Whether the occurrence of a mutual aid accident at the time of the mutual aid agreement should not be determined in order for the mutual aid agreement concluded by the broker and the Korean Licensed Real Estate Agent Association to be effective (affirmative)

The former Business Affairs of Licensed Real Estate Agents and Report of Real Estate Transactions Act (amended by Act No. 11690, Mar. 23, 2013) (amended by Act No. 11690, Mar. 23, 2013) aim at contributing to the national economy by guiding, fostering real estate brokerage business in a sound manner, establishing a fair and transparent order in real estate transaction (Article 1). In order for a broker to compensate for property damage incurred to a transaction party due to intentional or negligent conduct while acting as a broker, the broker must enter into a mutual aid agreement or make a deposit under mutual aid agreement conducted by the Licensed Real Estate Agent Association (Article 30(3) and Article 42). As such, the above mutual aid agreement concluded between the broker and the Korea Licensed Real Estate Agent Association is basically an insurance contract that is not an insurance business under the Insurance Business Act, and has the nature of guarantee insurance that the broker bears liability for damages to the transaction party due to unlawful conduct or nonperformance of obligation. Therefore, at least a mutual aid agreement should not be determined at the time of a mutual aid agreement becomes effective.

Articles 30(3) and 42 of the former Business Affairs of Licensed Real Estate Agents and Report of Real Estate Transactions Act (Amended by Act No. 11690, Mar. 23, 2013)

Supreme Court Decision 2010Da101776 Decided September 27, 2012

Plaintiff (Law Firm Sejong, Attorneys double-spe et al., Counsel for the plaintiff-appellant)

Korean Licensed Real Estate Agent Association (Attorney Park So-young, Counsel for defendant-appellant)

Busan High Court Decision 2013Na52301 decided May 22, 2014

The judgment below is reversed, and the case is remanded to Busan High Court.

The grounds of appeal are examined.

1. As to the assertion of misapprehension of legal principles as to brokerage

Examining the reasoning of the judgment below in light of the relevant legal principles and records, it is justifiable for the court below to have determined that the act of Lone Star Real Estate Brokerage Consulting Co., Ltd. (hereinafter “Lone Star Real Estate Brokerage Consulting”) objectively deemed as an act for mediating and mediating transactions in light of social norms, and it is not erroneous in the misapprehension of legal principles as to the act of

2. As to the assertion of misapprehension of legal principles as to risk acceptance and liability commencement in a mutual aid contract

A. The former Business Affairs of Licensed Real Estate Agents and Report of Real Estate Transactions Act (amended by Act No. 11690, Mar. 23, 2013) (amended by Act No. 11690, Mar. 23, 2013) provides that the purpose of this Act is to contribute to the national economy by guiding, fostering real estate brokerage business in a sound manner, establishing a fair and transparent order in real estate transaction (Article 1). In order for a broker to compensate for any property damage incurred to a transaction party due to intentional or negligent conduct while acting as a broker, a mutual aid contract shall be entered into or deposited with a mutual aid association established by the Licensed Real Estate Agent Association (hereinafter “instant mutual aid”) based on the provisions of a guarantee insurance or mutual aid agreement approved by the Minister of Land, Transport and Maritime Affairs (Article 30(3) and 42). As such, even if the insurance business under the Insurance Business Act is not an insurance business under the Insurance Business Act, the nature of the mutual aid agreement between the broker and the defendant should be determined at least 17.

B. Review of the reasoning of the lower judgment and the record reveals the following facts.

(1) On October 15, 2010, Lone Star Real Estate Brokerage Consulting Co., Ltd. concluded the instant mutual aid agreement with the Defendant with the content that the Defendant would compensate for the damage if the Lone Star Real Estate Brokerage Consulting Co., Ltd. caused property damage to the transaction party on purpose or by negligence in performing real estate brokerage services from October 15 to October 14, 201.

(2) On September 13, 2010, the Plaintiff and Lone Star Real Estate Brokerage Consulting Co., Ltd. sold the instant real estate owned by the Plaintiff on the condition that the instant real estate was offered as a prior collateral, the Plaintiff is liable for recovery of the remaining value. However, the Plaintiff concluded the instant service contract with the purport that the Plaintiff shall pay 65,000,000 won to the Lone Star Real Estate Brokerage Consulting at the consulting cost.

(3) On September 13, 2010, the Plaintiff concluded the instant sales contract with Nonparty 1 and 2 to sell the instant real estate in KRW 285,00,00 by means of the brokerage of Lone Star Real Estate Brokerage (hereinafter “Co., Ltd.”). At the same time, the Plaintiff agreed to the effect that “the seller agrees to a prior loan secured by the instant real estate when a bank loan is required, and the seller moves his name to the transfer on or before September 30, 2010 after the loan occurred.” Nonparty 1 and 2 had the intention or ability to pay the intermediate payment and the balance after receiving the loan secured by the instant real estate from the beginning.

(4) On September 13, 2010, the day of the instant sales contract, Nonparty 1 paid to the Plaintiff KRW 22,000,000 for the first down payment, and KRW 23,000,000 for the second down payment on September 16, 2010, respectively. Nonparty 2, according to the instant sales contract, on September 14, 2010, upon completing the registration of establishment of a mortgage for the instant real estate at KRW 150,00,000,000, Nonparty 1 and Nonparty 2 did not pay the intermediate payment and remainder to the Plaintiff.

C. Examining these facts in light of the legal principles as seen earlier, it is reasonable to view that, according to the instant sales contract concluded as a broker of Lone Star Real Estate Brokerage Consulting, Nonparty 1 and 2 suffered loss to the Plaintiff when acquiring property profits equivalent to the amount of money loaned as security on September 14, 2010. Thus, at the time of October 15, 2010 which entered into the instant mutual aid agreement, the occurrence of the accident was already determined at the time of the occurrence of the accident, and such risk was not included in the risk of the Defendant’s acceptance under the instant mutual aid agreement, there is considerable room to view that the Defendant is not obliged to pay mutual aid to the Plaintiff.

Nevertheless, the court below determined that the accident occurred within the period of mutual aid on the ground that the intermediate payment and the outstanding payment date of the sales contract of this case, which are included in the act of arranging Lone Star Real Estate Brokerage, are within the period of mutual aid contract of this case. The court below erred by misapprehending the legal principles as to the timing of mutual aid accident or the scope of risk taken over by the mutual aid business operator in the mutual aid contract

3. Conclusion

Therefore, without further proceeding to decide on the remaining grounds of appeal, the lower judgment is reversed, and the case is remanded to the lower court for further proceedings consistent with this Opinion. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Jo Hee-de (Presiding Justice)