Scope of the mortgagee's right to claim compensation

A mortgagee may seek the indication of a security against a third party through the exercise of a security right, and in the event of refusal to surrender, a claim for damages is filed on the ground of interference with the exercise of a security right. However, even in such a case, the mortgagee is not entitled to seek the compensation for damages equivalent to the rent because he/she has no right to use the real estate.

Article 372 of the Civil Act

Supreme Court Decision 66Da1330 Delivered on September 28, 1966

[Judgment of the court below]

Defendant 1 and one other, Counsel for the defendant 1-appellee

Seoul High Court Decision 78Da2860 delivered on July 19, 1979

The appeal is dismissed.

The costs of appeal are assessed against the plaintiff.

The so-called "mortgagee" who acquired real estate as the object of collateral security can seek an explanation against the third party who leases and occupies it from the secured debtor as part of the exercise of the security right, and also seek damages on the ground of interference with the exercise of the security right if he refuses to do so.

However, in such cases, there is no right to use or make profits from the target real estate to the mortgagee, so it is reasonable to say that it is not possible to seek damages from the rent party for the reason that the third party who illegally occupies the real estate owned by the general owner is unable to use or make profits from the ownership.

The reasoning of this part of the judgment of the court below is just and acceptable, and there is no error of law by misunderstanding the legal principles on compensation for damages, and therefore there is no argument against this.

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.

Justices Yang Byung-ho (Presiding Justice)