Where a possessor who has leased State or public property increases the value by his/her own expenses and effort after the commencement of possession, and another local government acquires the relevant land as the value of property appraised by another local government, etc. on the basis of changed conditions, and then concludes a new loan contract with the former occupant, the method of evaluating the

Inasmuch as the former Enforcement Decree of the Local Finance Act and the current Enforcement Decree of the Public Property and Commodity Management Act (wholly amended by Presidential Decree No. 19226, Dec. 30, 2005), the assessment of land value, which is a public general property, shall be based on the same or similar expression, barring any special circumstance, as the previous Supreme Court has previously decided with respect to the same or similar expression, rather than on the basis of a change in the situation in which the possessor to whom the public property was leased increases the value by his/her own cost and effort after the commencement of possession. However, such interpretation is based on the actual use situation at the time of the commencement of possession of the leased land, rather than on the case where the possessor is the same person before and after the commencement of possession of the leased land and the development activity is conducted. If a new loan contract is continued by acquiring the relevant land as the property value assessed by another local government, etc. based on his/her own cost and effort after the commencement of possession, and then the new owner of the leased land at the time of the first commencement of the loan agreement, not on the loan agreement.

Article 92(1) of the former Enforcement Decree of the Local Finance Act (wholly amended by Presidential Decree No. 19226, Dec. 30, 2005; see current Enforcement Decree of the Public Property and Commodity Management Act); Article 92(2)1 of the former Enforcement Decree of the Local Finance Act (see current Enforcement Decree of the Public Property and Commodity Management Act); Article 31(2)1 of the Enforcement Decree of the Public Property and Commodity Management Act

[Plaintiff-Appellant] Plaintiff 1 and 2 others (Law Firm Boba, Attorneys Soh LLC et al., Counsel for plaintiff-appellant)

Kim-si and two others (Government Law Firm Corporation, Attorneys Lee Jae-sik et al., Counsel for the plaintiff-appellant)

Seoul High Court Decision 2011Na58703 decided February 9, 2012

The part of the judgment of the court below as to each land listed in the separate sheet 1 of the judgment of the court below as to unjust enrichment and damages for delay after July 31, 2009, and as to each land listed in the separate sheet 2 of the judgment of the court below as to each land, and the part of the case is reversed and remanded to the Seoul High Court. All of the remaining appeals by the defendant-si and the Republic of Korea are dismissed.

The grounds of appeal are examined.

1. As to the grounds of appeal by Defendant Young-si and Korea as to each land listed in the separate sheet 1 of the judgment below

A. Article 26(1) and (2)1 of the former Enforcement Decree of the State Property Act (amended by Presidential Decree No. 20463, Dec. 28, 2007; Presidential Decree No. 26(1) and (2)1 of the former Enforcement Decree of the State Property Act (amended by Presidential Decree No. 21641, Jul. 27, 2009; Presidential Decree No. 26(1) and (2)1 of the former Enforcement Decree of the State Property Act (amended by Presidential Decree No. 21641, Jul. 27, 2009; Presidential Decree No. 21641, Jul. 27, 2009; Presidential Decree No. 21641, Jul. 1, 2009; Presidential Decree No. 22015, Feb. 1, 2009; Presidential Decree No. 22010, Feb. 1, 2009>

B. The assessment of the land value, which is a state-owned general property, which is to be calculated based on the “individual publicly announced land price” or “officially publicly announced individual land price” under the former Enforcement Decree of the State Property Act, shall not be based on the changed situation in which the possessor who leased a state-owned property increases its value with his own cost and effort after the commencement of occupation, as in the interpretation previously decided by the Supreme Court regarding the same or similar expressions, rather than on the changed situation in which the possessor who

However, according to the Enforcement Decree of the State Property Act amended in 2009, the standard of calculating the pertinent land value, which serves as the basis for calculating rent for the land which is a State-owned general property, is changed to the “individual land price at the time of determining the property value at the time of determining the property value for calculating rent.” Thus, the individual land price at the time of determining the property value at the time of determining the property value is determined by assessing the actual use of the relevant land at the time of determining the property value. If the legislative purport of the amendment as above changes the form and quality of the land, it is general to increase the profit from use depending on the changed form and quality of the land. As such, it is reasonable to view that the above revised provision of the “individual land price at the time of determining the property value for calculating rent” includes the meaning of the “individual land price at the time of determining the property value” as the basis of the “actual land price at the time of determining the property value” or unlike the former provision with the phrase “the actual use status at which it was newly concluded after the commencement of occupation and use status at 13.

C. According to the reasoning of the judgment below and the evidence duly adopted and examined by the court below, ① the Plaintiff was operating a golf course with the permission to occupy and use each land listed in the annexed Table 1 of the judgment below (hereinafter “the land No. 1”), which is State property, from October 3, 1970 after the Plaintiff entered into or renewed a golf course with the permission to occupy and use the land listed in the annexed Table 1 of the judgment below (hereinafter “the land No. 1”), and ② the land category of the instant land, which was originally or used as a ditch, changed into a sports site and is currently used as a golf course, etc.; ③ the Plaintiff entered into and renewed a loan contract under the State Property Act with the Young-si market, which is the managing authority of the instant land No. 1 and the Korea State Property Act (the land No. 1 was delegated by the Defendant Republic of Korea) (the purpose market was to determine the rent every year based on the property value calculated each year under the provisions of the Enforcement Decree of the State Property Act, and calculated the rent at the time of using the instant land.

D. Examining these facts in light of the legal principles as seen earlier, the following conclusion is derived.

1) Of the loan charges on the land No. 1 of this case, the loan charges prior to the enforcement of the Enforcement Decree of the State Property Act amended in 2009 prior to the enforcement of the Enforcement Decree of the State Property Act, according to the legal principles as seen earlier, corresponding to the portion of increase in the value of the land No. 1 of this case by the Plaintiff’s own cost and effort, namely, the loan charges reverted to the Defendant Young-si, and the Republic of Korea, calculated by deducting the appropriate amount of the loan charges calculated under the premise of the actual use status of the land as at the time of commencement of the occupation

The court below is just in determining the same purport, and there is no error in the misapprehension of legal principles as to the calculation of rent for State-owned general property.

2) On the other hand, the loan charges on the land No. 1 in this case since July 31, 2009, when the Enforcement Decree of the State Property Act amended in 2009, should be calculated by applying the officially assessed individual land price based on the actual conditions of use at the time of renewal of the loan contract where the land No. 1 in this case was used as a golf course, barring any special circumstances in accordance with the aforementioned legal principles. As long as the pertinent management agency calculated and received the loan charges accordingly, it is merely the Plaintiff’s performance of obligations under the above loan contract, and it cannot be deemed that the said Defendants obtained unjust profits without any legal grounds.

Nevertheless, on July 31, 2009, the lower court, based on its reasoning, received the Plaintiff’s claim for restitution on the ground that the loan charges corresponding to the portion of the Plaintiff increased the value of the instant land No. 1 by its own cost and effort, namely, the loan charges reverted to the Defendant Young-si and the Republic of Korea at the time of commencement of occupation of the said land had no legal grounds for deducting the amount equivalent to the loan charges calculated reasonably on the premise of the actual state of use of the said real estate at the time of commencement of occupation of the said land. Therefore, the lower court erred by misapprehending the legal doctrine on the calculation of loan charges for State-owned general property after the enforcement date of the amended Enforcement Decree of the State Property Act in 2009, and thereby,

2. As to the grounds of appeal by Defendant Young-si and Gyeonggi-do as to each land listed in the separate sheet 2 of the judgment below

A. In the former Enforcement Decree of the Local Finance Act and the Enforcement Decree of the Public Property and Commodity Management Act (hereinafter “Public Property Management Act”), which are the basis for calculating the rent for the land which is a public general property, provide that the rent shall be calculated by multiplying the relevant land by a certain rate. Specifically, Article 92(1) and (2)1 of the former Enforcement Decree of the Local Finance Act (wholly amended by Presidential Decree No. 19226, Dec. 30, 2005) provides that the rent shall be calculated by using “the publicly announced individual land price publicly announced recently.” Article 31(1) and (2)1 of the former Enforcement Decree of the Public Property Management Act (wholly amended by Presidential Decree No. 1927, Dec. 30, 2005) provide that the rent shall be calculated by using “individual publicly announced land price”.

B. The assessment of land value, which is a common general property, shall be calculated based on “the officially assessed individual land price recently announced” or “the publicly announced individual land price” under the former Enforcement Decree of the Local Finance Act and the current Enforcement Decree of the Public Property Management Act, is not based on the changed state in which the possessor who received a loan of public property increased the value by his own cost and effort after the commencement of occupation, but rather on the basis of the actual conditions of use at the time when the possessor begins possession, unless there are special circumstances.

However, such interpretation is based on the case where the person who received a loan is the same as the owner before and after the commencement of development activities by starting possession of the relevant land. If the possessor who received a loan from a State or public property acquired the relevant land as the value appraised by another local government, etc. based on its changed state of expenses and effort after the commencement of possession and concluded a new loan agreement with the previous occupant and continues to possess the relevant land, barring special circumstances such as succeeding the former owner’s status under the loan agreement, the value of property for calculating the loan should be assessed as at the time of entering into a new loan agreement between the local government, etc. which became the new owner and the new owner, rather than at the time of the first commencement of possession by the lender.

C. citing the reasoning of the first instance judgment, the lower court acknowledged the following facts: ① (a) the Plaintiff was operating a golf course with permission to occupy and use each land listed in the separate sheet 2 of the lower judgment, which is public property of Defendant Gyeonggi-do (hereinafter “instant land 2”); (b) the land category of the instant land, which was originally used as a whole or a ditch, was changed into a sports site and is currently used as a golf course; (c) the Plaintiff concluded a loan agreement and renewed it (the Plaintiff was delegated by Defendant Gyeonggi-do on the management and disposal of the instant land 2); (d) the Plaintiff agreed annually on the value of each property calculated each year based on the provisions of the former Enforcement Decree of the Local Finance Act, the Enforcement Decree of the Public Property Management Act, the Enforcement Decree of the Public Property Management Act, etc.; and (c) the amount calculated by multiplying the rent rate calculated by using the instant land as the rent rate at the time of using the instant land by the Plaintiff’s loan rate.

In addition, among the loan charges on the land No. 2 of this case, the loan charges corresponding to the portion that the plaintiff increased its value with his own cost and effort, that is, the loan charges reverted to the defendant Young-si and Gyeonggi-do, which are calculated by deducting the amount equivalent to the loan charges calculated reasonably under the premise of the actual use status of the above land at the time of commencing possession of the land No. 2 of this case from the loan charges reverted to the defendant Young-si and Gyeonggi-do,

D. However, the above fact-finding and determination by the court below are not acceptable.

According to the copy of the register, etc. on the land No. 2 submitted in the first instance trial, ① was originally owned by Defendant Republic of Korea. The Plaintiff entered into a new loan agreement with Defendant Republic of Korea and renewed the loan agreement under the State Property Act, which is the management authority, after obtaining permission to occupy and use the above land as State-owned property. ② Defendant Republic of Korea completed the registration of transfer of ownership on the land No. 2 in the future of Defendant Gyeonggi-do due to the exchange contract on December 31, 1993. At the time, the land category was changed; ③ Defendant Gyeonggi-do delegated the affairs on the management and disposal of the land No. 2 in the situation where the land category was changed; ③ Defendant Gyeonggi-do delegated the affairs on the management and disposal of the land No. 2 in the Yeongdeungpo-do Mayor after acquiring the ownership of the land of this case, and accordingly, it can be known that, as the lower court recognized,

Meanwhile, there is no data to verify the details of the calculation of the exchange price on the record, but in light of the provisions of the State Property Act, which requires the disposal price of the State-owned general property to be determined in consideration of the market price, it is highly probable that the price assessment was conducted based on the sports site, which is the land category of the second land at the time.

In light of the above facts in light of the legal principles as seen earlier, Defendant Gyeonggi-do acquired the instant land No. 2 from Defendant Republic of Korea in accordance with an exchange contract with the nature of a contract under private law and concluded a new loan contract with the Plaintiff through its management agency. Thus, in the process, barring special circumstances such as that Defendant Gyeonggi-do succeeded to the status of the loan contract against the Plaintiff of the Republic of Korea as the former owner, it shall be calculated by applying the officially assessed land price based on the actual usage conditions at the time of the conclusion of the new loan contract. As long as Defendant Gyeonggi-do calculated and received the loan charges accordingly, it is merely the Plaintiff’s performance of the obligation under the above loan contract, and it cannot be deemed that the above Defendants obtained unjust profits without any legal grounds.

Nevertheless, as seen earlier, the court below determined that the part of the loan charges exceeding the amount of the loan charges calculated on the premise of the actual conditions of use at the time the plaintiff commenced possession of the first land as to the land owned by the defendant Gyeonggi-do from the beginning, as to the part of the loan charges exceeding the amount of the loan charges calculated on the premise of the actual conditions of use at the time the plaintiff started possession of the first land. This is not only based on evidence but also on fact-finding but also by misapprehending the legal principles on the calculation of the loan charges of the public general property, thereby making a judgment more reasonable.

Therefore, without the need to further examine the remainder of the grounds of appeal by Defendant Young-si and Gyeonggi-do, this part of the judgment below cannot be maintained as it is.

3. Conclusion

Therefore, the part of the judgment of the court below as to the land No. 1 of this case, which was against the Republic of Korea, as to unjust enrichment and its delay damages after July 31, 2009, as to the land No. 2 of this case, is reversed, and this part of the case is remanded to the court below for further proceedings consistent with this Opinion. The remaining appeals by the defendant, Young-si, and Korea are all dismissed. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Park Poe-dae (Presiding Justice)