Where the buyer who takes over the ownership of the object of sale from the seller disposes of the object to a third party before the cancellation of the contract, and thus it is impossible to return the original object due to the cancellation of the contract, the scope of the value that the buyer has to return

Where a contract is terminated, each party shall be obligated to restore to the other party pursuant to Article 548 of the Civil Act, and shall pay the money to be returned as a result of the cancellation of the contract with interest added thereto. As such, Article 548 of the Civil Act, which provides that the duty to restore as a result of the termination of the contract, has the nature of a special provision on unjust enrichment. As such, the scope of return of profit is the whole profit received unless there is good faith, good faith, or bad faith, unless there is any special reason. Therefore, where it is impossible for the buyer to return the original property due to the cancellation of the contract by disposing of the property to a third party prior to the cancellation of the contract by the seller, the buyer shall return the property as the duty to restore, and the amount to be returned is the amount calculated by adding the legal interest from the date of the profit to the consideration of the object at the

Article 548 of the Civil Act

Supreme Court Decision 94Da2551 delivered on May 12, 1995 (Gong1995Sang, 2104) Supreme Court Decision 98Da43175 delivered on December 23, 1998 (Gong199Sang, 228)

Plaintiff 1 and one other (Law Firm Chang-Gong, Attorneys Park Jong-bong et al., Counsel for the plaintiff-appellant)

Defendant

Daegu District Court Decision 2012Na13390 decided January 16, 2013

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

The grounds of appeal are examined.

1. Where a contract is rescinded, each party shall be obligated to restore to the other party pursuant to Article 548 of the Civil Act, and shall pay the other party interest along with the money to be returned as a result of the termination of the contract. Article 548 of the Civil Act stipulating the duty to restore as the effect of the termination of the contract has the nature of special provisions on unjust enrichment. As such, the scope of return of profit is the whole of the profit received unless there is good faith or bad faith (see, e.g., Supreme Court Decision 98Da43175, Dec. 23, 1998). Therefore, where the buyer who received the ownership of an object sold from the seller disposes of the object to the third party before the cancellation of the contract and thus it becomes impossible to return the original object due to the cancellation of the contract, the buyer shall return the value as the object to the buyer, and in this case, the amount equivalent to the price of the object at the time of the disposition or the amount equivalent to the market value thereof (see Supreme Court Decision 94Da2551, May 12, 1995).

2. (1) The lower court determined that the sales contract of this case was lawfully rescinded upon the Defendant’s explicit intent to refuse performance and expressed his intent to cancel the sales contract on March 16, 201 when purchasing the instant land from the Plaintiffs and completing the registration of transfer of ownership under the Defendant’s name on December 13, 2005, and again selling it to the Nonparty and completing the registration of transfer of ownership on March 10, 2006, but the Defendant did not fully pay the purchase price to the Plaintiffs. Although the Defendant filed the instant lawsuit against the Defendant claiming payment of the purchase price, the Defendant explicitly expressed his intention to refuse performance and expressed his intention to cancel the sales contract on March 16, 201. (2) Although the Defendant was obligated to cancel the registration of transfer of ownership under the Defendant’s name with regard to the instant land to its original state, the scope of compensation for its value is equivalent to the sale price at the time when the land was already disposed to the Nonparty and was impossible to return its original property.

3. Examining the reasoning of the judgment below in light of the above legal principles, we affirm the judgment below that the court below held that, prior to the cancellation of the sales contract of this case, the land of this case was disposed of to the non-party and thus, it was impossible to return its original value.

However, according to the records, unless there are special circumstances, such as that the defendant's disposal of the land of this case to the non-party was revealed, and that the price recognized as the price exceeded the market price, the price that the defendant is to return as the duty to restore according to the above legal principles shall be the amount calculated by adding the above price and the legal interest from the payment date to the above price. Nevertheless, the court below determined otherwise that the defendant is liable to pay only the market price of the land of this case at the time near the disposal date and the delay damages from the date following the cancellation of the sales contract.

Therefore, the judgment of the court below is erroneous in the misapprehension of legal principles as to the scope of the duty to restore the original property where it is impossible to return the original property due to the termination of the contract, thereby failing to exhaust all necessary deliberations, which affected the conclusion of the judgment

4. 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 on the bench.

Justices Shin Young-chul (Presiding Justice)