In the case of a voluntary auction, the dividend is insufficient to extinguish all of several secured claims of the same secured party, and the method of satisfaction of performance

In the event that the dividend is insufficient to extinguish all of the secured claims held by the same secured party in an auction to exercise a security right, even if there is an agreement between the creditor and the debtor on the satisfaction of the claim, the satisfaction of the claim by such agreement cannot be permitted. In this case, the dividend shall be appropriated according to the method of satisfaction of the claim under Article 477 of the Civil Act, which is the most equitable and reasonable method of appropriation.

Article 477 of the Civil Act, Articles 587 and 735 of the Civil Procedure Act

Supreme Court Decision 86Meu2950 Decided May 26, 1987 (Gong1987, 1071) Supreme Court Decision 90Da18678 Decided July 23, 1991 (Gong1991, 220) Supreme Court Decision 91Da17092 Decided December 10, 1991 (Gong192, 480)

National Bank of Korea (Attorney Jin-hun et al., Counsel for the defendant-appellant)

Defendant

Seoul District Court Decision 95Na29245 delivered on October 26, 1995

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

As to the Grounds of Appeal

In light of the purpose and nature of the system for compulsory auction of real estate under the Civil Procedure Act and the contents of various regulations on the procedure, in the procedure for compulsory auction of real estate, an agreement may not be permitted even if there is an agreement between the obligee and the obligor on the satisfaction of obligation by agreement between the obligee and the receiver in the case of the repayment of obligation, or the designation of appropriation of obligation under Article 476 of the Civil Act may not be permitted (see Supreme Court Decision 90Da18678 delivered on July 23, 191), and in the case of an auction for the enforcement of the security right under the Civil Procedure Act where all the provisions on the procedure for compulsory auction of real estate are applied mutatis mutandis, there is no reasonable ground to see that there is a difference in the case of an auction for the enforcement of the security right under the current Civil Procedure Act where all the provisions on the procedure for compulsory auction of real estate are applied mutatis mutandis. In this case, even if there is an agreement on the satisfaction of obligation between the obligee and the obligor, it shall be appropriated in accordance with the method of statutory appropriation of obligation under Article 477.

The judgment of the court below to the same purport is correct and there is no error of law by misunderstanding the legal principles as to the appropriation of debt, such as the theory of lawsuit. The judgment of the party members who the plaintiff raised the appeal is related to the auction under the Auction Act before it was repealed by Act No. 4201 of January 13, 1990, and it is not appropriate to be invoked as it is in this case. There is

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

Justices Kim Jong-sik (Presiding Justice)