Whether a mortgagee may claim the return of unjust enrichment against another creditor who acquired the benefit where the mortgagee fails to exercise the right to preferential reimbursement by exercising the subrogation right, and where the mortgagee fails to exercise the subrogation right (negative)

Article 370 of the Civil Act and the proviso of Article 342 of the Civil Act provide that a mortgagee shall attach money or other things to be paid or delivered by the mortgagee in order to exercise the subrogation right is to maintain the specificity of the claim which is the object of subrogation, to preserve its validity, and not to inflict any damage on the third party. Thus, as long as money or other things which are the modified object of the mortgaged object have already been seized by a third party and the money or things have already been specified, the mortgagee may exercise the subrogation right and obtain preferential repayment from the general creditor even though he did not attach it by himself. However, the method of exercising the subrogation right can not be seen as an exercise of the right to preferential reimbursement under Article 273 of the Civil Procedure Act [Article 73 of the Civil Procedure Act (amended by Act No. 6626 of Jan. 26, 2002)]. Thus, even if the mortgagee fails to submit a document attesting the existence of the security right to the executing court and submit it to the court for an order to seize the claim or order to return the security right to another creditor, it can not be secured by subrogation.

Articles 342, 370, and 741 of the Civil Act; Articles 247(1) and 273 of the Civil Execution Act

Supreme Court Decision 94Da25728 delivered on November 22, 1994 (Gong1995Sang, 71) Supreme Court Decision 96Da21058 delivered on July 12, 1996 (Gong1996Ha, 2491) Supreme Court Decision 98Da12812 delivered on September 22, 1998 (Gong198Ha, 2552)

Plaintiff (Attorney Yoon Yong-sik, Counsel for the plaintiff-appellant)

Korea

Seoul District Court Decision 2001Na64454 Delivered on May 8, 2002

The appeal is dismissed. The costs of appeal are assessed against the plaintiff.

We examine the grounds of appeal.

Article 370 of the Civil Act and the proviso of Article 342 of the Civil Act provide that a mortgagee shall attach money or other things to be paid or delivered by the mortgagee in order to exercise the right of subrogation shall maintain the specificity of the claim which is the object of subrogation and preserve its validity, and at the same time not to inflict losses on the third party. Thus, as long as money or other things which are modified objects of mortgage have already been seized by a third party and the money or things have been specified, the mortgagee may exercise his right of subrogation and obtain preferential reimbursement from the general creditor even though he did not attach them by himself. However, the method of exercising the right of subrogation is a method of submitting documents proving the existence of the right of subrogation to the court of execution pursuant to Article 273 of the Civil Execution Act (Article 73 of the Civil Procedure Act) and submit documents to the court of execution, or submit a request for seizure and order, or obtain preferential reimbursement from the creditor under Article 247(1) of the Civil Execution Act (Article 580(1) of the Civil Procedure Act).

In this case where the non-party's share in the land which was the object of the right to collateral security was accepted and the compensation was deposited, and the plaintiff did not exercise the right to subrogation as the mortgagee, the court below is justified in holding that even if the defendant was paid the deposit under the procedure set forth in its holding, as long as the plaintiff lost the right to preferential reimbursement because he did not proceed to exercise the right to subrogation, the amount cannot be claimed as unjust enrichment, and there is no error of law by misunderstanding the legal principles as to the requirements for establishing unjust enrichment, as otherwise alleged in the ground of appeal.

In addition, according to the records, as to the judgment of the court of first instance which accepted most of the plaintiff's claims, the defendant did not appeal as to the principal portion and did not appeal as to the delay damages rate, but thereafter, it was recognized that the purport of appeal was expanded as to all disadvantageous parts to the defendant among the judgment of the court of first instance. Even if the court of first instance appealed as to the part of the judgment of first instance, the confirmation of the judgment of the court of first instance is interrupted by the principle of no appeal, and the appellant can expand the purport of appeal until the closing of argument in the appellate court. Thus, the ground of appeal that the part against which the defendant did not appeal was not

Therefore, the appeal is 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 Lee Jin-hun (Presiding Justice)