[1] Legal nature and duration of the right of completion of the promise for payment in substitution

[2] The method of exercising the right to conclude a promise for payment in substitution

[3] The case holding that there was an expression of intent to complete the promise for payment in kind in light of a series of judicial acts by the person having the right to complete the promise for payment in kind

[1] The right to complete a promise for payment in kind shall be exercised within a certain period if the parties agree to the exercise period as a kind of right to form, and if there is no such an agreement, within 10 years from the time when the rights occur, and when this period expires, the right to complete a promise shall become extinct upon the lapse of the limitation period.

[2] The declaration of intent of the completion of the promise for payment in kind is not a special method but a declaration of intent to the contractor.

[3] The case holding that there was an expression of intent to complete a promise for payment in kind in light of a series of judicial acts and circumstances before and after the person having the right to complete the promise

[1] Articles 162, 466, 564, and 607 of the Civil Act / [2] Articles 162, 466, 564, and 607 of the Civil Act / [3] Articles 162, 466, 564, and 607 of the Civil Act

[1] Supreme Court Decision 91Da44766, 44773 decided Jul. 28, 1992 (Gong1992, 2552), Supreme Court Decision 94Da22682, 22699 decided Nov. 10, 1995 (Gong1995Ha, 3904)

[Defendant-Appellee] Defendant 1 and 3 others

Defendant (Attorney Kang Dong-chul, Counsel for defendant-appellant)

Busan District Court Decision 96Na8250 delivered on February 5, 1997

The judgment below is reversed, and the case is remanded to Busan District Court Panel Division.

The grounds of appeal by the plaintiff and his/her attorney are also examined.

1. According to the reasoning of the judgment below, the court below rejected the Plaintiff’s claim on the ground that: (a) the Defendant borrowed money from Co-Defendant 1 of the court of first instance as indicated in its judgment from Non-Party 1, and made a promise for payment in lieu of payment in substitution for the transfer of the instant building owned by the Defendant to Non-Party 1, if it is impossible for the Defendant to repay the money by the due date; (b) the Plaintiff filed the instant lawsuit against the Defendant on May 25, 1995, claiming the implementation of the procedure for ownership transfer registration against the Defendant on the ground that the Plaintiff purchased the instant building from Non-Party 1, and the right to complete the pre-payment based on the pre-payment in substitution with the Defendant was exercised; and (c) the right to complete the pre-payment based on the pre-payment in substitution with the Defendant was extinguished by the lapse of the exclusion period prior to the filing date of the instant lawsuit.

2. The right to complete a promise for payment in kind is a kind of right to form a contract between the parties and to exercise the right within the period of exercise, if there is no such an agreement, within 10 years from the time when the right occurred, and the right to complete a promise becomes extinct upon the lapse of the exclusion period (see Supreme Court Decisions 91Da44766, 44773, Jul. 28, 1992; 94Da22682, 22699, Nov. 10, 1995, etc.).

However, the expression of intent of the reservation for payment in kind does not require any specific method, but can be made by the declaration of intention to the obligor. According to the records, around 1984, the Busan District Court 84Da2318 filed a lawsuit against the Defendant for an order of cancellation of the right to collateral on the building of this case, and the judgment was concluded on September 3, 1985, and around August 2, 1985, the above court 85Ka2111 for the purpose of preserving the right to claim ownership transfer upon the exercise of the right to collateral, and the court 85Ka21237, and the court 100's request for provisional disposition against the Defendant was also made within 10 years prior to the above court 9's execution of the right to demand payment in kind, and the court 20 days prior to the above court 9's execution of the right to demand payment in advance 10 days prior to the above court 9's execution of the right to claim payment in kind.

Therefore, the judgment of the court below which held that the right to complete the reservation based on the promise for payment in substitutes to the defendant by the non-party 1 had already been extinguished by the expiration of the exclusion period prior to the institution of the lawsuit in this case is erroneous in the misunderstanding of facts against the rules of evidence or in the misunderstanding of legal principles as to the declaration of intent

3. Therefore, the judgment of the court below is reversed, and the case is remanded to the court below. It is so decided as per Disposition by the assent of all participating Justices

Justices Cho Chang-hun (Presiding Justice)