In a case where an individual’s purchase of construction equipment for lease purposes entered into an installment financing contract with the installment financing company and paid the purchase price to the equipment selling company, but the relevant construction equipment is not manufactured and delivered to the buyer, whether the buyer may refuse to pay the installment to the installment financing company on this ground (negative)

Where an individual purchases construction equipment for the purpose of operating a business in which he/she receives rents and concludes an installment financing contract to raise funds for the purchase of such equipment, such installment financing contract shall not exercise the right to refuse the payment of installments as prescribed in Article 12 (1) 2 and (2), Article 4 (1) 2 and (2) of the Installment Transactions Act, on the ground that the application of Article 12 (1) 2 and (2) of the Installment Transactions Act is not made for the purpose of commercial activities.

Article 2(2), Article 12(1)2, and Article 12(2) of the Installment Transactions Act

Plaintiff 1 and five others (Law Firm Han, Attorneys Yoon-ju et al., Counsel for the plaintiff-appellant)

Samsung Capital Co., Ltd. (Attorney Cho Young-hoon, Counsel for the defendant-appellant)

June 26, 2003

1. All of the plaintiffs' claims are dismissed.

2. The costs of lawsuit are assessed against the plaintiffs.

The judgment of June 5, 200 between the plaintiff 1 and the defendant on March 25, 2002 against the above plaintiff's obligation of KRW 100,000,000 to the defendant under a installment financing contract dated June 5, 2002 between the plaintiff 2 and the defendant was made. The above plaintiff's obligation of KRW 60,000,000 to the defendant under a installment financing contract between the plaintiff 3 and the defendant on May 21, 2002 does not exist between the plaintiff 4 and the defendant, and the above plaintiff's obligation of KRW 60,000,000 against the defendant under the installment financing contract between the plaintiff 5 and the defendant on June 5, 202 does not exist between the plaintiff 60,000,000 and KRW 60,000,000 for each of the above plaintiff's obligation to the defendant under the installment financing contract between the plaintiff 5 and the defendant on March 25, 2002.

1. Basic facts

The following facts are alleged by the parties, or there is no dispute between the parties, or by Gap's evidence Nos. 1, 4-1 through 5, Gap's evidence Nos. 2 and 3-1 through 6, Gap's evidence Nos. 5, 6-1, 6-2, Gap's evidence Nos. 7 through 9-3, and Eul's evidence Nos. 1-6, which presumed the authenticity of the whole document due to the lack of dispute in the plaintiffs' seal imprints of the plaintiffs, and Eul's evidence Nos. 1-6 (the plaintiffs are forged documents prepared by non-party Nos. 1 using the plaintiffs' personal seal, but the testimony of non-party No. 2 and non-party No. 3 alone is insufficient to recognize it, and there is no other evidence to prove it differently), Eul's evidence Nos. 2 and 4-1 to 6, and all purport

A. On early 2002, Nonparty New Heavy Industries Co., Ltd. (hereinafter referred to as “Nonindicted Heavy Industries Co., Ltd.”) was a company manufacturing and selling vehicles, etc. and entered into a installment financing contract between the Defendant and the buyer in selling the vehicles, etc., the Defendant directly paid the installment capital to the Nonparty Company. On the other hand, the Defendant entered into a installment financing agreement with the buyer to receive monthly payments from the buyer, and the Defendant was able to enter into the said installment financing contract with the Defendant on behalf of the buyer.

B. On March 2002, the plaintiffs purchased a tunnel construction work vehicle manufactured by the non-party company from the non-party 1, the representative director of the non-party company, in the names of the plaintiffs, and leased it to a third party and paid a price of one million won per month to the plaintiffs. The plaintiffs agreed to do so and issued a certificate of seal impression and a certificate of seal impression to the above non-party 1.

C. Accordingly, on March 22, 2002, Nonparty 1 entered into a contract for vehicle purchase with the non-party company to purchase from the non-party company the amount of KRW 130,000,000 (Plaintiff 2 to 5) or KRW 200,000,000 (Plaintiff 1) for each of the following items: the non-party company and the non-party company purchased the vehicle for tunnel work (SH990) from the non-party company (hereinafter referred to as “the instant vehicle, etc.”). The price for the goods was paid in cash with the Defendant recommended by the non-party company.

D. After that, between March and June 2002, the above non-party 1, on behalf of the plaintiffs, extended a loan of 60 million won (Plaintiff 2 through 5) through 100 million won (Plaintiff 1) to the plaintiffs in the name of the defendant as shown in the attached Table on Transactions of Installment Financing. The above loan is concluded with an installment financing contract with the purport that the defendant will offer each of the above working vehicles as a security for transfer and deliver to the defendant a letter of transfer contract with the purport that he would waive the above work vehicle (the evidence No. 3-1 through No. 6) and each of the above defendant's installment financing funds will be paid by each of the above defendant for 24 months.

E. Meanwhile, the defendant urged the plaintiffs to perform the installment payment under the above agreement, and as a result of settlement of the principal and interest on the remaining installment loan on October 18, 2002, 32,40 won for the plaintiff 1, and 62,109,58 won for the principal and interest on the late installment loan, and 128,758 won for the principal and interest on the late installment loan for the plaintiff 2, and 59,312,398 won for the principal and interest on the late installment payment for the plaintiff 3, and 148,935 won for the principal and interest on the late installment payment for the plaintiff 4, and 53,62,783 won for the principal and interest on the late installment payment for the plaintiff 5, and 59,312,250 won for the principal, 193, 4300 won for the principal and interest on the late installment payment for the plaintiff 2, respectively, and 608 won for the principal and interest for the plaintiff 5.

2. Issues (existence of Installment Financing Obligations)

A. The plaintiffs' assertion

The plaintiffs, first, only leased their names to the above non-party 1, and there was no delegation or delegation of authority between the non-party company or the defendant to conclude the above automobile purchase contract or installment financing contract on behalf of the plaintiffs. Thus, they sought confirmation as to the defendant as there was no objection. Second, even if the plaintiffs are liable to pay the above installment financing fund to the defendant due to the validity of each of the above contract, each of the above vehicles was manufactured and delivered to the defendant. Thus, the plaintiffs did not have been delivered to the defendant and the non-party company pursuant to Article 5 subparagraph 2 through subparagraph 2 of Article 12 of the Installment Financing Agreement prepared between the defendant and the non-party company.

B. Determination

(1) Validity of a contract for purchase of goods and vehicles and a contract for installment financing

Therefore, as to the validity of each of the above contracts between the plaintiffs and the non-party company and the defendant, the above facts, Eul evidence Nos. 12, Eul evidence Nos. 13-1 through 6, Eul evidence No. 2-1 through 3, and the testimony of the non-party No. 4 and the non-party No. 5 are added to the whole purport of oral pleadings, the above non-party No. 1 consented to purchase of each of the of the vehicles in the plaintiffs' names, and the above non-party No. 1 issued a seal impression and a certificate of seal impression to the above non-party No. 1. Further, the method of raising the above vehicle purchase price also belongs to the above non-party No. 1. Thus, the above non-party Nos. 1 and the defendant who signed the installment financing contract on behalf of the non-party company and concluded the above installment financing contract with the non-party No. 1 and the defendant's employees were in charge of the defendant's telephone at the time of conclusion of each of the above installment financing contract, and the plaintiffs did not raise some of the above funds between the defendant No.

(ii)the existence of the right to refuse installment payments.

Next, as to whether the plaintiffs can refuse to pay installment financing under Article 5 (1) 2 through 12 (1) 2 of the above Agreement on Handling of Installment Funds on the ground that each of the above vehicles was manufactured and not delivered to the plaintiffs, it is found that there was no delivery to the plaintiffs since each of the above vehicles was actually manufactured and delivered. Article 5 (2) of the above Agreement on Handling of Installment Funds provides that the defendant may seek the return of installment financing funds and payment of interest thereon to the non-party company and that if the above provision of installment financing was not applied to non-party 2 for the purpose of delivery of all or part of installment financing funds, the defendant could not seek payment of installment financing funds from the non-party company for the purpose of the above agreement on the ground that Article 12 (1) 2 and (2), Article 4 (1) 2 and (2) of the above Agreement on Handling of Installment Funds was not applied to the non-party 1, and thus, the defendant's allegation that the above agreement was not applied to the non-party 2's purchase of installment funds for the purpose of this case.

3. Conclusion

Therefore, each of the plaintiffs' claims in this case is dismissed as it is without merit (the plaintiffs are claiming the lawsuit in this case with specifying the amount of claims, but it is difficult to specify the amount of obligations that the plaintiffs bear with respect to the defendant, and the plaintiffs also seek confirmation of the existence of obligations based on the premise that each of the above contracts is null and void. Thus, it is so decided as per Disposition.)

Judges Yan Jin-hun (Presiding Judge)