[1] Whether the State or a local government acquires the ownership of land designated as a school site necessary for the education of elementary schools, middle schools, and high schools in a land substitution plan for a land readjustment project (affirmative), and whether the State or a local government is liable to pay the project operator the price for the acquisition of the school site (affirmative)

[2] Criteria for calculating the acquisition price of school sites for which the State or a local government is obligated to pay to a project implementer under the proviso of Article 63 of the former Land Readjustment Project

[1] According to Articles 2(1)1, 2(2), and 63 of the former Land Readjustment Project Act (repealed by Act No. 6252, Jan. 28, 2000; hereinafter “Act”), land designated as school site necessary for education of elementary schools, middle schools, and high schools in a land substitution plan for a land readjustment project shall be reverted to the State or a local government which manages land pursuant to the main sentence of Article 63 of the Act (hereinafter “State, etc.”) on the day following the public announcement of a land substitution disposition, and the State, etc. shall be obligated to pay the project operator the price for the acquisition of school site in accordance with the proviso of Article 63 of the Act.

[2] According to Articles 2(1)2 and 63 of the former Land Readjustment Project Act (repealed by Act No. 6252, Jan. 28, 2000; hereinafter “Act”), the State or a local government is obligated to pay the price for acquisition to a project implementer in lieu of an original acquisition of the ownership of the land designated as a school site from a land substitution plan on the following day after the public announcement of a land substitution disposition. However, the proviso of Article 63 of the Act only provides that “school intersections, etc. shall pay for the price,” but does not provide for the criteria for the calculation of the price.

Therefore, the meaning of “relicity” should be interpreted in consideration of the legislative intent and purpose of the Act, the history of the enactment and amendment, the harmony with the entire legal order, and the relationship with other statutes. It is reasonable to calculate the acquisition price of school sites by adding the cost required for the creation and development of school sites to the land price excluded from development gains.

[1] Article 31 of the Constitution, Articles 2(1)1 and 2(2) (see Article 2(2) of the former Urban Development Act and Article 2 subparag. 11 of the National Land Planning and Utilization Act, and Article 2 subparag. 2 (see Article 2(2) of the current Urban Development Act and Article 2 subparag. 13 of the National Land Planning and Utilization Act), 54(1) (see Article 34(1) of the current Urban Development Act), 62(6) (see Article 42(5) of the current Urban Development Act), 63 (see Article 66(1) of the current Urban Development Act), 80 (see Article 3 of the current Urban Development Act, Article 5 of the Urban Development Act, Article 2 subparag. 11 of the former Urban Development Act, Article 2 subparag. 2 of the former Urban Development Act (see Article 2 subparag. 201 of the National Land Planning and Utilization Act, Article 6(2) of the current Urban Development Act, Article 20 subparag. 2(1) and 6(2) of the current Act)

[2] Supreme Court Decision 2006Da81035 decided Apr. 23, 2009 (Gong2009Sang, 724)

Gyeongbuk-do (Court of Law Firm, Attorneys Choi Jong-chul et al., Counsel for the defendant-appellant)

Bupyeong-gu Housing Co., Ltd. and five others (Law Firm Hun-Ga et al., Counsel for the plaintiff-appellant)

Daegu High Court Decision 2015Na20484 decided November 26, 2015

1. Of the judgment below, the part on the claim against Defendant 2 and the ancillary claim against Defendant 2 is reversed, and that part of the case is remanded to the Daegu High Court.

2. The appeal against Defendant 2, Defendant 3, Defendant 4, Defendant 5, and Defendant 6 is dismissed.

3. The costs of appeal incurred between the Plaintiff, Defendant 3, Defendant 4, Defendant 5, and Defendant 6 shall be borne by the Plaintiff.

The grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed).

1. Regarding ground of appeal No. 1

A. According to the former Land Readjustment Projects Act (amended by Act No. 6252 of Jan. 28, 200, but the provisions of the Act prior to the repeal shall apply to a land readjustment project, which meets the requirements of Article 2 of the Addenda due to the decision of urban planning; hereinafter referred to as the "Act"), the "land readjustment project" in this Act (hereinafter referred to as the "divided rearrangement project") means the "project concerning the exchange, division, or other division of land to be conducted under the provisions of this Act for the enhancement of utility as a site and the maintenance of public facilities" (Article 2 (1) 1), "public facilities" means roads (limited to roads that can enhance the utility of a site), parks, squares, rivers, schools necessary for education of elementary schools and middle and high schools, school lots necessary for education, and other public facilities prescribed by the Presidential Decree, and the land belonging to the State or public facilities as necessary for the implementation of a land rearrangement project (Article 2 (1) 2 of the Act).

According to the above legal provisions, the land designated as a school site necessary for the education of elementary schools, middle schools, and high schools in the replotting plan for the compartmentalization and rearrangement project belongs to the State or a local government (hereinafter “State, etc.”) which manages the land in accordance with the main sentence of Article 63 of the Act on the day following the public announcement of a replotting disposition, and the State, etc. acquires the ownership in its original condition, but the State, etc. is obliged to pay the project implementer the price for the acquisition of the school site in accordance

① Article 2 of the Act does not include school curriculum of public facilities at the time of the enactment of the Act, while Article 63 only stipulates that the site for public facilities shall be reverted to the State, etc. free of charge. However, as a result of a increase in demand for school attendance accompanied by the compartmentalization and rearrangement project, the securing of school site necessary for compulsory education has emerged as an important task, it became a legislation to revise the first bill to include the school curriculum necessary for compulsory education in public facilities under Article 2, thereby allowing the State, etc. to secure the site, and to acquire it for consideration in addition to the proviso to Article

② Article 63 of the Act provides that the title of the public facility site shall be “Reversion of the public facility site.” Since the main text sets the subject and timing of ownership ownership of the site for public facilities, but does not limit it to the site for public facilities that the State, etc. acquired without compensation, or does not exclude school sites, it shall be deemed that the general application shall apply to the site for public facilities without compensation, regardless of whether it is paid or not. In the case where the proviso of Article 63 of the Act provides that school intersections or market sites shall be paid, it is natural to view that the public facility site has provided an exception to the ownership of the site for

③ The State has a duty to secure the proper school site in order to guarantee the fundamental rights of citizens to receive education and to implement compulsory education. Accordingly, the former Urban Planning Act (wholly amended by Act No. 6655 of Jan. 1, 2003) provides that “Before repeal by Act No. 6243 of Jan. 28, 2000) stipulates that “Before repeal by Act No. 6243 of Jan. 1, 2000, the plans for establishing schools, etc. within urban planning zones shall be determined by urban planning [Article 2(1)1(b)]; and the Act provides that “The project plan for sectional adjustment projects shall conform to the plan for public facilities and other facilities determined by urban planning and shall be determined by taking into account to secure school sites necessary for the education of elementary schools, middle schools, and high schools (Article 80).”

Therefore, in connection with Article 63 of the Act on the Ownership Ownership of Land for Public Use, the purpose of the Act is to support the State's fulfillment of its obligations in relation to education, such as that, in the case of a compartmentalization and rearrangement project, the ownership should be attributed to the State, etc. en bloc along with the management right when the disposition of replotting becomes effective, and that, in the case of a rearrangement project, the project implementer does not dispose of the land for public use to a third

(4) Article 54 (1) of the Act provides that "The implementer may appropriate the expenses necessary for the compartmentalization and rearrangement project or determine them as the land secured by the authorities in recompense for development outlay or the reserved land without designating a certain land as a substitute lot in the replotting plan for the purposes stipulated by the regulations, articles of incorporation, implementation rules, or business plan," and Article 62 (6) of the Act provides that "the implementer shall acquire the ownership of the land secured by the authorities in recompense for development outlay under the provisions of Article 54 (excluding those already disposed under the provisions of Article 57 (4)) and the person specified in the replotting plan as the reserved land

Here, reserved land includes land not designated as substitute land for purposes other than business expenses by a project implementer (see Supreme Court Decision 2005Du333, Sept. 14, 2006, etc.). However, school site is clear that it is urban planning facility and public facility. As such, land designated as school site in a replotting plan is reserved land, and cannot be deemed as land that the project implementer acquires ownership on the day following the public announcement of a replotting plan. Therefore, it is reasonable to view school site as acquisition of ownership by the State, etc. as stipulated in a replotting plan as of the day following the public announcement of a replotting plan, just as other reserved land.

The acquisition of school sites by the State, etc. cannot be deemed different from the acquisition of the school sites is for consideration. If the acquisition of school sites is for consideration and it is treated as the land secured by the authorities in recompense for development outlay, it can be arbitrarily disposed of by the project implementer to meet the project cost, and may be contrary to the purpose designated in the land substitution plan as the land for public facilities. In addition, it is also inconsistent with the purport of the law that intends to clearly and clearly specify the ownership ownership ownership ownership, depending on whether the acquisition procedure has been completed before the land substitution disposition

(5) The alteration of a right resulting from a replotting disposition, which takes place according to a replotting disposition, is not effective in a replotting disposition, but pursuant to the provisions of Acts (Supreme Court Decision 90Meu2575 delivered on June 14, 191), so it is clear that the State, etc. acquires the ownership of a school site as a change in the real right under Article 63 of the Act.

B. The reasoning of the lower judgment and the evidence duly admitted by the lower court reveal the following.

1) Regarding school sites for ○○ Middle Schools

① On May 23, 1990, the Posidong District and the Land Partitioning Association (hereinafter referred to as the “Posidong District”) obtained authorization for establishment and authorization for project implementation from the Plaintiff, and implemented a land readjustment project in the Posidong District. In the public site protocol of the land substitution plan formulated at the time, 14,222m2 (hereinafter referred to as “the 1stm2”) was indicated as the site for the public facilities.

② In 2004, the head of the Si/Gun/Gu was authorized to revise a land substitution plan. The first land was written as school sites, respectively, as well as the “public site report after rearrangement,” “written confirmation of land allotted by the authorities in recompense for development outlay” and “written disposal of land allotted by the authorities

③ On December 31, 2005, the Plaintiff rendered a disposition of land readjustment and rearrangement project in the port district, which was publicly announced on December 31, 2005.

④ On January 27, 2006, the registration of ownership transfer was completed in its name with respect to the land No. 1 under its name, and on December 26, 2006, the registration of ownership transfer was completed on December 29, 2006 by selling it to the Nonparty in KRW 6,826,560,000, and completed the registration of ownership transfer on December 29, 2006.

⑤ Around July 2007, the Plaintiff (competent Office of Education) proposed that the Nonparty purchase the first land at KRW 201,548 per 1 square meter of the development cost, on March 28, 2008. However, the Nonparty did not respond on the ground that the amount is below the amount. The Plaintiff, whose scheduled date of opening the ○○ Middle School was multi-level, decided to purchase the first land from the Nonparty for KRW 12,771,205,00. Accordingly, the Nonparty (competent office of education) paid KRW 3,198/14,222 of the first land to the Plaintiff (competent office of education) on October 15, 2009, KRW 11,024/14,222 of the first land and paid KRW 12,71,205,00 to the Nonparty on January 21, 201, and the Plaintiff paid KRW 207,000 to the Nonparty on January 27, 2005.

④ Meanwhile, on March 23, 2015, the deceased Nonparty died after having left Defendant 2 and Defendant 3, Defendant 4, Defendant 5, and Defendant 6, who is his/her wife. A comprehensive legacy of all his/her property to Defendant 2 around July 25, 2014, which was the previous death.

2) Regarding school sites for △△ Middle Schools

① On August 5, 1999, the Posiwon-dong 3 District Land Partition Association (hereinafter “original Dong-dong Association”) obtained authorization for establishment and authorization for project implementation from the Plaintiff, and implemented a land readjustment project in the Posidong-dong 3 District. At the time of the land substitution plan, the “12,604 square meters of one middle school” stated that the “12,604 square meters of one middle school is a school site in the Posidong-dong 3 District-dong 3 District-dong 3 District-dong 3 District-dong 3 District-dong 3 District-dong 3 District-dong 3 District-dong 3 District-dong 3 District-dong 12,604 square meters

② On February 13, 2009, Han Dong-dong Partnership obtained authorization of change of a replotting plan. The content of the replotting plan is classified as school sites as public sites, but detailed items are divided into “written report of land allotted by the authorities in recompense for development outlay”, “parking lot”, and “school” included in the authorization form, and the land No. 2 is entered in “school”.

③ On March 12, 2009, the Plaintiff issued a disposition of land readjustment and rearrangement and rearrangement and rearrangement and rearrangement and rearrangement and public announcement thereof on March 12, 2009.

④ On March 26, 2009, the Wondong Partnership completed the registration of initial ownership on the land under its name, and on April 13, 2009, transferred the registration in lieu of the repayment of the obligation to pay construction expenses equivalent to KRW 3,094,578,579 to the Vice-Defendant Co-Defendant Co-Defendant Corporation of the first instance trial, and completed the registration of ownership transfer on May 13, 2009, and on March 3, 2010, vice-young Co., Ltd completed the registration of ownership transfer to the Defendant Non-Defendant Co-Defendant Co-Defendant Corporation (hereinafter “Defendant Co-Defendant Company”).

⑤ The Plaintiff (competent office of education) decided to purchase KRW 4,537,764,00 from the Defendant Company, the scheduled date of opening △△△ middle school. Accordingly, on July 20, 2010, the Defendant Company completed the registration of ownership transfer on the second land to the Plaintiff (competent office of education), and around that time, the Plaintiff paid KRW 4,537,764,00 to the Defendant Company.

C. Examining the above facts in light of the legal principles as seen earlier, since the land No. 1 and 2 is a public facility site designated as a school site necessary for middle school education in the initial land substitution plan, it constitutes a reserved land due to its nature. Therefore, since the land was designated as a school site, it cannot be said that there was an alteration to the content of the initial land substitution plan, since the land No. 1 was entered in the “public site report after rearrangement,” which is included in the authorization for alteration of a land substitution plan for the long-term association, as well as in the “written confirmation of land allotted by the authorities in recompense for development outlay” and “written disposal of land allotted by the authorities in recompense for development outlay” or the land No.

Therefore, the land Nos. 1 and 2 shall be deemed to have been acquired at the time on the day following the public announcement of each replotting disposition. Accordingly, the registration of ownership preservation in the name of the Sungsung Cooperative with respect to the land No. 1, the registration of ownership transfer in the name of the deceased non-party, the registration of ownership preservation in the name of the original partnership with respect to the land No. 2, and the registration of ownership transfer in the name of the defendant corporation and the registration of ownership transfer

Ultimately, the deceased Nonparty and the Defendant Company had no right to the land Nos. 1 and 2 and sold it to the Plaintiff who had acquired the ownership in the original form. This constitutes a case where the purpose of a juristic act is deemed to be original impossible under social norms and thus null and void. Nevertheless, the deceased Nonparty and the Defendant Company received the purchase price of KRW 12,771,205,00 and KRW 4,537,764,00 from the Plaintiff on the grounds of each sale. Thus, Defendant 2 and the Defendant Company, who received comprehensive legacy from the deceased Nonparty, have the duty to return each of the above purchase price to the Plaintiff as unjust enrichment, barring any special circumstances.

D. Nevertheless, the lower court determined otherwise, on the erroneous premise that, even if a land substitution plan was designated as a school site necessary for the education of elementary schools and middle and high schools, if there were no circumstances such as concluding a sales contract with the State, etc. before a land substitution disposition, a project implementer shall acquire ownership on the day following the public announcement of a land substitution disposition pursuant to Article 62(6) of the Act, on the following day: (a) the first and the second land was acquired by the Ksung association and the KIC association; and (b) the deceased Nonparty and the Defendant Company were legally transferred the ownership from each of the above associations; and (c) the sale of the first and the second land by the deceased Nonparty and the Defendant Company cannot be deemed null and void, and thus, the unjust enrichment cannot be established. In so determining, the lower court erred

2. As to the grounds of appeal Nos. 2 and 3

Even if the Plaintiff acquired the land No. 1 and No. 2 on the day following the announcement of each disposition of replotting, the lower court determined that the Plaintiff’s act of disposal of the land No. 1 and No. 2 ought to be deemed impliedly ratified, according to the circumstances indicated in its reasoning, and that the Plaintiff’s assertion that the sales contract concluded between the deceased Nonparty and the Defendant Company was null and void and sought restitution of unjust enrichment is contrary to the principle of good faith or the principle of notions

However, according to the reasoning of the lower judgment and the evidence duly admitted by the lower court, the Plaintiff revealed the following: (a) there was no choice but to purchase the land Nos. 1 and 2 with the appraisal price claimed by the deceased Nonparty, etc. for the construction of a school according to the defective school date, while the opening date of the ○○ Middle School and △△ Middle School is different; and (b) the network Nonparty, etc. presented by the Plaintiff at the development cost.

In light of this, it is difficult to view that the Plaintiff, solely based on the circumstances stated in the judgment of the court below, knew or suspected that the act of disposal of the land 1/2 was null and void, and thus, it cannot be deemed that the Plaintiff explicitly ratified the act of disposal of the land 1/2 association and the original association. In addition, it is not reasonable to deem that the Plaintiff offered the trust that the sales contract entered into between the deceased Nonparty and the Defendant Company was legitimate, or that the deceased Nonparty and the Defendant Company had such trust from an objective point of view. Thus, the Plaintiff’s assertion that the sales contract was null and void cannot be said to contravene the principle of good faith or the principle of good faith.

Nevertheless, the lower court determined otherwise solely on the basis of the circumstances indicated in its reasoning. In so determining, the lower court erred by misapprehending the legal doctrine on ratification of invalidation and the principle of good faith, thereby adversely affecting the conclusion of the judgment.

3. As to the fourth ground for appeal

A. According to the provisions of Articles 2(1)2 and 63 of the Act, the State, etc. on the day following the public announcement of a replotting disposition, in lieu of original acquisition of ownership of the land designated as a school site in a replotting plan, on the day following the public announcement of a replotting disposition, bears the duty to pay the project implementer the price for its acquisition. However, the proviso of Article 63 of the Act only provides that “school land, etc. shall be paid for” and does not stipulate any criteria for the calculation of the price.

Therefore, the meaning of “oil” should be interpreted in consideration of the legislative intent and purpose of the Act, the history of the enactment and amendment, the harmony with the entire legal order, and the relationship with other statutes (see Supreme Court Decision 2006Da81035, Apr. 23, 2009, etc.). For the following reasons, it is reasonable to calculate the acquisition price of school sites by adding the cost required for the creation and development of school sites to the land price excluded from development gains, i.e., the cost required for the creation and development

① The reasonable compensation stipulated in Article 23(3) of the Constitution refers to, in principle, complete compensation that fully compensates the objective value of the property concerned. However, the development gains accrued from the compartmentalization and rearrangement project cannot be deemed to be included in the scope of complete compensation due to its nature.

(2) Although the Act provides that the State, etc. shall pay the price for the school site to the project implementer, it shall not be deemed that the payment of the price for the school site, including the development gains accrued from the compartmentalization and rearrangement project, is limited to consideration to prevent landowners from suffering disadvantages because the depreciation rate due to the compartmentalization and rearrangement project increases excessively.

(3) The compartmentalization and rearrangement project is an important purpose of “acquisition of a site for public facilities” by means of the reduction of replotting, and such reduction is that the utility of the site increases as a result of the compartmentalization and rearrangement project, which is, in other words, to include development gains in the acquisition price of the site for public facilities, does not fit the essence of the said compartmentalization and rearrangement project. On the other hand, it is not reasonable to determine the price of the site for public facilities to be paid by the State, etc. in accordance with the method of calculating acquisition price under the Act on Acquisition of and Compensation for Land, etc. for Public Works Projects, since it may be deemed that development gains are compensated for by the development gains, it is not in violation of equity to have the project implementer bear the expenses incurred in the creation and development of the site for public facilities. Accordingly, it is not reasonable to determine the price

B. The lower court determined that: (a) even if the Plaintiff had a claim for return of unjust enrichment against Defendant 2 and the Defendant, ① the Ksung Cooperative and the Ksung Cooperative transferred the claim for the school site against the Plaintiff to Defendant 2 and the Defendant Company and notified the Plaintiff thereof; (b) Defendant 2 and the Defendant Company set-off a defense against the Plaintiff’s claim for return of unjust enrichment by making the claim for the school site against the Plaintiff taken over as above as above as automatic credit; (c) it is apparent that the claim for the school site should be calculated based on the market price and it is equivalent to or equal to the Plaintiff’s claim for return of unjust enrichment; and (d) both claims are set-off on April 3, 2014 after the delivery of the copy of the complaint of this case reached the maturity date, and thus, they retroactively extinguished both the Plaintiff’s claim for return of unjust enrichment against Defendant 2 and the Defendant Company on April 3, 2014.

C. However, in light of the legal principles as seen earlier, since Defendant 2 and the Plaintiff Company’s claim for school site against the Plaintiff, which the Defendant Company acquired, should be calculated at the cost of creation, it cannot be deemed that the Plaintiff’s claim for return of unjust enrichment exceeds or equal to the Plaintiff’s claim

Therefore, even if the assignment of claims by the head of the Si/Gun/Dong association is valid, the lower court should have deliberated on the development cost of the land No. 1 and 2 and calculated the amount of the claim for school site against Defendant 2 and the Plaintiff that the Defendant Company received, and should have determined whether the Plaintiff’s claim for return of unjust enrichment has ceased to exist.

Nevertheless, the lower court determined that the Plaintiff’s claim for return of unjust enrichment was entirely extinguished by set-off. In so doing, the lower court erred by misapprehending the legal doctrine on the computation of the purchase price of school sites and set-off in the case where the claim was transferred, thereby adversely affecting the conclusion

4. Conclusion

Therefore, without further proceeding to decide on the remaining grounds of appeal, the part concerning the claim against the Defendant Company and the conjunctive claim against Defendant 2 is reversed, and that part of the case is remanded to the court below for further proceedings consistent with this Opinion. The appeal against Defendant 2, Defendant 3, Defendant 4, Defendant 5, and Defendant 6 is dismissed. The costs of appeal between the Plaintiff, Defendant 3, Defendant 4, Defendant 5, and Defendant 6 are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Kwon Soon-il (Presiding Justice)