Korea Electric Power Corporation (Law Firm P & P, Attorneys Seo Jong-hun et al., Counsel for defendant-appellant)

Han Gyeong Construction Co., Ltd. (Attorney Cho Jong-soo, Counsel for defendant-appellee)

April 21, 2016

Daejeon District Court Decision 2015Da5114 Decided August 26, 2015

1. Of the judgment of the court of first instance, the part against the plaintiff corresponding to the money ordered to pay below shall be revoked.

The defendant shall pay to the plaintiff 3,880,000 won with 6% interest per annum from April 6, 2012 to July 14, 2016, and 20% interest per annum from the next day to the day of full payment.

2. The plaintiff's remaining appeal is dismissed.

3. All costs of the lawsuit shall be borne by the defendant.

4. The portion paid with the amount under paragraph (1) may be provisionally executed.

The judgment of the first instance is revoked. The defendant shall pay to the plaintiff 3,880,000 won with the interest of 6% per annum from April 6, 2012 to the service date of a copy of the complaint of this case, and 20% per annum from the next day to the day of complete payment.

1. Basic facts

A. The Plaintiff is a corporation established for the purpose of electrical construction business, etc., and the Defendant was a corporation established by Nonparty 1 for the purpose of construction business, etc. on August 22, 2007, the trade name of Nonparty 2, which was acquired by Nonparty 2, changed to T.C. Construction Co., Ltd. on August 8, 2012, and was changed to K.C. Construction Co., Ltd. as of March 6, 2014.

B. On August 26, 2011, the Defendant entered into a contract with the Plaintiff to subcontract the electricity fire fighting construction work (hereinafter “instant construction work”) to KRW 33,880,000 for the construction cost (hereinafter “instant subcontract”). Upon completion of the instant construction work, the Defendant agreed to pay the price after receiving the certificate of electrical fire fighting construction from the Plaintiff.

C. After completing the instant electrical construction on January 6, 2012, the Plaintiff delivered it to the Defendant and received a certificate of the performance of the instant construction from the Defendant. On March 13, 2012, after completing the fire-fighting system installation, the Plaintiff obtained a certificate of completion of fire-fighting system construction from the chief of Ansan fire station and provided it to the Defendant.

D. The instant extension corporation was completed on April 6, 2012, and Nonparty 1, the initial representative director of the Defendant, was in excess of the construction cost, and the Defendant did not pay it to Nonparty 2.

[Reasons for Recognition] Uncontentious Facts, Gap evidence 1 to Gap evidence 4, Gap evidence 7, Eul evidence 2 (including provisional number), the purport of the whole pleadings

2. Determination as to the cause of action

According to the basic facts, the Defendant is obligated to pay the construction cost of KRW 33,880,00 to the Plaintiff who completed the instant construction work and issued the fire-fighting inspection certificate, and the delay damages therefrom.

3. Judgment on the defendant's assertion

A. Summary of the defendant's assertion

1) Since Nonparty 1, the former representative director of the Defendant, agreed to grant the Plaintiff a contract for the instant construction in return for introducing and receiving other electrical construction besides the instant construction, the Plaintiff agreed to grant the instant construction without compensation, the Plaintiff’s claim for the construction cost of this case is without merit.

2) The time when the instant claim for construction cost occurred is January 6, 2012 when the Defendant issued a certificate of the performance of electrical construction to the Plaintiff, and the Plaintiff filed the instant lawsuit on April 1, 2015 when three years have elapsed since the Plaintiff filed the instant lawsuit. As such, the instant claim for construction cost expired by prescription.

B. Determination

1) Whether there was an agreement on the construction of the instant case at no cost and at no cost

In light of the fact that Non-Party 1’s testimony of Non-Party 2 as shown in the Defendant’s above argument and Non-Party 1’s testimony was the former representative director of the Defendant, it is difficult to believe it as it is, and there is no other evidence to acknowledge it otherwise. Rather, according to the standard subcontract agreement of construction work (Evidence A) which is a disposition document of the instant construction contract, the Plaintiff and the Defendant specified the construction cost of the instant construction, the payment period, the performance guarantee rate, the performance guarantee rate, and the liquidated damages rate, and if the construction of the instant case was to be done without compensation as alleged by the Defendant, the above contract would not be deemed to have been prepared, and it cannot be deemed that the said contract was made without compensation as alleged by the Defendant.

2) Whether the extinctive prescription of the instant claim for construction price expires

A) The date for the payment of the instant claim for construction price (the initial date of extinctive prescription)

(1) At the time of concluding the instant construction contract, the Plaintiff and the Defendant completed the instant construction in relation to the payment of the construction price, and provided the Defendant with the certificate of electrical construction and fire fighting, and agreed to pay the construction price to the Plaintiff after the Defendant received it. On March 13, 2012, the Plaintiff received the certificate of completion of fire fighting system construction from the chief of Ansan fire station and provided the Defendant with the certificate of completion of fire fighting system construction

(2) Meanwhile, the part of the instant fire-fighting system installation business performed by the Plaintiff is (2) under Article 14 of the Fire-Fighting System Installation Business Act, and the director of the fire-fighting headquarters or the chief of the fire station, upon receiving an application for completion inspection under Article 13 of the Enforcement Rule of the same Act, shall issue a certificate of completion of fire-fighting system installation to the construction business operator, if the relevant fire-fighting system installation works meet the statutes and the fire safety standards. In light of the purport of such statutes, the part of the instant fire-fighting system installation works cannot be deemed as immediately completed merely because the Plaintiff installed the fire-fighting system on the extended part of the instant fire-fighting system, and it is deemed as completed when the chief of the fire station provides the Defendant with the certificate of completion of fire-fighting system installation at the time of receiving the fire-fighting system installation completion certificate at the time when the Plaintiff delivered the same time as the first fire-fighting system construction completion certificate at the time when the Plaintiff delivered the same time as the first 20th of March 13, 2012.

(3) Therefore, since the date of payment of the instant construction work is March 13, 2012, the extinctive prescription will run from the following day.

B) Determination as to the expiration of extinctive prescription of the instant construction price claim

(1) A claim on a contractor’s construction work is subject to a three-year short-term extinctive prescription under Article 163 subparag. 3 of the Civil Act. As seen earlier, it is apparent in the record that the instant lawsuit was filed on April 1, 2015, which was the date of the payment of the instant construction work payment, from March 13, 2012 to March 13, 2012, and barring any special circumstance, the Plaintiff’s claim on the instant construction work payment has expired.

(2) Judgment on the Plaintiff’s assertion of suspending extinctive prescription

(A) The plaintiff's assertion

The plaintiff asserts that the period of extinctive prescription was suspended since the defendant's right to claim the delivery of investment certificates against the construction mutual aid associations by making the construction cost of this case as the preserved right.

(B) Facts of recognition

The following facts are recognized in light of each of the above evidence, Gap evidence 8 to Gap evidence 10, unless there is a dispute between the parties, or in light of the above evidence.

① The Defendant was holding one share of investment, 1,391,660 won, and 25 shares of investment. The Defendant was in custody of the Korea Construction Financial Cooperative.

② On February 9, 2015, the Plaintiff filed an application with the Daejeon District Court for provisional attachment against the claim for the payment of the instant contribution certificates with the Defendant and the third debtor as the Construction Mutual Aid Association. On March 24, 2012, the Daejeon District Court rendered a provisional attachment against the obligor’s claim for the delivery of the instant contribution certificates. On March 24, 2012, the third obligor shall not distribute profits, return investments, or distribute residual assets to the obligor. The third obligor shall not deliver the said contribution certificates to the obligor. The third obligor is prohibited from issuing the said contribution certificates. The third obligor is issued a provisional attachment order (hereinafter referred to as “provisional attachment”).

③ On March 26, 2015, the provisional attachment decision of this case was served on the Construction Mutual Aid Association. After receiving the provisional attachment decision of this case, the Construction Mutual Aid Association notified the Plaintiff that the instant investment certificate was already established as a security for the Defendant’s obligation to the Construction Mutual Aid Association.

(C) Determination

① Article 168 of the Civil Act provides that a provisional seizure as a cause of interrupting prescription may be deemed to have been exercised by an obligee by a provisional seizure. Since the effect of preserving the execution by a provisional seizure continues to exist, the interruption of prescription by a provisional seizure shall continue to exist during the effectiveness of preserving the execution of a provisional seizure (Supreme Court Decision 2006Da32781 Decided July 27, 2006). Meanwhile, a provisional seizure order by a construction mutual aid association’s share is a securities, and a seizure of an investment certificate is effective by an execution officer of a security claim the endorsement of which is prohibited (Supreme Court Decision 86Meu1456 Decided January 20, 1987, Article 59 of the Framework Act on the Construction Industry). The seizure of a right to request the delivery of corporeal movables is, in principle, made by a seizure order by the execution court and its service corresponding to the seizure order by a third-party obligor, and it does not constitute a seizure order by the so-called order for the delivery of 3rd obligor.

② A provisional attachment against an investment certificate takes effect when an execution officer of a security claim prohibited from endorsement takes possession of the investment certificate. However, if the debtor's property belongs to a third party and the third party refuses to submit such investment certificate, it is not possible to enforce compulsory execution by possession of the investment certificate, and the creditor is bound to realize it by means of seizing the debtor's right to demand delivery of corporeal movables. In addition, in light of the above legal principles, compulsory execution against the right to demand delivery of corporeal movables should be based on the compulsory execution procedure against the right to demand delivery of corporeal movables in light of the above legal principles. As such, the provisional attachment itself takes effect upon delivery of a seizure order against the third party corresponding to the seizure of corporeal movables, and it cannot be deemed that the execution officer's security possession takes effect as an effective requirement, unlike the provisional attachment itself. Therefore, the provisional attachment of this case takes effect as delivery to the Construction Mutual Aid Association, which is the debtor on March 26, 2015, and the provisional attachment of this case loses its effect, barring any circumstances otherwise, it constitutes a cause under Article 168 (2).

③ Therefore, on February 9, 2015, before three years have passed since March 13, 2012, which was the date of the payment of the instant contract price claim, the provisional attachment application of this case and its provisional attachment became effective, and thus, the extinctive prescription of the instant contract price claim was interrupted. Therefore, the Plaintiff’s assertion pointing this out has merit.

C) Sub-determination

Ultimately, the defendant's defense that the extinctive prescription for the claim for the construction price of this case has expired cannot be accepted.

4. Conclusion

A. Accordingly, the Defendant is obligated to pay to the Plaintiff 3,880,000 won for the instant construction cost and the interest rate of 20% per annum as stipulated in the main sentence of Article 3(1) of the former Act on Special Cases Concerning Expedition, etc. of Legal Proceedings, and the statutory interest rate of 30% per annum as stipulated in the main sentence of Article 3(1) of the former Act (amended by Presidential Decree No. 26553, Sep. 25, 2015) from April 6, 2012, which is deemed reasonable for the Defendant to dispute on the existence and scope of the obligation to perform the instant claim from the date of payment of the instant construction cost, to July 14, 2016, which is the date of the adjudication of the first instance.

B. The plaintiff's claim is justified within the scope of the above recognition, and the remaining claims are dismissed as it is without merit. Since the judgment of the court of first instance is unfair with some different conclusions, part of the plaintiff's appeal is accepted and the corresponding part in the part against the plaintiff in the judgment of the court of first instance is revoked, order to pay the above money to the defendant, order to dismiss the remaining appeal of the plaintiff. It is so decided as per Disposition.

Judges Choi Jin-su (Presiding Judge)