Whether it is possible to receive preferential payment from the compensation only if the security right is registered;

As long as a mortgagee loses a preferential right to payment because he/she fails to exercise the subrogation right, the mortgagee may not claim the return of such right as unjust enrichment, even if other creditors have obtained the benefit from the compensation or the deposit for repayment.

2019 Ghana 5056513 Undue gains

KimA

Korea

2019.06.26

2019.08.21

1. The plaintiff's claim is dismissed.

2. The costs of lawsuit shall be borne by the Plaintiff.

The defendant shall pay to the plaintiff 120,000,000 won with 15% interest per annum from the day following the delivery of a copy of the complaint of this case to May 31, 2019, and 12% interest per annum from the next day to the day of complete payment.

1. Basic facts

(a) Acceptance ruling;

1) On November 12, 2018, the ○○○ Regional Land Expropriation Committee made a decision of expropriation (hereinafter referred to as “instant adjudication of expropriation”) on December 27, 2018, with regard to ○○○○○○○○-dong, 472-40 square meters (hereinafter referred to as “instant land”) owned by KimB, with regard to the commencement date of expropriation as of December 27, 2018, and made a decision of correction on December 10, 2018, the compensation for the instant land was corrected as KRW 233,445,00 (hereinafter referred to as “instant compensation”).

2) At the time of the instant decision on expropriation, the instant land was registered: ① on November 4, 2013, the establishment registration of a nearby the Plaintiff’s name (the maximum amount of claims KRW 120,000,000, hereinafter “instant establishment registration”); ② on April 21, 2015, the attachment registration, etc. was completed by the Defendant (the director of the tax office) (the director of the tax office).

(b) Payment, etc. of compensation for expropriation;

1) Meanwhile, around June 15, 2016, the head of the ○○○ Tax Office under the Defendant’s control (hereinafter “head of the ○○○ Tax Office”) issued a disposition of seizure of claims on the instant land on the grounds that KimB failed to pay capital gains tax of KRW 337,320,770, etc., and notified the fact of seizure at ○○○○○○ Tax Office around that time.

2) On December 19, 2018, 201, the head of ○○ Tax Office requested the Defendant, who is the seizure authority, to pay the instant compensation.

3) On December 21, 2018, ○○ City notified the Plaintiff on December 21, 2018, and until December 26, 2018, that the seizure and collection order regarding the instant compensation should have arrived, and that the Plaintiff’s right to the instant land is lost on December 27, 2018, which is the commencement date of expropriation.

4) On December 28, 2018, ○○ City paid the instant compensation to the Defendant. The head of ○○ Tax Office appropriated the instant compensation for national taxes in arrears.

2. The plaintiff's assertion

On December 21, 2018, the Plaintiff issued a notice from ○○ City to December 26, 2018, stating that “the Plaintiff requested the issuance of a seizure and collection order with respect to the instant compensation from ○○ City to December 26, 2018.” However, it was practically impossible to obtain a seizure and collection order with the court only 24 days per day except weekends and holidays. Notwithstanding the Plaintiff’s provision, ○○ City paid the Defendant, who is a senior mortgagee, the instant compensation amount to be paid to the Plaintiff, who is a senior mortgagee. The Defendant, out of the instant compensation amount, received KRW 120,000,000 to be paid by the Plaintiff without any legal cause, and thus, is obligated to return it to the Plaintiff.

3. Determination

A. Article 370 and the proviso of Article 342 of the Civil Act provides that "a mortgagee shall seize money or other things to be paid or delivered by the mortgagee in order to exercise the subrogation right." The purpose of this provision is to maintain the specificity of the claim which is the object of subrogation, preserve its validity, and not to inflict any loss on a third party at the same time. If money or other things which are modified objects of mortgage have already been seized by a third party and have already been specified as money or things, the mortgagee may obtain preferential reimbursement from the general creditor by exercising his/her subrogation right even if he/she did not seize them. However, the method of exercising this right is to submit documents proving the existence of a security right to the executing court pursuant to Article 273 of the Civil Execution Act, to request the seizure and order of the claim, or to demand a distribution pursuant to Article 247 (1) of the Civil Execution Act, so it is not possible to obtain preferential reimbursement from the compensation. Thus, even if the mortgagee fails to exercise the subrogation right, the mortgagee cannot obtain the preferential reimbursement right from another creditor or creditor (see Supreme Court Decision 201601.206.

B. We examine the instant case in accordance with the foregoing legal doctrine. The secured claim of the instant mortgage establishment registration takes precedence over the Defendant’s transfer income tax, and the instant land, which is the object of mortgage, was expropriated, and thus the instant compensation, which is the object of mortgage under Articles 370 and 342 of the Civil Act, became the object of subrogation. However, as seen earlier, the Plaintiff, the mortgagee of the instant compensation, before exercising the subrogation right by means of filing an application for seizure and assignment order regarding the instant compensation, etc. However, as seen earlier, the head of ○○ Tax Office seized the instant compensation claim as part of the procedure for disposition on default by the head of ○○ Tax Office, and as long as ○○○○○○ Tax Office received the instant compensation claim from the Defendant as part of the procedure for disposition on default, the Plaintiff’s right of subrogation based on the right of collection was extinguished by lack of the object, and the Plaintiff loses the right of preferential reimbursement. Therefore, it cannot be deemed that the appropriation of the compensation to the national tax of this case is a benefit

4. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and it is so decided as per Disposition.