[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 State or local government acquires the ownership of land designated as a school site necessary for the education of elementary schools, middle schools, and high schools in a land substitution plan for a land readjustment project (affirmative), and in this case, whether the State or local government should pay the price for the acquisition of the school site to the implementer of a land readjustment project (affirmative)

[1] The right to defense of simultaneous performance is a system where each party’s obligation is related with each other’s obligation on the basis of the concept of fairness and the principle of good faith, thereby recognizing the relationship in 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 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 was created from the same legal requirement, or is of a quid pro quo from the perspective of fairness.

[2] According to the provisions of Articles 2(1)1, 2(2), and 63 of the former Land Readjustment Project Act (repealed by Act No. 6252, Jan. 28, 2000; hereinafter “Act”), land designated as school site necessary for the education of elementary schools and middle and high schools in a land readjustment project shall be reverted to the State or a local government (hereinafter “State, etc.”) to manage land pursuant to the main sentence of Article 63 of the Act on the day following the public announcement of a land readjustment plan, and the State, etc. shall pay the project operator of a land readjustment project (hereinafter “project operator”) for the acquisition of school site in accordance with the proviso of Article 63 of the Act.

Therefore, a project implementer is obligated to deliver a school site to the State, etc. that originally acquires the ownership of the school site, and the State, etc. is obligated to pay the price for the school site to the project implementer. It is reasonable to deem that the duty of the project implementer to deliver the school site and the payment duty of the school site by the State, etc. is recognized by Article 63 of the Act, and it is reasonable to view that the project implementer has a mutual quid pro quo relationship or should be performed in a faithful manner from the perspective of fairness arising from

[1] Article 536 of the Civil Act / [2] Article 2 (1) 1 (see Article 2 (2) of the current Urban Development Act and Article 2 subparagraph 11 of the National Land Planning and Utilization Act) and Article 2 (2) (see Article 2 (2) of the current Urban Development Act and Article 2 subparagraph 13 of the National Land Planning and Utilization Act), Article 63 (see Article 66 (1) of the current Urban Development Act), Article 536 of the Civil Act

[1] Supreme Court Decision 92Da25656 Decided October 9, 1992 (Gong1992, 3116), Supreme Court Decision 201Da67699 Decided December 26, 2013 / [2] Supreme Court Decision 2015Da256312 Decided December 15, 2016 (Gong2017Sang, 99), Supreme Court Decision 2016Da221566 Decided December 15, 2016 (Gong2017Sang, 111), Supreme Court Decision 2016Da261632 Decided February 15, 2017

Gyeongbuk-do (Government Law Firm Corporation, Attorneys Jeong Sung-ap et al., Counsel for the plaintiff-appellant)

Non-permanent Housing Co., Ltd. (Law Firm LLC et al., Counsel for the plaintiff-appellant)

Supreme Court Decision 2015Da256312 Decided December 15, 2016

Daegu High Court Decision 2016Na27215 decided November 22, 2017

The appeal is dismissed. The costs of appeal are assessed against the defendant.

The grounds of appeal are examined.

1. The portion of the price for the school site:

A. As to the assertion that the ○○ Partnership did not possess the second land and does not bear the duty of delivering the second land

The lower court determined that the ○○ Cooperative did not perform its duty of delivery to the Plaintiff on March 26, 2009, after completing the registration of ownership preservation on the name of March 26, 2009, on May 13, 2009, after completing the registration of ownership transfer on the ground of payment in kind to the father-young Co., Ltd. and transferring the possession of the second land.

Examining the reasoning of the lower judgment in light of the relevant legal principles and records, the lower court’s fact-finding and determination are justifiable, and contrary to what is alleged in the grounds of appeal, the lower court did not err by exceeding the bounds of the principle of free evaluation of evidence against logical and empirical rules, or by exceeding the bounds of the principle of free evaluation of evidence, or by misapprehending the legal doctrine

B. As to the assertion that the duty of the project implementer to deliver the school site and the duty of the State to pay the school site price are not the simultaneous performance relationship

1) 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 the principle of good faith and, in the event that the performance is related to each other’s obligation, one of the parties can 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 providing the other party’s obligation. In light of the purport of such a system, even if each obligation to be borne by the party is not in a quid pro quo relationship in the bilateral contract, if the both obligation is of a quid pro quo meaning arising from the same legal requirement, or if the performance must be performed periodically from the perspective of fairness, the right to defense of simultaneous performance may be acknowledged (see, e.g., Supreme Court Decisions 92Da25656, Oct. 9, 192; 201Da67699, Dec. 26, 2013).

According to the provisions of Articles 2(1)1, 2(2), and 63 of the former Land Readjustment Projects Act (amended by Act No. 6252, Jan. 28, 2000; hereinafter “Act”), land designated as school site necessary for education of elementary schools and middle and high schools in a land substitution plan for land readjustment projects shall be reverted to the State or a local government (hereinafter “State, etc.”) to manage the relevant land pursuant to the main sentence of Article 63 of the Act on the following day after the public announcement of a land substitution disposition, and the State, etc. shall acquire the ownership: Provided, That the State, etc. shall pay the price for the acquisition of school site to the implementer of a land readjustment project (hereinafter “project implementer”) pursuant to the proviso to Article 63 of the Act (see Supreme Court Decisions 2015Da256312, Dec. 15, 2016; 2016Da261632, Feb. 15, 2017).

Therefore, a project implementer is obligated to deliver a school site to the State, etc. that originally acquires the ownership of the school site, and the State, etc. is obligated to pay the price for the school site, which is the price to the project implementer. As such, the duty to deliver the school site by the project implementer and the duty to pay the school site by the State, etc., are recognized by Article 63 of the Act, and it is reasonable to view that the project implementer has a mutual quid pro quo relationship or must be performed in a faithful manner from the perspective of fairness due

2) Based on its stated reasoning, the lower court rejected the Defendant’s counterclaim based on the claim for damages for delay on the land 2, on the ground that the obligation to deliver the school site to the Plaintiff and the Plaintiff’s obligation to pay the school site to the said ○○○ Cooperative was related to the performance or simultaneous performance. However, insofar as the Plaintiff did not receive the land 2 from the ○○ Cooperative, the Plaintiff’s obligation to pay the school site to the ○○ Cooperative as well as the obligation to pay the school site to the Plaintiff does not occur as it did not result in delay.

3) Examining the reasoning of the lower judgment in light of the aforementioned legal principles and records, the lower court’s determination that the obligation to deliver the school site and the obligation to pay the school site or to simultaneously perform the obligation to pay the school site is justifiable and acceptable. In so doing, it did not err by misapprehending the legal doctrine on the relationship between the obligation to deliver the school site and the obligation to pay the school site under Article 63 of the Act, as

C. As to the assertion on the inconsistency in the reasoning regarding the possession of ○○ Partnership

The allegation in this part of the grounds of appeal is with the purport of rejecting the Defendant’s counterclaim based on the claim for damages for delay of school land, on the premise that the Plaintiff did not have any delay after July 20, 2010, even though the lower court acknowledged that the Plaintiff was transferred possession of the land No. 2 from the Defendant on July 20, 2010.

However, the Plaintiff’s performance of the duty to deliver land under Article 63 of the Act by the ○○ Cooperative, which is a business operator, is not a delivery of the land 2. In other words, the Plaintiff purchased the land 2 at approximately KRW 4.5 billion from the Defendant who acquired the land 2 from the ○○ Cooperative, the scheduled date for opening the △△ Middle School, while not having received the land 2 from the ○○ Cooperative, which was based on Article 63 of the Act, and purchased the land 2 at KRW 4.5 billion, and received the registration of transfer on July 20, 2010 upon the sales contract, and received the transfer of the land 2. Therefore, it cannot be deemed that the Plaintiff still fell into delay with respect to the ○○ Cooperative in relation to the duty to pay the school site under Article 63 of the Act.

In the same purport, as long as the Plaintiff did not receive land 2 from the ○○ Cooperative, the judgment of the court below that the Plaintiff did not incur damages for delay due to the Plaintiff’s obligation to pay the school site to the ○○ Cooperative as well as delayed performance is justifiable. In so doing, contrary to what is alleged in the grounds of appeal, the

2. Part of charges for the purchase of school sites;

A. The lower court, on the following grounds, rejected the Defendant’s counterclaim based on the claim for refund of the purchase cost of the school site premised on the invalidity of the pertinent conditions for approval in violation of the former Act on Special Cases Concerning the Securing, etc. of School Sites (wholly amended by Act No. 13006, Jan. 20, 2015; hereinafter “former School Sites Act”) or against Article 5(1)2 proviso of the former Act on Special Cases Concerning the Securing, etc. of School Sites.

(1) On June 28, 2013 and December 9, 2015, the office of education notified the Defendant to pay the charges for school sites of KRW 1,134,441,00 each, respectively, on the ground that it did not notify the Defendant of the payment of the charges for school sites based on Articles 5(1) and 5-2 of the former School Sites Act and Article 5-2(2) of the Enforcement Decree of the same Act, but rather notified the Defendant of the payment of the charges for school sites based on the payment notice of the charges. Upon the Defendant’s receipt of the entire housing construction right from the lus and lusssssssssssssssssss and pans and the lusssium to change the purpose of apartment sites from the “sale” to the “lease” from the “sale” to the “approval of the change of the project plan,” and even if the Defendant notified the Defendant of the charges to pay the charges for each school site of Article 25(25).

(2) In light of the following circumstances, even if there is a defect in violation of the former provisions of the School Sites Act in the instant approval terms, it cannot be deemed that the instant approval terms, which is an associate officer, are necessarily null and void.

① When obtaining the approval of a housing construction project plan on April 28, 2009, both the issuer of the contract and the panscam were assumed to bear the burden of “25% of the purchase cost of the school site” as required by the Poscam Office of Education, and accordingly, the conditions for such approval were added. The Defendant already acquired the housing construction right with additional conditions for the said approval already taken over from the Poscam and panscam.

② In the case of a large-scale housing construction project, such as the instant apartment housing construction project, it is essential to secure school sites due to the inevitable increase in the number of students. However, in light of the fact that there are considerable budgetary difficulties to cover the expenses incurred in establishing a school caused by the large-scale housing construction project, the approval of the Defendant’s change in the instant housing construction project plan was based on the instant approval conditions. In the absence of the instant approval conditions, each of the changes in the housing construction project plan itself is likely to have not been approved.

③ Even if the Defendant accepted the instant approval conditions, it appears that the convenience of executing the instant apartment construction project was deemed favorable. In particular, the Defendant accepted the instant approval conditions on May 14, 2012, after obtaining the approval for the amendment of a business plan, which added the instant approval conditions to the business plan, with regard to the business acquired from the Possssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssss

④ While the Defendant’s project cost for the construction of the instant collective housing is KRW 236,962,542,000 in total (i.e., KRW 125,594,155,00 in total as the project cost for the construction of the instant collective housing that was approved for the change of the project plan (i.e., KRW 111,368,387,00 in total), the Defendant’s share of the purchase cost for the instant collective housing site was merely KRW 2,268,82,00 in total, and KRW 111,368,387,00 in total as the project cost for the construction of the instant collective housing that was acquired from the

B. Examining the reasoning of the lower judgment in light of the relevant legal principles and records, the lower court’s aforementioned determination is justifiable, and contrary to what is alleged in the grounds of appeal, there were no errors by misapprehending the legal doctrine regarding the grounds for imposition of school site charges, additional requirements

3. Conclusion

Therefore, the appeal is 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 Park Sang-ok (Presiding Justice)