Plaintiff (Appointed Party) (Law Firm Lee Hydd, Attorney Cho Chang-sik, Counsel for the defendant-appointed party-appellant)

Defendant 1 and two others (Law Firm Masung, Attorney Cha Jae-il, Counsel for the defendant-appellant)

April 11, 2016

Seoul Central District Court Decision 2015Da30778 Decided November 27, 2015

1. All appeals by the Defendants are dismissed.

2. The costs of appeal are assessed against the Defendants.

1. Purport of claim

The Defendants shall deliver to the Plaintiff (Appointed Party) the real estate indicated in the attached Form.

2. Purport of appeal

The judgment of the first instance is revoked. The plaintiff (Appointed)'s claim against the defendants is dismissed in entirety.

1. Basic facts

A. Construction of the apartment of this case and registration of preservation of ownership

1) On March 28, 2003, the Seocho-gu Seoul Jongno-gu General Construction Co., Ltd. (formerly: New Stocks Construction Co., Ltd.; hereinafter “Nonindicted Company”) entered into an agreement with the Plaintiff (Appointed Party), 2, 3, 1, and 2 (Appointed Party), 2 (Appointed Party), 3, 2, 3, 3, 1, and 2 (hereinafter collectively referred to as “Plaintiffs”) holding the land on March 28, 2003, including the following: “The apartment of 20 households above the above land (hereinafter referred to as “the apartment of this case”), and the apartment of 13 households above the above land except the seven households designated by the land owners.”

2) On November 2003, the non-party company completed almost the apartment of this case, but the completion was not completed thereafter. However, upon the provisional attachment of the two shares of the designated parties among each of the individual households of the apartment of this case (Seoul Central District Court Decision 2006Kadan80127) on November 16, 2006, the non-party company registered the preservation of ownership for each of the individual households of this case in the name of the land owners (the shares of each land owner 1/5).

(b) land owners' lawsuits for delivery of buildings;

1) Around 2007, the apartment of this case was occupied by several buyers (including Defendant 1) who asserted that the apartment of this case was sold in lots by the non-party company and construction business operators who asserted the unpaid construction cost.

2) On October 5, 2007, the landowner filed a lawsuit for the delivery of a building (hereinafter “the first extradition lawsuit”) against the person who occupied the individual apartment units of the instant apartment units at the time, including Defendant 1, etc. In the said lawsuit, Defendant 1 asserted that “the sales contract (hereinafter “the sales contract of this case”) was concluded between the non-party company and the non-party company on November 12, 2004 as to the building indicated in the attached list (hereinafter “No. 503”).”

3) On February 18, 2009, the court dismissed the land owner’s claim for the delivery of a building against Defendant 1 on the ground that “the non-party company has the authority to sell or lease 503 units, and Defendant 1 concluded the instant sales contract with the non-party company in such status, and thus has a legitimate title to possess 503 units.” The part against Defendant 1 in the said lawsuit against Defendant 1 was final and conclusive as the withdrawal of appeal.

C. Lawsuits to invalidate the sales contract of the non-party company

1) The non-party company filed a lawsuit against Defendant 1 and Defendant 2 (the father of Defendant 1) seeking confirmation of the invalidity of the instant sales contract (hereinafter “the lawsuit seeking confirmation of invalidity”). The court of first instance accepted the claim of the non-party company, and the appeal and appeal by Defendant 1 and Defendant 2 were dismissed, respectively (Seoul High Court Decisions 2012Na45940, Jan. 10, 201; 2014Da8820, May 16, 2014).

2) The purport of the judgment of the appellate court in the above lawsuit was that “this case’s sales contract concluded in the name of the non-party company was concluded by a person with legitimate authority to represent the non-party company, and thus, is null and void.”

D. Co-owner's lawsuit for delivery of building by Nonparty 3

1) Nonparty 3 completed the registration of ownership transfer on February 10, 2012 with respect to 1/5 (1/25 shares) out of 1/5 shares (1/25 shares) held by Nonparty 2, one of the landowners against No. 503.

2) Nonparty 3 filed a lawsuit against Defendant 1 and three other parties on the ground that he/she was the co-owner of each household, 503, etc. (Seoul Central District Court Decision 2012Gadan79130). On January 10, 2013, the court dismissed Nonparty 3’s claim on the ground that “The registration of transfer of shares in the name of Nonparty 3 on the apartment of this case was made primarily with the intention of blocking the res judicata effect of the final and conclusive judgment in the first extradition lawsuit against the Defendants of the landowner and filing a second extradition lawsuit on the ground that he/she was the co-owner of the individual household, including Nonparty 3. Therefore, the registration of transfer of shares in the name of Nonparty 3 is null and void as it falls under the trust of lawsuit.” Nonparty 3’s appeal and appeal were dismissed (Seoul Central District Court Decision 2013Na9627, Aug. 21, 2013; Supreme Court Decision 2013Da13236, Dec. 13, 2013).

【Ground of recognition】 In the absence of dispute, entry of Gap’s 1 through 4, 7, 8 evidence and evidence of Nos. 1, 2, 7 through 10 (including additional number), obvious facts in this court, and the purport of the whole pleadings

2. The parties' assertion;

A. The plaintiff (appointed)'s assertion

1) The Plaintiff (Appointed Party) and the designated parties (hereinafter collectively referred to as “the Plaintiffs”) currently own shares of 503 shares in relation to the current 503 co-owners (i) shares of the Plaintiff (Appointed Party), 2/5 shares of the designated parties, and (ii) shares of Nonparty 4 as to Nonparty 2’s shares on the ground of “the inheritance by agreement and division on May 29, 2014,” and Nonparty 2’s share of Nonparty 4/25 shares on December 2, 2014). The Defendants occupy 503 shares without any justifiable title. Accordingly, the Plaintiffs seek delivery of 503 shares by exercising their right to claim the exclusion of disturbance against the Defendants as an act of preserving jointly-owned property.

B. The defendants' assertion

1) The land owners paid in lieu of the payment of the construction price to the non-party company in lieu of the payment of the construction price to the non-party company, and the disposal authority over 503 was reverted to the non-party

2) Meanwhile, Defendant 2: (a) operated a restaurant in front of the instant apartment site under Defendant 3 (Defendant 2’s wife); (b) acquired food credit amounting to KRW 32,389,050 against the non-party company; and (c) Defendant 3 concluded the instant sales contract under the name of Defendant 1 on the ground that the head of the division in charge of sales of the non-party company would sell the loan amounting to KRW 100 million against the non-party company ( KRW 35 million on March 5, 2004, KRW 25 million on March 20, 2004, KRW 40 million on April 11, 2004, and KRW 503,000 on April 11, 2004.

3) Although the instant sales contract was concluded in the name of the non-party company, the non-party 4 who was the representative director of the non-party company at the time concluded the instant sales contract for land owners, and the Defendants also concluded the contract with the knowledge of the land owners as the parties. Therefore, the instant sales contract should be deemed to have been concluded between the land owners and the defendant 1. Therefore, regardless of the outcome of the lawsuit seeking nullification, the instant sales contract is valid, and the Defendants have a legitimate right to possess 503

4) Meanwhile, even if the sales contract of this case is null and void, the disposition authority for 503 subparagraph belongs to the non-party company, and the plaintiffs do not have any authority over 503 subparagraph, and the plaintiffs are landowners and owners of land who enjoy the benefits of the Corporation. Thus, the defendants are liable to repay the defendant's claim, the non-party company is in fact not having any financial capacity, and exercising its claim against the non-party company against the non-party company, is in an uncertain situation, and the non-party company is filing the extradition suit of this case on the ground of the plaintiffs in order to deliver 503 subparagraph 503 without repayment of the debt, in light of the principle of fairness, the defendants' obligation to deliver 503 subparagraph 503 is concurrently in the repayment of the defendant's claim. Furthermore, considering the above circumstances, the defendant'

3. Determination

A. The facts that the plaintiffs are co-owners of 503 and the facts that the defendants possessed 503 units of 503 do not conflict between the parties. Moreover, it was confirmed through a lawsuit seeking nullification that the sales contract of this case claimed by the defendants as possession title of 503 is null and void. This is because the res judicata effect of the first extradition lawsuit does not extend to this case on the grounds that occurred after the closure of the arguments of the court of fact-finding in the first extradition lawsuit, barring any special circumstances, the defendants are obligated to deliver

B. The Defendants asserted that “this case’s sales contract is concluded with landowners and is valid.” However, this is different from the contents asserted in the first extradition lawsuit and the lawsuit seeking nullification, and it was first raised for the first time in the trial. Moreover, the evidence submitted by the Defendants and the testimony of Nonparty 4 of the party witness Nonparty 4 cannot be deemed as land owners. Thus, the Defendants’ assertion cannot be accepted.

C. The Defendants asserted to the effect that “the Defendant’s obligation of delivery and the Plaintiffs’ obligation of payment of the Defendant’s claim are concurrently performed.” However, the claims asserted by the Defendants are not claims against the non-party company but claims against the non-party company, which differs from the Plaintiffs’ claim of delivery and its parties and causes. Moreover, the mere fact that part of the Plaintiffs are the orderer who entered into a construction contract with the non-party company does not have any grounds for the Plaintiffs to bear the obligations against the non-party company’s third party. Therefore, the Defendants’ simultaneous performance defense cannot be accepted.

D. Meanwhile, the Plaintiffs still bear the duty to perform the payment agreement in kind against the non-party company as the registered titleholder under 503, and the Plaintiffs need to recover possession of 503 in order to fully implement the payment in kind agreement with the non-party company. The Defendants do not have any title to occupy 503 against the Plaintiffs, so long as they do not have any title to occupy 503, it is difficult to view the Plaintiffs’ claim for delivery as abuse of rights solely on the sole basis

4. Conclusion

Therefore, the plaintiffs' claims against the defendants shall be accepted in its entirety on the grounds of its reasoning, and the judgment of the court of first instance is just in its conclusion, and all appeals by the defendants are dismissed as it is without merit. It is so decided as per Disposition.

[Attachment]

Judges Kim Jong-young (Presiding Judge)