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Power to receive performance

1. Who has the 'power' to receive?

  • creditor, his agent, receiver (when the creditor is in bankruptcy)
  • pledgee (where credit is offered as a pledge)
  • (apparent or true) possessor of a negotiable instrument, documentary credit
  • possessor of a receipt issued by the creditor: Art. 471
  • those who have the appearance of an agent (distinct from ostensible authority)
  • appearance of an assignee
  • invalid collection order or assignment order

2. Protecting the debtor

  • Article 470: good faith + absence of negligence
  • 98Da61593 (payment to survivors of a car accident)(suing the "payee"):
    • The Insured received payment from the aggressor after receiving the insurance payment.
    • Insurer sues the Insured claiming unjust enrichment or tort damage.
    • For the Insurer's claim to be successful, the Insurer must prove the aggressor's payment was in good faith (not negligent), i.e., the aggressor did not know about the insurance payment or erroneously believed that the payment was insufficient.
    • If the Insurer fails to prove the validity of the aggressor's payment, the Insurer's claim against the Insured will fail. (for the Insurer sustained no loss because its claim against the aggressor remains valid).
  • 2000Da23006: The debtor who paid negligently (upon erroneous advice of lawyers) successfully claimed (alleging its own negligence) return of the payment from the recipient.

3. Protecting the creditor

  • creditor may sue the party who received the performance
  • the debtor who paid in good faith will be discharged as long as he was not negligent
  • 78Da1292 (suing the "payer" in tort?)
    • debtor who paid in good faith is absolved; hence, may not demand return of the payment.
    • Creditor who suffered loss may sue the "recipient" of the payment to claim unujust enrichment (or in tort; see 98Da61593).
    • If, however, the debtor was negligent, the payment does not discharge the debt. (But the Supreme Court rules that such a negligent payment constitutes a tort to the creditor... How? considering that the debt remains undischarged.)
  • 87Daka546 (suing the "payer" in tort)
    • A and B are competing creditors who have claims against C.
    • C has 5.8 million KRW credit claimable from D.
    • A attached C's claim against D. B also attached C's same claim.
    • B applied for and got an assignment order which transferred C's claim (against D) to B. B sued D and D did not contest the validity of the assignment order. Upon judgment in favour of B, D promptly paid to B, purporting to discharge its debt to C.
    • A sues D for payment of the debt (relying on an assignment order, which turned out to be equally invalid). A modified the claim and sues D in tort to seek damage (resulting from the loss incurred by D's collusive discharge of debt).
    • If D was negligent in discharging its debt, D's debt to C would still remain undischarged. In theory, A could apply for a collection order (authorising A to claim against D) and bring a claim against D. But the court allowed A to sue D in tort.