[1] Criteria and scope of determination as to whether an act of brokerage constitutes "act of brokerage" under Article 19 (1) of the former Real Estate Brokerage Act

[2] The meaning of "the analysis of rights to real estate subject to auction and mediation of acquisition thereof" under Article 9-2 subparagraph 6 of the former Real Estate Brokerage Act, and whether such act constitutes "the act of brokerage" under Article 19 (1) of the same Act (affirmative)

[1] Articles 2 subparag. 1 and 19(1) and (3) of the former Real Estate Brokerage Act (amended by Act No. 7638 of Jul. 29, 2005) / [2] Articles 2 subparag. 1, 9-2 subparag. 6, 17(1), and 19(1) of the former Real Estate Brokerage Act (amended by Act No. 7638 of Jul. 29, 2005)

[1] Supreme Court Decision 94Da47261 delivered on September 29, 1995 (Gong1995Ha, 3600), Supreme Court Decision 2000Da48098 delivered on December 22, 200 (Gong2001Sang, 351) / [2] Supreme Court Decision 99Do2193 delivered on December 24, 199 (Gong200Sang, 349)

Plaintiff (Attorney Kim Jong-hwan, Counsel for plaintiff-appellant)

Korean Licensed Real Estate Agents Association (Law Firm Gyeong & Yang, Attorneys Noh Jeong-soo et al., Counsel for the plaintiff-appellant)

Seoul High Court Decision 2004Na93852 delivered on June 22, 2005

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

The grounds of appeal are examined.

Article 19(1) of the former Real Estate Brokerage Act (amended by Act No. 7638 of Jul. 29, 2005; hereinafter the same shall apply) provides that "where a broker causes property damage to a transaction party by intention or negligence in performing brokerage, the broker shall be liable for such damage," and Article 19(3) provides that "the broker shall, under the conditions as prescribed by the Presidential Decree, subscribe to mutual aid or deposit under Article 35-2 in order to guarantee liability for damages under the provisions of paragraph (1)." On the other hand, with respect to the concept of "brokerage", Article 2 subparagraph 1 of the Brokerage Act provides that "the broker shall act as a broker for the sale, exchange, lease, or other acts concerning acquisition or change of rights between the transaction parties" under Article 3 subparagraph 2 of the same Article, it shall be interpreted that it is inevitable to interpret the meaning of "the act as a broker" under Article 6(1) and Article 9(1) of the Brokerage Business Act as well as the meaning of "the act as a broker" under the Social Act.

Article 9-2 subparagraph 6 of the Brokerage Business Act (amended by Presidential Decree No. 19248 of Dec. 30, 2005; hereinafter the same shall apply) provides that "a broker shall display necessary data on real estate subject to auction, verify and explain the matters prescribed in Article 17 (1) of the Brokerage Business Act and Article 22 (1) 1 through 3 of the Enforcement Decree of the same Act (amended by Presidential Decree No. 19248 of Dec. 30, 2005; hereinafter the same shall apply), such as legal relationship, restrictions on transaction or restriction on use, etc., and shall not intervene in auction procedures by providing information and advice on the economic value, and shall assist its acquisition without involvement in auction procedures (see Supreme Court Decision 9Do2193, Dec. 24, 199). Thus, even if the act falls under the brokerage business itself, it is reasonable to interpret Article 2 subparagraph 1 of the Brokerage Business Act as an "act subject to brokerage" and Article 22 (1) of the Enforcement Decree of the Brokerage Act as an act.

Examining the above legal principles in light of the evidence duly adopted by the court below and the first instance court, the judgment of the court below is somewhat insufficient. However, the judgment below is just in finding the defendant liable for deduction on the ground that the intermediary corporation engaged in the analysis and mediation of the right to real estate subject to auction at the request of the plaintiff as an intermediary act under Article 19 (1) of the Brokerage Act, and there is no error in the misapprehension of legal principles as to the above legal provisions.

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.

Justices Jeon Soo-ahn (Presiding Justice)