The meaning of “a claim determined within a period of one year” under Article 163 subparag. 1 of the Civil Act / Whether the damage claim due to nonperformance has the identity of the original claim (affirmative), and in a case where the extinctive prescription expires, whether the damage claim also terminates (affirmative)

Article 163 Subparag. 1 of the Civil Act provides that the extinctive prescription of a claim for the purpose of the payment of interest, support fees, salaries, usage fees, and other money or other things within a period of not more than one year shall be completed if it is not exercised for three years. This is determined by the extinctive prescription of a share claim arising from a claim for the payment of a bond, which is a basic right, and “claim determined by a period of not more than one year” refers to a claim

In addition, the damage claim due to nonperformance is an extension of the original claim or a change in the contents of the original claim. Therefore, when the original claim has expired by prescription, the damage claim also terminates.

Meanwhile, even if an obligor fails to perform any contractual obligation, the obligee still holds the claim stipulated in the pertinent contract, barring any special circumstance, barring any special circumstance, it cannot be said that the obligor gains profits without any legal ground on the ground that the obligor fails to perform his/her obligation, and even if the statute of limitations expires, it cannot be viewed otherwise.

Article 163 subparag. 1, Article 390, and Article 741 of the Civil Act

Supreme Court Decision 91Da28979 Decided May 12, 1992 (Gong1992Ha, 1835), Supreme Court Decision 93Da21705 Decided September 10, 1993 (Gong1993Ha, 2735), Supreme Court Decision 96Da25302 Decided September 20, 196 (Gong196Ha, 3145), Supreme Court Decision 99Da1949 Decided June 12, 2001 (Gong2001Ha, 1565), Supreme Court Decision 2005Da3113 Decided April 28, 2005 (Gong2005Sang, 803), Supreme Court Decision 2013Da2013813 Decided 12, 2013 (Gong2013, 205Ha13, 205Ha, 2013).

Plaintiff (Law Firm SN, Attorneys Choi Min-young et al., Counsel for the plaintiff-appellant)

F&MD Co., Ltd. (Attorney Jeon Chang-soo, Counsel for the defendant-appellant)

Seoul Central District Court Decision 2016Na31182 Decided October 7, 2016

The appeal is dismissed. The costs of appeal are assessed against the plaintiff.

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

1. Article 163 Subparag. 1 of the Civil Act provides that the extinctive prescription of a claim for the purpose of the payment of interest, support fees, salaries, rent, and other money or other things determined by a period not exceeding one year shall expire if it is not exercised for three years. This is determined by the extinctive prescription of a claim for share arising from a claim for the payment of the basic right (see, e.g., Supreme Court Decisions 93Da21705, Sept. 10, 1993; 9Da1949, Jun. 12, 2001). Here, “claim determined by a period not exceeding one year” refers to a claim paid regularly for one year or less (see, e.g., Supreme Court Decisions 96Da25302, Sept. 20, 196; 2013Da20571, Jul. 12, 2013).

In addition, the damage claim due to nonperformance is an extension of the original claim or a change in the contents of the original claim. Therefore, when the original claim has expired by prescription, the damage claim also terminates.

Meanwhile, even if a debtor has failed to perform any contractual obligation, the creditor still holds the claim stipulated in the pertinent contract. Thus, barring any special circumstance, the debtor cannot be deemed to have obtained profits without any legal ground on the ground that the debtor has failed to perform his/her obligation, and even if the claim has expired by prescription, it cannot be viewed otherwise (see Supreme Court Decisions 91Da28979, May 12, 1992; 2005Da3113, Apr. 28, 2005, etc.).

2. Review of the reasoning of the lower judgment and the record reveals the following facts.

A. On January 1, 2007, the Plaintiff entered into a contract for the publication of music rights (hereinafter “instant contract”) with the Defendant on the following grounds: (a) from January 1, 2007, the Plaintiff delegated the Plaintiff’s copyright management of the rice produced by the Plaintiff to the Defendant in a foreign country excluding Korea for five (5) years (from December 31, 201) years (from January 1, 2007, to December 31, 201).

B. In the instant contract, the Defendant agreed to set the end of June and the end of December of each year as the closing date for the accounting accounting of the instant contract, distribute and settle the royalty paid from abroad to the Plaintiff at the ratio of Plaintiff 65% and Defendant 35%, and then pay to the Plaintiff within 100 days.

C. The Defendant received copyright usage fees from the ASEAN Community Co., Ltd. (hereinafter “Nonindicted Company”) in the second half of 2008 for the Plaintiff’s grain, and paid the Plaintiff the amount of KRW 101,404,306 on October 30, 2008 and KRW 29,147,827 on April 13, 2009, respectively.

D. The Plaintiff filed the instant lawsuit on July 15, 2013 on the premise that the Plaintiff did not pay KRW 147,705,060 to the Plaintiff by omitting or unfairly deducting the royalty revenue that the Defendant received from the Nonparty Company during the second half of 2008. The Plaintiff asserted for the return of unjust enrichment equivalent to the unpaid royalty, namely, (i) the settlement and distribution of the unpaid royalty under the instant contract; (ii) the compensation arising from the nonperformance of the obligation to settle and distribute the unpaid royalty; and (iii) the return of unjust enrichment equivalent to the unpaid royalty.

3. Examining the above facts and the progress of the lawsuit in light of the legal principles as seen earlier, the following is determined.

A. According to the instant contract, the Plaintiff’s right to the Defendant is not a copyright user, and the Defendant agreed to pay the Plaintiff the royalty received from a foreign country every six months after settling accounts every six months, and thus, the Plaintiff was entitled to the share of the right to claim the royalty distribution every six months for a period of less than one year. Such right is subject to the short-term extinctive prescription of three years as stipulated in Article 163 subparag. 1 of the Civil Act.

B. In the instant case, the Plaintiff’s right to claim the distribution of copyright royalties from April 13, 2009 that the Defendant paid for the latter part of the year 2008, the extinctive prescription period from April 13, 2009. Since the instant lawsuit was filed on July 15, 2013, the right to claim the distribution of copyright royalties in the latter part of the year 2008 expired due to the expiration of the extinctive prescription period, and as long as the right to claim the distribution of copyright royalties in the latter part of the year 2008, which is the original claim, expired due to the expiration of the extinctive prescription period, the right to claim the delayed damages, etc

C. Even if the Defendant did not perform his obligation to distribute the royalty as above, the Plaintiff still has the right to claim the distribution of the royalty as stipulated in the contract of this case. Thus, the Defendant cannot be said to have obtained a benefit without any legal ground on the ground that the Defendant did not perform his obligation to distribute the royalty. This cannot be viewed as different even if the right to claim the distribution of the royalty became extinct by the statute of limitations in the second half of 2008.

4. The lower court did not err in its judgment by exceeding the bounds of the principle of free evaluation of evidence inconsistent with logical and empirical rules, or by misapprehending the legal doctrine on the scope of application of short-term extinctive prescription under Article 163 subparag. 1 of the Civil Act, thereby adversely affecting the conclusion, contrary to what is alleged in the grounds of appeal.

5. Therefore, the appeal is dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Park Sang-ok (Presiding Justice)