Lee Young-ho (Attorney Lee Yong-sung et al., Counsel for the defendant-appellant)

Defendant 1

Defendant 2 (Seoulnam Law Firm, Attorneys Shin Tae-chul et al., Counsel for the defendant-appellant)

November 30, 2005

Changwon District Court Decision 2003Gahap1904, 2004Gahap397 decided Dec. 9, 2004

1. All appeals against the principal lawsuit by Defendant 1 and Defendant 2 and the counterclaim claim that changed in exchange from the original trial by Defendant 2 (Counterclaim Plaintiff) are dismissed.

2. Of the costs of appeal, the part resulting from the principal lawsuit shall be borne by Defendant 1 and Defendant 2, and the part resulting from the counterclaim (including the cost of the claim that was changed to exchange in the trial) by Defendant 2, respectively.

1. Purport of claim

A. Main suit: Defendant 1 and Defendant 2 (Counterclaim Plaintiff; hereinafter Defendant 2) ordered the Plaintiff (Counterclaim Defendant 2; hereinafter the Plaintiff), among the buildings listed in the separate sheet, the 124.33 square meters of underground floor, 752.61 square meters of ground surface and 747.33 square meters of ground surface from among the buildings listed in the separate sheet, and paid the amount calculated by jointly and severally applying the 187.5 million won and the 12.6 million won from October 6, 2004 to the completion of the above name (the Plaintiff added the claim for return of unjust enrichment from illegal possession at the trial).

B. Counterclaim: The plaintiff shall pay to the defendant 2 130,583,100 won with 20% interest per annum from the day following the delivery of the counterclaim of this case to the day of complete payment (the defendant 2 changed the claim for the counterclaim from the claim for construction cost to the obligor's claim for reimbursement of expenses).

2. Purport of appeal

The judgment of the court of first instance is revoked. All of the plaintiff's claims are dismissed. The plaintiff shall pay to the defendant 2 the amount of KRW 710 million with 50 million per annum from the day following the service of the counterclaim in this case to the day of the judgment of the court of first instance and 20% per annum from the next day to the day of full payment.

1. Basic facts

The following facts do not conflict between the parties, or can be acknowledged by taking into account the whole purport of arguments as a result of a request for a voluntary evaluation of the expert testimony of the first instance court as to Gap evidence 1, 2, 4, 5, Gap evidence 6-1, 2, 3, and Gap evidence 12-1 through 4, and the whole purport of arguments.

A. The Plaintiff newly constructed a building listed in the separate sheet (hereinafter “the instant building”) on the ground of the Jinsung-gun, Chungcheongnam-gun, Gyeongnam from February 16, 2002 to March 28, 2003, and completed the registration of ownership transfer under the name of the Plaintiff on April 7, 2003.

B. From July 25, 2003 to the date, the Defendants, both married and married, occupy and use 124.33 square meters of underground floor and 1st 752.61 square meters of ground and 2nd 747.3 square meters of ground among the instant buildings (hereinafter “the instant building parts”), and jointly operate accommodation business (trade name omitted) with the trade name.

C. The sum of the rent equivalent to the portion of the instant building possessed and used by the Defendants from July 25, 2003 to October 15, 2004 is KRW 187.5 million, and the monthly rent on October 15, 2004, which is close to the date of the closing of the instant argument, is KRW 12.6 million.

2. Determination on the main claim

(a) An explanation and a duty to compensate for damage;

According to the above facts, the defendants are obligated to order the plaintiff to possess and use the part of the building of this case, and to compensate the plaintiff for damages equivalent to the rent calculated by the ratio of KRW 187,500,000 to KRW 12,60,000 from July 25, 2003 to October 15, 2004, jointly and severally commencing illegal possession, as long as there is no legitimate title to possess the part of the building of this case.

B. Determination of the defendants' assertion

(1) Lien claim with the claim for the construction cost as the secured claim

(A) The Defendants asserted that, around April 2002, Defendant 2 paid the construction cost of the instant building to Defendant 2 as KRW 1.635 billion in the construction cost, KRW 14 billion in the construction cost, KRW 1.4 billion in the construction cost, KRW 1.21 billion in the construction cost, and Defendant 2 did not pay the construction cost after paying KRW 1.213.5 billion in the construction cost. Defendant 2, upon completing the construction work with Defendant 1, who was the wife, operated accommodation business according to ordinary purposes while occupying the instant building by exercising the right of retention for the purpose of paying the unpaid construction cost. As such, the Defendants asserted that the Plaintiff’s remaining construction cost of KRW 71,07 million in the construction cost of the instant building (the contract price of KRW 1.635 billion in the construction cost of civil and construction + KRW 1.4 million in the construction cost of retaining walls and civil and civil construction construction cost of KRW 14 billion in the entry of the building + KRW 1.1.35 billion in the Plaintiff’s total number of KRW 1.5 billion.

(B) As to whether Defendant 2 was a contractor for the new construction of the building of this case by the Plaintiff, there is no evidence to acknowledge it otherwise, in light of the following facts, unless it is believed that each entry of evidence Nos. 14, 15, and 59 corresponding thereto is followed.

Rather, Gap evidence 1, 2, 7-1, 8, Gap evidence 9-1 through 24, Gap evidence 1-1, 15-1 to 6, Eul evidence 14, 2-11, Eul evidence 13-1, 2-2, 34-2, Eul evidence 1, 2-2, 34-2, Eul's new construction contract amount to the plaintiff 1-2, 000, 000, 000, 000, 000, 000, 000, 000,000,000 won for the above new construction of 5-2, 00,000,000 won, 00,000 won, 00,000 won, 1-2,000,000,000 won, and 2-7,000,000 won,00 won.

According to the above facts, in relation to the new construction of the building of this case, Defendant 2 is not a person entrusted with the designation of a contractor or the management of construction funds by the Plaintiff, or a person entrusted with the management of construction funds by the Plaintiff, or is not recognized as a contractor or contractor awarded a contract for the new construction of the building of this case from the Plaintiff. Thus, the Defendants’ assertion that Defendant 2 has a right to occupy the building of this case with a lien with a claim for the remainder payment

(2) Lien claim with a claim to reimburse necessary expenses as secured claim

(A) The Defendants asserted that, with respect to the new construction of the building of this case, Defendant 2 is the executor’s choice, the preparation of construction funds, and the person entrusted with the sale of the building after completion of the construction work, and that, with respect to the new construction work, between April 30, 200 and August 11, 2002, between April 30, 2002 and August 11, 2002, Defendant 2 paid on behalf of the Plaintiff KRW 60 million (4 million for civil and design expenses, KRW 10 million for construction expenses, KRW 36 million for underground floor, KRW 36 million for construction expenses, KRW 16 million for underground markets, and KRW 10 million for waterproof construction expenses) and the Defendants’ right to claim reimbursement of the building of this case from April 8, 2003 to early July 2003 on behalf of the Plaintiff, it is not necessary to refund the Plaintiff’s right to claim reimbursement of the interest of the building of this case to the Plaintiff.

(B) First, in light of the fact that Defendant 2 paid KRW 60 million to the Plaintiff’s creditor from April 30, 2002 to May 11, 2002 by receiving KRW 170 million in total from April 30, 2002, as well as KRW 60 million to handle the Plaintiff’s construction work, it is difficult to acknowledge that Defendant 2 paid KRW 60 million to the Plaintiff’s creditor by adding the Plaintiff’s KRW 170 million to its own expense, and there is no evidence to acknowledge that Defendant 2 paid KRW 60 million in addition to the Plaintiff’s KRW 1770 million prepared by the Plaintiff.

(C) Next, as to whether Defendant 2 paid a total of KRW 70,583,100 on behalf of the Plaintiff at the cost of the new construction of the instant building after April 8, 2003, the following circumstances are difficult to recognize the remainder of the construction of the instant building, excluding the construction of the instant building on March 26, 200, based on the following facts: (a) evidence Nos. 18, 19, and Nos. 20-1 through 5, Nos. 20-21-1, Nos. 21-2, 22, 3, and 22 through 27; (b) it is difficult for Nonparty 2 to recognize that additional construction was necessary on behalf of the Plaintiff; (c) evidence No. 1715, May 203, 200; and (c) evidence No. 300,000, which is the Plaintiff’s creditor, to the Plaintiff’s new construction of the instant building; and (c) it is difficult to recognize the Plaintiff’s demand for the Plaintiff’s payment of KRW 20130.

(D) Accordingly, Defendant 2’s assertion of the above lien and the grounds for offset are without merit, which are premised on the fact that Defendant 2 paid necessary expenses for the performance of duties delegated by the Plaintiff.

(3) The assertion about the scope of return of unjust enrichment

The Defendants asserted that the gains actually earned in the possession of the instant building are not more than 40,522,540 won, and thus, they are obligated to return only within that limit. However, the Plaintiff is seeking compensation for damages arising from illegal possession, barring special circumstances, whether the amount equivalent to the rent is equivalent to the damages arising from illegal possession of real estate, and not the actual gains that the illegal occupant acquired through such possession. Therefore, the above assertion is without merit.

3. Determination on Defendant 2’s counterclaim

Defendant 2 asserted that, with respect to the new construction of the building of this case, 60 million won between April 30, 2002 and August 11, 2002 (4 million won for civil engineering and design expenses, 10 million won for construction design expenses, 36 million won for underground floor construction expenses, 10 million won for underground floors, and 10 million won for waterproof construction expenses), between April 8, 2003 to July 2003 and 11, 70,583,100 (in addition, with respect to retaining wall construction including entry roads, seed spraying expenses, 4 million won for construction expenses, 13058,00 won for construction expenses, 13058,00 won for equipment expenses) on behalf of the Plaintiff, Defendant 2 paid the Plaintiff damages for delay as the necessary expenses between the Plaintiff and the first police officer from April 8, 2003 to July 203.

However, as seen in the above 2.B.(2), Defendant 2 did not have to pay necessary expenses for the performance of the business delegated by the Plaintiff. Thus, Defendant 2’s counterclaim claim is without merit.

4. Conclusion

Therefore, the plaintiff's claim against the defendants is accepted in its reasoning, and the judgment of the court of first instance is just, so the appeal against the defendants against the plaintiff's main lawsuit is dismissed as it is without merit, and the plaintiff 2 has changed in exchange for the trial against the defendant 2 is dismissed as it is without merit.

[Attachment Form omitted]

Judges Ma Sung-man (Presiding Judge) and Kim Dong-jin applied mutatis mutandis to the case