This part of the cancellation of the contract to establish a medium-sized mortgage and the claim for restitution is reversed.

1. (1) As to the cancellation of a mortgage contract and the part of the claim for restitution of the original status, even if the mortgage contract between the debtor and the beneficiary is fraudulent, if the mortgage contract was cancelled due to the acquisition of ownership by a third party during an auction procedure following the execution of the mortgage, allowing a beneficiary to receive dividends as a mortgagee, contrary to the purport of Article 406(1) of the Civil Act, and therefore, the creditor who was damaged due to the registration of the establishment of a mortgage has a benefit to seek cancellation of the mortgage contract, in order

(See Supreme Court Decision 97Da8687 delivered on October 10, 1997). Meanwhile, in the event that the debtor sells real estate during the auction procedure by means of a fraudulent act to exercise the right to collateral security, and in the event that the registration of creation of a mortgage was cancelled by paying the proceeds thereof to the beneficiary who is the right to collateral security, it is reasonable to view that the aforementioned repayment was made preferentially to the general creditor with the right to preferential payment of the right to collateral security,

Therefore, it is improper to have the beneficiary obtain the benefit of repayment for cancellation of the right of collateral security, just as in the case of cancellation of the registration of collateral security.

Therefore, in this case, the creditor who was damaged due to the establishment registration of a mortgage has the interest to seek cancellation of the mortgage contract which is a fraudulent act to restore the original state.

(2) According to the reasoning of the judgment of the first instance court cited by the lower court and the records, the Plaintiff loaned KRW 100 million to C on December 7, 2005, with interest rate of 1% on December 9, 2010 (see, e.g., Supreme Court Decision 201Da65058, Nov. 15, 2012).