Medical practitioner Co., Ltd. (Law Firm Spah, Attorneys Kim Jong-tae, Counsel for the plaintiff-appellant)

Gwangju City of Gyeonggi-do (Law Firm tower, Attorneys Cho Young- Line, Counsel for the plaintiff-appellant)

December 9, 2009

Suwon District Court Decision 2008Gahap9538 Decided May 1, 2009

1. The part against the plaintiff corresponding to the money ordered to be paid under the judgment of the court of first instance shall be revoked.

The defendant shall pay to the plaintiff 508,337,704 won with 5% interest per annum from September 13, 2008 to January 13, 2010, and 20% interest per annum from the next day to the date of full payment.

2. The plaintiff's remaining appeal is dismissed.

3. Of the total litigation costs, 80% is borne by the Plaintiff, and the remainder is borne by the Defendant, respectively.

4. The monetary payment portion under paragraph (1) may be provisionally executed.

The judgment of the first instance shall be revoked. The defendant shall pay to the plaintiff 2,400,000,000 won with 20% interest per annum from the day after the delivery date of a copy of the complaint of this case to the day of complete payment.

1. Basic facts

The following facts may be acknowledged in full view of each of the statements in Gap's evidence Nos. 1, 3, 6, 8, Eul's evidence Nos. 1, 2, 4, 5, 6, 7, 9, 10, 12, 13, 14, 15, 16, 17, 18, 4, 6, 8 (including branch numbers), and the testimony of non-party No. 2 of the first instance trial.

A. On August 16, 2007, in order to secure the Plaintiff’s sales claim against Nonparty 1, the Plaintiff made a transaction of selling home appliances with Nonparty 1 (the Nonparty in the judgment of the Supreme Court), on which the Suwon District Court completed the registration of the establishment of a neighboring mortgage (hereinafter “the creation of a mortgage”) with respect to the land of 3,506 square meters (hereinafter “instant land”) owned by Nonparty 3 in Suwon-si (hereinafter “non-party 3”), the Suwon District Court, Sung-nam Branch Branch Office of 5087, August 17, 2007, against the maximum debt amount of 2.4 billion won, and the debtor completed the registration of the establishment of a neighboring neighboring mortgage (hereinafter “the establishment of a mortgage of this case”). At the time of the registration of the establishment of a mortgage of this case, the Plaintiff’s sales claim against Nonparty 1 was KRW 2,635,609,285, and the land of this case was registered with the maximum debt amount of the non-party 4 corporation in the first order.

B. On the other hand, around March 1, 2006, the Gwangju City Mayor calculated the officially assessed land price as KRW 109,000 per square meter by taking the land characteristics of the instant land as natural forests according to the Public Notice of Values and Appraisal of Real Estate Act (hereinafter “Real Estate Public Notice Act”) and the Enforcement Decree thereof, in order to determine and publicly announce the officially assessed land price as of January 1, 2006 of the instant land. In addition, the ASEAN appraisal corporation requested the verification thereof. The ASEAN appraisal corporation corrected the land characteristics of the instant land from natural forests to industrial use, thereby calculating the land price of the instant land as KRW 820,000 per square meter.

C. Accordingly, the Gwangju City had landowners and interested parties peruse the land price and present their opinions in accordance with the above statutes, but if interested parties such as landowners do not present any opinions, the Gwangju City Real Estate Evaluation Committee decided on May 31, 2006, the officially assessed individual land price as of January 1, 2006 was determined and publicly announced as KRW 820,000 per square meter.

D. Meanwhile, as seen above, the land characteristics applied at the time of calculating the officially assessed individual land price as of January 1, 2006 were reflected as they were, and the land characteristics were determined and publicly announced as of January 1, 2007 as of January 1, 2007, the individual land price as of January 1, 2008 was determined and publicly announced as KRW 900,000 per square meter per square meter, and the individual land price as of January 1, 2008 was determined and publicly announced as of January 1, 2008, and there was no objection by interested parties, such as the landowner.

E. However, in the course of the regular land survey on January 1, 2008, the public officials belonging to the defendant discovered that the land characteristics of the instant land were natural pictures, and accordingly, the Gwangju City Mayor determined the officially assessed individual land price as of January 1, 2006 and the officially assessed individual land price as of January 1, 2007, followed the statutory procedure, and made a correction of the officially assessed individual land price as of February 29, 2008 and the officially assessed individual land price as of January 1, 2007 as of January 22, 2000 and the officially assessed individual land price as of January 1, 2007.

F. Meanwhile, on the other hand, on December 12, 2007, the Suwon District Court rendered a voluntary decision to commence the auction (hereinafter “instant auction procedure”) on the instant land at the Plaintiff’s request on December 12, 2007. At the instant auction procedure, the land was appraised at KRW 298,010,000, and the said court decided to grant the temporary auction permit on February 16, 2009, following the procedure for re-sale.

2. Judgment on the plaintiff's claim

A. The plaintiff's ground of claim

(1) At the time of calculating the officially assessed individual land price as of January 1, 2006 as of the instant land, the public official in charge of the Defendant’s position found the characteristics of the instant land differently from the actual ones due to negligence in the course of performing duties, which did not properly conduct a field investigation, and was calculated on January 1, 2007 as the amount much higher than the appropriately assessed individual land price (3,15,400,000, the officially assessed individual land price as of January 1, 2007 was much higher than the appropriately assessed individual land price (3,506㎡ x 90,000,000).

(2) However, the Plaintiff trusted the officially assessed individual land price of the instant land that was mistakenly calculated as above, and the instant land alone deemed that the Plaintiff could sufficiently secure the Plaintiff’s claim against Nonparty 1. Nonparty 1 supplied goods in addition to the instant land without setting up a collateral for other real estate, on which Nonparty 1 seeks to offer the instant land as collateral, while continuously trading with Nonparty 1.

(3) If the Plaintiff knew that the officially assessed individual land price of the instant land was erroneously determined and publicly announced, the Plaintiff did not set up a security against other real estate which Nonparty 1 had intended to provide as a security or supply additional goods to Nonparty 1, and eventually, the Plaintiff was not reimbursed KRW 2,415,806,00,000, which is the maximum amount of debt, due to the supply of additional goods without setting a security against other real estate and continuously trading. In the event that the officially assessed land price of the instant real estate was not mistakenly determined and publicly announced, the Plaintiff could have been reimbursed KRW 2,400,000,000, which is the maximum amount of debt, by exercising the right to collateral security established on the instant real estate, and the Defendant was obligated to compensate for the damages incurred by the Plaintiff due to a tort committed by a public official under his jurisdiction.

(4) Even if not, the plaintiff renounced the establishment of a security for five other real estate in trust in the publicly announced individual land price of this case to offer additional security. If the officially announced price of the real estate of this case was properly published, the plaintiff also created a security for the five above real estate in which the non-party 1 expressed his intention to offer the real estate as security. In such a case, the plaintiff could be reimbursed for 338,024,067 won, which is an amount equivalent to the price of the above real estate by realizing the above real estate, even though it was not repaid, and the plaintiff suffered a loss not being reimbursed for it. Since the plaintiff supplied the non-party 1 with the goods equivalent to the total amount of KRW 815,216,670, which is the price of the above real estate after the completion of the establishment registration of the neighboring real estate of this case, the defendant was liable to compensate the plaintiff for the total amount of KRW 1,153,240,737 won (338,067,816,70).

B. Determination

(1) Occurrence of damages liability

(A) Therefore, the point of view is as seen earlier, which had been erroneously applied to the land of this case on January 1, 2007 due to the erroneous application of the industrial use of the land of this case, despite its nature. Meanwhile, Article 1 of the Public Notice of Real Estate Act provides that “The purpose of this Act is to establish a reasonable price for real estate by publicly announcing the reasonable price of real estate, such as land and housing, and to promote an efficient utilization of the land and to contribute to the development of the national economy by prescribing matters concerning appraisal of land, buildings, movables, etc., and further, the Minister of Land, Transport and Maritime Affairs shall determine and assess the reasonable price as of the basic date of the land of this case on a group of land which are generally recognized as being similar to the natural and social conditions, and if the land price of this case is to be determined and publicly announced through deliberation by the Central Evaluation Committee on Real Estate under Article 19, the officially announced individual land price shall be determined and publicly announced to the public, and the land price of this case shall be determined and publicly announced individually by the State or local government.”

(B) As to this case, Article 11(3) of the Public Notice of Real Estate Act provides that "where the head of a Si/Gun/Gu determines and publicly announces the officially assessed individual land price, he/she shall use the land price index on the basis of one or more officially assessed land prices deemed to have similar utility values to the land in question, and shall determine the land price, but shall maintain a balance between the price and the officially assessed land price." Article 11(4) provides that "where the head of a Si/Gun/Gu calculates the price of individual land to determine and publicly announce the officially assessed individual land price, he/she shall undergo an inspection by an appraisal business operator and the opinions of the landowners and other interested parties: Provided, That where it is deemed unnecessary to verify the land price, the head of a Si/Gun/Gu may omit an inspection by an appraisal business operator under the conditions as prescribed by the Presidential Decree, such as the change of land price, and where the head of a Si/Gun/Gu or the head of a Gu intends to obtain verification under paragraph (4) of the officially assessed individual land price, he/she shall again calculate the officially assessed individual land price of the land price."

(b) Scope of damages;

(1) Furthermore, in relation to the scope of damages that the Defendant is liable for, the damages suffered by the Plaintiff due to the Plaintiff’s erroneous calculation and publication of the officially assessed individual land price of the instant land as above are the amount equivalent to the amount that the Plaintiff provided other real estate than the instant land as security if the officially assessed individual land price of the instant land was properly publicly announced, or the amount that was not reimbursed out of the goods that the Plaintiff believed to have been provided as security for the instant real estate and believed to have been provided as security for the instant real estate (if the Plaintiff did not have mistakenly assessed the officially assessed individual land price of the instant real estate, the amount that would have been 2,400,000 won that was able to be reimbursed by exercising the right to collateral security established on the instant real estate is not accepted by the Plaintiff’

(2) Therefore, in a case where the officially assessed individual land price of the instant land was calculated appropriately, the Plaintiff’s assertion on this part is without merit, in light of the following: (a) whether there was a real estate that was mistakenly publicly announced publicly and additionally provided, and whether there was a real estate that was not provided with additional security, despite the fact that the Plaintiff could have been provided with additional security besides the instant land by Nonparty 1; (b) whether there was an erroneous publicly announced individual land price of the instant real estate; and (c) whether there was a real estate that was not provided with additional security by Nonparty 1.

(3) Next, since the officially assessed individual land price of the instant real estate announced by the Plaintiff is appropriate, comprehensively taking account of the health class, Gap evidence 6, Gap evidence 12-2, 3, and 4 as to whether the instant real estate was supplied in trust and additionally, and the testimony of non-party 2 as to whether the instant real estate was worth collateral, the Plaintiff believed that the instant real estate had adequate collateral value and completed the registration of the establishment of the instant real estate on September 30, 207, and paid 640,536,300, and 87,127,820 won to non-party 1, which was supplied to the above non-party 9, the Plaintiff did not additionally claim that the Plaintiff supplied 9,67,400 won to the non-party 1 on November 30, 2007, which was 967, 709, 796, 207, 7967, 209, 209.

Meanwhile, it is reasonable to examine whether the officially announced individual land price as to the real estate of this case is appropriate by requesting a specialized appraisal business entity to appraise the real estate of this case or identifying the market price of neighboring land, etc. at the time when the establishment registration of the neighboring land of this case was completed. According to the testimony of Non-Party 2 of the above witness, the plaintiff requested a so-called deposit appraisal or summary appraisal without requesting a periodic appraisal of the land of this case, but requested the so-called deposit appraisal or summary appraisal from the Onnuri Donuri appraisal corporation without requesting a periodic appraisal of the land of this case. Since the transaction price of the land of this case is similar to the surrounding market price, it is anticipated that the price of the land of this case would be above the officially announced individual land price. If it is acknowledged that the sale price of this case would be above the officially announced individual land price of this case, the price of the land of this case should be more than the officially announced individual land price of this case, and if it can be seen that there was an additional supply of the goods to Non-Party 1 after completing the establishment registration of the construction of this case.

3. Conclusion

Therefore, the defendant is obligated to pay to the plaintiff 508,37,704 won (726,196,720 won x 70%) and damages for delay at the rate of 5% per annum under the Civil Act from September 13, 2008, which is the day following the delivery date of the copy of the complaint of this case, to January 13, 2010, the day after the decision of the court of first instance, which is deemed reasonable for the defendant to dispute the existence and scope of the obligation as requested by the plaintiff, and from January 13, 2010, from the day after the decision of the court of first instance, to the day after the full payment is made. Since the judgment of the court of first instance is unfair on the grounds of partial conclusion, the part of the plaintiff's appeal against the plaintiff corresponding to the above amount ordered to be paid is revoked, and the remaining appeal of the plaintiff is dismissed. It is so decided as per Disposition.

Judges Jin-hun (Presiding Judge)