[1] The method of assessing "value of the pertinent property" under Article 26 (1) of the former Enforcement Decree of the State Property Act

[2] The case reversing the judgment below on the ground of misapprehension of legal principles as to the calculation of loan charges

[1] The "value of the pertinent property" under Article 26 (1) of the former Enforcement Decree of the State Property Act (amended by Presidential Decree No. 16913 of July 27, 2000), which serves as a basis for calculating rent for the State property, shall not be based on the changed condition in which the possessor to whom the State property was leased increased the value by his/her own cost and effort after the commencement of possession, barring special circumstances, and shall be assessed based on the actual state of use at the time of commencement of possession by the possessor. The same applies to a case where a loan contract was concluded after obtaining permission for occupation or use or profit-making of the State

[2] The case holding that the appraisal of the value of the above land for the calculation of rent for State property shall not be based on the changed land category and utilization status, but on the basis of the land category and use status at the time of commencement of possession, if the land category of the above land changes to a sports site as the construction is completed by investing considerable funds in the land which was a road or ditch at the time of commencement of possession of the land, and the construction is completed.

[1] Article 26 (1) of the former Enforcement Decree of the State Property Act (amended by Presidential Decree No. 16913, Jul. 27, 2000); Article 741 of the Civil Act / [2] Article 26 (1) of the former Enforcement Decree of the State Property Act (amended by Presidential Decree No. 16913, Jul. 27, 200)

[1] Supreme Court Decision 97Nu4098 delivered on January 28, 2000 (Gong2000Sang, 594 delivered on February 12, 1999)

Heung Tourism Development Co., Ltd. and one other (Attorney Lee Jae-soo, Counsel for the plaintiff-appellant)

Republic of Korea and two others (Attorney Kim Tae-Gyeong, Counsel for the plaintiff-appellant)

Seoul High Court Decision 2001Na25247 delivered on March 8, 2002

All the judgment below is reversed, and the case is remanded to Seoul High Court.

We examine the grounds of appeal.

1. Fact-finding and judgment of the court below

A. The court below acknowledged the following facts in full view of the admitted evidence.

(1) On September 1, 1984, the Plaintiff Open Tourist Development Co., Ltd. (hereinafter referred to as the “BGD Tourism”) operated golf course business with the trade name “AGD club” after undergoing the completion inspection on August 30, 1986 after obtaining permission for occupation or use or profit-making on the land attached to the judgment of the court below on May 3, 1985 (hereinafter referred to as “the land attached to the judgment of the court below”) as to the land attached to the Annex II of the real estate indication I (hereinafter referred to as “the land attached to the judgment of the court below”).

(2) On April 22, 1990, Plaintiff New Games Tourism Co., Ltd. (hereinafter referred to as “New Games Tourism Co., Ltd.”) started with the construction of golf courses on April 22, 1990 and completed the construction on October 30, 1993, and operated golf courses with the trade name “Korea Communications Network” from June 29, 1994 after the completion of the construction on October 30, 199.

(3) In relation to the creation of such golf courses, the use and category of the instant land I, II, and III were changed to a ditch within a quasi-agricultural and forest area, and a sports site within a quasi-urban area (sports and recreational area) on the road

(4) The Plaintiffs concluded a loan agreement with the State-owned property as stated in the attached Table of the loan agreement, as to each of the instant land as stated in the judgment below, and paid the loan charges. The loan charges are calculated by applying the criteria for calculating the loan charges (loan area x publicly assessed individual land price x 50/1000) based on the officially assessed individual land price of each year under Article 26(2)1 of the former Enforcement Decree of the State Property Act (amended by Presidential Decree No. 16913, Jul. 27, 200; hereinafter the same shall apply) as stated in the loan agreement agreement as to each of the instant land, as stated in the attached Table of the judgment below. As the golf course was created, and the purpose and land category were changed to a sports site in a quasi-urban area

B. The plaintiffs' assertion and the judgment of the court below on this issue

(1) The plaintiffs' assertion

Since it is unreasonable for the Plaintiffs to calculate the rent for State-owned property based on the officially announced value calculated based on the increase in land prices, which was developed by the Plaintiffs’ efforts, even though each of the instant lands leased by the Plaintiffs was developed as a golf course site before they were leased to the Plaintiffs, inasmuch as the amount exceeding the appropriate rent calculated based on the officially announced value calculated based on the actual usage of the relevant golf course before the creation of the golf course was received by the Defendants without any legal cause, the Defendant Republic of Korea shall return 70% of the rent exceeding the appropriate rent pursuant to Article 34(3)2 of the Enforcement Decree of the State Property Act, and 30% of the rent exceeding the reasonable rent pursuant to Article 34(3)2 of the former Enforcement Decree of the State Property

(2) The judgment of the court below

The reason why the officially announced value of each land of this case is increased is that the construction work of the plaintiffs' golf course, the specific use area under the Act on the Utilization and Management of the National Territory is changed from the quasi-agricultural and forest area to quasi-urban area, the land category is changed to the Gu or road, and the price increase is combined. Therefore, the appropriate rent for each land of this case should be calculated based on the amount calculated by deducting the land price increase arising from the plaintiffs' construction work from the officially announced value of land in the changed use and land category. Therefore, it is unreasonable for the defendants to calculate rent based on the officially announced value included in the increased value portion due to the plaintiffs' golf course

However, there is no evidence to calculate the amount equivalent to the increased value due to the plaintiffs' golf course construction works among the rent paid by the plaintiffs. The appraisal result by the appraiser non-party 1 of the first instance court is that the land of this case is a road or a ditch at present, and thus, it is assessed as 30% of the present officially announced value, so it cannot be deemed that the current officially announced value increase due to the plaintiffs' golf course construction works in the present officially announced value, and it cannot be deemed that the present officially announced value is the remaining assessment calculated by deducting the increased value due

Ultimately, it is difficult to know how much the land price increase due to the plaintiffs' golf course construction work among the officially announced land values of the land of this case. It is difficult to find out how much the rent paid by the plaintiffs exceeds the reasonable rent. Thus, unless the plaintiffs prove it, the plaintiffs' claim of this case cannot be accepted.

2. The judgment of this Court

Of the judgment of the court below, the part that the pertinent land is formed into a golf course and the land price of the changed use and land category should be calculated on the basis of the amount calculated by deducting the land price increase arising from the Plaintiffs’ construction works of golf course from the officially announced land price of the changed use and land category is presumed to be premised on the fact that the pertinent land should be developed into a golf course and the reasonable rent for each of the instant land should be calculated on the basis of the officially announced land price of the changed land category. Therefore, the above determination by the court below

The "value of the pertinent property" under Article 26 (1) of the former Enforcement Decree of the State Property Act, which serves as the basis for calculating rent for the State property, shall not be based on the changed state in which the possessor to whom the State property was leased increased the value by his own cost and effort after the commencement of possession, unless there are special circumstances, but shall be assessed based on the actual use state at the time of commencement of possession by the possessor (see, e.g., Supreme Court Decisions 98Du17647, 17654, Feb. 12, 1999; 97Nu4098, Jan. 28, 200). The same applies to cases where a loan contract was concluded after the commencement of possession with the permission for occupation or use of the State property at first time.

However, according to the testimony of Gap evidence Nos. 32-1 through 8 and Gap evidence Nos. 33-1 through 5 and witness testimony of the court of first instance, the plaintiffs, at the time of commencement of possession of each of the lands of this case, performed a golf course construction by investing considerable funds in each of the lands of this case and its surrounding areas, and as the above construction is completed, the land category of each of the lands of this case was changed to a sports site. For this reason, there is sufficient ground to view that the plaintiffs increased the value of each of the lands of this case by constructing a golf course with their own cost and effort after the commencement of possession of each of the lands of this case, and the land category was changed to a sports site. Thus, the assessment of the value of each of the lands of this case for the calculation of the rent of this case is not based on the changed land category and use condition at the time of commencement of possession by the plaintiffs.

Despite the above, the court below held that the appropriate rent should be calculated for each land of this case on the basis of the value calculated by deducting the land price increase arising from the plaintiffs' construction works from the officially announced land price in the state where each land of this case was formed into a golf course and the land category was changed. The appraisal result of the appraiser non-party 1 of the first instance court assessed the value of each land of this case on the basis that it is a road or ditch state, cannot be deemed that the appraisal of the appraisal result of the appraisal of non-party 1 of the present officially announced land price of this case constituted an appraisal of the plaintiffs' increase in value arising from the construction works of the golf course. The current officially announced land price cannot be deemed as an appraisal remaining after subtracting the increased value arising from the plaintiffs' construction works of the golf course. Thus, the court below rejected the plaintiff's assertion that the appropriate rent should be calculated on the basis of the present officially announced land price at the time of the commencement of possession, which is erroneous in the misapprehension of legal principles as to the

3. Conclusion

Therefore, without further proceeding to decide on the remaining grounds of appeal, all the judgment below is reversed, and the case is remanded to the court below for a new trial and determination. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Kim Yong-dam (Presiding Justice)