2018Da214210 Return, etc. of down payment

Plaintiff

Law Firm Jin- Training, Counsel for defendant-appellant

[Defendant-Appellee] Plaintiff 1 and 1 other

Defendant

Law Firm Cho & Lee, Counsel for the defendant-appellant

[Defendant-Appellee]

Suwon District Court Decision 2017Na65449 Decided January 18, 2018

July 15, 2021

The judgment of the court below is reversed, and the case is remanded to Suwon District Court.

The grounds of appeal are examined.

1. Case overview and key issue

A. According to the reasoning of the lower judgment and the record, the following facts are revealed.

On March 25, 2016, the Plaintiff entered into a contract for leasing the instant officetel from April 22, 2016 to April 21, 2018 (hereinafter referred to as “instant lease contract”) and paid 20 million won to the Defendant as the down payment.

Article 7 of the instant lease agreement provides that “If the details of the instant contract are not fulfilled, the other party may notify the person who has failed to perform the contract in writing and cancel the contract, the other party may claim damages due to the cancellation of the contract to the other party, and the other party shall be deemed as the basis for compensation for damages, unless there is any separate agreement.” The current heating method is stipulated as a special agreement, which is not the floor heating system but the lessee wishes to provide the floor heating. Therefore, the lessor shall complete the heating work after the contract by not later than the remainder date ( April 22, 2016) and shall not interfere with the occupancy.”

On April 5, 2016 and April 6, 2016, the Defendant: (a) explained the telephone call to the Plaintiff; (b) the illegality of floor heating works; and (c) difficulties in construction; and (d) stated that the Defendant installed carpets in lieu of floor heating works; or (c) installed electric panel construction works.

On April 6, 2016, the Plaintiff sent to the Defendant the instant lease agreement with the word “final floor construction is a carpet and a stopin s to be a construction site?” On the same day, the Plaintiff sent to the Defendant a certification that the instant lease contract will be rescinded.

B. The Plaintiff asserted that the rescission of the instant lease agreement was lawful, and filed the instant lawsuit claiming the return of down payment and damages, as the Defendant made clear that he/she had expressed his/her intent to refuse performance with respect to the floor heating construction stipulated in the special agreement clause. Accordingly, the Defendant asserted that the cancellation was unlawful on the ground that the Defendant presented an alternative to the floor heating construction and did not express his/her intent to refuse performance.

The issue is whether there was a defendant's refusal of performance as a requirement for rescinding a contract without notice in accordance with Article 544 of the Civil Code.

2. Lower judgment

The lower court determined that there was Defendant’s refusal of performance on the following grounds.

The relevant construction laws prohibit floor heating using hot-water, hot-water, or electric heat, etc. on the instant officetels. The Defendant continuously demanded the Plaintiff to provide heating by other means, such as the floor heating system, as it is impossible to perform the floor heating system. The Nonparty, who arranged the instant lease contract, also considered other means, because he/she should be within the floor heating system. Although the Plaintiff finally sent a letter asking the Defendant whether to harm the floor heating system, the Defendant did not give any answer. Although the Defendant was notified of the termination of the contract, the floor heating system was performed by the Defendant, but this is merely a situation after the termination of the contract.

3. Supreme Court Decision

A. Article 390 of the Civil Act provides, “In a case where an obligor fails to perform his/her obligation in good faith, the obligee may claim damages. However, this shall not apply if the obligor has become unable to perform his/her obligation without any intention or negligence.” Article 544 of the Civil Act provides, “In a case where one of the parties fails to perform his/her obligation, the obligor may rescind the contract with a reasonable period fixed, and if the obligor fails to perform his/her obligation within the said period, the other party may rescind the contract.” However, if the obligor expresses his/her intention to refuse the performance in advance, it does not require a peremptory notice.” It is apparent that the obligee may rescind the contract without demanding the performance.

Furthermore, in cases where an obligor clearly expresses his/her intent not to perform a contract even before the due date, the obligee may rescind the contract or claim damages against the obligor on the ground of the obligor’s refusal of performance, without the obligor’s demand for performance. Whether the obligor clearly expresses his/her intent not to perform the contract ought to be determined by comprehensively examining the party’s behavior and specific circumstances before and after the contract (see Supreme Court Decision 2004Da53173, Aug. 19, 2005). In cases of cancelling the contract due to the foregoing refusal, the obligee’s demand for the performance of one’s own obligation in the simultaneous performance relationship is unnecessary without the obligee’s demand for the extension of performance (see Supreme Court Decision 92Da9463, Sept. 14, 192). Therefore, in order to clearly recognize the intention of refusal of performance by comparing the termination of contract on the ground of delay of performance with the obligor’s refusal of performance, the obligee’s intention of refusal of performance is apparent and final (see Supreme Court Decision 2004Da297171, supra).

B. Examining the following circumstances revealed in the reasoning of the lower judgment and the record in light of the aforementioned legal doctrine, there is room to deem that the Defendant is not clearly willing to refuse performance.

(1) Examining the dialogue between the Plaintiff and the Defendant on April 5, 2016 and April 6, 2016, the part that directly expresses the intent to refuse floor heating construction even if the Plaintiff does not finally adopt any other alternative is difficult.

(2) On April 6, 2016, the Plaintiff sent to the Defendant a certificate of the content that the instant lease contract will be rescinded immediately after sending the letter of confirmation that “the floor construction works are the carpets, the electric board, or the construction works,” to the Defendant. In light of the fact that the Plaintiff sent the letter of confirmation and the short time before notifying the rescission, there may be inevitable circumstances that the Defendant could not immediately respond to the letter of confirmation and that the Defendant does not have an obligation to immediately respond to the letter of confirmation to the Defendant, it cannot be readily concluded that the Defendant expressed to the Plaintiff the intent to refuse to comply with the floor heating works.

(3) Rather, on April 8, 2016, the Defendant received the foregoing confirmation letter, and requested the floor heating construction to the business entity on the water-based net after the mold, and completed the floor heating construction work on April 11 through April 18, 2016 with the resident’s consent. On April 20, 2016, the Defendant informed the Plaintiff of such fact.

(4) In full view of the above circumstances at the time of the contract or thereafter, even if the Defendant knew the Plaintiff to adopt another alternative instead of floor heating construction works, or the Defendant did not immediately respond to the confirmation letter sent by the Plaintiff, it cannot be said that the refusal intention on the implementation of floor heating works is clearly acknowledged to the Defendant.

C. Nevertheless, the lower court determined that the Defendant had the intent to refuse performance on the sole basis of the foregoing facts. In so doing, the lower court erred by misapprehending the legal doctrine on the refusal of performance, or failing to exhaust all necessary deliberations, thereby exceeding the bounds of the principle of free evaluation of evidence against logical and empirical rules,

4. Conclusion

The Defendant’s appeal is with merit, and 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 Noh Jeong-hee

Justices Kim Jae-hyung

Justices Ansan-chul

Justices Lee Dong-gu