Plaintiff (Law Firm Oiop, Attorneys Hwang Tae-tae et al., Counsel for the plaintiff-appellant)

National Real Estate Brokerage Association (Law Firm Rogos, Attorneys Jeon Man-soo et al., Counsel for the plaintiff-appellant)

June 9, 2005

Incheon District Court Decision 2004Gadan9383 Delivered on September 8, 2004

1. The judgment of the court below is revoked.

2. The plaintiff's claim is dismissed.

3. The total costs of the lawsuit shall be borne by the plaintiff.

1. Purport of claim

The defendant shall pay to the plaintiff 48,406,861 won with 5% interest per annum from April 28, 2003 to May 31, 2003, and 20% interest per annum from the next day to the date of full payment.

2. Purport of appeal

The same shall apply to the order.

1. Basic facts

The following facts are not disputed between the parties, or may be acknowledged by taking into account the whole purport of the pleadings in each entry described in Gap evidence 1, 5 through 7, evidence 2-1, 2, Eul evidence 2-4, and evidence 5-1 through 11.

A. The chief real estate brokerage company is a brokerage corporation under the Real Estate Brokerage Act, and the non-party 1, as a licensed real estate agent affiliated with the above company, was in office as the vice-branch of the above company, and operated the real estate brokerage business in Seocheon-gu, Seocheon-gu, Seocheon-gu.

B. On December 5, 200, the Plaintiff entered into a lease agreement with Nonparty 2 for renting KRW 65,000,000 for So-called So-called So-called So-called So-called So-called So-called So-called So-called So-called So-called So-called So-called So-called “instant Housing”) of So-called So-called So-called So-called So-called So-called So-called So-called So-called 6,50,000 for the first intermediate payment of KRW 14,00,000 for the second intermediate payment of KRW 15,00,000 for the second intermediate payment of KRW 15,00,000 for the remainder payment of KRW 29,50,000 for the same month on the 29th of the same month (hereinafter “instant lease agreement”).

C. At the time of the conclusion of the instant lease agreement, the Plaintiff and Nonparty 2 made a registration of ownership transfer under the name of Nonparty 2 on December 16, 200, and the said registration of ownership transfer until December 16, 2000. However, if any defect occurs in the register, such as a mortgage and a provisional registration of a right to lease on a deposit basis, until the remainder is paid, the lease agreement was revoked and Nonparty 2 agreed to compensate the Plaintiff twice the down payment.

D. On December 23, 200, the date of the first intermediate payment payment, the Plaintiff confirmed the registry of the instant house on December 23, 200, and confirmed that the establishment registration (hereinafter “instant establishment registration”) was completed under the name of the Korea Housing and Commercial Bank Co., Ltd. (hereinafter “Housing Bank”) (hereinafter “Housing Bank”) with the maximum debt amount of KRW 59,600,000,000, with the registration of ownership transfer in the name of Nonparty 2 as of December 22, 200, the date of the first intermediate payment, and it was impossible for Nonparty 2 and Nonparty 1 to implement the contract. Nonparty 2 provided that the Plaintiff had completed the establishment registration of the instant house to obtain a loan of KRW 45,00,000 from the Housing Bank (hereinafter “instant loan”), and provided that the Plaintiff would have been responsible for the intermediate payment of KRW 45,500,000,000,0000 in total, and that the Plaintiff would be liable for the intermediate payment of this case to Nonparty 1.

E. After that, in order to secure the difference of KRW 5,00,000, when Nonparty 1 was unable to repay the total amount of KRW 45,500,000,000 in total of the above second intermediate payments and the balance, Nonparty 2 agreed with Nonparty 2 to have Nonparty 3 deposit KRW 60,000,000, in order to secure the difference of KRW 500,000,00,000, the amount of the above collateral debt of the right to collateral security established on December 26, 200 and to use KRW 53,00,000,000 among the balance of the above deposit amount of KRW 58,00,000,000, which was agreed to have Nonparty 1 keep the remainder of the above deposit amount of KRW 50,000,000,000.

F. On December 26, 200, the Plaintiff paid to Nonparty 1 the second intermediate payment of KRW 15,000,000 to Nonparty 2, but Nonparty 3 failed to pay KRW 58,000,000 to Nonparty 2. Nonparty 2 paid KRW 58,000 to Nonparty 1 the deposit amount of KRW 58,00,000 to Nonparty 1 out of the deposit amount of KRW 58,000,000, which was agreed to have Nonparty 1 keep to Nonparty 1 in custody. Nonparty 2 paid KRW 500,000 to Nonparty 4,50,000, which was paid to Nonparty 2 from the Plaintiff, and requested Nonparty 1 to pay KRW 15,00,00 to Nonparty 3 the remainder of the deposit amount of KRW 15,00,000,000 to Nonparty 2, which was paid to Nonparty 205,200,205.

G. On December 29, 200, the Plaintiff paid the remainder of KRW 19,50,000 among the remainder of KRW 29,50,000 to Nonparty 1. On that day, Nonparty 2 and Nonparty 1 paid the remainder of KRW 19,50,000,00 to Nonparty 1, together with Nonparty 2 and Nonparty 1, and the said KRW 10,50,000 among the second intermediate payment and KRW 80,000,000, which Nonparty 2 had brought interest to Nonparty 2, and paid the remainder of the instant loan to Nonparty 4, a brokerage assistant of Nonparty 1, on January 6, 2001, Nonparty 4 paid the remainder of KRW 10,000,000 to the said Housing Bank, thereby having paid the remainder of the instant loan to Nonparty 10,500,000,000 as part of the instant loan.

H. On January 19, 2001, the Plaintiff and Nonparty 1 urged Nonparty 2 to repay KRW 5,000,000 in the balance of the instant loan to the Housing Bank. On the following day, Nonparty 2 paid KRW 5,000,000 in the balance of the instant loan to the Housing Bank on January 19, 201, taking advantage of the condition that the registration of creation of a mortgage of this case was not cancelled, the Plaintiff and Nonparty 1 borrowed KRW 45,000,000 as new collateral from the Housing Bank as security, and then temporarily locked around that time.

I. Afterward, the Plaintiff, as a lessee, applied for a demand for distribution in the voluntary auction procedure where a national bank, a corporation which merged housing banks, applied for a voluntary auction based on the instant collateral security, received only KRW 16,593,139 in the order of priority on April 28, 2003, which is the date of distribution.

(j) The plaintiff filed a lawsuit against the non-party 1 on April 28, 2003 against the non-party 1 for damages compensation amounting to 48,406,861 won (=65,000,000 - 16,593,139 won) in the remainder of the lease deposit amount suffered by the plaintiff as it is recognized that the non-party 1 is liable for damages equivalent to 48,406,861 won and its amount from April 28, 2003 to May 31, 2003, since the non-party 1 was negligent in acting as an intermediary in violation of the provisions of the Civil Act, the Real Estate Brokerage Act, the Enforcement Decree of the Real Estate Brokerage Act, etc. Act, and the duty of care required by social norms, and thus, the above judgment became final and conclusive at the above annual rate from June 1, 2003 to 200.

(k) Pursuant to Article 35-2 of the Real Estate Brokerage Act, the Defendant is a business operator operating a mutual aid project to guarantee the broker's liability for damages as stipulated in Article 19 (1) of the same Act. At the time of concluding the lease contract, Nonparty 1 was subscribed to the said mutual aid contract.

2. Judgment on the plaintiff's assertion

A. The Plaintiff refused to implement the instant lease agreement with the knowledge of the fact that the instant right to collateral security was established prior to the payment of intermediate payment, and the Nonparty 1 promised to be liable for damages to the Plaintiff due to the occurrence of the Plaintiff under the instant lease agreement. However, the Plaintiff did not take proper measures to cancel the instant lease agreement, and thereby inflicted damages on the Plaintiff equivalent to KRW 48,406,861 in the balance of the said lease deposit. Nonparty 1’s act was caused by intention or negligence on the part of the broker under Article 19(1) of the Real Estate Brokerage Act, which caused property damage to the transaction party in the course of acting as a broker, and the Defendant asserted that he/she is liable for compensation pursuant to the said lease agreement, and sought compensation against the Defendant.

B. Therefore, Article 19(1) of the Real Estate Brokerage Act provides that "where a broker has caused property damage to a transaction party by intention or negligence while acting as a broker, the broker shall be liable for such damage." Article 1 of the mutual-aid agreement provides that "where a mutual-aid policyholder who is a real estate broker causes property damage to a transaction party by intention or negligence in performing a real estate brokerage act, he/she shall be liable to compensate for the damage suffered by the transaction party in accordance with the terms and conditions stated in the certificate of mutual-aid as well as the matters entered in the certificate of mutual-aid." Thus, the defendant is liable to compensate for the damage suffered by the transaction party only when the broker is liable to compensate the transaction party by intention or negligence while acting as a broker. On the other hand, brokerage refers to mediating the transaction, exchange, lease, or other acts of acquisition, loss or change of rights between the transaction parties (Article 2 subparagraph 1 of the Real Estate Brokerage Act). Whether an act constitutes a brokerage act is objectively deemed to have been objectively 980/199 of a transaction with the intention of 97.

C. As seen earlier, insofar as the instant lease agreement was concluded between the Plaintiff and Nonparty 2 with Nonparty 1’s good offices, it is reasonable to view that Nonparty 1’s act of brokerage terminated, barring any special circumstances. Accordingly, barring any special circumstance, it cannot be deemed that Nonparty 1’s act of arranging and mediating transactions in social norms is merely an act of arranging and arranging transactions, and even if Nonparty 1 did not actually cancel the instant lease agreement, and thus, even if the Plaintiff suffered losses due to the Plaintiff’s failure to perform the instant lease agreement, it cannot be deemed that the Plaintiff’s act of arranging and arranging transactions is a case where the broker under Article 19(1) of the Real Estate Brokerage Act committed an intentional or negligent act to cause property damage to the transaction party, and thus, Nonparty 1’s act of refusing to implement the instant lease agreement cannot be deemed as an act of cancelling the instant lease agreement. Furthermore, the Plaintiff’s assertion is without merit.

D. Although the Plaintiff did not recognize the above assertion, Nonparty 1 did not take all necessary measures so that the right relationship of the instant house was confirmed through the registry at the time of the payment of intermediate payment and the remainder of the lease contract in accordance with Article 17(1) of the Real Estate Brokerage Act, Article 22(1)5 of the Enforcement Decree of the same Act, and Article 681 of the Civil Act, and if the establishment registration of the instant house was completed or not cancelled at the time of the payment of intermediate payment and the remainder, the Plaintiff would have caused damage equivalent to KRW 48,406,861 in the remainder of the lease deposit amount to the Plaintiff by neglecting this, and thus, Nonparty 1’s act constitutes a case where the broker under Article 19(1) of the Real Estate Brokerage Act caused property damage to the transaction party by intention or negligence.

E. Therefore, Article 17(1) of the Real Estate Brokerage Act provides that "where a broker receives a request for brokerage, he/she shall confirm the state, location, and rights of the relevant object of brokerage, transaction or restriction on use by Acts and subordinate statutes, and other matters prescribed by the Presidential Decree, and present them in writing to the broker who intends to acquire the right to the relevant object of brokerage and explain it faithfully and correctly." Article 22(1)5 of the Enforcement Decree of the Real Estate Brokerage Act provides that "the matters concerning the right to the relevant object of brokerage, such as ownership, lease on a deposit basis, mortgage, superficies, superficies, leases, etc.," shall be confirmed and explained by the broker pursuant to Article 17 of the Real Estate Brokerage Act." However, even if the above provisions are followed, it is difficult for the mandatory to confirm the remainder of the registration and the duty of intermediate payment to the broker once again before the execution of the contract was concluded, and it is difficult to view that the Plaintiff did not pay the remainder of the registration and the duty of intermediate payment to the client before the execution of the contract or the obligation of intermediate payment.

3. Conclusion

Therefore, the plaintiff's claim based on the premise that the non-party 1 caused damage to the plaintiff by intention or negligence in acting as a broker is dismissed as it is without merit, and the judgment of the court below which accepted the plaintiff's claim is unfair. Thus, the judgment of the court below is revoked and the plaintiff's claim is dismissed as per Disposition

Judges Cho Jong-il (Presiding Judge)