In a case where a real estate sales contract was concluded to secure school sites to promote apartment construction projects, the case holding that the above sales contract should be deemed to have become null and void in a case where each real estate is finally excluded within the scope of the site subject to the project, on the premise that each real estate subject to the contract is included in the entire project site covering apartment sites and school sites accompanying apartment projects, etc.;

Article 105 of the Civil Act, Article 423 of the Civil Procedure Act

Plaintiff 1 and three others

Postal Co., Ltd. (Attorney Go Young-young et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2004Na8829, 2005Na33956 decided January 18, 2006

The judgment below is reversed and the case is remanded to Seoul High Court.

1. Fact-finding and summary of the judgment of the court below

A. The lower court acknowledged the following facts based on the evidence adopted by the lower court.

(1) While the Defendant (Counterclaim Plaintiff; hereinafter “Defendant”) jointly with a broad company (the Defendant representative director is a company substantially operated by the Defendant’s representative director; hereinafter “Nonindicted Company”) and carried out a project to build apartment houses of the Geum River District Housing Association (hereinafter “instant project”) on the land of Geum River-si, Suwon-si, Suwon-si, Seoul Special Metropolitan City (hereinafter “Seoul Special Metropolitan City”) on the land of 156 North Korea Special Metropolitan City, the Defendant transferred the instant business right to Nonparty Company around 2003.

(2) On March 7, 2003, the Defendant, which was in need of obtaining the approval of the housing construction project plan for the instant project, concluded a sales contract with the Plaintiff (Counterclaim Defendant; hereinafter “Plaintiff”) to purchase KRW 1,074,800,000 for each of the instant real estate owned by the Plaintiffs (hereinafter “instant sales contract”), and the main contents thereof are as follows.

Section 1. (Purpose of this Agreement: The purpose of this Agreement is to provide for the rights and obligations between the plaintiff and the defendant after the conclusion of this Agreement in order to purchase real estate owned by Eul (referring to the defendant) and purchase all lots of land owned by the plaintiffs, including real estate owned by the plaintiffs, and to promote apartment construction projects.

Article 2 (Methods of Payment of Contract Price): (1) After the completion of a sales agreement on the pre-owned land (excluding State and public land) before the project site, the Defendant shall be deemed to have concluded a contract after the Plaintiffs received the payment (hereinafter omitted

Article 8 (Effect of Contract): A contract shall not be unilaterally destroyed by both the plaintiffs and the defendant, and where it is impossible to implement the project because a land contract with 90% of the site subject to the project is not completed, the contract shall be null and void.

(3) At the time of entering into the instant sales contract, the Defendant agreed with the Plaintiffs to sell each of the instant real estate and receive KRW 30,000,000, which the Plaintiffs received from the said company, to Dong L&C Co., Ltd., the former implementer of the instant business, as part of the down payment of the instant sales contract. Accordingly, the Defendant paid the Plaintiffs KRW 150,00,000 as the down payment, upon the Plaintiffs’ request.

(4) On August 6, 2003, five months after the date of the conclusion of the instant sales contract, the Plaintiffs urged the Defendant to pay the remainder from August 6, 2003. On February 26, 2004, the Plaintiffs notified the Defendant to pay the balance at the certified judicial scrivener’s office on March 5, 2004 with the necessary documents and reimbursement for the registration of transfer of ownership prepared by the Plaintiffs. However, the Defendant did not appear at the above date and place.

(5) On April 21, 2004, the Geum River District Housing Association, a project proprietor of the instant project, applied for approval of the housing construction project plan that wishes to build an apartment 974 households on the Suwon-si, Suwon-si, Suwon-si, 156 and 142 lots of land on the 43,246 square meters of land. According to the initial plan for securing school sites, which was formulated in line with the housing construction project plan, the housing association originally planned to secure a total of 13,149 square meters of land adjacent to the apartment site including each of the instant real estate as a school site. However, as a result of the examination by the Suwon-si Office of Education, the area of the adequate school site was 12,102 square meters around August 21, 2004, the apartment site was adjusted to 11,318 square meters around December 204, 2004, and the housing association was not able to obtain the approval of the plan for the housing construction project of this case on the 100-day and 20.

B. Summary of the judgment of the court below on the validity of the instant sales contract

As to the plaintiffs' assertion that the sales contract of this case is null and void as it constitutes a anti-social order or unfair contract, or that it has already lost its validity in accordance with the provisions of the sales contract of this case, the court below held that the sales contract of this case was established or entered into on the condition that the contract of this case will be received down and the contract of this case would be received down on the condition that the execution of the project of this case would be impossible because some land owners could not secure the whole site of this case due to the reasons such as rejection of sale, etc., and that the execution of the project of this case would be impossible. The above conditions for establishing the sales contract of this case and the terms for the payment of the purchase money would be in an unstable state of the plaintiffs' status as the seller for the business convenience of the defendant who is the buyer, but on the other hand, it was impossible for the project operator of this case to enter into the sales contract of this case to enter into the sales contract of land equivalent to 90% of the site of this case, and there was no sufficient evidence to acknowledge that the contract of this case was unfair or contrary to social order.

2. The judgment of this Court

As determined by the court below, the sales contract of this case is based on the premise that the defendant purchased the entire site of this case including each of the real estate of this case and promoted the project of this case (Article 1). In preparation for the case where the defendant's failure to secure the whole site of this case and it is impossible to promote the project of this case, the contract of this case is concluded only on the condition that the contract is to be received and paid down payment will be concluded (Article 2). In addition, in light of the fact that the defendant could find out the situation where the project of this case cannot be promoted because it is actually impossible to do so and if so, the parties can escape from the binding force of the contract (Article 8), the sales contract of this case is based on the premise that each of the real estate of this case is included in the site of this case including the site of apartment and the school site incidental to the apartment project. If each of the real estate of this case is finally excluded within the scope of the site of the project of this case, the sales contract of this case shall be deemed null and void.

However, as stated in the judgment of the court below, the defendant entered into the contract of this case with the plaintiffs in order to secure school sites for the promotion of the project of this case. However, according to the plan to establish a middle school at other places on August 30, 2005, the Suwon District Office of Education did not need to secure the whole real estate site of this case as a separate school site. Accordingly, if the Suwon District Office of Education approved the housing construction project plan to build an apartment 912 households with only other land except the planned school site for each real estate of this case as of October 18, 2005, as apartment site site, the head of Suwon District Office of Education approved the construction project plan to build an apartment 912 households, the court below should have deliberated on whether each real estate of this case can be deemed to have been finally excluded from the scope of the site for the project of this case due to the plan of Suwon District Office of Education and the approval of the construction project plan of Suwon District Office of Education, it should have reviewed whether the validity of the contract of this case remains.

However, the Defendant asserted from the first instance trial to the school site that the purpose of securing each of the instant real estate was to jointly purchase each of the instant real estate by linking the instant project and the instant construction project, which was conducted in the vicinity thereof, with the Defendant and the Copia Copia Co., Ltd., Ltd. in order to jointly purchase each of the instant real estate. Therefore, in examining the validity of the instant sales contract, the lower court pointed out that it is necessary to review the scope, etc. of the site for the apartment building construction project, which was the premise at the time of the instant sales contract.

3. Conclusion

Therefore, 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 Park Si-hwan (Presiding Justice)