In a case where Gap corporation occupied a building and exercised a lien because it was not paid part of the new construction cost of the building, and thereafter purchased the commercial part of the building in this auction procedure and completed the registration of ownership transfer, and thereafter leased it to Byung, the case holding that the judgment below which held that Gap corporation's lien was not extinguished was erroneous in the misapprehension of legal principles.

In a case where Gap corporation, as it was unable to receive part of the construction cost of new building, has been exercising a lien while occupying the building; thereafter, in this auction procedure, Eul purchased some commercial buildings among the buildings and completed the registration of ownership transfer; and thereafter leased them to Byung, the case holding that the court below erred by misapprehending the legal principles as to the extinction of the lien due to the loss of possession, inasmuch as Gap corporation lost its possession due to the deprivation of possession, as long as Eul corporation lost its possession by filing a lawsuit for recovery of possession, and the right of retention was deemed not lost if it restored possession upon Gap's winning judgment. However, even though the right of retention was not restored before the recovery of possession by the above method, even though the right of retention was not restored until the recovery of possession by the above method, although Eul corporation could recover possession by filing a lawsuit for recovery of possession of commercial buildings, it did not extinguish the right of retention of Gap corporation.

Articles 320 and 328 of the Civil Act

Daewoo Motor Sales Co.,

Defendant (Attorney Han Chang-ho et al., Counsel for the defendant-appellant)

Incheon District Court Decision 2010Na15462 Decided July 22, 2011

The judgment below is reversed, and the case is remanded to Incheon District Court Panel Division.

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

The lower court determined that: (a) the Plaintiff was awarded a contract for construction work of KRW 18,457,780,00 on the ground of the 1148-2 ground of the 15th floor of the 15th floor and the construction work of the 18,457,780,00; (b) the Plaintiff was awarded a contract for construction work of KRW 1,182,940,00 with a contract for construction work of KRW 1,182,940,00 and completed the construction work before June 204; (c) the Plaintiff did not pay the remainder of construction work cost at KRW 7,711,175,265 to the Plaintiff; and (c) the Plaintiff was unable to voluntarily file an application for the registration of ownership transfer from the 200th floor of the building of this case to the 15th floor of this case; and (d) the Plaintiff did not have any right to demand sale of the building of this case to the 206th floor of this case.

However, the judgment of the court below is not acceptable in the following respect.

According to the evidence adopted by the court below, from May 2002 to November 2004, the number of buyers of the building of this case deposited 7 billion won in the Plaintiff’s bank account, and the current construction deposited 900 million won additionally, and 11 billion won was deposited in the name of intermediate payment, etc. Thus, the court below should have deliberated on whether the above amount was paid as the construction price of the building of this case by urging the Defendant to prove or seeking confirmation from the Plaintiff. However, the court below judged that the evidence submitted by the Defendant alone is difficult to deem that the Plaintiff was fully paid the construction price. In so doing, the court below erred by failing to exhaust all necessary deliberations due to a failure to exercise the right of explanation.

In addition, as long as the Plaintiff lost possession of the commercial building of this case due to the Defendant’s deprivation of possession, the Plaintiff’s right of retention was extinguished, and the Plaintiff did not lose possession when the Plaintiff recovered possession upon winning a favorable judgment by filing a lawsuit for recovery of possession, and thus, the right of retention would continue to exist. However, even if the right of retention was not restored before restoring possession by the aforementioned method (see Supreme Court Decision 2003Da46215, Feb. 27, 2004). The lower court determined that the Plaintiff’s right of retention was not extinguished solely on the ground that the Plaintiff could recover possession by filing a lawsuit for recovery of possession without examining whether the Plaintiff recovered possession of the commercial building of this case. In so doing, the lower court erred by misapprehending the legal doctrine on the extinguishment of the right of retention due to the loss of possession, which led to the failure to exhaust all necessary deliberations.

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.

Justices Kim Nung-hwan (Presiding Justice)