Plaintiff

Defendant 1 and one other

March 26, 2009

Changwon District Court Decision 2008Gadan18706 Decided October 1, 2008

1.The judgment of the first instance shall be modified as follows:

A. Defendant 1 received KRW 16,987,116 from the Plaintiff and received KRW 16,987,116 from the Plaintiff; Defendant 2 received KRW 36,621,186 from the Plaintiff; at the same time, Defendant 1 delivers each of the two floors among the buildings indicated in the attached Form to the Plaintiff.

B. The plaintiff's remaining claims against the defendants are dismissed.

2. Two minutes of the total costs of the lawsuit shall be borne by the Plaintiff, and the remainder shall be borne by the Defendants, respectively.

3. The above paragraph 1(a) may be provisionally executed.

The judgment of the first instance is revoked, and the defendant 1 shall be revoked, and the defendant 2 shall deliver each of the three floors among the buildings listed in the attached Form, and the two floors among the above buildings.

1. Basic facts

The following facts are either disputed between the parties, or acknowledged by Gap evidence 1-2, Gap evidence 6, Eul evidence 1-2, Eul evidence 4, Eul evidence 5-1, 2, 5, and 7, and the whole purport of the pleadings.

A. Defendant 1 possessed the whole third floor (hereinafter “the third floor of the instant building”) from among the buildings indicated in the attached Form, which Nonparty 1 owned by Nonparty 1, and Defendant 2 possessed the whole second floor of the attached Form (hereinafter “the second floor of the instant building”) from September 2005 to March. 2005.

B. The Defendants asserted that there was a lien on May 3, 2006, on the following grounds: (a) the building indicated in the attached Table (hereinafter “the instant building”) and on the 214.6 square meters (number omitted) of the Masan-dong (hereinafter “instant land”); and (b) the Changwon District Court 2006ta-7088 square meters (hereinafter “instant land”); and (c) the Defendants filed a respective lien on May 3, 2006, asserting that there was a lien on the instant building as the secured claim.

C. On January 24, 2007, the Defendants filed a lawsuit against each non-party 1 corporation for the claim for the construction payment of the instant building against Changwon District Court Decision 2005Da34783, and rendered a judgment on January 24, 2007 to the effect that “the non-party 1 corporation shall pay to Defendant 2 the amount of KRW 60 million, KRW 40 million, and KRW 40 million to Defendant 1, and KRW 20% interest per annum from September 29, 2006 on each of the said amounts,” and the said judgment became final and conclusive around that time.

D. Meanwhile, on the other hand, on February 28, 2007, the Plaintiff acquired ownership of the instant land and buildings by completing the registration of ownership transfer on March 22, 2007, upon receiving a decision of permission for sale in the above voluntary auction procedure, and completing the registration of ownership transfer.

E. On August 27, 2008, the Plaintiff filed a lawsuit against the possessor of the instant building, including Defendant 1 and Nonparty 2, with the Changwon District Court Decision 2007Kadan49154, which decided on August 27, 2008 that “Defendant 1 and Nonparty 2 shall pay money at the rate of KRW 56,200 per month from March 22, 2008 to March 22, 2008, respectively, to Nonparty 2 against the second floor of the instant building, and from March 2, 2008, Defendant 1 shall pay money at the rate of KRW 56,200 per month from the date of completion of possession of the instant building.”

2. The parties' assertion

A. On the basis of ownership, the Plaintiff sought the delivery of each of the second and third floors of the instant building to the Defendants, the Defendants asserted that they have the right to the construction cost according to the said final judgment regarding the instant building, and that they have not been reimbursed even until now, they have the right to the custody of the second and third floors of the instant building in order to secure the Defendants’ claim for the construction cost.

B. As to this, the Plaintiff asserts that the Defendants’ right of retention is unreasonable for the following reasons, and even if the Defendants’ right of retention is justified, the Defendants’ unjust enrichment equivalent to the monthly rent during the period of occupation and use of the instant building and the amount of damages sustained by the Plaintiff due to the Defendants’ occupation and use should be deducted from the construction cost.

① Although the principal contractor was prepared by Nonparty 1 corporation and the subcontractor as Defendant 1, Defendant 1’s wife around November 16, 2004 when the instant contract was concluded, Defendant 1’s wife Nonparty 3 was a director of Nonparty 1 corporation, and Defendant 2 was made after August 2004 when the Defendants ceased construction of the instant building, it is difficult to believe the said contract. Defendant 2 filed a lawsuit against Nonparty 1 for the claim for construction cost payment against Defendant 58 million won, while Defendant 2 filed a lawsuit against Defendant 1 for the claim for construction cost payment, it is suspected that the secured claim is correct.

(2) The Defendant’s possession of the second and third floors of the instant building goes against the effect of prohibition of disposition of seizure, since it was made after the entry of the decision of voluntary commencement of auction (No. 2005 another District Court Decision 23878) on the instant land was registered and thus, the Defendants cannot claim a lien against the Plaintiff.

③ The Defendant’s claim for construction price constitutes illegal consideration as it was acquired in the course of causing the destruction of a building that had been mortgaged by another mortgagee and constructing the instant building. It did not obtain the consent of Nonparty 1 Co., Ltd. at the time of occupying the 2 and 3 floors of the instant building, and did not grant any right to use the instant land. Although the Plaintiff used the 2 and 3 floors of the instant building, the Plaintiff did not pay any unjust enrichment equivalent to the rent corresponding thereto. The occupancy of the 2 and 3 floors of the instant building violates Article 29(4) of the Housing Act, and ultimately, the Defendants’ possession of the 2 and 3 floors of the instant building constitutes tort.

④ Even if the Defendants’ lien on the 2 and 3th floor of the instant building was established, defects occurred in the instant building due to the Defendants’ failure to perform his/her duty of care as a good manager while occupying the 2 and 3th floor of the instant building. Since the Defendants used the instant building 2 and 3 floors, the Defendants’ lien on the 2 and 3th floor of the instant building was extinguished.

(5) The defendants' right of retention is against the abuse of rights or the principle of good faith inasmuch as it is prejudicial to the successful bidder, etc. who occupies the building and claims a right of retention on the ground that construction was conducted only on the building, which is anticipated to

3. Determination as to whether a lien exists

A. First, in light of the overall purport of pleadings as to whether the Defendants’ claim for construction cost is false, Eul evidence Nos. 1 through 4, Eul evidence Nos. 5-1, 2, 5, and 7 as to whether the above claims for construction cost of the building of this case are false, and considering the following facts: ① between the non-party 1 corporation and the defendant 1, on Nov. 16, 2004, the construction cost of the building of this case was KRW 40 million; and the construction period was determined from Nov. 16, 2004 to Nov. 5, 2005 by the court below for the above fact that the Defendants’ claim for construction cost of this case was submitted to the non-party 2 to the non-party 4 corporation, and there was no other evidence that the Defendants’ claim for construction cost of this case was entered into on May 31, 2004 to the non-party 20, the construction period of this case was within 800,000 won.

B. Next, we examine the plaintiff's assertion that the possession of the second and third floors of the building of this case of this case of the defendants against the effect of the prohibition of disposition of seizure, and even according to the plaintiff's assertion, the decision of voluntary decision of the auction of this court around 2005 to 23878 of this court is against the land of this case. Thus, even if the second and third floors of the building of this case were occupied after the entry registration, it cannot be viewed that the plaintiff's assertion is against the effect of prohibition of disposition of seizure of real estate following the decision of voluntary decision of the auction.

C. The Plaintiff’s assertion that the possession of the 2 and 3th floor of the instant building by the Defendants was caused by a tort is presumed to have been occupied in good faith, peace, and public performance, and the possessor’s right to exercise the right is presumed to be lawful. As such, the Plaintiff seeking delivery of the 2 and 3th floor of the instant building was obliged to prove that the possession of the 2 and 3th floor of the instant building by the Defendants was commenced as a tort, or that at least the Defendants knew, or did not know, due to gross negligence, that the Defendants did not have the right to possess at the time of expense disbursement. The Plaintiff’s assertion that the possession of the 2 and 3th floor of the instant building by the Defendants was caused by a tort is nothing more than the Plaintiff’s independent opinion or there is no evidence to acknowledge it differently.

D. In addition, the Defendants’ claim of lien on the 2 and 3th floor of the instant building violates the abuse of rights or the principle of good faith, or the Defendants did not fulfill their duty of care as a lien holder on the 2 and 3rd floor of the instant building. The Plaintiff’s above assertion is rejected, unless there is any evidence to deem that the Defendants failed to

E. We examine the defendants' assertion that the lien was extinguished due to the use of the second and third floors of the building in this case by the defendants. According to Article 323 of the Civil Code, the lien holder can receive the negligence of the object of custody and use the proceeds of use equivalent to the rent gained by the defendants from occupying and using the second and third floors of the building in this case, which are the object of custody, in preference to other claims. However, as seen thereafter, there is no evidence to acknowledge that the profits gained by the defendants from the use of the second and third floors of the building in this case fall short of the defendants' appropriation for the construction price and otherwise the defendants' claim for construction price against the non-party 1 corporation was extinguished, the plaintiff's assertion is without merit.

F. Therefore, Defendant 1 has a claim for the construction cost of KRW 40 million against Nonparty 1 corporation, and Defendant 2 has a claim for the construction cost of KRW 60 million. Thus, the Defendants may refuse the Plaintiff’s request for extradition by exercising a right of retention to secure the payment of the said claim against the successful bidder of the instant building.

4. Whether and scope of the judgment of repayment has been rendered;

(a) Whether a judgment of repayment has been rendered;

The plaintiff asserts that the right of retention of the defendants is to be performed when the right of retention is recognized, and therefore, Article 91 (5) of the Civil Execution Act, which applies mutatis mutandis in the auction procedure to exercise the security right pursuant to Article 268 of the same Act, provides that "the purchaser is liable to repay the claims secured by the right of retention to the lien holder" and thus, the lien holder cannot claim the buyer for the repayment of the secured claim because "the meaning of the right of retention is not that the personal obligation is taken over." Thus, the lien holder may still refuse the delivery of the secured claim until his/her secured claim is repaid, and thus, if the buyer intends to obtain the secured claim, the lien holder is bound to pay the secured claim, so it is reasonable for the court to order the delivery of the goods in exchange for the claim secured by the defendant in the lawsuit to claim the delivery of the goods (see Supreme Court Decision 69Da1592, Nov. 25, 196).

However, as seen earlier, the Defendants’ claim for construction cost, which is the secured claim of the right of retention on the instant building, is based on the fact that the amount of the said claim for construction cost was KRW 40 million against Defendant 1, and KRW 60 million against Defendant 2. However, as seen earlier, the amount of the said claim for construction cost, as seen earlier, shall be deducted from the profits acquired by the Defendants on the 2 and 3th floor of the instant building. As such, the Defendants are obligated to receive from the Plaintiff the remainder of the amount obtained by deducting the profits accrued from the use of the 2 and 3rd floor of the instant building from the amount of the said claim for construction cost ( KRW 40 million, KRW 60 million, KRW 200, KRW 60,000).

B. Scope of deduction such as unjust gains

1) First of all, the Defendants’ profits from the rent of 2 and 3 stories of the instant building should be deducted from the Defendants’ claim for construction cost. However, as seen earlier, considering the overall purport of pleading No. 34, the amount equivalent to the rent is 6,586,543 won from March 22, 2007 to March 21, 208 (the Plaintiff’s profits from the rent of 20.36.20 to March 21, 2008 from March 22, 2008). Thus, the Plaintiff’s profits from the rent of 20.3 to 208.36 billion won from March 21, 2008 (the rent of 20.3 billion won from March 22, 2008 to the price of the instant building) can be acknowledged as 6,674,221 won from March 21, 200 to the price of the instant building.

2) The Plaintiff’s damages amount as follows due to Defendant 2’s possession of the instant building: (i) the Plaintiff could not use the 1,4,5 floors of the instant building due to Defendant 2’s unreasonable request for auction against the instant building; (ii) the Plaintiff’s objection against the decision to commence auction from April 29, 2008, when the registration was completed due to the decision to commence auction from April 2008 to February 19, 2009, and the final and conclusive judgment of February 14, 216,760, and (ii) Defendant 2’s interference with the construction of the instant building, it is difficult to view that Defendant 2 was liable to compensate the Plaintiff for damages due to the Plaintiff’s interference with the Plaintiff’s use of the 5th floor, and that Defendant 2,847,400 (the amount equivalent to the Plaintiff’s damages and construction cost due to the destruction or damage of the instant building, or that the Plaintiff’s negligence should not be considered to have been attributable to all of the Defendants’ damages.

3) Meanwhile, the Defendants spent expenses to preserve the possession of the instant building 2 and 3, and the amount of such expenses reaches KRW 9,372,800, and KRW 10,107,80 by Defendant 2’s wife Nonparty 2, Defendant 1’s wife and Nonparty 2’s wife constituted KRW 10,107,80. Thus, the Defendants’ assertion that the expenses incurred by the Defendants should be deducted or offset from the profits arising from the possession and use of the instant building. However, there is no evidence to support that the Defendants paid the necessary or beneficial expenses to seek reimbursement to the Plaintiff. Therefore, the Defendants’ assertion is groundless

(c) Conclusion

① As to Defendant 1, the unpaid construction cost of KRW 40,00,00 (the duty to pay the construction cost and the duty to deliver the building is in simultaneous performance relationship. As seen earlier, since the Defendants possessed the building of this case since they completed the construction of the building of this case, the Plaintiff’s delayed liability may not accrue, and thus, the damages for delay due to the final and conclusive judgment of the construction contract of this case shall not be included in the repayment obligation) shall be deducted from September 29, 2005 to March 21, 2009 from KRW 23,012,884, which is the profits from the use of the third floor of the building of this case, from KRW 60,00,000 to KRW 60,000 to KRW 30,00, KRW 2005 to KRW 2378,816, KRW 2816, KRW 3608, KRW 2088, KRW 16816, KRW 2008, KRW 163684,200.

5. Conclusion

Therefore, the plaintiff's claim of this case against the defendants is justified within the scope of the above recognition and the remaining claim is dismissed as it is without merit. Since the judgment of the court of first instance is unfair with different conclusions, the plaintiff's appeal is partially accepted and the judgment of the court of first instance is modified as above, and it is so decided as per Disposition.

[Attachment Form Omission of Indication of Real Estate]

Judges Choi Sung-sung (Presiding Judge) Kim Jong-young