[1] Where a purchaser of a contract for the sale of movable property under an agreement for reservation of ownership transfers an object to a third party without paying the price in full, the validity of such transfer (negative in principle)

[2] In a case where a buyer of a contract for the sale of movable property under an agreement for reservation of ownership transfers an object to another person without payment of the price, the case holding that the bona fide acquisition is not recognized on the ground that the transferor was negligent in failing to perform his/her duty of care as to the transfer

[1] In a case where a so-called ownership reservation agreement has been made between the parties on the transfer of ownership in the future to the buyer while the seller agrees to possess the object in advance until the purchase and sale of movable property pays the price in full, barring any special circumstances, it shall be interpreted that the agreement between the parties on the transfer of ownership in the future was made under the condition that the purchase price is to be paid in full. Therefore, while the buyer does not pay the price in full, the ownership of the object still belongs to the seller in accordance with the agreement, and the terms and conditions of the suspension are fulfilled upon the payment of the price in full, and the ownership of the object is transferred to the buyer without any separate declaration of intention by the buyer. This does not change even if the buyer transfers the object without payment in full to another person. Accordingly, even if the buyer transfers it, barring any special circumstances such as the requirements for bona fide acquisition by the transferee or the seller of ownership who is the owner after the disposal, such transfer does not become effective and its ownership is not transferred to the buyer.

[2] The case holding that in case where a buyer of a contract for the sale of movable property under an ownership reservation agreement transfers an object to another person without paying the price in full, the bona fide acquisition is not recognized on the ground that the transferor was negligent in failing to perform his duty of care as to the transferor's source of right of transfer normally required to the transferee, such as investigating whether the ownership is reserved, in case where the transferor was aware that part of the installment of the contract for the sale

[1] Articles 147(1), 188, and 568 of the Civil Act / [2] Articles 147(1), 188, 249, and 568 of the Civil Act

[1] Supreme Court Decision 96Da14807 delivered on June 28, 1996 (Gong1996Ha, 2358) Supreme Court Decision 99Da30534 delivered on September 7, 199 (Gong199Ha, 2088)

Plaintiff

Defendant (Law Firm Chungcheong, Attorneys Cho Jong-chul et al., Counsel for the defendant-appellant)

Seoul Northern District Court Decision 2009Na3904 Decided November 4, 2009

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

The grounds of appeal are examined.

1. The lower court acknowledged the following facts.

On June 10, 2006, Nonparty 1 entered into a contract with Nonparty 2, who operates the ○○ Construction Co., Ltd. (hereinafter “instant machinery”), to purchase one million and KRW 1,80,000,000 (hereinafter “instant contract”), and paid in installments the balance of KRW 1,30,000,000 each month from July of the same year to July of the same year, but delivered the instant machinery under the agreement with Nonparty 2 to withhold the ownership of the instant machinery until the full payment was made. Nonparty 1 paid to Nonparty 2 the sum of the down payment, intermediate payment, and partial remainder of the down payment. On June 28, 2006, Nonparty 1 reserved the ownership of the instant machinery until the full payment was made in installments over 2,00,000 won by November 5 of the same year.

However, Nonparty 1 did not pay KRW 5,710,00 among the installment payments after the lapse of the above installment period. Meanwhile, on June 21, 2007, Nonparty 1, who operated the “○○ Industrial Complex,” was liable for KRW 1,30,000,000 to the Plaintiff, but requested the Plaintiff to sell the instant machine and appropriate it for the said debt amount, and delivered it. However, as seen above, the Defendant, as the principal seller of the instant machine, was Nonparty 2’s fraud, who was the Plaintiff’s factory, transferred the instant machine to ○○ Industrial Complex, without notifying the Plaintiff on November 24, 2007.

2. In this case, the Plaintiff asserted that the Plaintiff acquired the ownership of the instant machine by taking over the instant machine in lieu of the performance of his obligation against Nonparty 1, or by taking in good faith the instant machine by being handed over as a medical negligence, and sought compensation for damages equivalent to the market price on the ground of infringement of ownership against the Defendant.

A. As in the instant contract, in the event that there is a so-called ownership reservation agreement whereby the seller of an object holds the ownership of the object in advance and transfers the object to the buyer in advance, barring any special circumstances, it is interpreted that the agreement between the parties on the transfer of ownership in the future between the buyer on the condition of suspending the payment of the price in full. Therefore, while the price is not paid in full, even if the buyer received the object, the ownership of the object still belongs to the seller in accordance with the said agreement, and the condition of suspension is fulfilled upon the payment of the price in full, and the ownership of the object is immediately transferred to the buyer without any separate declaration of intention (see Supreme Court Decision 96Da14807, Jun. 28, 1996). This is no different even if the buyer paid a considerable portion of the price in full, even if the buyer transfers the object to another person without payment in full, the transferee satisfies the requirements for bona fide acquisition, and barring any special circumstances, such as ratification’s transfer of ownership after the buyer’s ownership does not take effect.

In this case, even if Nonparty 1, a purchaser of ownership reservation of the instant machinery, transferred the instant machinery to the Plaintiff instead of performing the obligation owed to the Plaintiff, the transfer was made by failing to pay the price in full and without acquiring the ownership of the subject matter of sale. Therefore, barring any special circumstances, barring any special circumstance in accordance with the aforementioned legal principles. Therefore, the lower court is justifiable to have rejected the Plaintiff’s assertion that Nonparty 1 was the owner of the instant machinery due to payment in substitutes, and thus, the transfer was made by the unentitled person.

B. Furthermore, the Plaintiff asserts that he acquired the instant machinery in good faith and in good faith, and that he did not know the fact that he did not own ownership, and that he did not know that he did not have any negligence.

The lower court determined as follows and rejected the Plaintiff’s assertion as to this part of this case’s assertion. In other words, the Plaintiff was deemed to have acquired the instant machinery in peace and performance from Nonparty 1, but according to evidence, it is recognized that Nonparty 1 purchased the instant machinery from Nonparty 1 to the seller at the time of the delivery of the instant machinery from Nonparty 1, but at the time of Nonparty 1’s purchase, Nonparty 1 had known that the amount of KRW 5.7 million was not paid to the original seller. Thus, the Plaintiff was negligent in believing that the ownership of the instant machinery was owned by Nonparty 1 due to the Plaintiff’s failure to ask the Defendant as to whether the ownership of the instant machinery was reserved by Nonparty 1 in acquiring the instant machinery.

According to the records, in trading a large amount of product manufacturing machinery as in the instant machine, if the payment of price is to be made frequently, the agreement for reservation of ownership is made frequently. The Plaintiff, who has been engaged in the installation and repair of the machine, was engaged in transactions before Nonparty 2’s “○○ Construction” and was in transactions before, and was the Plaintiff’s construction in Nonparty 1’s factory. Moreover, at the time of the Plaintiff’s acquisition of the instant machine, the Plaintiff was aware of the fact that the Plaintiff’s claim of KRW 1.3 million against Nonparty 1 was a commercial bond, such as factory facility and machinery repair cost (in particular, the record No. 33 pages).

Therefore, the Plaintiff, as a merchant engaged in the transaction of goods such as the instant machinery, was aware that Nonparty 1 did not pay 5.7 million won out of the installments at the time of the transfer of the instant machinery, according to the fact-finding by the lower court, and was included in the agreement for reservation of ownership under the instant contract, and was transferred without investigating and investigating whether the ownership of the instant machinery is still not reserved to Nonparty 2, the seller of ownership reservation. Thus, even if there was no intention to do so, the Plaintiff was at least negligent in failing to pay the assignee with due care for the transfer right of the transferor ordinarily required for the transfer right.

In taking over the instant machinery, the lower court’s explanation that the Plaintiff was the Defendant who should ask Nonparty 1 about whether the ownership of the instant machinery was owned by Nonparty 1 is appropriate. However, it is justifiable in rejecting the Plaintiff’s assertion of bona fide acquisition by recognizing the Plaintiff’s negligence in taking over the instant machinery. In so doing, the lower court did not err by misapprehending the legal doctrine on bona fide acquisition, violating the rules of evidence, and failing to exhaust all deliberations, etc., as alleged in the grounds of appeal.

3. 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 Kim Ji-hyung (Presiding Justice)