Damethyl Co., Ltd. (Attorney Bo Byung-chul et al., Counsel for defendant-appellant)

Jink Construction Co., Ltd. (Law Firm Chungcheong, Attorney Kim Jong-chul, Counsel for the plaintiff-appellant)

September 22, 2005

Seoul Southern District Court Decision 2004Da44951 Delivered on September 17, 2004

1. The judgment of the first instance is revoked, and the plaintiff's claim is dismissed.

2. The costs of lawsuit shall be borne by all the plaintiff of the first and second instances.

1. Purport of claim

The defendant shall pay to the plaintiff 84,367,140 won with 20% interest per annum from July 16, 2004 to the day of complete payment.

2. Purport of appeal

The same shall apply to the order.

1. Determination as to the cause of claim

In full view of the evidence Nos. 1 through 5, evidence Nos. 6-1, 2, 7, Eul evidence Nos. 1, 1, and 2, and part of the testimony of non-party 1 by the witness of the trial court, the plaintiff was awarded a contract with the defendant on Jan. 9, 2004 with the non-party 2 Co., Ltd. to the non-party 3 for construction of the juvenile complex center located in the Nam-gu Incheon Metropolitan City, the defendant was awarded a subcontract for 669,402,250 won (including value-added tax) and completed the construction by March 30, 2004. However, the defendant cannot be held liable to pay the construction price of this case to the plaintiff, unless special circumstances exist.

2. Judgment on the defendant's defense

The defendant asserts that the plaintiff, the defendant, and the non-party 3 corporation, the main contractor of the above construction works, have reached an agreement between the plaintiff, the defendant and the non-party 3 corporation to pay the construction price in this case directly to the plaintiff, the subcontractor.

According to Article 14 (1) of the Fair Transactions in Subcontracting Act (amended by Act No. 7315, Dec. 31, 204) and Article 4 (1) of the Enforcement Decree of the same Act, when the owner, prime contractor, and subcontractor directly agree on the payment of the subcontract price, the ordering person shall directly pay the subcontractor, and the principal contractor’s obligation to pay the subcontract price to the Plaintiff shall be deemed extinguished within the above direct payment limit, on the ground that the Plaintiff’s direct payment of the contract price to the non-party 3 corporation and the non-party 6 corporation’s direct payment of the contract price to the non-party 3 corporation (the non-party 3 corporation’s delivery of the contract price to the non-party 4 corporation) were written at the request of the non-party 1 corporation and the non-party 2 corporation’s delivery of the contract price to the non-party 3 corporation, and there is no evidence to acknowledge that the non-party 2 corporation’s delivery of the contract price was non-party 4 corporation’s receipt of the subcontract price.

Therefore, the defendant's defense is justified.

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and the judgment of the court of first instance is unfair, and it is revoked, and the plaintiff's claim is dismissed. It is so decided as per Disposition.

Judges Cho Jong-ok (Presiding Judge) (Presiding Judge) Kim Jae-sik