The appeal is dismissed.

The costs of appeal are assessed against the defendant.

The grounds of appeal are examined.

1. Where an agreement is reached between the ordering person, the prime contractor and the subcontractor to pay the subcontract price directly to the subcontractor under the Fair Transactions in Subcontracting Act (hereinafter referred to as the “subcontract Act”), the subcontractor shall pay the subcontract price corresponding to the portion of the manufacture, repair, construction, or service performance by the subcontractor directly to the subcontractor;

(Article 14(1)2. In addition, where such a cause occurs, the obligation to pay to the principal contractor by the ordering person and the obligation to pay the subcontractor by the principal contractor to the subcontractor shall be deemed extinguished within the scope of the obligation to pay the subcontract price (Article 14(2)). Even if there has been an agreement between the ordering person, the principal contractor and the subcontractor on the direct payment as above, the ordering person shall not immediately pay the subcontract price in full, but shall bear the obligation to pay the subcontract price

(1) In cases where a subcontractor is liable to pay a subcontract price to a subcontractor, the person placing an order shall be held liable to pay the subcontract price to the subcontractor within the scope of the subcontract price for which the obligation to pay the subcontract price has arisen, and the subcontractor’s obligation to pay the subcontract price to the subcontractor is all extinguished. As such, the person placing an order may not set up against the subcontractor due to any cause against the subcontractor by the subcontractor, which occurred after the obligation to pay the subcontractor was incurred.

2. The reasoning of the lower judgment and the record reveal the following facts.

1) The Defendant is a wall construction company around February 2012 (hereinafter referred to as “ wall construction”).

(2) On October 2012, 2012, the building project of this case was subcontracted to secondary construction, Co., Ltd. (hereinafter “sub-construction”) during the instant construction project, and its initial price was KRW 1,790,800,000.