Industrial Bank of Korea (Law Firm Spah, Attorneys Kim So-uri et al., Counsel for the plaintiff-appellant)

Incheon Urban Corporation and one other (Law Firm Western, Attorneys Cho Dong-dong et al., Counsel for the plaintiff-appellant)

September 17, 2013

Seoul Central District Court Decision 2012Gahap520406 Decided January 10, 2013

1. The plaintiff's primary claim against the defendant Incheon Urban Corporation and the first preliminary claim and the plaintiff's appeal against the defendant Republic of Korea are all dismissed.

2. The costs of lawsuit after the appeal shall be borne by the Plaintiff.

Purport of claim

[State-Appellee Claim] Defendant Incheon Urban Corporation (hereinafter “Defendant Corporation”) shall deliver to the Plaintiff a claim for land compensation amounting to KRW 344,000,000 in face value issued by Defendant Corporation, and shall pay to the Plaintiff the amount equivalent to its face value when compulsory execution of delivery of the above claim is impossible.

[1] The defendant Corporation shall pay to the plaintiff 344,00,000 won with 20% interest per annum from the day following the day when the copy of the application for modification of the lawsuit in this case was served to the day of complete payment.

[Secondary Claim] Defendant Republic of Korea shall pay to the Plaintiff 344,00,000 won with 5% interest per annum from February 27, 2012 to the day on which a copy of the complaint of this case was served, and 20% interest per annum from the next day to the day of complete payment.

(The court changed the claim against the primary defendant corporation to the primary claim and the primary claim in exchange for the primary claim)

Purport of appeal

The judgment of the court of first instance is revoked. In the first instance, the Defendant Corporation will deliver to the Plaintiff the claim (securities) equivalent to KRW 344,00,000, out of the adjudication compensation for Nonparty 1 ( omitted resident registration number). In the first instance, the judgment is the same as the entry in the second preliminary claim.

1. Case summary

In this case, the plaintiff primarily received a seizure and collection order against the defendant Corporation's claim for the land expropriation compensation against the non-party 1. The defendant Corporation deposited the bonds (securities) equivalent to the amount exceeding KRW 100 million out of the land expropriation compensation against the non-party 1 as the deposited person. However, this claim cannot be asserted against the plaintiff against the above seizure and collection order, and there is no reason for the repayment deposit, and the above seizure and collection order were asserted to be unlawful, and the plaintiff seeks the delivery of the above bonds (securities) based on the above seizure and collection order against the defendant Corporation. For the defendant Republic of Korea, the plaintiff received the seizure order against the non-party 1's defendant 1 after the above payment deposit, and requested the court to deliver the above securities by facsimile to the deposit officer and not deliver the above securities, even though the deposit officer requested the plaintiff to deliver the above securities to the non-party 1, thereby asserting that the plaintiff suffered losses from not recovering the amount equivalent to the face value of the above securities and sought compensation for delay damages pursuant to Article 2 of the State Compensation Act.

The judgment of the court of first instance dismissed all the plaintiff's claim against the defendants, and the plaintiff appealed against this and filed an appeal (this court, as a claim against the defendant Corporation, sought an amount equivalent to the face value when the plaintiff primarily delivered the claim for compensation for land issued by the defendant Corporation and the delivery of the claim is impossible. Preliminaryly, the defendant Corporation made a repayment deposit against the seizure order of this case, or did not give the plaintiff an opportunity to exercise the subrogation right, and the plaintiff suffered damages due to the plaintiff's error in repayment immediately immediately after the issuance of the securities without giving the opportunity to exercise the subrogation right, due to the plaintiff's failure to recover the face

B. Presumed factual basis

The court's explanation on this part is identical to the reasoning of the judgment of the court of first instance, and this part is cited in accordance with the main sentence of Article 420 of the Civil Procedure Act.

2. Judgment of this court on the plaintiff's assertion

A. Whether the effect of the Plaintiff’s seizure and collection order on the Plaintiff’s claim for delivery of the securities of this case

【Plaintiff’s Claim】

The plaintiff asserts that the seizure and collection order of this case against the compensation claim of this case also becomes effective against the non-party 1's defendant corporation's claim for delivery of securities of this case. Thus, the defendant corporation's deposit of this case's securities with the non-party 1 as the deposited person is unlawful against the above seizure and collection order, and therefore, the plaintiff can seek delivery of this case's securities based on the above seizure and collection order against the defendant corporation.

[Judgment]

In a situation where it is possible to pay a claim as compensation for land expropriation, and an entrepreneur does not choose to pay in cash or in cash, an order of seizure on the compensation claim is subject to the compensation claim arising from the condition that public project operators choose to pay in cash in the future (see Supreme Court Decision 2004Da24168, Aug. 20, 2004). Moreover, inasmuch as a collection order on the compensation claim is premised on a valid seizure order, it is premised that it can collect the seized claim without the subrogation procedure, and thus, it does not take effect as a seizure order takes effect, it does not have the effect of a collection order (see Supreme Court Decision 2011Da38394, Nov. 15, 2012).

Meanwhile, according to Article 63(8) of the Act on Acquisition of and Compensation for Land, etc. for Public Works Projects (hereinafter “Public Works Projects Act”), Articles 27(1) and 27-2 of the Enforcement Decree of the same Act, a housing site development project is implemented on the land located within an area subject to permission for a land transaction contract, the Defendant’s construction project requires that the amount exceeding KRW 100 million be paid as the bonds issued by the Defendant Corporation for the amount exceeding KRW 100 million out of the compensation for the land owned by the absentee real estate owner. Accordingly, the Defendant’s unreal estate owner’s right to request the seizure of this case, other than the amount of KRW 101,834,90,000, which was decided to be paid in cash among the compensation for the land expropriation, shall not affect the Plaintiff’s right to request the seizure of this case’s securities and the right to request the seizure of this case’s claim against Nonparty 1, who is the unreal estate owner of this case’s seizure and collection order. Accordingly, the Plaintiff’s right to request for the seizure of this case’s order shall not be effective.

B. Whether tort liability of Defendant Incheon Urban Corporation is established

【Plaintiff’s Claim】

① Even if the effect of the instant order does not extend to the Plaintiff’s claim for delivery of the instant securities, the Defendant Corporation erred by making Nonparty 1 as the depositee and deposited the said securities against the effect of prohibition of payment of the instant order. ② Even if the effect of the instant order does not extend to the claim for delivery of the instant securities, the Defendant Corporation immediately issued the said securities to Nonparty 1 as the depositee, thereby making the Plaintiff lose an opportunity to exercise subrogation right by seizing the said securities. Accordingly, the Plaintiff incurred damages, which led to the Plaintiff’s failure to recover the face value equivalent to the face value of the securities, and thus, the Defendant Corporation is obligated to compensate for damages pursuant to tort liability under Article 750 of the Civil Act.

[Judgment]

According to the facts and relevant legal principles as seen earlier, since the effect of the instant seizure order does not extend to the claim for delivery of the instant securities, it cannot be deemed that the deposit for payment of the instant securities made by the Defendant Corporation contravenes the seizure order, and even if there exist no grounds for payment deposit such as rejection of payment, etc., Nonparty 1 paid the instant securities without reservation, and thus, the Defendant Corporation may be deemed to have repaid the said deposit to Nonparty 1.

In addition, Article 69(4) of the Public Works Act provides that compensation bonds shall be issued by the Corporation upon payment to the owner of the land and the person concerned. It is lawful to issue the securities of this case on the date of payment deposit when the Defendant Corporation pays compensation to Nonparty 1 as the securities of this case. Furthermore, on September 22, 2011, the Plaintiff was notified on September 30, 201 that the amount in excess of KRW 100,000 out of the compensation for expropriation ruling against Nonparty 1 should be deposited with the bonds (securities) as of September 30, 201, and thus, the Plaintiff could not immediately seize the securities of this case by specifying the cause of the securities of this case and face value, but did not take measures until the Defendant Corporation deposited the securities of this case until the payment of the securities of this case. Accordingly, it is difficult to view that there is no reasonable proximate causal relation between the Plaintiff’s payment of the securities of this case and the Plaintiff’s payment of the securities of this case.

C. Whether the State liability of Defendant Republic of Korea was established

The court's explanation on this part is consistent with the reasoning of the judgment of the court of first instance with the reasoning of the judgment of the court of first instance under Article 420 of the Civil Procedure Act.

3. Conclusion

Therefore, the plaintiff's primary claim against the defendant Corporation and the preliminary claim against the defendant Corporation and the secondary claim against the defendant Republic of Korea are without merit. Among the judgment of the court of first instance, the part against the defendant Republic of Korea is just as above. The main claim against the defendant Corporation that the plaintiff changed in exchange for exchange and the preliminary claim against the plaintiff and the appeal against the defendant Republic of Korea are all without merit. It is so decided as per Disposition by the assent of all.

Judges Dohn Jink (Presiding Judge)