In cases where a real estate seller has completed the registration of ownership transfer but continues to possess real estate even though it has not been paid the purchase price, whether a lien may be claimed against a purchaser or a third party who has acquired the ownership of real estate as a secured claim for the purchase price (negative)

In a case where a real estate seller transfers the ownership of an object to a buyer after completing the registration of ownership transfer without having paid the purchase price in advance, the right of retention, which is a real right, is not recognized in addition to the right of defense of simultaneous performance. This is because, in light of the basic spirit of the Civil Act of the Republic of Korea, seeking the clarification of real right relations and the safety and facilitation of transaction by requesting the registration as a requirement for change of real right to real estate rights due to a juristic act, if recognized, the seller still holds the right of detailed possession, belonging to the ownership, against the buyer or a third party who acquired the ownership based on his/her disposal, even though he/she transferred the ownership to the buyer by registration. Furthermore, the seller, without exercising his/her right of defense of simultaneous performance, transferred the ownership of the object to the buyer by prior performance of his/her obligation of ownership transfer without exercising his/her right of defense of simultaneous performance. Accordingly, the seller’s possession of real estate and the buyer is not paid a part of the purchase price, and thus, cannot claim a lien against the buyer or the third party who acquired the ownership.

Articles 320(1), 536, and 568 of the Civil Act

S. S. KON Construction Co.

Applicant

Busan District Court Order 2011Ra700 dated November 18, 2011

The reappeal is dismissed.

The grounds of reappeal are examined.

1. A. According to the reasoning of the order of the court below and records, ① the re-appellant completed a new construction work and completed ownership registration under his name, transferred the ownership of each of the above sub-sections (hereinafter “each of the instant real estate”) to 60 million won from the Busan-dong, Busan-dong, Busan-dong, and 667-17, and 4 to 7 stories (401, 502, 501, 601, 602, 701, and 702) from the building E-Opard, the medical corporation of this case (hereinafter “the Re-Appellant”) and purchased the above real estate as part of the auction procedure of 200 million won from the medical corporation (hereinafter “the Re-Appellant’s real estate purchase price of this case”); ② the Re-Appellant’s real estate purchase price of 200 million won from the new bank (hereinafter “the new bank”), and the Re-Appellant’s real estate sale price of 200 million won from the auction procedure of this case.

B. In the above auction procedure, the applicant who acquired the ownership of the real estate of this case filed an application for a real estate delivery order against the re-appellant, the re-appellant asserted that he had a legitimate title to possess the real estate of this case on the basis of a lien held as the secured claim for the purchase-price claim against the Re-Appellant, which is the other party to the sales contract for each of the real estate of this case, and the court below held that the re-appellant only has a right to defense of simultaneous performance based on the above purchase-price claim, and that the above purchase-price claim cannot be deemed to have arisen from the real estate of this case or from the same legal relation or factual relation as the right to claim the return of the real estate of this case, and maintained the

2. Article 320(1) of the Civil Act provides that “A person who has possession of another person’s article or securities shall have the right to retain such article or securities until repayment is made, if the claim arising in respect of such article or securities is due.”

Meanwhile, in a sales contract, a seller shall transfer a right which has become the object of the sale to the buyer, and the buyer shall pay the purchase-price to the seller. Such both obligations of the parties are simultaneously performed (Article 568 of the Civil Act). One of the parties to a bilateral contract has a right of defense of simultaneous performance that the other party may refuse to perform his/her obligation until the other party provides the other party with the simultaneous performance (Article 536 of the Civil Act). Unless there are special circumstances, the seller of real estate has a right of defense of simultaneous performance that may refuse to perform the obligation of the object of the transfer of ownership until he/she pays the purchase-price

However, in a case where a real estate seller has completed the registration of ownership transfer to a buyer with no payment of the purchase price, and transfers the ownership of an object to the buyer, the right of retention, which is a real right, is not recognized as well as the right of defense of simultaneous performance. This is because, in light of the basic spirit of the Korean Civil Act, in order to clarify the relationship of real rights and ensure the safety and smooth activation of transaction by requesting the registration as a requirement for change of real rights in real rights due to a juristic act, if recognized, the seller still holds the right of possession belonging to the ownership of the buyer or a third party who acquired the ownership based on his/her disposal, even though he/she transferred the ownership to the buyer by registration. In addition, the seller, without exercising his/her right of defense of simultaneous performance, has transferred his/her ownership transfer to the buyer by prior performance of his/her obligation of ownership transfer. Therefore, the risks incidental thereto should be borne by himself/herself.

Therefore, on the ground that the Re-Appellant occupied the instant real estate and the ownership of the instant real estate was not paid part of the purchase price from the Re-Appellant Medical Foundation to which the ownership of the instant real estate was transferred, a lien cannot be asserted against the applicant who acquired the ownership of the instant real estate from the Re-Appellant Medical Foundation or the Plaintiff who acquired the ownership of said

The judgment of the court below that rejected the Re-appellant's claim of lien is just, and it did not err by misapprehending the legal principles on the requirements for establishing lien, thereby affecting the judgment.

3. Therefore, the reappeal is dismissed. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Park Il-young (Presiding Justice)