2017Da256477 Unjust enrichment

A Stock Company

B A.

Seoul Central District Court Decision 2017Na5401 Decided July 20, 2017

April 26, 2018

The judgment of the court below is reversed, and the case is remanded to the Seoul Central District Court Panel Division.

The grounds of appeal are examined.

1. Article 116(1) of the Civil Act provides, “When an expression of intent is affected by a defect of intention, fraud, coercion or any other circumstance or failure to know such fact by negligence, the existence of such fact shall be determined on the basis of an agent.” Therefore, where an agent has made a false declaration in collusion with the other party and made a false declaration of intent, such declaration of intent shall not become effective without asking the other party’s good faith or bad faith, and the principal may not be protected as a third person acting in good faith under Article 108(2) of

2. The court below, citing the judgment of the court of first instance, acknowledged that the defendant entered into the original manufacture subcontract (the above contract appears to be merely a purchase contract of the original unit according to the records; hereinafter referred to as the "contract of this case") with the plaintiff and did not perform the obligation to deliver the original unit to the plaintiff even after receiving KRW 165,616,00 from the plaintiff, and the plaintiff did not perform the obligation to deliver the original unit. Since the contract of this case was terminated upon the delivery of the complaint containing the plaintiff's declaration of intent to cancel the contract by the defendant on the ground of such non-performance, the defendant is liable to recover the original unit price to the plaintiff and pay the interest and delay damages accordingly.

Furthermore, the lower court rejected the Defendant’s assertion that the instant contract constitutes a false declaration of conspiracy and thus null and void, on the grounds that there is no difference between the truth and indication of the declaration of intention in order to establish a false declaration of conspiracy and there is an agreement with the other party as to the inconsistency. The lower court rejected the instant contract on the grounds that the Plaintiff and the Defendant knew that the instant processing transaction was made without the actual transaction relationship and there is no evidence

3. However, it is difficult to accept such a determination by the lower court for the following reasons.

A. According to the evidence duly adopted and examined by the lower court, the following facts are revealed.

1) Since December 2010, C, as the head of the Plaintiff’s mother business division, has overall control over the conclusion and sale of the contract and the collection of the price.

2) On August 201, 201, C established E Co., Ltd. (hereinafter referred to as “E”), a representative director of the Plaintiff, for the same kind of business, and operated a separate business.

3) C had a comprehensive authority over the Plaintiff’s original transaction and acquired the Plaintiff’s funds by means of processing transaction using the fact that E is a company of C, without knowledge.

4) C intended to purchase the original unit from E to the representative G of the Defendant, and the Defendant changed to intermediate agency. As the Plaintiff paid the original unit to the Defendant, the Plaintiff would be exempted from sending the said amount to E if it paid the original unit. The original unit would be directly sent to the Plaintiff by E. The Defendant’s representative G accepted it and agreed that “C and E supplied the original unit to the Plaintiff under the Defendant’s name, and then delivered the original unit payment to E by the Defendant on behalf of the Plaintiff.”

5) On April 4, 2013, C, by deceiving H, had the Defendant pay KRW 88,00,000 under the Plaintiff’s name, and the Defendant wired KRW 114,40,000, including the said money to E’s account on the same day. In addition, the Defendant issued a tax invoice of KRW 88,00,000 to the Plaintiff.

6) On April 30, 2014, C, by deceiving H, had the Plaintiff pay KRW 77,616,00 to the Defendant under the Plaintiff’s name. On the same day, the Defendant issued a tax invoice of KRW 77,616,00 to the Plaintiff. On May 7, 2014, C remitted KRW 76,692,00 out of the said money to the E account under the name of E.C. 7) was indicted for the crime of violating the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Fraud) and was convicted of having been sentenced to imprisonment for four years.

8) Meanwhile, the Plaintiff filed a complaint with G by asserting that the Defendant’s representative G conspireds with C that the Plaintiff deceivings the Plaintiff and acquired money, but the prosecutor of the Seoul Central District Prosecutor’s Office rendered a disposition that was not suspected of suspicion against G on July 31, 2015 on the ground that the Defendant was merely used in committing the crime by C and that there was insufficient evidence as to the suspected facts. The Plaintiff appealed against the foregoing non-prosecution disposition, but all dismissed.

B. According to the above facts, C, as the head of the Plaintiff’s mother business division, has overall control over the conclusion of the contract and the collection of the price for the sale of the headquarters and the sales. As such, C, as an employee delegated to the specific type of business or specific matters under Article 15 of the Commercial Act, is an employee with the partial comprehensive power of attorney. In addition, according to the above facts, it appears that the contract between the Plaintiff and the Defendant was effective. However, this is merely the most act performed by C according to the Defendant’s agreement on the processing transaction between the Plaintiff and E, and its substance is reasonable to deem that C entered into an interim agency contract by way of delivering the original amount received from the Plaintiff to E without receiving the original amount from the Plaintiff in the processing transaction relationship between the Plaintiff and E.

Therefore, in light of the above legal principles, since C, an employee with a partial comprehensive power of attorney, has made a false declaration in collusion with the representative of the defendant, the contract in this case is null and void pursuant to Article 108(1) of the Civil Act. As such, in a case where an agent made a false declaration in collusion with the other party, the principal cannot be protected as a bona fide third person because he did not constitute a third party. Thus, the plaintiff cannot assert the validity of the contract in this case against the defendant, or on the premise of his claim for performance or nonperformance

C. Nevertheless, solely on the grounds indicated in its reasoning, the lower court deemed that the instant contract was actually effective between the Plaintiff and the Defendant, and recognized the Defendant’s duty to restore the Plaintiff’s rescission. In so doing, the lower court erred by exceeding the bounds of the principle of free evaluation of evidence in violation of logical and empirical rules, or by misapprehending the legal doctrine on false conspiracy, thereby adversely affecting the conclusion of

4. Therefore, the lower judgment is reversed, and the case is remanded to the lower court for further proceedings consistent with this Opinion. It is so decided as per Disposition by the assent of all participating Justices on the bench.

The presiding judge shall keep the record of the Justice

Note Justice Ko Young-young

Justices Kim Gin-young

Justices Cho Jae-chul