Plaintiff (Attorney Kim Jong-sik, Counsel for the plaintiff-appellant)

EP et al. (Attorneys Seo-sik et al., Counsel for the plaintiff-appellant)

July 6, 2011

Seoul Central District Court Decision 2010Gahap29046 Decided November 3, 2010

1. Of the judgment of the court of first instance, the part against the plaintiff falling under the order of additional payment shall be revoked.

2. The Defendants shall pay to each of the Plaintiff 19,053,90 won with 5% interest per annum from September 21, 2010 to July 22, 2011, and 20% interest per annum from the next day to the day of full payment.

3. The plaintiff's remaining appeal is dismissed.

4. Of the total litigation costs, 90% is borne by the Plaintiff, and the remainder is borne by the Defendants, respectively.

5. Paragraph 2 can be provisionally executed.

Purport of claim

The Plaintiff shall pay 199,253,000 won, and Defendant Yang & Yang Construction Co., Ltd. shall pay 100,000,000 won and 20% interest per annum from the day following the delivery date of the application for the purpose of the instant claim and the cause of the claim, to the day of full payment with respect to each of the above amounts.

Purport of appeal

Among the judgment of the first instance, the part against the plaintiff falling under the order of additional payment shall be revoked.

The Plaintiff shall pay 198,98,000 won to Defendant U.S. and 19,745,000 won to Defendant U.S. and each of the above money to Defendant U.S. with 20% interest per annum from the day following the day of service of the application for modification of the claim and the cause of the claim in this case to the day of full payment.

1. A cited part;

The court's explanation on this case is identical to the part concerning the reasoning of the judgment of the court of first instance, except where the second (c) or less of the judgment of the court of first instance is used as follows. Thus, the court cites it as it is by the main text of Article 420 of the Civil Procedure

2. A part used in a trial;

C. Judgment on the Plaintiff’s assertion

As of January 21, 2010, when the seizure and collection order of this case was served on the Defendants, the fact that the amount of the construction price payable by the Defendants to the non-party company was KRW 185,893,00 (amount settled in installments) is identical to the above-mentioned facts. Therefore, the Plaintiff, a person holding the right to collect the construction price, is obligated to pay KRW 100,000,000 within the scope of the Plaintiff’s seizure and collection money among the above construction price by Defendant Corporation and each of the above construction companies.

D. As to the defendants' assertion that prohibition of seizure is prohibited

(1) Judgment as to the defendants' assertion

In Article 88 of the Framework Act on the Construction Industry and Article 84 of the Enforcement Decree of the same Act, the prohibition of seizure on the amount equivalent to wages to be paid to workers of the construction work in question out of the contract amount of the construction work for which the constructor receives a contract, is derived from the demand of social security under the Constitution to guarantee workers' right to life minimum, and it is another provision to guarantee workers' right to preferential payment in terms of wages and other provisions to actually guarantee workers' livelihood stability. As such, an order of seizure on a claim, the seizure of which the seizure is prohibited, is in violation of compulsory law and null and void, and where the seizure, which is the premise of the collection order, is null and void, the collection order based on the seizure cannot be deemed null and void under the substantive law, even if it does not become null and void under the procedural law, and therefore, the third debtor may defend against the claim for the collection of the money by the execution creditor (see Supreme Court Decision 2007Da29591, Sept. 6, 2007).

In full view of the following circumstances revealed in light of the above facts, 185,638,00 won out of the subcontract price of this case to be paid to the non-party company by Defendant Yang Ho Construction as of January 21, 2010, which was served on the Defendants by the attachment collection decision of this case, is prohibited from seizure as it constitutes wage claim.

(A) Under the subcontract contract of this case between the non-party company and the defendant Yang & Yang Construction (Evidence A No. 3), the wage is calculated as KRW 1,749,11,91,910, and the ratio of wages to the construction cost is 54% (==3,207,30,000 ± 100 ± 2,991,653,000 ± 1,615,492,620 (=2,91,653,00 x 00 x 0.54). At the time of the settlement of other accounts, the wage is calculated at the same rate as the above 2,91,653,00 x 1,615,63,620 x 00 x 0 0.54).

(B) The fact that Defendant Yang & Yang Construction actually paid 185,638,000 won to the employees of the non-party company

(2) The plaintiff's assertion and judgment on this issue

(A) As to the assertion that the instant other settlement agreement does not have the effect of prohibiting seizure

1) The plaintiff's assertion

The other settlement agreement of this case is a contract that changes the initial contract for construction works on essential elements of the contract, such as construction cost and construction period, and is a new contract that is different from the initial contract for construction works, so the wage under the other settlement agreement shall be specified in the contract for construction works in accordance with Article 84(2) of the Enforcement Decree of the Framework Act on the Construction Industry so that the wage under the above settlement agreement falls

However, since the other settlement agreement (No. B B) of this case does not distinguish the wage amount and other construction cost from the other settlement agreement of this case, it is not possible to distinguish the amount of wage claims prohibited from seizure by the contract itself from the amount of wage claims in the form of a formal and uniform manner. Thus, the prohibition of seizure of all the construction cost claims does not have the effect.

(ii) the board;

In order to constitute a claim to be prohibited from seizure of wages, the contract amount shall be specified in the contract amount pursuant to Article 84 (2) of the Enforcement Decree of the Framework Act on the Construction Industry, as alleged by the plaintiff.

However, the other settlement agreement of this case seems to be merely a settlement agreement for the termination of the above construction contract on the basis of the first construction contract rather than a new contract for the alteration of the first construction contract. As seen above, as long as the amount of wages is specified in the subcontract contract of this case in detail, this part of the Plaintiff’s assertion on the premise that the above other settlement agreement of accounts is a separate contract for the alteration of the first construction contract is without merit.

(B) As to the scope of prohibition of seizure

1) The plaintiff's assertion

Although the total amount of construction work was KRW 2,91,653,00 at the time of the settlement of accounts, the unpaid construction work amount was KRW 199,253,00,000, and thus, the said unpaid construction work amount was 107,596,620 (i.e., 199,253,000 x 0.54) multiplied by the rate of wages in the initial construction contract.

(ii) the board;

The ratio of wages to the construction cost stated in the subcontract contract (Evidence A 3) between the non-party company and the defendant Yang & Yang Construction is 54%, and the wage calculated in the same proportion among the above adjusted amount of 2,91,653,00 won is 1,615,492,620 won, and the wage of 185,638,000 won, which the defendant Yang & Yang Construction decided to pay directly on behalf of the non-party company at the time of the above adjusted adjustment is within the above amount of 1,615,492,620 won.

However, in light of the legislative intent of Article 88 of the Framework Act on the Construction Industry and Article 84 of the Enforcement Decree of the same Act, the amount of wages prohibited from seizure pursuant to Article 88 of the Framework Act on the Construction Industry shall be the actual amount of wages which a constructor deducts the wages received from the ordering person within the scope of the total amount of wages indicated in the calculation sheet among the contract amount of the construction work in question. As alleged by the plaintiff, the seizure of the amount equivalent to the ratio of the unpaid wages out of the contract amount, regardless of the actual or unpaid wages, is not prohibited.

However, in cases where it is impossible to determine the amount of wages actually paid or not paid, the amount calculated by multiplying the amount of the unpaid construction price by the ratio of the wage, as alleged by the Plaintiff, can be determined as the amount of the wage prohibited from seizure. However, in this case where the amount of the unpaid wage is determined as KRW 185,638,00, as alleged by the Plaintiff, and the amount of the unpaid wage is determined as the amount of 185,638

Therefore, the seizure of wages related to the subcontracted project of this case shall be prohibited as to the actual unpaid wages within the limit of KRW 1,615,492,620, and this part of the plaintiff's assertion is without merit.

(C) As to the amount of direct wage payment

1) The plaintiff's assertion

Of the money that Defendant Yang Ho Construction paid as wages to daily workers, KRW 60,821,570, including KRW 10,109,160 paid to Nonparty 1, and KRW 8,944,740 to Nonparty 2, and KRW 8,821,570 to Nonparty 2 was not paid as wages or paid falsely. As such, the Defendants cannot oppose the Plaintiff’s seizure as wages paid to Nonparty 1, etc.

(ii) the board;

According to the statements in Gap evidence Nos. 13 and 14, it can be recognized that the non-party 1 and 2 are not an employee of the non-party company.

Thus, 19,053,90 won paid to Nonparty 1 and 2 as wages (=10,109,160 won paid to Nonparty 1 + 8,94,740 won paid to Nonparty 2) does not constitute wages under Article 88 of the Framework Act on the Construction Industry. Thus, the Defendants cannot oppose the Plaintiff’s seizure of KRW 19,053,90 paid to Nonparty 1 and 2 as above.

The defendants asserted that the above money paid to the non-party 1 and 2 was directly paid by the defendant Yang & Yang Construction on behalf of the non-party company, but the non-party company is within the three months of default or the scope of the claim with the right of priority repayment under the Civil Execution Act, so it cannot be seized.

However, the evidence submitted by the Defendants alone is insufficient to recognize that the said money paid to Nonparty 1 and 2 is within the period of Non-Party 3 months and constitutes a claim with the highest priority repayment right under the Civil Execution Act. Since there is no other evidence to acknowledge this, the above assertion by the Defendants is without merit.

Furthermore, as to the remaining claim 41,767,670 won (=60,821,570 won claimed by the Plaintiff - KRW 19,053,90 which was paid to Nonparty 1 and 2) alleged by the Plaintiff, there is insufficient evidence to acknowledge that the said money was not wages or was paid by falsity. Thus, this part of the Plaintiff’s assertion is without merit within the scope of recognition and there is no other reason.

(3) Amount of claims prohibited from seizure

Of 166,584,100 won out of the amount of the non-party company's claim for the payment of the contract price against the defendant Yang Ho Construction (=185,638,000 won of the above-mentioned wage claim amount - 19,05,053,90 won paid to non-party 1 and 2 under the name of wage) is prohibited from seizure.

E. As to the amount of debt payable for the construction price of Defendant Yang Ho Construction

(1) The plaintiff's assertion

In reality, the Defendant Yang & Yang Construction: (a) deposited KRW 608,400 on May 28, 2009, including KRW 339,400,000, and KRW 600,000 on July 30, 2009; and (b) deposited KRW 13,360,000 in the above account; and (c) did not have paid KRW 621,760,00 in total, including the waste disposal cost, the employment insurance premium, etc.; and (d) did not have paid KRW 13,360,00 in substitute payment for waste disposal expenses (i.e., KRW 608,40,000 + KRW 13,60,000 + KRW 13,60,000; and (e) Defendant Yang & Yang Company had the obligation to pay the construction price separately from the subcontract in this case; and (e) Defendant Yang & Yang Company had the obligation to pay the construction price separately from the subcontract in this case.

(2) Determination:

As seen above, Defendant Yang Yang Construction paid for KRW 13,360,000, such as waste disposal expenses and employment insurance premium for the non-party company. The evidence submitted by the Plaintiff alone is insufficient to recognize the Plaintiff’s assertion that Defendant Yang Yang Yang Construction withdrawn a total of KRW 608,40,000, as alleged by the Plaintiff, while managing the bank account in the name of the non-party company, and there is no other evidence to acknowledge otherwise.

However, as seen above, Defendant Yang & Yang Construction and the non-party company entered into an agreement by settling the unpaid construction cost of Defendant Yang & Yang Construction at KRW 185,893,00 on January 15, 2010 following the non-party company’s waiver of construction work at KRW 185,893,00, and the fact that Defendant Yang & Yang Construction was served with the collection order of this case on January 21, 2010 after the above settlement agreement was reached, as long as the above settlement agreement between Defendant Yang & Yang Construction and the non-party company was not invalidated, the plaintiff cannot oppose the defendant company solely on the above ground that the above settlement agreement between the defendant Yang & Yang Construction and the non-party company cannot be asserted

(f) Conclusion

The Defendants are obligated to pay to the Plaintiff, each holder of collection right, 19,308,90 won (=185,893,00 won for the claim for construction price - the claim amount prohibited from seizure - the claim amount of 16,584,100 won) and damages for delay.”

3. Conclusion

The plaintiff's claim of this case is justified within the scope of the above recognition, and the remainder is dismissed as it is without merit. Since part of the part against the plaintiff in the judgment of the court of first instance which differs from this conclusion is unfair, it is so revoked and order the defendants to pay 19,053,900 won additionally recognized in the trial (=19,308,90 won for the original judgment - 255,000 won for the original judgment). The remaining part of the judgment of the court of first instance is legitimate, and the plaintiff's remaining appeal is dismissed as it is so decided as per Disposition.

Judges Kim Jong-tae (Presiding Justice)