In the event of a claim for reimbursement of beneficial expenses, whether the actual expenses actually paid and the increase in the existing amount should be calculated (affirmative)

With respect to the claim for reimbursement of beneficial expenses, Article 203(2) of the Civil Act provides that with respect to the amount disbursed by the possessor to improve the object possessed by the possessor and other beneficial expenses, only if there is an increase in the value thereof, the possessor may demand reimbursement of the amount disbursed or the increased amount thereof at his option. Article 626(2) of the Civil Act provides that the lessor shall reimburse only the amount disbursed by the lessee when the increase in the value thereof exists at the time when the lease is terminated. As such, the scope of reimbursement of beneficial expenses is determined according to the owner or the lessee’s choice out of the increased amount in the cost disbursed by the possessor or the lessee as beneficial expenses and the increased amount in the rent. Accordingly, for the right of reimbursement of the lessor or the lessor, the amount actually disbursed and the increased amount in the rent should be calculated in full.

Articles 203(2) and 626(2) of the Civil Act

Supreme Court Decision 62Da437 delivered on October 18, 1962 (No. 10-4, 93) Supreme Court Decision 86Meu2342 Delivered on April 14, 1987 (Gong1987, 805)

[Judgment of the court below]

Defendant (Law Firm Squa, Attorneys Seo Jong-woo et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2000Na31672 delivered on June 1, 2001

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

The grounds of appeal are examined.

1. As to the assertion of waiver of beneficial costs

Examining the reasoning of the judgment below in comparison with the records, the court below's purport of the conciliation clause of this case is that the plaintiff gives up the remainder of the beneficial expenses except for the beneficial expenses incurred due to the laying-off of the retaining wall without any condition, but the beneficial expenses incurred due to the laying-up of the retaining wall shall be deemed to have been renounced only on the condition that the lease of this case remains in existence until the expiration of the period. Since the plaintiff did not pay the rent prescribed in the conciliation clause after the conciliation was completed, the defendant has already received a decision to substitute the removal of the building as provided in the conciliation clause of this case and notified the plaintiff to execute it before the expiration of the period of the lease, and thus the lease of this case is not continued until the expiration of the period of the lease, the plaintiff may claim reimbursement of the beneficial expenses incurred due to the laying-up of the retaining wall part of this case, and it is just to have determined that this is not contrary to the contents of the conciliation of this case or against the res judicata effect, and there is no violation of law by failing

2. As to the assertion on the scope of beneficial costs

The lower court determined to the effect that the Plaintiff is liable to reimburse the Plaintiff on the following grounds: (a) on the scope of beneficial costs, the Plaintiff may claim reimbursement of the beneficial costs arising from the filling of the retaining wall part; (b) on the ground that the Plaintiff’s lease of the instant land from the Defendant and then changes its form and quality and land category by installing retaining walls on the boundary line of the instant land; and (c) changing its form and quality and land category by packing concrete on the ma, etc., thereby increasing the value of the instant land;

However, it is difficult to accept the above measures by the court below for the following reasons.

With respect to the claim for reimbursement of beneficial expenses, Article 203(2) of the Civil Act provides that with respect to the amount disbursed by the possessor to improve the possessor’s possession and other beneficial expenses, only if there is an increase in the value thereof, the possessor may demand reimbursement of the amount of expenditure or increase in the value thereof at his option. Article 626(2) of the Civil Act provides that the lessor shall reimburse only the amount disbursed by the lessee when the increase in the value thereof remains at the time of termination of the lease. As such, the scope of reimbursement of beneficial expenses is determined according to the owner or the lessee’s choice among the increase in the cost disbursed by the possessor or the lessee as beneficial expenses and the increase in the value thereof. Accordingly, the amount of reimbursement of beneficial expenses shall be calculated in full between the amount actually disbursed and the increase in the value actually incurred by the buyer or the lessor (see Supreme Court Decision 86Meu2342, Apr. 14, 1987, etc.).

Nevertheless, the court below determined that the plaintiff's actual expenses due to the filling of retaining wall constituted a beneficial expense to be repaid by the defendant, without any deliberation and determination as to the actual expenses incurred by the plaintiff due to the filling of retaining wall, by calculating only the existing increase in the value of the land in this case and calculating only 461,004,00 won. The court below did not err in the misapprehension of legal principles as to the scope of the duty to repay beneficial expenses and by failing to exhaust all necessary deliberations, which affected the conclusion of the judgment. The ground for

3. Therefore, without examining the remaining grounds of appeal, the judgment of the court below shall be reversed, and the case shall be 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.

Justices Cho Cho-Un (Presiding Justice)