In a case where: (a) Party A entered into a land sales contract with Party B and entered into an automatic effective special agreement with the effect that the sales contract becomes null and void; (b) part of the land subject to sale was sold by auction or expropriated; and (c) Party B refused to pay a promissory note issued and delivered by Party B for the payment of a certain purchase amount, the case holding that the sales contract cannot be deemed null and void solely on the ground that Party B did not pay any balance

In a case where: (a) Party A entered into a land sales contract with Party B and entered into an automatic effective special agreement with the effect that the sales contract becomes null and void; (b) part of the land subject to sale was sold by auction or expropriated; and (c) Party B refused to pay a promissory note issued and delivered by Party B for the payment of a part of the purchase price, the case holding that the sales contract does not become null and void solely on the ground that Party B did not pay any balance due to the nonperformance of the obligation to pay the remainder as it became impossible for Party B to acquire ownership of a part of the land; and (c) the said special agreement applied

Articles 536 and 563 of the Civil Act

Plaintiff 1 and five others (Attorney Jeong-sung, Counsel for the plaintiff-appellant)

Bog Housing Construction Co., Ltd. (Attorney Kim Sung-sung, Counsel for the plaintiff-appellant)

Daegu High Court Decision 2010Na5534, 5541 decided November 11, 201

All appeals are dismissed. The costs of appeal are assessed against the Plaintiff (Counterclaim Defendant).

The grounds of appeal are examined.

1. The reasoning of the lower judgment reveals the following facts.

A. On behalf of the deceased non-party 2 on October 16, 1999, the non-party 1 entered into a sales contract with the Defendant (non-party 1; hereinafter referred to as the “Defendant”) on behalf of the deceased non-party 2, including the land indicated in No. 20 and the land indicated in No. 1, 3 through 5, 7 through 19, and 21 of the attached Table of the judgment below, which is owned by the deceased non-party 2 (hereinafter referred to as the “land No. 1”) and the land indicated in No. 1, 3 through 5, 7 through 19, and 21 square meters in total, including the land No. 2,491 square meters in the Nam-gu, Seoul Special Metropolitan City (number 1 omitted), and the river No. 750 square meters in total (hereinafter referred to as the “the instant sales contract”).

B. In entering into the instant sales contract, the Defendant entered into an agreement with the seller, “(i) the sales price shall be paid in a lump sum, and if the buyer requests documents and acts necessary for receiving a loan from a financial institution, the seller shall immediately comply therewith. ② The buyer shall issue and deliver a promissory note equivalent to the sales price, exchange with a promissory note at the time of receiving the loan, and settle the difference when the loan from a financial institution is not appropriated. ③ The seller shall pay the balance in a promissory note issued by the buyer. ③ The seller shall give the buyer all documents that can change the name at the time of payment of the balance. ④ In the event that a bank loan is not paid or a promissory note delivered as the sales price is not settled, the sales contract and provisional registration shall be null and void, and each of the above provisional registrations shall be cancelled (hereinafter “the instant special agreement with the effect of automatic registration”).

C. After that, on November 19, 199, the Defendant, using the loan-related documents received from the deceased non-party 2 on November 19, 199, completed the registration of creation of a mortgage over the land Nos. 1 through 19,000 won with the maximum debt amount of KRW 819,00 million with respect to the land No. 1 through 19, and received loans from the National Bank of Korea as security, and paid KRW 235,00,000 to the deceased non-party 2 as part of the purchase price, and KRW 100,000 to the non-party 1 as part of the purchase price, and repaid KRW 279,760,136,000 with respect to the secured debt on the land No. 1 or 18, which was established in the name of the new bank.

D. Ultimately, the Defendant paid to the deceased non-party 2 a total of KRW 614,760,136 (=200 million + KRW 100 million + KRW 279,760,136). On January 18, 200, the Defendant paid a total of KRW 760,000 as the purchase price until June 23, 200, such as additional KRW 100 million, and issued and delivered a promissory note with KRW 150,000,000 at face value (as of July 27, 2000, the payment date) to pay the balance of KRW 150,000,000 at face value (as of July 24, 200, the Defendant recovered the above promissory note with KRW 30,000,000 at face value and KRW 270,000,000 at face value and KRW 270,000,000,00 respectively.

E. After the above promissory notes were recovered again, the Defendant and the deceased non-party 2 confirmed that the balance of the purchase price for the remaining 19 parcels of land, excluding each parcel of land Nos. 20 and 21, which completed the registration of ownership transfer on September 25, 2000, was KRW 120 million. The Defendant paid KRW 19 million to the deceased non-party 2 in cash, and issued and delivered a promissory note (payment date Dec. 23, 2000) with a face value of KRW 11 million for the payment of the remainder.

F. After that, on December 29, 2000, the Defendant issued and delivered to the deceased non-party 2 a promissory note (the payment date January 10, 2001; hereinafter “the Promissory note of this case”) with a face value of KRW 11 billion at its face value. On January 12, 2001, the Defendant again issued and delivered a promissory note of KRW 1.1 million at face value (the payment date blank; hereinafter “the Promissory note of this case”).

G. However, although the Promissory Notes dated December 29, 200 and the Promissory Notes dated January 12, 2001 are not recovered by the Defendant, they were presented respectively on January 29, 2007 and September 2, 2008, they were refused to pay on the ground of non-transaction.

H. Meanwhile, among the land subject to sale in the instant case, Nonparty 3 was awarded the said land on January 4, 2002 and completed the registration of ownership transfer in the name of the said land in the voluntary auction procedure applied by the Ocheon Agricultural Cooperative, the mortgagee, among the land subject to sale and purchase. On August 18, 2006, among the land subject to sale and purchase in the instant case, the land was divided into 1,015 square meters from the 2,491 square meters prior to the subdivision (number 1 omitted) and was expropriated at the port of port prior to the subdivision, and was divided into 1,015 square meters prior to the subdivision (number 3 omitted), and (number 2 omitted) from the 750 square meters prior to the subdivision (number 4 omitted) river and was expropriated at the port of distribution.

I. The deceased non-party 2 died on October 10, 2002, and the plaintiff (the counter-party 1; hereinafter "the plaintiff") 1 succeeded to his wife and the rest of the plaintiffs as his children.

2. According to the above factual relations, as new promissory notes were issued and delivered on behalf of the deceased non-party 2 and the Defendant for the payment of the purchase price under the instant sales contract, the payment date of the purchase price has been postponed in sequence. Ultimately, as the Defendant’s bill of January 12, 2001, which was finally issued for the payment of the remaining 1 billion won, was presented to September 2, 2008, as the payment of the outstanding 10 million won was presented in blank, the outstanding payment date under the instant sales contract shall arrive on September 2, 2008.

However, on January 4, 2002, Nonparty 3 was awarded the land No. 19 from among the land subject to the sale in this case and completed the registration of ownership transfer in its name. The Si of Pohang-gu is part of the area of 2,491 square meters prior to Yancheon-gu (Eup/Myeon 1 omitted) and 1,015 square meters prior to the subdivision (number 3 omitted) and 750 square meters prior to the subdivision (number 2 omitted), and it is impossible for the Defendant to acquire ownership of each of the above parts of the land from the deceased Nonparty 2 or his heir at the time of September 2, 2008, which is the remaining payment date. Accordingly, even if the Defendant did not specifically state his intent to refuse the performance, the Defendant may refuse the payment of the balance with the payment for the acquisition of ownership and the payment thereof, and even if it did not express his/her intention to refuse the performance, the Defendant may be held liable for delay of performance (see, e.g., Supreme Court Decision 97Da54575.

Then, even if the instant automatically effective special agreement was concluded to invalidate the instant sales contract without payment at the time of the conclusion of the instant sales contract, it would be reasonable to deem that the instant sales contract was null and void solely on the ground that the Defendant was not liable for the delay of performance due to the Defendant’s failure to pay the remainder as the ownership of some of the land subject to the instant sales contract became impossible.

3. The court below held that the sales contract of this case does not become null and void even if the defendant did not pay any balance, on the ground that there is no assertion or proof as to the fact that the plaintiffs provided documents necessary for the registration of transfer of ownership to the defendant as a result of the performance of opposite obligations in the simultaneous performance relationship at the payment date and caused the defendant to be omitted from the delay of performance, without asking whether the documents necessary for the registration of transfer of ownership were provided in the process of the payment of the purchase price after the conclusion of the sales contract of this case, and there is no special circumstance to deem the sales contract of this case as null and void on the ground of the automatic performance agreement of this case, such as that the defendant agreed to invalidate the sales contract of this case only with the Do of the remaining payment date, and there is no error of misapprehending the legal principles on the right to defense

4. 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 Park Poe-young (Presiding Justice)