Whether the payment of an advance as substitute for real estate violates Article 17 of the Fair Transactions in Subcontracting Act (affirmative with qualification)

The agreement to pay the advance payment of a construction project on behalf of a contractor for a real estate less than the amount of the advance payment on behalf of the subcontractor is null and void in violation of Articles 17 and 20 of the Fair Transactions in Subcontracting Act. However, it is reasonable to deem that the contract between the contractor and the contractor is valid for the amount equivalent to the market price of the real estate transferred to the contractor by the contractor, and is null and void only for the portion exceeding the market price.

[1] Articles 2(1), 17, and 20 of the Fair Transactions in Subcontracting Act

The same corporation and one other (Attorney Ansan-sik et al., Counsel for the plaintiff-appellant)

Electrical Construction Financial Cooperative (Attorney Ansan-tae, Counsel for defendant-appellant)

Dae-jin Power Co., Ltd. (Attorney Ansan-tae, Counsel for the defendant-appellant)

Busan District Court Decision 98Na13320 delivered on November 11, 1999

1. Of the original judgment, the part against the defendant ordering the same defendant corporation to pay 469,145,784 won to the same defendant, 332,145,00 won to the same comprehensive construction company of the plaintiff corporation, and 5% per annum from June 25, 1998 to April 12, 2001, and 25% per annum from the next day to the date of full payment, shall be revoked, and all of the plaintiffs' claims corresponding to this part shall be dismissed.

2. The defendant's remaining appeals against the plaintiffs are all dismissed.

3. The costs of the lawsuit shall be four minutes by adding the first and second instances, and their three costs shall be borne by the defendant, and the remainder by the plaintiffs.

1. Purport of claim

The defendant shall pay to the same plaintiff corporation 577,30,00 won, 430,354,285 won, and 25% interest per annum from the day following the delivery of the complaint of this case to the day of complete payment.

2. Purport of appeal

The part of the judgment of the court below against the defendant is revoked and all of the plaintiffs' claims corresponding thereto are dismissed.

1. Facts of recognition;

The following facts are not disputed between the parties, or there is no dispute between the parties, Gap evidence 1-4, 2-1 through 16, Eul evidence 3-1 through 8, Gap evidence 4-1 through 5, Gap evidence 5-1 through 13, Gap evidence 9, 19, 20, 25, Gap evidence 11, 26, 28-1, 27-2, Gap evidence 29-1 through 4, Eul evidence 29-2, Eul evidence 5, 9, 10, 12, 13, 16, Eul evidence 1-1 through 14-1, Eul evidence 1-2, Eul evidence 1-1, 17-1, Eul evidence 3-2, Eul evidence 37 through 41, Eul evidence 5-2, the composition of the court below's new testimony and evaluation team of each of the above evidence, Eul evidence appraisal and evaluation team of each of the above 3-1 and 6-1, defendant 37 through 41.

A. Status of the parties

The same and the same comprehensive construction company is a contractor for each of the following construction contracts, and the non-party Hanyang Electric Co., Ltd. (hereinafter referred to as the "non-party company") is the contractor, and the defendant guarantees the obligation to pay the contract deposit and the obligation to return the advance payment for the plaintiffs of the non-party company.

(b) Details of the contract;

Between the non-party company and the same company of the plaintiff corporation (hereinafter referred to as "the same plaintiff") entered into a contract for the following (1) through (3) and the same comprehensive construction company of the plaintiff corporation (hereinafter referred to as "the same comprehensive construction company of the plaintiff") (hereinafter referred to as "construction company of the plaintiff") under (4) below (hereinafter referred to as "construction company of the case 1, 2, 3 and 4").

(i)the same apartment and fire fighting construction (the first construction of this case).

(A) The contract date: August 14, 1996

(B) Purpose of contract: The part of the electrical construction and fire fighting construction among the construction works of the same apartment (499 households) that the plaintiff was constructed on the land of 243-3 et al., Busan Northern-dong, Busan-dong, Busan-dong.

(c)Contract amount: 1,243,930,544 won (including value-added tax of KRW 23,930,544);

(D) Construction period: from September 2, 1996 to February 8, 1999

(e) Contract bond: gold 124,393,054 won, 10% of the contract amount;

(f) Advance payments: 390,000,000 won;

(2) The second and second same apartment construction (the second construction of this case)

(A) The contract date: April 3, 1997

(b)Contract Purpose: the portion of electrical construction among the construction works of the same second apartment (232 households) constructed by the plaintiff on the land of the same kind, the second apartment (232 households), which is constructed on the land of the same kind in Busan, Seo-gu, Busan

(c) Contract amount: gold 471,620,000 won (including value-added tax of KRW 1,620,000);

(D) Construction period: from April 15, 1997 to April 30, 1999

(e) Contract bond: gold 47,162,00 won, 10% of the contract amount;

(f) Advance payments: 47,000,000 won;

(3) The same apartment fire fighting construction in the second example (the third construction in this case)

(A) The contract date: October 22, 1997

(B) Purpose of contract: the part of the fire-fighting construction among the construction works of the same second-class apartment.

(c) Contract amount: 311,069,000 won (including value-added tax of KRW 1,069,000);

(D) Construction period: from November 1, 1997 to November 30, 1998

(e) Contract bond: gold 31,106,90 won, 10% of the contract amount;

(f) Advance payments: 100,000,000 won;

(4) The same apartment construction and fire fighting construction of the first-class same apartment (this case No. 4)

(A) The contract date: May 29, 1996

(b) Purpose of contract: Electric construction and fire fighting works among the construction works of the first same apartment (498 households) that the plaintiff's integrated construction is constructed on the land of the same kind, the main house of which is 939-3 and 8, the main house of which is 93

(c) Contract amount: gold 1,367,634,611 won (including value-added tax 37,634,611);

(D) Construction period: from June 1, 1996 to November 30, 1998

(e) Contract bond: gold 136,763,461 won, 10% of the contract amount;

(f) Advance payments: 350,000,000 won;

(c) Details of agreements and issuance of certificates of guarantee for contract deposit;

(1) The plaintiff and the non-party company agreed to deliver to the non-party company a contract guarantee issued by the defendant for the corresponding amount instead of paying the contract bond in cash, when it is clearly acknowledged that the construction cannot be completed within the air due to the reasons attributable to the non-party company, the plaintiffs may cancel or terminate the contract. If the contract is cancelled or terminated due to such reasons, the plaintiffs shall not return the amount received as the contract

(2)In respect of the instant construction works, the non-party company received three copies of each of the contract guarantee certificates (124,393,054 won as of August 20, 1996, gold 47,162,000 won as of April 4, 1997, and gold 31,106,90 won as of November 4, 1997) from the Defendant with respect to the instant construction works, and delivered one copy of the contract guarantee certificate (136,763,461 won as of May 27, 1996) to the same Plaintiff.

(d) To deliver a written agreement and guarantee with respect to advance payments;

(1) The Plaintiff and the non-party company paid advance payment under each of the instant construction contracts to the non-party company, and the Plaintiffs agreed to cover the construction cost at the rate of the construction cost for each of the future contract amounts, and the non-party company issued a written guarantee corresponding to advance payment from the Defendant to deliver it to the Plaintiff.

(2)In connection with the instant construction work, the non-party company received three copies of the advance payment guarantee form (390,000,000 won on August 21, 1996, gold 47,000,000 won on April 4, 1997, and gold 100,000,000 won on October 31, 1997) from the Defendant with respect to the instant construction work, and delivered to the same Plaintiff with respect to the instant construction work, two copies of the advance payment guarantee form (220,000,000 won on June 25, 1996 and gold 130,000,000 won on August 21, 196) from the Defendant.

(e) Advance payments;

(1) Advance payment of the instant 1 Corporation

(A) At the time of entering into a contract, the same Plaintiff, on behalf of the said Plaintiff, proposed transfer of the real estate that the said Plaintiff constructed and sold in lieu of advance payment, and the Nonparty Company consented to the payment of advance payment to the Nonparty Company, as well as to make it difficult for the Nonparty Company to receive orders for other construction works in the future. Accordingly, if the Plaintiff issued a promissory note equivalent to advance payment to the Nonparty Company, the Nonparty Company made an endorsement and transfer to the said promissory note and made payment to the Plaintiff as the sale price of real estate, and the same Plaintiff agreed to sell the real estate equivalent thereto to the Nonparty Company.

(b)In accordance with this agreement, the Plaintiff issued to the non-party company a promissory note of KRW 390,00,000,000, which is the same amount as the advance payment of the agreement on September 7, 1996, and the non-party company endorsed it on the same day and transferred it to the same Plaintiff. The same Plaintiff made a registration of ownership transfer to the non-party company's designated person, such as the non-party company's 103, 127 (Ga), 116, 116, 204 (GaGa), 116, 216, 213 (GaGa) and 116, 312 (GaGaGa).

(c) At that time, the plaintiff and the non-party company assessed the price of the above housing and commercial buildings as the initial sale price of KRW 390,00,000,00 in advance, and adjusted that the aggregate of the price of the above housing and commercial buildings would be KRW 95,000,000 in advance, KRW 127 as gold KRW 96,00,000, KRW 83,000,000 in advance, KRW 213 as gold KRW 77,00,000 in advance, KRW 312 as gold KRW 39,00,000 in advance. At that time, the market price of the above housing and commercial buildings was lower than the initial sale price of KRW 309,80,000 in advance, KRW 50,000 in advance, KRW 905,000 in advance, KRW 3008, KRW 30000 in advance, KRW 309,0000 in advance.

(D)After that, on September 9, 1996, the above 127, 204 and 213 were the regular director of the non-party company, and on July 5, 1997 with respect to the above 101, the non-party 127, 204 and 213, the registration of ownership transfer was made in the name of the non-party 1, the representative director of the non-party company, and on March 24, 1997 with respect to the above 312, the non-party 1 was agreed to make the registration of ownership transfer in the name of the non-party 1, but the registration of ownership transfer was not completed due to the circumstances of the non-party 1, the non-party 1, who filed the lawsuit against the same plaintiff for the registration of ownership transfer (the judgment of winning the case around

(2) The advance payment for the second and third construction works of this case

For the payment of KRW 47,00,000 as the advance payment of the 2nd Corporation, the Plaintiff and the Plaintiff were issued to the non-party company on April 23, 1997 and settled on August 25, 1997 for the payment of KRW 40,00,000,000, which is part of the advance payment of the 3rd Corporation, for the payment of KRW 100,000,000,000. A promissory note of the same amount on December 5, 1997 was issued to the non-party company and settled on March 31, 1998.

(3) Advance payment of the instant 4 Corporation

(A) The Plaintiff’s integrated construction agreed to substitute for advance payment by transferring real estate on behalf of KRW 350,000,000 between the non-party company and the non-party company like the Plaintiff. Accordingly, the Plaintiff’s comprehensive construction, upon receipt of two advance payment guarantee from the non-party company, issued two promissory notes with face value of KRW 220,00,000 and KRW 130,000,000 to the non-party company. The non-party company re-endorseed and transferred them to the above plaintiff. The above Plaintiff, as the parent company, transferred them again to the non-party company. On September 16, 1996, the non-party company completed the registration of transfer of ownership of the non-party company’s representative director, the non-party company’s non-party company’s representative director.

(b) At the time of the above transfer, the Plaintiff’s integrated construction and the non-party company set the above 401 Ba-Ba at KRW 350,000,000 on the basis of the initial sale price. However, the market price at the time of the above transfer date was the amount equivalent to KRW 284,625,000,000 in advance payment, which was 350,000,000 in advance payment.

(f) Suspension of construction works and cancellation of a contract therefor;

On January 3, 1998, the non-party company, which carried out each of the instant construction works, was suspended from current account transactions and was no longer capable of carrying out construction works. The plaintiffs cancelled each of the instant construction works around that time on the grounds that the non-party company was clearly unable to complete construction works in the air due to the non-party company's default, and then requested the Defendant to pay advance payment and contract deposit on the seventh of

2. Determination on the claim for return of advance payment

(a) Cancellation of a contract for construction works;

According to the facts of the above 1. The non-party company, the contractor of each of the instant construction works, was unable to complete the construction works in the air due to the reasons attributable to the contractor, as the non-party company ceased the construction while performing the construction works, and on this ground, the contract for each of the above construction works was lawfully rescinded according to the plaintiffs' intention of cancellation.

B. Whether the obligation to return an advance exists

(1) The defendant's assertion

The plaintiff asserts that the return of KRW 37,300,00 ( KRW 390,00,000 + KRW 47,000,000 + KRW 47,000 + KRW 40,000 + KRW 40,000 + KRW 99,700,000 due to the non-party company's personality and personality) paid by the non-party company to the non-party company as advance payment of the 1,2, and the amount of KRW 37,30,00 ( KRW 47,00,000- KRW 9,70,000) due to the non-party company's personality and personality shall be deducted from KRW 350,00,00 which was paid by the non-party company to the non-party company as advance payment of the 4,000,000, KRW 52,645,705,000; the defendant shall not respond to each of the following reasons:

(A) The Plaintiff issued a promissory note equivalent to the amount of the advance payment for the 1/4 construction works of this case to the non-party company, but immediately recovered from the sales price for other real estate, and the said promissory note was not settled on the due date. The advance payment is intended to ensure that the contractor can prepare for the commencement of the construction work by securing materials necessary for the construction work in advance and employing human resources, so it does not interfere with the construction and completion of the construction work. It is contrary to the nature of the advance payment. Thus, in relation to the 1/4 construction of this case, the Plaintiffs cannot be deemed to have paid advance payment to the non-party company.

(B) The Plaintiff’s payment of advance payment to a real estate not in cash against the subcontractor’s will by taking advantage of the superior position of the contractor for construction work, and completing the registration of ownership transfer to a third party who is not the non-party company for real estate title trust constitutes an act contrary to the principle of trust and good faith or social order, and further constitutes an unfair act contrary to the provisions of Article 17 of the Fair Transactions in Subcontracting Act. Furthermore, even if there is no suspicion, the actual price of the real estate paid by the Plaintiffs as a substitute does not reach the advance payment of the agreed amount, and thus, it cannot be deemed that the agreed advance payment was made by substitute payment.

(C) The Defendant guaranteed the obligation to return advance payment only when advance payment was made normally in accordance with its original intent. Thus, in the case of this case, it shall be deemed that the Defendant did not establish the Defendant’s obligation to guarantee, or that the Defendant’s responsibility should be mitigated or mitigated. The Defendant guaranteed the return of advance payment by deceiving the Plaintiffs and the Nonparty Company by misrepresenting that the Nonparty Company received advance payment in cash from the Plaintiffs. Since the contract for the guarantee of advance payment was cancelled due to fraud or mistake, the guarantee contract was null and void.

(D) The plaintiff did not actually pay advance payment to the non-party company, resulting in the non-party company's insolvency due to the shortage of funds. Accordingly, Hanyang Electrical suffered losses from the plaintiffs at least KRW 600,000,000, which is 20% of each of the construction costs of this case. Thus, this amount must be deducted or offset from the obligation to return advance payment to the plaintiffs.

(2) Determination:

(A) Determination on the assertion of Paragraph (1)(A)

In the contract for construction work, the contractor can pay advance payment in real estate under the agreement with the contractor, so it cannot be viewed that advance payment has not been made because he paid advance payment in real estate not in cash. The defendant's above (1) (A) argument is without merit.

(B) Determination as to the assertion under Paragraph (1) (b) above

First, it is difficult to readily conclude that the plaintiffs' transfer of real estate to a third party designated by the non-party company and completion of the registration of transfer of ownership is a title trust, and there is no other evidence to acknowledge this. Even if there was a title trust agreement between the non-party company and the third party, there is no evidence to deem that the plaintiffs knew such circumstance, and it is difficult to view that the agreement to transfer real estate, the market price of which is 80% higher than the advance payment, constitutes a violation of the principle of good faith or social order, or an unfair act. Thus, the defendant's assertion on this

However, according to the provisions of Article 2 (1) of the Fair Transactions in Subcontracting Act, each contract for the construction work of this case is included in the subcontract price under the above Act, and the above Act provides that "the prime contractor shall not pay the subcontract price as goods against the will of the subcontractor" in Article 17, and Article 20 provides that "the prime contractor shall not substantially evade the application of this Act in connection with the subcontract price" in the manner of bypassing it. The following facts are shown in the above 1.1. situation. In other words, the non-party company was unable to accept the plaintiffs' intention to pay the advance payment of the 1.4 construction work of this case as real estate. However, the non-party company took no choice but to accept it for the relevant construction work and other construction works. The real estate which the plaintiffs decided to sell in lieu of the advance payment was newly constructed before or after 2 years or more, and the market price does not reach the initial sale price, and it seems that the price of the real estate does not reach the actual amount of the advance payment of the construction work of this case and the non-party 1.

However, in this case, it is possible to divide the amount exceeding the market price and the amount exceeding the market price in the above advance payment agreement, and it is reasonable to view that the plaintiffs paid the amount equivalent to the market price at the time of the real estate transferred to the non-party company to the non-party company as the advance payment is in line with the intent at the time of the plaintiffs or the non-party company. Thus, this part of the agreement between the plaintiffs and the non-party company is valid and invalid only

Therefore, when calculating the advance payment of each of the instant construction works as the market price of real estate for the first and fourth construction works, and as for the second and third construction works, the advance payment of each of the instant construction works is KRW 309,886,00 (the first construction works), KRW 47,000 (the second construction works), KRW 40,000 (the third construction works) and KRW 284,625,000 (the fourth construction works) and KRW 284,625,000 (the fourth construction works).

(C) Determination as to the assertion of paragraph (1) (c) above

First, it is difficult to believe that the plaintiffs paid advance payment to the non-party company only when the plaintiffs paid advance payment to the non-party company in cash, and the statements in Eul Nos. 6, 8, 30, and 31 as well as the above statements in the above statements, the above statements, and the testimony in Yellow Won as to whether the defendant paid the advance payment to the non-party company, and there is no other evidence to acknowledge it. Next, even if the non-party company did not notify the defendant of the fact that the advance payment was paid to the non-party company, it is difficult to view it as a deception

In addition, the defendant's argument related to mistake is understood as claiming partial revocation of the portion exceeding the market price under the payment agreement in advance. As seen above, the advance payment already paid is not determined as much as it is already limited to the market price of real estate.

(D) Determination on the assertion of the above (1) (D)

As alleged by the defendant, it is examined whether the non-party company's failure to pay advance payment to the non-party company actually led to the non-party company's insolvency due to the lack of funds, and it is difficult to believe that each statement of Nos. 6, 8, 30, and 31, and each statement of Nos. 6, 8, 30, and 31, as well as the above statement of Nos. 6, 8, 30, and Ywon's testimony, and there is no other evidence to acknowledge

C. Scope of responsibility for return of advance payment

(1)The following facts are not disputed between the parties, or there is no dispute between Gap evidence 15-1 to 9, Gap evidence 16-1 to 17-2, Gap evidence 17-1 to 22, Gap evidence 18-1 to 24, Gap evidence 22-1 to 4, Gap evidence 23-1, 23-2, Gap evidence 24-1 to 5, Gap 30, 31 to 33, 34-1, 34-2, Eul evidence 34-1, 34-1, 34-2, and each testimony of the above Kim Jong-hun, long-term, and Composition, and contrary to this, Eul evidence 34, 35-1 to 34 and 35-1 to 24, and there is no other counter-proof evidence.

(A) The payment for the completed portion until the discontinuance of the instant construction project is KRW 204,40,000 in total ( KRW 171,200,000 for the completed portion up to November 1, 1997 plus KRW 33,200,00 for the completed portion up to 12.12. The Plaintiff paid KRW 104,70,000 among them.

(b)The progress payment up to the suspension period of the 2/3 works in the instant case is KRW 37,640,216 (materials Cost of KRW 18,703,390 + Labor Cost of KRW 18,936,826) and the same Plaintiff paid KRW 9,60,000 among them.

(C) The progress payment up to the suspension of the instant 4 construction project is KRW 240,480,000 in total (204,560,000 for progress payment up to November 1, 1997 + KRW 35,920,00 for progress payment up to 12.12), and the Plaintiff’s integrated construction paid KRW 155,00,000 for that portion.

(2)Therefore, according to the facts found in Section 1, the amount that the Defendant is liable to pay to the Plaintiffs according to the payment guarantee for advance payment, the amount of KRW 210,186,00 [309,886,000 + 104,700,000 + 204,40,000 - 309,886,86,000 for advance payment under the ratio of the pre-paid construction cost to the pre-paid construction cost under the ratio of the pre-paid construction cost to the pre-paid portion, the remaining advance payment and the unpaid construction cost shall be calculated, and the result thereof shall be calculated simply because it is the same as the result; hereinafter the same shall apply] and the same amount of KRW 58,959,784 (87,000,600, 600, 307, 409, 2084, 2096, 20846, 2096, 20946, 205467, 167

3. Determination on a claim for payment of a contract bond

The reasoning of this court concerning this part is as stated in the corresponding part of the reasoning of the judgment of the court below (3. obligation to pay the contract deposit), and such part is cited as it is in accordance with Article 390 of the Civil Procedure Act (200,000,000 won (the same as the plaintiff), 133,00,000 won (the same comprehensive construction as the plaintiff).

4. Conclusion

Thus, the defendant is liable to the same plaintiff for 469,145,784 won (Advance payment of 269,145,784 + 200,000,000 won) and 332,145,000 won (Advance payment of 199,145,000 won + 133,000,000 won) to the same construction, and each of them is the following day after the delivery date of the complaint of this case sought by the plaintiffs, which is obvious from June 25, 1998 to June 25, 2008, which is the date of the decision of the court below that it is reasonable for the defendant to dispute the existence or scope of the obligation, and the remaining part of the appeal of this case is dismissed as it is without merit, and it is so decided that the remaining part of the appeal of this case is without merit. It is dismissed as per all of the judgment below.

Judges Kim Jong-sung (Presiding Judge)