In a case where a part of the site which is the object of a real estate sales contract belongs to another person and a part of a building is constructed on the land of another person, and the existence of the building cannot be maintained by the exercise of the right by the owner of the affected land, whether the seller's liability for warranty under Article 572 of the Civil Act can be applied mutatis mutandis

In a case where a building and its site are constructed on adjoining land because part of a building is the object of a contract, and the seller fails to acquire a part of the site for the part of the building over the boundary of the neighboring land and transfer it to the buyer, the buyer may apply Article 572 of the Civil Act mutatis mutandis to the seller. In such a case, if the owner of the adjoining land has obtained a final and conclusive judgment in favor of the buyer by filing a lawsuit seeking the exclusion of such disturbance based on the ownership, it shall be reasonable to deem that the seller is unable to acquire and transfer the site part to the buyer, barring any special circumstances.

Articles 572, 575(2), and 580 of the Civil Act

Plaintiff

Defendant

Seoul Eastern District Court Decision 2008Na7668 Decided March 27, 2009

The part of the judgment below against the defendant is reversed, and that part of the case is remanded to the Seoul Eastern District Court Panel Division. The plaintiff's appeal is dismissed.

1. The judgment of the court below

A. The lower court acknowledged the following facts in full view of the evidence of the employment.

(1) The Defendant sold the instant land and the building on its ground to the Plaintiff, and each registration of ownership transfer was completed on March 31, 2004 in the future of the Plaintiff. A part of the instant land and the building was leased from the Defendant and possessed and used by the Nonparty to the Automobile Repair Center and its parking lot before that day, but the Plaintiff acquired the status of the lessor due to the sale and acquisition.

(2) As above, each part of the land and building purchased or leased belongs to adjoining land or was constructed on the adjoining land (the retaining wall or fence, which is divided into two lands, was falsely accumulated differently from the boundary of intellectual injury). Accordingly, the owner of adjoining land filed a lawsuit against the Plaintiff seeking the removal of the building part, delivery of the land part, and return of unjust enrichment equivalent to the rent, which infringes his/her ownership, due to Daejeon District Court Decision 2006Gadan19807, Daejeon District Court Decision 2006Gadan19807. While the lawsuit is pending, the Plaintiff removed the said building part and delivered the occupied land. Accordingly, the judgment against the Plaintiff (the Defendant in this case) was rendered and finalized regarding the claim for return of unjust enrichment equivalent to the rent.

B. In the instant case, the Plaintiff sought compensation for damages incurred by the Plaintiff by selling the instant land and buildings “a person who intrudes another’s land” as above, based on the Defendant’s nonperformance of obligation or tort (main claim), and liability for warranty (preliminary claim).

The lower court rejected the Plaintiff’s primary claim on the ground that the Defendant could not have known or could have known that each part of the land for sale and purchase and the building of the said Automobile Repair Center was located in neighboring land at the time of the said sale and purchase. Furthermore, the lower court determined that the Defendant was liable to compensate the Plaintiff for damages pursuant to Article 580 of the Civil Act, on the ground that it was not negligent on the ground that the Plaintiff was not aware of or could not have known that part of the land for sale and purchase as seen above belongs to neighboring land, and that there was a defect that was not equipped with ordinary real estate because part of the boundary retaining wall and the building of the instant site were invaded on adjoining land, and barring any special circumstance, it cannot be said that the Plaintiff had a duty of care to confirm exactly whether the land for sale and purchase is consistent with that on the cadastral map.

2. Judgment on the Defendant’s grounds of appeal

A. In a case where a building and its site are constructed on adjoining land because part of the building is the object of the contract, and the seller fails to acquire the part of the site for the part of the building over the boundary of the neighboring land and transfer it to the buyer, the buyer can apply mutatis mutandis Article 572 of the Civil Code to the seller. In such a case, if the owner of the adjoining land files a lawsuit seeking the exclusion of such interference based on the ownership and obtains a final and conclusive judgment in favor of the buyer, it shall be reasonable to deem that the seller is unable to acquire and transfer the site part to the buyer, barring any special circumstances.

Article 572 of the Civil Act provides for the seller's liability for warranty in cases where a part of the subject matter of sale belongs to another person and the seller is unable to acquire it and transfer it to the buyer. Therefore, there is no doubt as to the application of the above provision in cases where only part of the subject matter of sale belongs to another person in the sale and purchase of a building and site. However, there is also a case where a part of a building is constructed on the land of another person. In such cases, if a part of the building, which is the subject matter of sale, is a pre-sale order where it is impossible to maintain its existence, such as in accordance with the exercise of the rights by the owner of the subject matter of sale, and ultimately removal is in accordance with the principle of the right to the existence of the subject matter of sale, and ultimately, the seller lacks the right to the subject matter of sale, and it is ultimately a defect that a typical risk factor that prevents the acquisition of the subject matter of sale, which is inherent in the sales

Meanwhile, Article 575(2) of the Civil Act provides for the seller’s liability for warranty where there is no servitude that exists for the purpose of sale, but it is a case where there is no right to convenience in the profit of an object, and thus, it cannot be applied by analogy in the absence of a right to establish a building as above. In addition, Article 580 of the Civil Act applied to this case by the court below is related to a case where there is a defect in the material nature of the object of sale, and it cannot be easily applied to the case where there is a defect in the status of the right to the

B. Nevertheless, the court below erred by misapprehending the legal principles as to the seller's warranty liability under the premise that Article 580 of the Civil Code applies to this case. The ground of appeal pointing this out is with merit.

3. Judgment on the Plaintiff’s grounds of appeal

In light of the records, the court below is just in finding that the defendant did not know or could have known the above fact of violation of security at the time of the above sale, and there is no violation of the rules of evidence as otherwise alleged in the ground of appeal.

4. Therefore, without examining the Defendant’s other grounds of appeal, the lower judgment is reversed, and the case is remanded to the lower court for further proceedings consistent with this Opinion. The Plaintiff’s appeal is dismissed. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Kim Ji-hyung (Presiding Justice)