[1] Whether it is permissible for an obligee to seek performance if performance of an obligation is already impossible at the time of a contract (negative in principle) / Whether performance of an obligation is prohibited by law, and whether performance of an obligation is included in cases where realization of an act is legally impossible (affirmative)

[2] In a case where a sales contract was concluded by specifying a part of a parcel of land, but the area of such part is limited pursuant to Article 57(1) of the Building Act and Article 80 of the Enforcement Decree of the Building Act, whether the seller’s obligation to perform the procedure for registration of transfer of ownership is impossible (affirmative), and whether the same applies to an exchange contract (affirmative)

[1] Where the performance of an obligation becomes impossible after the conclusion of a contract, the obligee may claim compensation for damages or rescind the contract on the ground of nonperformance without claiming the performance of the obligation. However, barring any special circumstance, barring any special circumstance, the obligee is not allowed to seek the performance of an obligation, and the right is bound to be relieved by enforcing the liability for negligence in concluding a contract under Article 535 of the Civil Act.

The impossibility of performing an obligation does not include cases where an obligee cannot expect the realization of the obligor’s performance in light of the empirical rule or the concept of transaction in social life, rather than cases where it is absolute and physical impossible to perform an obligation. The same applies to cases where the performance of an obligation is prohibited by law, and thus, it is legally impossible to realize

[2] If a sales contract was concluded by specifying a part of a parcel of land, but the area of such part constitutes a case where the division is restricted pursuant to Article 57(1) of the Building Act and Article 80 of the Enforcement Decree of the Building Act, a seller cannot perform the procedure for registration of ownership transfer by dividing that part. Therefore, the seller’s obligation to perform the procedure for registration of ownership transfer to a buyer according to the sales contract shall be deemed impossible. This also applies to an exchange contract

[1] Articles 389, 390, 535, and 546 of the Civil Act / [2] Article 57(1) of the Building Act, Article 80 of the Enforcement Decree of the Building Act, Articles 563 and 596 of the Civil Act

[1] Supreme Court Decision 94Da42020 delivered on February 28, 1995 (Gong1995Sang, 1463)

Plaintiff 1 and one other

Defendant (Attorney Lee Jae-soo, Counsel for defendant-appellant)

Gwangju District Court Decision 2015Na54161 Decided February 17, 2016

The judgment below is reversed, and the case is remanded to the Gwangju District Court.

The grounds of appeal are examined.

1. The judgment of the court below

The lower court acknowledged that the Defendant was liable for the registration of ownership transfer for the instant land to the Plaintiffs on May 20, 208. The Defendant asserted that the instant land fell under the prohibition of subdivision under the Building Act or the Act on the Establishment, Management, etc. of Spatial Data and thus the Defendant’s obligation of registration of ownership transfer is impossible to perform. However, the lower court rejected the Defendant’s defense on the ground that, even if the person entitled to registration was ordered to perform the procedure of registration of ownership transfer for the specific part of the land, the said person entitled to registration can complete the procedure of registration of ownership transfer after completing the procedure of registration of ownership transfer for the specific part

2. Judgment of the Supreme Court

A. Where the performance of an obligation becomes impossible after the conclusion of a contract, the obligee may claim damages or rescind the contract on the ground of nonperformance without claiming the performance of the obligation. However, barring any special circumstance, barring any special circumstance, the obligee is not allowed to seek the performance of the obligation, and the obligee is bound to seek remedy for the right by enforcing the liability for negligence under the contract under Article 535 of the Civil Act.

The impossibility of performance of an obligation does not include cases where an obligee cannot expect the realization of an obligor’s performance in light of the empirical rule or transaction concept in social life, rather than where it is absolutely and physically impossible (see, e.g., Supreme Court Decision 94Da42020, Feb. 28, 1995). The same applies to cases where an act of performing an obligation is prohibited by law, and the realization of such act is legally impossible.

Article 57(1) of the Building Act provides that a site on which a building is located may not be excessively partitioned within the extent prescribed by Presidential Decree. Accordingly, Article 80(1) of the Enforcement Decree of the Building Act provides that “the scope prescribed by Presidential Decree” means 60 square meters in cases of a residential area, 150 square meters in cases of a commercial area, 150 square meters in cases of an industrial area, 150 square meters in cases of an industrial area, 20 square meters in cases of a green area (No. 4), 20 square meters in cases of a green area (No. 4), and 1 through 4, 60 square meters in cases of an area that does not fall under the provisions of subparagraphs 1 through 4.

If a sales contract was concluded by specifying a part of a parcel of land, but the area of the part is limited pursuant to the above Acts and subordinate statutes, the seller cannot perform the procedure for registration of ownership transfer by dividing it. Therefore, the seller’s obligation to perform the procedure for registration of ownership transfer to be borne by the buyer according to the above sales contract shall be deemed impossible. This also applies to an exchange contract

B. Review of the reasoning of the lower judgment and the record reveals the following facts.

On May 20, 2008, the Plaintiffs and the Defendant agreed to exchange the instant land equivalent to the size of 117 square meters in the original adjudication among the land of four lots owned by the Plaintiffs and the land of 2,502 square meters (hereinafter “road omitted”) prior to the 1,502 square meters (hereinafter “the land of 2,502 square meters”) owned by the Defendant. However, the land is a natural green area, and part of the housing building owned by the Plaintiffs is on the instant land.

C. Examining these factual relations in light of the aforementioned statutes and legal principles, there is no circumstance to deem that the division is already limited at the time of the exchange contract, and that the division is possible by the time of closing argument in the lower court, in order to divide the instant land equivalent to 117 square meters from the land located on the instant land, which is a natural green area (location omitted), with respect to the building on the instant land. Accordingly, the Defendant’s obligation to register ownership transfer of the instant land, which is premised on division, is impossible.

Nevertheless, the lower court determined that the Defendant’s defense was groundless without examining whether the aforementioned statutes apply to divide the instant land from the land (location omitted). In so doing, the lower court erred by misapprehending the legal doctrine on the impossibility of performing the duty of ownership transfer registration as to part of the land, thereby failing to exhaust all necessary deliberations. The allegation contained in the grounds of appeal on this point

3. Conclusion

The defendant's appeal is with merit, and the judgment of the court below is reversed and the case is remanded to the court below for a new trial and determination. It is so decided as per Disposition by the assent of all participating Justices

Justices Kim Chang-suk (Presiding Justice)