The legislative intent of Article 666 of the Civil Act concerning the contractor's right to demand mortgage, and whether the act of establishing a mortgage by the contractor in accordance with the contractor's right to demand mortgage constitutes a fraudulent act (negative)

Article 66 of the Civil Act, which provides for a contractor's right to demand the settlement of mortgage, stipulates that the ownership of an object shall be granted to the contractor in consideration of the fact that the object is completed by the contractor's materials and effort, so that the contractor may have him paid the construction price preferentially from the object in fact by granting the contractor a right to demand the settlement of mortgage on the object, and such status of the contractor shall not be more strengthened than that of the contractor's exercise of the right to demand the settlement of mortgage on the object, and it does not constitute a fraudulent act unless there are special circumstances.

Articles 406(1) and 666 of the Civil Act

Plaintiff 1 and 2 others (Law Firm Pok, Attorney Lee Gyeong-pon, Counsel for the plaintiff-appellant)

Defendant 1 and one other (Attorney Soh-young et al., Counsel for the defendant-appellant)

Defendant 2 (Attorney In-bok, Counsel for defendant-appellant)

Busan High Court Decision 2007Na8228, 8235 decided October 17, 2007

Each appeal is dismissed. The costs of appeal are assessed against each party.

1. Regarding the plaintiffs' grounds of appeal

Article 66 of the Civil Act provides that "A contractor of a real estate construction may claim the establishment of a mortgage for the purpose of securing a claim for remuneration, which is the object of which, in consideration of the fact that the ownership of the object is completed by the materials and efforts of an ordinary contractor in the real estate construction work, the purpose of this provision is to grant a contractor a right to demand mortgage on the object so that the contractor may actually receive a preferential payment for the construction price from the object by granting the contractor if the ownership of the object is originally reverted to the contractor. Such status of the contractor is not more strengthened than that of exercising a right of retention on the object, and it is not unfairly unfavorable to the general creditors of the contractor, in light of the fact that the contractor of a newly constructed building is not unfairly unfavorable to the general creditors of the contractor, and thus, the act of creating a mortgage on the building as a security for the obligation for construction price upon the exercise of the contractor

In full view of the selected evidence, the court below determined that Defendant 2, etc. offered a contract with Defendant 2, etc. for the part of painting, painting, outer wall, sculpture, etc. among the new construction works of apartment houses with the name of "Man-do, Seo-gu, Busan (hereinafter "multi-family housing of this case"), "Man-do, Seo-gu, Busan (hereinafter "multi-family housing of this case"), and Defendant 2, etc. did not receive a total of KRW 275,015,000 for the construction cost, but did not receive a total of the construction cost from December 2001 to June 2002, the court below concluded a new contract with Defendant 2, etc. of this case as a collateral for the establishment of a mortgage on each of the real estate of this case, which is the exclusive ownership of each of the above apartment housing of this case, and concluded a mortgage contract with Defendant 2 of this case with the maximum debt amount of KRW 275,015,000,000 for the construction cost of this case.

In light of the above legal principles and records, the above fact-finding and judgment of the court below are just and acceptable, and there are no errors in the misapprehension of legal principles as to the establishment registration of mortgage or the establishment of fraudulent act due to the exercise of the right to demand mortgage, as otherwise alleged in the grounds of appeal.

2. As to Defendant 1’s ground of appeal

In light of the adopted evidence, the court below concluded a mortgage contract with Defendant 1 on June 26, 2004 with respect to each real estate of this case, which is the section for exclusive use of the apartment of this case, and concluded a mortgage contract with Defendant 1 on June 28, 2004 with a maximum debt amount of KRW 390 million (hereinafter "mortgage 1"), and concluded a mortgage contract with Defendant 1 on June 28, 2004, and concluded a mortgage establishment registration on June 18, 2004. At the time of entering into the first mortgage contract of this case, it is confirmed that the Seo Young-young's active property was 1 billion won in total and 30.6 million won in total, on the other hand, the court below erred in the misapprehension of the facts as otherwise alleged in the ground of appeal by the court below, and it is just to deem that the above contract was concluded with the general creditor of this case with Defendant 1, as well as the debts of each of the instant case.

3. As to Defendant 3’s ground of appeal

In light of the adopted evidence, the court below acknowledged that, while the construction of a new apartment in order to newly build and sell the apartment house of this case, the construction of the new apartment of this case was conducted with Defendant 3 on July 1, 2004, the establishment of a mortgage contract with Defendant 10 million won for the same day (hereinafter "mortgage 3 contract of this case"), and concluded a mortgage contract with Defendant 3 on the same day on the same facts. According to the facts established, it constitutes fraudulent act in relation to general creditors including the plaintiffs, and it is reasonable to view that the conclusion of the third mortgage contract of this case with Defendant 3 on the ground that it did not constitute a fraudulent act in violation of the rules of evidence No. 3 contract of this case, and that it was not reasonable to acknowledge that there was no evidence to acknowledge that there was an intention to establish a new mortgage contract of this case between Defendant 3 and Defendant 6 on the ground that it was against the rules of evidence No. 10 and Defendant 3's new mortgage contract of this case.

4. Conclusion

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

Justices Jeon Soo-ahn (Presiding Justice)