In a case where Party B purchased corporeal movables on the auction date of a compulsory execution case concerning corporeal movables owned by Company A as the applicant for the highest price bid while the employees of Company B participated, and thereafter they subsequently transferred corporeal movables to Party C and B through the process of sale, and as a result, it was confirmed that some of corporeal movables were unknown during the final judgment procedure of the lawsuit demanding the delivery of corporeal movables filed against Company A and the procedure of execution of delivery of corporeal movables filed by Party B, the case holding that Party A was liable for compensation for losses suffered by Party A, on the grounds that Party A, who occupied corporeal movables and used corporeal movables, had a duty of care to keep corporeal movables so that they may not be stolen and lost, even with the knowledge of the absence of such right, and thus, Party A was destroyed and lost part of corporeal movables due to its violation

In a case where Party B purchased corporeal movables on the auction date of a compulsory execution case for corporeal movables owned by Company A as the highest purchaser, and thereafter they were finally transferred to Party B through the permission of sale as the highest purchaser, and as a result, it was confirmed that some of corporeal movables were unknown during the final judgment procedure of the lawsuit demanding the delivery of corporeal movables filed against Party A and the procedure for execution of delivery of corporeal movables, which was enforced by Party B, the case holding that Party A is liable for compensation for damages sustained by Party B, on the grounds that Party A, while knowing the absence of any right, was obliged to keep corporeal movables for the purpose of its business at least not being stolen or lost, on the grounds that Party A occupied corporeal movables while using corporeal movables and neglecting some of them, and thereby infringed upon Party A’s ownership without the transfer of corporeal movables by causing their possession to be destroyed and lost, the case holding that Party A is liable for compensation for damages suffered by such unlawful acts.

Article 750 of the Civil Act

Plaintiff (Law Firm Tae, Attorneys Kim Nam-soo et al., Counsel for plaintiff-appellant)

G&L Co., Ltd.

Busan High Court Decision 2016Na53497 decided April 20, 2017

The part of the judgment of the court below against the plaintiff concerning the claim for damages shall be reversed, and that part of the case shall be remanded to Busan High Court.

The grounds of appeal are examined.

1. The lower court rejected the Plaintiff’s claim seeking compensation for damages equivalent to the value of the said corporeal movables, on the grounds that it is difficult to view that the said corporeal movables as listed in the separate sheet No. 1 of the lower judgment, which was owned by the Defendant, to be kept in custody by the Defendant with due care as a good manager, even though they had already been sold to another person.

2. However, the lower court’s determination is difficult to accept for the following reasons.

A. The reasoning of the lower judgment and the evidence duly admitted and examined by the lower court reveal the following.

1) On the date of auction on August 12, 2010 of the Compulsory Execution Case No. 2010No. 581 against each of the corporeal movables listed in the separate sheet No. 2 of the lower judgment owned by the Defendant (hereinafter “the instant corporeal movables”), Nonparty 1 purchased the instant corporeal movables with the permission of sale as the applicant for the highest price in the presence of the Defendant, who was his employee Nonparty 2 through Nonparty 2. Thereafter, on August 14, 2010, the instant corporeal movables were sold to Nonparty 3 in KRW 140 million, and again sold to Nonparty 4 in KRW 50 million on December 1, 201.

2) On December 7, 2011, Nonparty 4 filed a lawsuit against the Defendant demanding the delivery of the instant corporeal movables by the Jeju District Court 201Gadan22183. The Defendant asserted that he/she is the lawful owner of the instant corporeal movables and continued possession of the instant corporeal movables. The said court rejected the Defendant’s assertion and rendered a ruling that “the Defendant shall deliver the instant corporeal movables to Nonparty 4 on March 20, 2012.” The Defendant filed an appeal (No. 2012Na785, Jeju District Court 2012Da84998) and the final appeal (Supreme Court Decision 2012Da8498, Dec. 20, 2012) against it. However, the said ruling was concluded by its dismissal.

3) On August 7, 2013, Nonparty 4 transferred the instant corporeal movables to the Plaintiff on November 6, 2014, and notified the representative director of the Defendant of the transfer thereof and served the notification at that time to the representative director of the Defendant. In addition, Nonparty 4 transferred the Plaintiff’s damage liability to the Defendant on May 14, 2015, which was after the instant lawsuit was filed, and notified the Defendant’s representative director of the transfer thereof and served the notification at that time on November 26, 2015 to the Defendant’s representative director.

4) Based on the final judgment under the foregoing 2, Nonparty 4 filed an application for the delivery of the instant corporeal movables with Jeju District Court No. 2012No. 387. On August 8, 2014, the Jeju District Court’s enforcement officer inspected the subject matter of enforcement. Nonparty 2’s list No. 5, 14, 15, 22, 23, 25, 26, 28, 28, and 30 indicated in the lower judgment was identified as the name of unknown whereabouts or the non-sub-sub-sub-sub-sub-sub-sub-consc

5) On January 13, 2015, Nonparty 4 was handed over part of the instant corporeal movables in the process of executing the delivery of corporeal movables by the said Jeju District Court Decision 2012No. 387. During that process, some of the items listed in No. 2 List 1 and No. 4 of the lower judgment and the items listed in No. 6,8,9,20,20, and 21 of the said list were dismantled and partially replaced to a new one without the court’s permission. The said list No. 10 was additionally missing, and the remaining items were confirmed to be in storage inside the warehouse, etc.

On the other hand, on July 17, 2015, the Defendant transferred corporeal movables not executed during the above extradition execution procedure to the warehouse located at Jeju city (name omitted).

6) Based on the final judgment under the foregoing 2, the Plaintiff filed an application for delivery execution of corporeal movables (No. 2012No. 534) with the Jeju District Court, and received delivery of remaining corporeal movables in the extradition execution procedure implemented on September 11, 2015. During that process, it was confirmed that some of the articles listed in No. 20, 24 of the [Attachment 2] No. 20, and 29 of the above list were additionally missing.

B. In light of the aforementioned factual basis, the following facts were revealed: (a) in the Jeju District Court Decision 2011No. 22183, the Defendant did not assert that the instant corporeal movables were one’s own possession, and there was no part thereof; (b) it appears that Nonparty 1 acquired the ownership of the instant corporeal movables from August 12, 201 to December 1, 201; (c) it was reasonable to deem that only the Defendant occupied the instant corporeal movables after Nonparty 4 acquired the ownership of the instant corporeal movables; (d) the Defendant used the said corporeal movables without using or storing them in its original form; (e) it was not necessary to replace some of them; and (e) the place where it was removed to be kept in custody; and (e) the Plaintiff’s inspection and execution of the instant corporeal movables was carried out in the process of taking into account the fact that some of the said corporeal movables were destroyed or lost as a result of the Plaintiff’s overall inspection and enforcement of the instant corporeal movables.

In addition, according to the aforementioned facts, the Defendant was aware that Nonparty 1 participated on the auction date of the Jeju District Court 2010No. 581, which purchased the instant corporeal movables, at that time, the instant corporeal movables had been owned by another person. Moreover, Nonparty 4, who was transferred the ownership of the instant corporeal movables from Nonparty 3, filed a lawsuit against the Defendant on December 7, 201 against the Defendant on December 7, 2011 against Jeju District Court 201No. 2183, the Defendant, at the latest, knew that the instant corporeal movables was owned by Nonparty 4.

As such, the Defendant, while knowing that he had no right to the instant corporeal movables, has a duty of care to keep at least a part of the instant corporeal movables in possession for his own business, so that they may not be stolen or lost. Thus, in a case where the Defendant breached such duty of care, while using and occupying a part of the instant corporeal movables by neglecting, etc., and thereby, thereby infringing on Nonparty 4 and the Plaintiff’s ownership that was transferred the ownership of the instant corporeal movables by causing a partial destruction of the instant corporeal movables to be destroyed, then the Defendant is liable to compensate for the damages suffered by Nonparty

C. Nevertheless, the lower court dismissed the Plaintiff’s claim for damages against the Defendant, solely based on its stated reasoning. In so doing, the lower court erred by exceeding the bounds of the principle of free evaluation of evidence in violation of logical and empirical rules, or by misapprehending the legal doctrine on illegal acts, which affected the conclusion of the judgment. The allegation contained in the grounds of appeal on this point is with merit.

3. Therefore, without examining the remaining grounds of appeal, the part against the Plaintiff regarding the claim for damages among the judgment below is reversed, and that part of the case is remanded to the court below for further proceedings consistent with this Opinion. It is so decided as per Disposition by the assent of all participating Justices.

Justices Kwon Soon-il (Presiding Justice)