[1] The purpose of the "defense of the simultaneous performance" system, and the case where a right to defense of simultaneous performance can be acknowledged even if each of the obligations to be borne by the parties is not an obligation in the bilateral contract with its own consideration

[2] Whether the lessee’s duty to return the leased object following the termination of the lease agreement and the lessor’s duty to compensate for damages arising from the lessor’s failure to recover the premium is concurrently performed (negative)

[1] The right to defense of simultaneous performance is a system where each party's obligation is related to each other's obligation on the basis of the concept of fairness and good faith, and the relation between performance is recognized, and either party may refuse to perform his/her obligation when the other party requests performance of the other party's obligation without performing the other party's obligation or not providing the other party's obligation. In light of the purport of the system, even if each obligation to be borne by the party is not in a quid pro quo relationship in the bilateral contract, the right to defense of simultaneous performance may be acknowledged in a case where both obligation is deemed to have a quid pro quo meaning arising from the same legal requirement or is deemed to have been performed fairly from the perspective of fairness.

[2] Although a lessee’s obligation to return the leased object arises upon termination of a lease contract, the lessor’s obligation to compensate for damages due to interference with the lessor’s collection of the premium constitutes a breach of the duty to protect the opportunity to recover the premium under the Commercial Building Lease Protection Act, so both obligations are not only arising from a separate cause, not from the same legal requirement, but also from the perspective of fairness, it is difficult to recognize the relation of performance.

[1] Article 536 of the Civil Code / [2] Articles 536, 615, and 654 of the Civil Code, Article 10-4 of the Commercial Building Lease Protection Act

[1] Supreme Court Decision 2017Da291593 Decided July 24, 2018 (Gong2018Ha, 1770)

Plaintiff (Attorney Jeong-hee et al., Counsel for plaintiff-appellant)

Defendant 1 and one other (Law Firm Yun, Attorneys Yoon-Gyeong et al., Counsel for the defendant-appellant)

Suwon District Court Decision 2017Na68141 decided May 30, 2018

All appeals are dismissed. The costs of appeal are assessed against the Defendants.

The grounds of appeal are examined.

1. The judgment of the court below

With respect to the claim for extradition of the leased object on the ground of the expiration of the lease term of the Plaintiff, the Defendants asserted simultaneous performance that the Plaintiff could not deliver the leased object until the Plaintiff fulfilled the obligation to compensate for damages due to interference with the collection of premiums, and the lower court determined as follows and rejected the Defendant’s defense.

A. 1) Since the entire term of the instant lease agreement exceeds five years, the Defendants cannot demand the Plaintiff to renew the contract. Thus, the Plaintiff did not bear the duty to protect the opportunity to recover the premium pursuant to Article 10-4(1) of the Commercial Building Lease Protection Act, and the Plaintiff’s duty to protect is acknowledged. However, there is no evidence to prove that the Defendants arranged a new lessee to the Plaintiff, or the Defendants refused to conclude a lease agreement with a new lessee arranged by the Defendants without justifiable grounds, and there is no evidence to prove that the Defendants committed an act of obstructing the collection of premium, such as refusing to conclude a lease agreement with the new lessee arranged by the Defendants. Accordingly,

B. Even if the Plaintiff is liable for damages due to interference with the collection of premiums, there is no relation between the lessor’s duty to compensate for damages due to interference with the collection of premiums and the lessee’s duty to return the leased object. Therefore, the Defendants’ simultaneous performance defense is without merit.

2. The Defendants’ ground of appeal

The Defendants asserted that the lower court, which did not recognize the Plaintiff’s liability for damages, erred by misapprehending the legal doctrine as to Article 10-4(1) of the Commercial Building Lease Protection Act and violating the bounds of the principle of free evaluation of evidence as to whether to recognize

3. Judgment of the Supreme Court

A. The right to defense of simultaneous performance is a system in which each party’s obligation is related with each other’s obligation on the basis of the concept of fairness and good faith, thereby recognizing the relationship of performance and allowing either party to refuse to perform his/her obligation when either party requests performance of the other party’s obligation without performing the other party’s obligation or not providing the other party’s obligation. In light of the purport of such system, even if each obligation to be borne by the party is not in a quid pro quo relationship in the bilateral contract, in cases where both obligations are of a quid pro quo meaning arising from the same legal requirement or are deemed to be performed fairly from the perspective of fairness, a right to defense of simultaneous performance may be acknowledged (see, e.g., Supreme Court Decision 2017Da291593, Jul. 24, 2018).

However, the lessee’s duty to return the leased object arises upon the termination of the lease contract, but the lessor’s duty to compensate for damages due to the interruption of the lessor’s right to recover the premium is a breach of the duty to protect the opportunity to recover the premium as prescribed by the Commercial Building Lease Protection Act. Therefore, both obligations are arising from a separate cause, not only the same legal requirement, but also from the perspective of fairness. Therefore, the lower court’s rejection of the Defendants’ simultaneous performance defense is justifiable.

B. Although the court below determined that the lessor did not have the duty to protect the opportunity to recover the premium where the lessee is unable to exercise the right to demand renewal of the contract, it erred by misapprehending the legal principles on the requirements to protect the opportunity to recover the premium of the lessor prescribed in Article 10-4(1) of the Commercial Building Lease Protection Act (see Supreme Court Decision 2017Da225312, 225329, May 16, 2019). However, as long as the Defendants cannot assert the right to defense of simultaneous performance, the lower court’s error does not affect the judgment. Furthermore, even if the lower court’s judgment as to whether to recognize the right to collect the premium, contrary to what is alleged in the grounds of appeal, erred by violating the bounds of the principle of free evaluation of evidence, etc., the Defendants’ defense of simultaneous performance cannot be accepted,

4. Conclusion

Therefore, all appeals are 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 Lee Ki-taik (Presiding Justice)