1. The plaintiffs' claims are dismissed.

2. The costs of lawsuit are assessed against the plaintiffs.

1. Basic facts

A. C completed the registration of creation of a collateral security right (hereinafter “instant collateral security right”) on June 19, 2008 with respect to the housing of 70.25 square meters and 56.79 square meters on the two-storys of cement block block structure, 122 square meters and 70.25 square meters on the two-storys of the land, which was owned by the Plaintiff A (hereinafter “each of the instant real property”).

B. On November 17, 2011, the registration of ownership transfer was completed under the Plaintiff B’s name, and thereafter, the Busan District Court J real estate auction procedure (hereinafter “instant voluntary auction procedure”) was conducted upon C’s application. On May 30, 2016, K purchased each of the instant real estate during the instant voluntary auction procedure, and accordingly, the registration of creation of the instant collateral security was revoked.

C. C received dividends of KRW 42 million as the mortgagee in the instant voluntary auction procedure as the second applicant creditor.

On the other hand, C died on July 9, 2018, which was after the filing of the instant lawsuit by the Plaintiffs. The heir taken over the instant lawsuit against C by Defendant D, E, F, G, and H, the deceased’s children.

[Ground of recognition] Facts without dispute, Gap evidence 1-1, Gap evidence 1-2, 3, Gap evidence 3, Gap evidence 5-1 and 2, the purport of the whole pleadings

2. Summary of the parties’ assertion

A. The plaintiffs' assertion (i) The registration of the establishment of the right to collateral security in this case was completed with the promise that "In order to obtain a discount on a promissory note issued by M&A from L Co., Ltd., the plaintiff made endorsement on the Promissory Notes and borrowed KRW 10 million on the face of each of the real estate in this case by establishing the right to collateral security and subcontracted the construction work."

However, C did not grant a discount on promissory notes, and accordingly, Nonparty L did not give a subcontract for the construction work with a loan of five million won to Plaintiff A.

D. Nevertheless, C received 35 million won of the Promissory Notes whose discount was requested from the N Bank and received from the N Bank.