Challenges to Judicial Justice in the Restitution of the Sold Property and the Precariousness of the Rights of a Good-Faith Holder in Light of Supreme Court Unification of Precedent Decision No. 810

Abstract

Ensuring judicial justice and safeguarding transactional security are among the most fundamental objectives of a legal system, particularly where the original seller’s right of rescission conflicts with the rights of subsequent transferees. In installment sale contracts, the intermediary buyer’s failure to pay the installments of the purchase price, coupled with the subsequent transfer of the sold property to a third party, gives rise to a complex legal issue concerning whether restitution of the specific property is permissible. The issuance of Unification of Precedent Decision No. 810, dated May 25, 2021, by the General Assembly of the Supreme Court, which permits restitution of the property itself and renders a subsequent transfer ineffective under the prescribed circumstances, constituted a significant development in judicial practice. This study aims to critically examine and analyze the foundations of this decision, assess its effectiveness from the perspective of judicial justice, and investigate the legal status of a good-faith holder. The research employs a descriptive-analytical method, with data collected through library research. The findings indicate that an expansive interpretation of Decision No. 810 and the prioritization of the right of rescission over the rights of subsequent transferees may, in certain circumstances, undermine the protection afforded to good-faith third parties and the principle of transactional security, thereby creating instability throughout the chain of transactions. Judicial justice requires a distinction to be drawn between the defaulting initial buyer and an uninformed third party acting in good faith, and the legal effects of the subsequent transfer should be assessed in light of the third party’s knowledge or lack thereof and the terms of the original contract. Accordingly, where the third party’s good faith is established, protecting that party while compensating the original seller through the contractual liability of the initial buyer and the recovery of an appropriate substitute may provide a balanced solution that reconciles protection of the original owner, judicial justice, and transactional security.