In the case of a contract for the purchase of goods, where the advance payment is made in advance and the advance payment is agreed to offset it against the price of goods, whether the goods price claim and the advance return claim are naturally offset without a separate declaration of intent when a offset occurs following the termination of the transactional relationship (affirmative)

In a case where Party A agreed to offset the price of goods for the future by the price of goods to be supplied by Party B while paying the price of the goods for the purpose of assistance in the conclusion of the basic purchase contract with Party B, the advance payment is made in advance for the price of goods to be supplied by Party B. Also, since the obligation to repay the advance payment and the obligation to pay the price of goods arise under the same purchase basic contract and are highly advanced in performing their mutual obligations, in principle, the advance payment is in the nature that it is naturally appropriated for the price of goods supplied by Party B. However, for the benefit of Party B, it is reasonable to set off the advance payment in advance for the benefit of the first time that the whole amount corresponding to the advance payment can not be achieved if it is appropriated for the advance payment in advance for the benefit of Party B, it is reasonable to view that the transaction relationship between Party B and Party B would be a set-off for the remainder of the advance payment before the lapse of 1 month from the date of signing the contract with Party B, and thus, it is not reasonable to deem the advance payment to be made.

Articles 492 and 493 of the Civil Act

[Plaintiff-Appellant] Plaintiff 1 and 1 other (Law Firm Gyeong, Attorneys Park Jong-soo et al., Counsel for plaintiff-appellant)

Boyang Engineering Co., Ltd. (Attorney Boyang-il, Counsel for defendant-appellant)

Treatment Heavy Industries Co., Ltd. (Attorney Lee Jong-won, Counsel for defendant-appellant)

Korea Guarantee Insurance Corporation

Seoul High Court Decision 95Na49099 delivered on August 9, 1996

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

We examine the grounds of appeal.

1. Facts recognized;

(1) On March 16, 1995, the court below may find the following facts as follows. (1) The debtor, 2. The non-existence of the contract for purchase of the parts and components from the original machinery 40. The debtor, 3.0,000 won, 195, 3.0 won, 10,000 won, 3.0 won, 10,000 won, 10,000 won, 3.0 won, 9,000 won, 10,000 won, 10,000 won, 10,000 won, 10,000 won, 10,000 won, 3.0,000 won, 10,000 won, 10,000 won, 10,000 won, 10,000 won, 3.0,000 won, 10,000 won, 10,000 won,

2. The judgment of this Court

(1) If the facts are as above, advance payment of KRW 100,00,00 paid to the original machinery by the debtor to the original machinery shall be paid in advance as the price for the equipment and parts of rolling stock to be supplied in the future according to the basic purchase contract with the debtor. Also, since advance payment and the obligation for price for goods are arising under the same purchase basic contract, in principle, since the above advance payment is highly comparable in the performance of the mutual contract, it shall be in principle appropriated for the price for the goods that the original machinery was supplied in accordance with the basic purchase contract with the debtor. However, in this case, inasmuch as advance payment is appropriated as advance payment for the entire amount equivalent to advance payment among the price for the first machinery supplied by the debtor, it shall not be possible to achieve the original purpose of the advance payment for the benefit of the original machinery, it is reasonable to view that advance payment would be appropriated for the benefit of the original machinery before the expiration of the basic purchase contract with the debtor, in light of the nature of the advance payment for the goods supplied by the original machinery to the debtor for the benefit of the original machinery.

In the same purport, the court below is just in holding that the obligation to repay advance payment of KRW 95,00,000 to the debtor of the original machine as of April 17, 1995 when the transaction relationship between the original machine and the debtor was terminated, was terminated as a matter of course by the deduction or set-off of KRW 119,245,791, which was delivered to the debtor by the original machine. The court below determined as above by reasonably interpreting the intent of the parties in accordance with logical and empirical rules after comprehensively considering the nature of the advance payment in this case and the purpose to achieve it. Thus, the court below did not err in the misapprehension of legal principles as to the probative value of the disposal document and the effect of preferential repayment as of April 17, 1995. The arguments are without merit.

(2) On May 23, 1995, the argument points out that the debtor had terminated the claim for the price of the goods by declaring his/her intention of set-off on an equal amount with the claim for the price of the goods of KRW 119,245,791, which the debtor had against the debtor for the goods of KRW 96,00,03,430,000,000,000,000 which the debtor had against the original machines at the time, with the debtor's credit sales claim of KRW 23,164,273,00,000,000,000 which the debtor had against the original machines as the automatic claim for the payment of the goods of KRW 119,245,791 which the debtor for the original machines had against the debtor, but there is no error in the judgment of the court below that affected the conclusion of the judgment by the omission of a judgment as to the declaration of set-off as in the lawsuit.

In addition, the judgment of the court below as to the point that the theory of lawsuit points out (the fact that the debtor agreed to invalidate the forced deduction or offset on an equal amount with the advance payment claim of KRW 95,000,000 against the debtor of the original machine by entering into an agreement on offset with the original machine on May 23, 1995) is justified in light of the evidence relation as stated in the judgment below, and there is no violation of the rules of evidence or misapprehension of the legal principles as to the probative value of the disposal document, such as the theory of lawsuit. All arguments 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 Chocheon-sung (Presiding Justice)