[1] Whether a mortgagee may exercise the subrogation right in a case where a land owner receives money, etc. on the basis of the right to claim delivery before seizing the right to claim delivery of money or goods to the land owner due to the public collection of land which is the object of the right to collateral security (negative)

[2] Criteria for determining the specific scope of claims subject to an order of seizure (=the language and text stated in the order of seizure) and the method of interpreting language and text

[1] The mortgagee may exercise the subrogation right against the money or other things which the owner of the land is entitled to receive due to the public collection of the land which is the object of the right to collateral security, but the mortgagee may not exercise the subrogation right if the mortgagee receives money or other things on the basis of the right to claim the delivery of the money or things before the payment or delivery is made (Articles 370 and 342 of the Civil Code).

[2] A creditor who requests an order of seizure against a claim shall clarify the type and amount of the claim to be attached (Article 225 of the Civil Execution Act), and an order of seizure against a claim becomes effective within the scope of the claim to be attached. Furthermore, the specific scope of the claim subject to an order of seizure is determined by the interpretation of the language and text of the order of seizure, such as “order” and “Indication of the claim to be attached.” However, the third debtor is obligated to perform the duty under the order of seizure as a legal dispute between others under other circumstances. Therefore, it is necessary to protect the third debtor so that he/she does not bear an excessive burden in determining the type and scope of the claim subject to the seizure. Therefore, the language and text of the order of seizure should be objectively strictly interpreted in accordance with the language and text itself. If the meaning of the language and text is unclear, it is reasonable to impose on the creditor who requested the order of seizure. Therefore, any claim that a third debtor may have a question as to whether it includes the text based on the average person with ordinary caution cannot be deemed included in the subject matter of the order

[1] Articles 342 and 370 of the Civil Act / [2] Article 225 of the Civil Execution Act

[1] Supreme Court Decision 2008Da17656 Decided May 14, 2009 (Gong2009Sang, 829) / [2] Supreme Court Decision 2010Da32214 Decided October 25, 2012 (Gong2012Ha, 1894) Supreme Court Decision 2013Da26296 Decided December 26, 2013

Industrial Bank of Korea (Law Firm, Kim & Lee LLC, Attorneys Kim Jong-soo et al., Counsel for the plaintiff-appellant)

Incheon Urban Corporation and one other (Law Firm Seoun, Attorneys Lee Jae-do et al., Counsel for the plaintiff-appellant)

Seoul High Court Decision 2013Na2003307 decided October 17, 2013

All appeals are dismissed. The costs of appeal are assessed against the Plaintiff.

The grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed).

1. Regarding ground of appeal No. 1

A. The mortgagee of a right to collateral security may exercise a subrogation right on money or other things to be received by the owner of the land due to the public collection of the land which is the object of the right to collateral security, but the mortgagee may not exercise a subrogation right on the money or other things before payment or delivery (Articles 370 and 342 of the Civil Act). If the mortgagee of a right to collateral security has received money or other things upon the right to claim for delivery before seizure of the right to claim for delivery of the money or things, the mortgagee of a right to collateral security may not exercise a subrogation right any longer (see Supreme Court Decision 2008Da17656, May

Meanwhile, a creditor who files an application for an order of seizure on a claim shall clarify the type and amount of the claim to be attached (Article 225 of the Civil Execution Act). An order of seizure on a claim becomes effective within the scope of the claim subject to the order (see Supreme Court Decision 2010Da32214, Oct. 25, 2012). Furthermore, the specific scope of the claim subject to the order of seizure is determined by the interpretation of the text of the order of seizure, such as the “order” and “the indication of the claim to be attached.” However, the third debtor is obliged to bear the obligation under the seizure order, as a legal dispute between others by virtue of other parties, and thus, it is necessary to protect the third debtor so as not to bear any excessive burden in determining the type or scope of the claim subject to the seizure order. Therefore, the language and text of the order of seizure should be objectively strictly construed in accordance with its language and text itself, and any disadvantage arising therefrom should be imposed on the creditor who files an application for the order of seizure. Therefore, it cannot be deemed that the third debtor has an ordinary obligation.

B. Review of the reasoning of the lower judgment and the reasoning of the first instance judgment as cited by the lower court, and the record reveals the following facts.

① The Plaintiff was the mortgagee of the instant land when Nonparty 1 and Nonparty 2 owned 1/2 shares. On January 6, 2010, the instant land was incorporated into the Incheon Land Development Project area by the Ministry of Land, Transport and Maritime Affairs Notice No. 2009-1307.

② On June 3, 2010, the Plaintiff received the instant seizure and collection order as to the money until it reaches KRW 950,000,000, out of the compensation to be received by Nonparty 1 from Defendant Incheon Urban Corporation (hereinafter “Defendant Corporation”), which is the executor of the said housing site development project, based on the right of subrogation for the right to collateral security (hereinafter “mortgage”) and was served on the Defendant Corporation on June 7, 2010.

③ On August 12, 2011, the Central Land Tribunal rendered a ruling to the effect that “the Defendant Corporation shall have the Defendant Corporation expropriate the instant land, and the compensation for losses shall be KRW 891,669,80 (the compensation for losses shall be KRW 145,834,90, Nonparty 245,834,90, and Nonparty 2445,834,900)” and the starting date of the expropriation shall be October 5, 2011.

④ However, according to Article 63(8) of the Act on Acquisition of and Compensation for Land, etc. for Public Works Projects, and Articles 27(1) and 27-2 of the Enforcement Decree of the same Act, a public institution that implements a housing site development project in an area located within the area subject to permission of a land transaction contract shall pay the portion exceeding KRW 100 million out of the compensation for the land owned by an absentee real estate owner as bonds issued by the project operator. As such, the Defendant’s construction that implements a housing site development project in the instant land located within the area subject to permission of a land transaction contract has paid KRW 101,834,90 as compensation for the land expropriation to Nonparty 1 who is an absentee real estate owner.

⑤ On August 23, 2011, the Defendant Corporation notified the Plaintiff of the purport that “the procedures for preserving claims, such as the seizure of adjudication compensation, are withdrawn by September 30, 201, which is the scheduled date of deposit of adjudication compensation.” Furthermore, on September 22, 2011, the Defendant Corporation notified the Plaintiff of the purport that “the amount exceeding KRW 100,000,000, out of the compensation for adjudication of expropriation, shall be deposited as bonds (securities). The portion deposited as securities is the relation that the seizure of monetary claims does not take effect and the execution deposit cannot take effect, and that the scheduled amount to be deposited (non-party 1) to be paid to the Incheon District Court as of September 30, 2011 would take effect only on the exercise of rights.”

④ However, the Plaintiff did not take any additional measures, and on September 30, 201, the Defendant Corporation deposited KRW 101,834,900, which was to be paid in cash out of Nonparty 1’s expropriation compensation with the Incheon District Court in gold 8515 in 2011, and deposited KRW 34,000,000, which was to be paid with the claim (claim) with the amount of KRW 345,00,000, which was to be paid with the claim (claim), deposited with Nonparty 1 as the Incheon District Court gold 35 in 2011.

7) Meanwhile, “the indication of the claim to be seized” in the seizure and collection order of this case stated “the amount until it reaches the above claim amount (950,000,000 won) out of the compensation to be received by Nonparty 1 from the Defendant Corporation.” The “order” also stated the same content as the typical seizure and collection order against the monetary claim. There is no indication on the delivery order incidental to the seizure order against the right to claim the delivery of corporeal movables, and there is no separate order until the Defendant Corporation deposits the above repayment.

C. Examining these facts in light of the relevant statutes and the legal principles as seen earlier, Nonparty 1 was entitled to monetary claims and right to claim the delivery of securities against the Defendant Corporation. The seizure and collection order of this case are only subject to monetary claims against the Defendant Corporation by Nonparty 1. Meanwhile, in the case of Nonparty 1’s claim against the Defendant Corporation, the entire amount of monetary claims was first incurred and included in the subject of the seizure and collection order of this case, and it cannot be deemed that part of the order was later changed into the right to claim the delivery of securities. Thus, the effect of the seizure and collection order of this case cannot be said to affect Nonparty 1’s right to claim the delivery of securities against the Defendant Corporation.

Therefore, the judgment of the court below that dismissed all the plaintiff's claim against the defendant Corporation is just, and it did not err by misapprehending the legal principles on the effective scope of seizure order against the claim for expropriation compensation.

2. Regarding ground of appeal No. 2

The lower court, citing the reasoning of the first instance judgment, acknowledged facts as indicated in its reasoning, and dismissed the Plaintiff’s claim against the Defendant Republic of Korea on February 27, 2012, 2012, prior to February 29, 2012, the deposit officer’s delivery of the instant securities in response to Nonparty 1’s claim for withdrawal of deposited goods, the deposit officer’s delivery of the instant securities is lawful, and otherwise, there is no evidence to support that the delivery of the instant securities by the deposit officer contravenes the relevant statute.

In light of the records, such determination by the court below is just, and it did not err by misapprehending the legal principles on the authority of the deposit officer to review and duty of care, or by failing to exhaust all necessary deliberations

3. Conclusion

Therefore, all appeals by the Plaintiff are dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Kim Shin (Presiding Justice)