeal.

Examining relevant evidence in light of the records, the court below is justified in holding that the plaintiff was aware of the circumstances that the above appraisal report was used for any purpose other than the original appraisal request or appraisal purpose by others, other than the client, based on the facts as stated in its reasoning concerning the preparation purpose of the appraisal report of this case, its use relation, and the contents of the above appraisal report, and there is no violation of the Civil Procedure Act such as violation of the rules of evidence.

Article 26 (1) of the Public Notice of Values and Appraisal of Lands, etc. Act provides that where an appraisal business operator causes damage to a client or a bona fide third party by making an appraisal at the time of appraisal or by making a false statement on the appraisal document with intent or negligence, the appraisal business operator shall be liable to compensate for such damage. Here, “the bona fide third party” refers to not only the appraisal content is not known to have a substantial difference from the reasonable price at the time of appraisal, but also the appraisal document itself is used for the purpose other than the appraisal request or it is not possible for other than the client to use the appraisal document (see, e.g., Supreme Court Decision 83Meu395, Jun. 28, 1983). Thus, in the process of acquiring the right to collateral security of the land of this case at the request of another person, the plaintiff may not use the appraisal document for other than the client’s purpose or make a false statement on the appraisal document, and in light of the legal principles as seen above, it cannot be seen that it constitutes an unlawful purpose of appraisal other than the original client’s statutory purpose.

The grounds of appeal are without merit.

Therefore, the appeal is 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 Seo Sung-sung (Presiding Justice)