Plaintiff (Appointed Party) (Law Firm Han, Attorneys Lee Jong-il et al., Counsel for the plaintiff-appointed party-appellant)

The Home Housing Association and other 7 (Attorneys Shin Shin-ho et al., Counsel for the plaintiff-appellant)

November 27, 2007

Suwon District Court Decision 2005Gahap1806 Decided September 28, 2006

1. In the judgment of the court of first instance, the part against the defendant Southern Construction Co., Ltd. shall be revoked, and the lawsuit against the plaintiff (appointed party) shall be dismissed;

2. All appeals filed by the Plaintiff (Appointed Party) against the remaining Defendants are dismissed.

3. The total cost of the litigation incurred between the Plaintiff (Appointed) and the Defendant Nam Namdong Co., Ltd. is borne by the Plaintiff (Appointed Party) and the remainder of the appeal cost incurred between the Plaintiff (Appointed Party) and the remaining Defendants are borne by the Plaintiff (Appointed Party).

1. Revocation of a judgment of the first instance;

2. The Defendant Composition. Home Housing Association, the Defendant Composition. the Defendant Composition. the Village Association, the Defendant Composition. the Defendant 11 District Housing Association, the Defendant Composition. Home2 Housing Association, the Defendant Composition. The Defendant Composition.... The Defendant Composition...... the District Housing Association, the Defendant 21 District Housing Association, and the Defendant Nam-Top each of the designated parties listed in the separate list No. 2, and the amount calculated by 20% per annum from the day following the delivery of a copy of the complaint of this case to the

3. The Defendants as stated in Paragraph 2 of the above and the defendant Han-ri Co., Ltd. shall pay to each of the designated parties listed in the separate sheet No. 3 the amount of money indicated in the same list, and the amount at the rate of 20% per annum from the day after the delivery of the copy of the complaint of this case to the day of complete

4. The Defendants as stated in paragraph (2) of the above and the Defendant Flason Co., Ltd. shall pay to each of the plaintiffs (appointed parties; hereinafter referred to as the "Plaintiffs") and the designated parties (hereinafter referred to as the "Plaintiffs, etc.") the amount indicated in the claim column for the same list and the amount at the rate of 20% per annum from the day following the delivery of a copy of the complaint of this case to the day of complete payment.

1. Basic facts

A. Nonparty 3, along with Nonparty 1, decided to jointly carry out the apartment construction project in Mapo-si, Mag-ri (number 1 omitted). On April 24, 2001, Nonparty 3 acquired the business right regarding the construction of apartment from the Mag-ri Industrial Development Co., Ltd., Ltd., which purchased the land of Mag-ri (number 1 omitted), in the name of Tae River Construction Co., Ltd. (Representative 3) and the Mag-ri Housing Association (the president of the Association Nonparty 1).

B. After that, Nonparty 3 and Nonparty 1 recruited members of the Young-gu Housing Construction Promotion Act (wholly amended by Act No. 6655 of Feb. 4, 2002) on June 9, 2001, under the former Housing Construction Promotion Act (wholly amended by Act No. 66555 of Feb. 4, 2002), each association was modified by each association’s name on Apr. 17, 2003 (hereinafter “Defendant 1 Cooperative”) with the name of the Defendant’s name (hereinafter “Defendant 2 Housing Association”) and the Defendant’s name (hereinafter “Defendant 2”)’s name (hereinafter “Defendant 2 Housing Association”), each of which was approved for the establishment of the association, and thereafter, recruited members of the Defendant 1 and the second association under the name of the member of each of the above Association.

C. On the other hand, on August 3, 2001, a construction contract was entered into between the Net Crown Housing Association and the Composition Home Housing Association Promotion Committee (the second association prior to the authorization thereof) and the Defendant Southern Mine Construction Co., Ltd. (hereinafter “Defendant Southern Mining Co., Ltd.”) to newly construct 377 units of the above land at KRW 30,394,00,000 for construction cost.

D. When the members of Defendant 1 and the second association are recruited additionally, Nonparty 1 and 3 decided to establish a separate association composed of the members additionally recruited without obtaining authorization for modification following the increase of the members, and obtained authorization for the establishment of the separate association on March 27, 2002 as to the Defendant 1-1 Regional Housing Association (hereinafter “Defendant 1-1 Association”) and the Defendant Composition 2-1 Regional Housing Association (hereinafter “Defendant 2-1”) on March 27, 2002.

E. The details of the establishment and authorization of each of the above associations are as follows:

(2) The number of non-party 2, non-party 2, non-party 4, non-party 2, non-party 2, non-party 4, non-party 2, non-party 2, non-party 2, non-party 7, non-party 4, non-party 2, non-party 2, non-party 7, non-party 2, non-party 4, non-party 2, non-party 2, non-party 4, non-party 2, non-party 7, non-party 2, non-party 4, non-party 2, non-party 2, non-party 7, non-party 2, non-party 4, non-party 2, non-party 2, non-party 2, non-party 4, non-party 2, non-party 2, non-party 2, the non-party 2, non-party 25, and the non-party 4, the non-party 25, the non-party 27, Dong 2, Dong-dong 3,

F. Meanwhile, Defendant 1, Defendant 2, Defendant 1-1, and the 2-1st Union delegated the partnership apartment project implementation agency to the Tae River Construction Co., Ltd. (hereinafter “ Tae River Construction”), which was actually operated by Nonparty 1, after Nonparty 3 resigned from the office of representative director. After that, Nonparty 1 resigned from the office of the first partnership of Defendant 1 and withdrawn from the said partnership on April 2003.

G. Around June 2003, Defendant 1 and the second union, Defendant 1-1 and approximately KRW 3,000 of the project site of the 2-1st union and the 2-1st union were designated as a natural green belt. From that time, each of the above Defendant unions suffered difficulties in implementing apartment construction projects.

[Based on the recognition] Evidence No. 2, evidence No. 3-1, evidence No. 3-2, evidence No. 4-1 through 4, evidence No. 6-13, evidence No. 14-13, Eul-20, 20, 26, 33, and 36, evidence No. 27-1 through 36, Eul-2, evidence No. 31-1, evidence No. 32-1 through 35, Eul-2 through 6, and evidence No. 9 through 11, testimony of Non-Party No. 10, and the purport of the whole pleadings

2. Determination as to the legitimacy of the lawsuit against the Defendant’s constituent head-a home housing association

The court's explanation on this part is the same as the corresponding part of the reasoning of the judgment of the court of first instance (from the last line to the third one of the pages 6 to the third one). Thus, this part is cited in accordance with the main sentence of Article 420 of the Civil Procedure Act.

3. Determination as to the claim against each of the defendant unions of this case

A. Determination on the claim for return of the sale price

1) The plaintiff's assertion

The Plaintiff et al. concluded a sales contract with the non-party 1, who is the actual head of the Defendant 2-1 partnership or delegated the affairs related to the recruitment of union members, the sale price, or the receipt of contributions from the non-party 2, the head of the partnership. Since the business operation of the Defendant 2-1 partnership has become impossible, the sales contract is cancelled through the delivery of a copy of the complaint of this case. Defendant 2-1 partnership should be liable for the sales contract as a contractor. The remaining Defendant 2-1 partnership of this case should be jointly held liable for the sales contract. Since each of the instant contracts is jointly agreed with Defendant 2-1 partnership and its businesses, purchase of land, apartment lot number, and the settlement of accounts and accounts, each of the instant contracts should be jointly held liable for the sales contract. Accordingly, each of the instant contracts is obligated to return the sales price to the Plaintiff

2) Determination

A) Nos. 16-6, 34-1, 2, and 35-1, 10-5, 10-1 through 5, 25, 25, 30, 39-3, 10, and 10 are insufficient to acknowledge the Plaintiff’s assertion. There is no other evidence to acknowledge the Plaintiff’s assertion.

Rather, evidence No. 5, evidence No. 7-1 to 13, evidence No. 8, and No. 9-2, evidence No. 11, and evidence No. 15-1 to 12, and each part of evidence No. 10-1 to 5 can be acknowledged as follows. Although Nonparty 2 is the representative of the above defendant 2-1 association, he/she delegated all of his/her authority as the representative from the time of establishment of the above defendant association to Nonparty 1 and carried out the duties of the above defendant association’s representative with the seal of the above defendant association and his/her identification card No. 2. Nonparty 1 was designated as a green belt, and it was difficult for the plaintiff’s association to carry out the above apartment building project by the above defendant 1-2 to enter into a contract form with the defendant 2-1 association’s members of the housing association with the defendant 2 as an agent, and the defendant 1-2's housing association additionally collected money from each of the plaintiff 1's members of the association.

According to the above facts, in light of the fact that the non-party 1 established the non-party 1 and the non-party 2 association, and established the non-party 2-1 association composed of the members additionally recruited, and each of the above defendant association continued to exist as a separate association, and the contract documents related to the membership joining agreement prepared by the plaintiff et al. are composed of the contract parties, it cannot be viewed that the plaintiff et al. entered into the contract for the non-party 2-1 association (or the contract for membership joining the association) with the defendant 2-1 association.

B) Even if Nonparty 1 concluded a sales contract on behalf of the Defendant 2-1 partnership with the Plaintiff, etc., the sales contract remains effective as against Defendant 2-1 partnership.

Defendant 2-1 Cooperatives and non-corporate associations should apply mutatis mutandis to the non-corporate associations, such as the Civil Act on the basis of legal personality, except for the establishment of an incorporated association. In light of the provisions of Article 62 of the Civil Act, the representative of non-corporate association can allow other persons to act on behalf of others only for matters not prohibited by the resolution of the articles of association or the general meeting, and cannot comprehensively delegate the affairs of the non-corporate association. Thus, the comprehensive delegation of the affairs to others and the vicarious delegation of the comprehensive agent pursuant thereto to the provisions of Article 62 of the Civil Act are in violation of the provisions of Article 62 of the Civil Act, and thus, it does not affect the non-corporate association company (see Supreme Court Decision 94Da18522 delivered on September 6, 1996). Since Nonparty 2 comprehensively delegated all authority as the representative of Defendant 2-1 Partnership and the first instance court delegated the affairs of the non-party 2 to the non-party 1 Association, even if the non-party 1 was delegated to the non-party 2.

The plaintiff's assertion against the defendant 2-1 partnership is without merit.

C) Since the Plaintiff’s assertion against Defendant 2-1 Union is without merit, the remaining arguments against each Defendant Union are without merit. In addition, each Defendant Union decided to jointly hold that Defendant 2-1 Union and the remaining Defendant Union should be jointly held liable for the sales contract with Defendant 2-1 Union on the ground that Defendant 2-1 Union and the remaining Defendant Union jointly agreed to jointly carry out the business of the apartment, the purchase of land, the trend of apartment houses, and the settlement of accounts. The Plaintiff’s remaining arguments against each Defendant Union are without merit.

B. Determination on the claim for damages

1) The plaintiff's assertion

The non-party 1 entered into a sales contract with the plaintiff et al. as the actual head of each defendant association of this case. The non-party 1's act of recruiting the members of each defendant association of this case constitutes an act relating to duties externally and objectively. However, as long as the plaintiff et al. did not obtain the membership of each association of this case, the non-party 1 suffered losses equivalent to the sales price. Each of the defendant association of this case is liable for damages incurred to the plaintiff et al. by analogy of Article 35 (1) of the Civil Act or by analogy of the above provision. Even if the non-party 1 was not the head of each defendant association of this case, the non-party 1 was entrusted with the affairs related to the recruitment of the members and the sale price or the receipt of shares from the non-party 2, the head of each defendant 2-1 association of this case, and the non-party 1 was entrusted with the affairs related to the collection of contributions from the non-party 2, the non-party 2-1 association of this case through the defendant 2-1 association of this case.

In addition, each of the defendant associations of this case is liable for damages equivalent to the purchase price incurred to the plaintiff as the employer of the non-party 1.

2) Determination

A) In a case where the representative of a non-corporate group, such as a housing association, causes damage to another person in connection with his/her duties, the non-corporate group is liable to compensate for such damage by analogy of Article 35(1) of the Civil Act, but such a legal principle applies only to a case where a legitimate representative of a non-corporate group causes damage to another person

As seen earlier, the Plaintiff’s assertion that Nonparty 1 was the actual head of each Defendant’s association cannot be acknowledged. Even if Nonparty 1 was the actual head of each Defendant’s association at the time of entering into a membership agreement with the Plaintiff, it is not the representative duly appointed in accordance with the respective Defendant’s association rules, and thus, the said provision is not applicable or analogically applied to Nonparty 1’s act.

B) We examine the Plaintiff’s assertion on the premise that Nonparty 1 was delegated by Nonparty 2, the president of the 2-1 partnership, with the affairs related to the recruitment of union members, the sale price, and the receipt of contributions.

As seen above, even if Nonparty 1 was delegated with all rights as representative by Nonparty 2 from the time of the establishment of Defendant 2-1 partnership, it is not recognized that Nonparty 1 entered into an membership agreement with the Plaintiff, etc. as representative of Defendant 2-1 partnership.

C) We examine the Plaintiff’s assertion that each of the Defendant unions of this case is liable for damages equivalent to the sales price incurred to the Plaintiff as the employer of Nonparty 1.

The employer's liability is that an employee has a person who has had another person engage in a certain business using another person compensates for damages incurred by an employee to a third party in connection with the performance of his/her business, and the employer's liability is established. In order to establish the employer's liability, the employer should have the relationship of use between the employer and the illegal person, i.e., the relationship of actual direction and supervision of the illegal person. However, there

D) The Plaintiff’s assertion is without merit.

4. Determination as to the claim against Defendant Southern Mining Construction

A. The plaintiff's assertion

In order to preserve the Plaintiff’s claim for the refund of the sale price or the claim for damages against each of the Defendant unions of this case, the Fund Management Contract concluded between each of the above Defendant unions and the Defendant Mine Construction in subrogation of each of the above Defendant unions shall be terminated. The Defendant Southern Construction has the obligation to return the funds of each of the above Defendant unions, which the said Defendant Association keeps in custody. The Plaintiff, etc., by subrogation of each of the above Defendant unions, seek for the refund of the amount equivalent to each of the claims stated in the purport of the instant claim

B. Determination

We examine ex officio the plaintiff's lawsuits against the defendant Nam Nam-gu.

As seen earlier, the Plaintiff’s claim for the refund of the sale price or the damage claim against each Defendant’s association of this case exists, and thus, the Plaintiff’s lawsuit against the Defendant Southern Land is unlawful.

5. Determination as to the claim against the defendant Han-rier Co., Ltd., and the defendant Flaz.

A. The plaintiff's assertion

Since the plaintiff and the designated parties listed in the list 3 and 4 cancel a sales contract, the defendant Han Syuri and the defendant Syuri Syuri Co., Ltd. who vicariously concluded a sales contract have a duty to return the sales price or a liability corresponding to the sales price.

B. Determination

Even if the plaintiff's assertion is based on the plaintiff's assertion, the above defendants are not parties to the sales contract, and there is no obligation to return the sale price due to the cancellation of the sales contract to the above defendants. In addition, there is no ground to view the above defendants as liability

6. Conclusion

The plaintiff's lawsuit against the defendant Nam Nam-gu shall be dismissed as it is unlawful. The plaintiff's remaining claims against the defendants shall be dismissed as it is without merit. Since the part against the defendant Nam-gu in the judgment of the court of first instance as to the defendant Nam-gu is unfair with different conclusions, the judgment of the court of first instance is revoked and the plaintiff's lawsuit against the defendant Nam-gu shall be dismissed as to that part. The remaining part of the judgment against the defendants in the judgment of first instance is legitimate with this conclusion. Thus, the plaintiff's appeal against

[Attachment]

Judges Kim Jong-dae (Presiding Judge)