Written gift and its rescission ― A critical analysis of the Korean Supreme Court case ruling (1998. 9. 25. 98다22543) ―

Abstract

In the given case ruling the central issue is the interpretation of rescission of gift as stipulated in articles 555 and 558. This paper examines the following. First of all, article 558 which stipulates the effect of a gift rescission is clearly a legislative mistake. This provision stems from the provisory clause in article 550 of the old Civil Law which was acceptable under such conditions. However the legislators of the current Civil Law included ungrateful acts (article 556) and aggravation of economic conditions (article 557) as causes for rescission along with unwritten gift (article 555 of the current Civil Law; main clause in article 550 of the old Civil Law) which already existed in the old Civil Law. As a result, article 558 came to encompass not only article 555 but articles 556 and 557 as well. Such legislation cannot be found anywhere else in the world and needs to be amended. Secondly, ‘written form' in article 555 is decisive for the interests of the parties to a dispute. This is so since if a gift is in written form it is not rescindable and therefore article 558 which stipulates the effect of rescission becomes irrelevant. Over the years case law has changed and is showing a tendency to interpret ’written form' very widely. The given case ruling does confirm the initial stance of the court on the matter of ’written form'. However it seems that this case is diverging from the general tendency. The trial court's decision that ‘written form' under article 555 does not necessarily mean that the gift must be written by the parties themselves or exchanged in between them, as long as the parties took part in or gave consent to the gift. The trial court's decision seems compatible with article 555 and initial case law. Thirdly, the prevalent view and case law see registration as the point in time after which the rescission of gift in article 558 can no longer have any legal effect. Such a position is predicated on the assumption that the transfer of real right is based on formalism. However there is no rational explanation as to what article 558 has to do with the point in time of the transfer of real right. In interpreting article 558 one should consider the purpose of the provision and therefore article 558 can be said to become effective upon either transfer or registration.