Legal relations where the value of collateral in provisional registration security falls short of the principal and interest of the debt;

In a case where a provisional registration is made in the form of a promise to sell and purchase real estate as security for a bond, and the ownership transfer registration is made in relation to this, what form of security contract should be examined and confirmed specifically for each individual case. However, unless otherwise stipulated by the group, it is reasonable to presume that it is a weak meaning of transfer for security requiring settlement procedures, unless otherwise stipulated by the special agreement of the group. This does not change because the market price at the time of the promise to sell and sell collateral falls short of the principal and interest of the bond.

Article 372 of the Civil Act

Supreme Court Decision 84Meu933 Decided December 11, 1984

Plaintiff (Counterclaim Defendant) Attorney Lee Jae-soo, Counsel for the plaintiff-Counterclaim defendant)

Defendant-Counterclaim Plaintiff (Attorney Lee Jae-sik, Counsel for the defendant-Counterclaim plaintiff-appellant)

Seoul High Court Decision 84Na699,700 delivered on November 2, 1984

The part of the judgment of the court below regarding the principal lawsuit shall be reversed, and the case shall be remanded to the Seoul High Court.

The Plaintiff’s attorney’s ground of appeal is examined.

According to the reasoning of the judgment below, since the plaintiff entered into a contract with the defendant for sale and purchase of 59,00,00 won on several occasions at the end of December of 1980, and if the defendant did not pay the principal and interest, the amount of interest on the above loan between the defendant and 10,000 won shall be set at 10,000,00, and if the above total amount is 60,000,00 won, the principal and interest on the above real estate shall not be paid until October 10, of the same year after the provisional registration was made at the time of sale and purchase, and if the defendant fails to pay the principal and interest on the above real estate at the time of the above provisional registration by the expiration of 10,000,000 won, the provisional registration shall be deemed to have been made at the time of sale and purchase, and the defendant shall not be required to pay the principal and interest on the above real estate at the time of the above provisional registration until the expiration of 10,000,00 won following the agreement.

However, in cases where provisional registration is made in the form of a promise to sell and purchase real estate as security for bonds, and the transfer of ownership is registered on the basis of the telephone system, it is necessary to examine and confirm the intent of the parties specifically for each case. However, in cases where no special agreement is recognized by the group, it is reasonable to presume that if the creditor is unable to repay the balance to the debtor if it is returned to him/her, it is a weak meaning that requires the so-called settlement procedure in which the debtor can claim for it, and the market price at the time of the promise to sell and purchase collateral falls short of the principal and interest of the bonds.

The court below determined that the provisional registration on the real estate of this case was made for the purpose of securing the claim, and according to the protocol of compromise, which is part of Gap evidence No. 2 adopted by the court below, the ownership transfer registration on the basis of the above provisional registration, was also made for the purpose of securing the claim. Thus, unless otherwise agreed upon, it shall be deemed as a weak meaning of transfer for security, unless otherwise agreed upon. However, if the contract of different groups is acknowledged, which is part of Eul evidence No. 2-2, adopted by the court below, stated that the amount of KRW 60,000,00, which is the principal and interest on the obligation of this case, is the purchase price, and the defendant did not pay the above amount by the due date, it shall be deemed that the plaintiff declared the intention to complete the sale and acquire the ownership of this case, even if the contract of this case was concluded in the form of provisional registration for securing the claim, as seen in the court below, and thus, it cannot be deemed that there was a special agreement

However, under the view that in the case where the market price at the time of the promise to sell and purchase collateral is less than the principal and interest of the obligation, unless otherwise stipulated in the dissenting opinion, the entire amount of the obligation is extinguished by making a principal registration on the basis of provisional registration, barring any assertion or proof as to the special agreement on the dissenting opinion, and thus, the court below erred by misapprehending the legal principles as to the settlement of the transfer of ownership, thereby misunderstanding that the plaintiff's obligation to the plaintiff was all extinguished by making a registration of the transfer of ownership on the real estate of this case on December 23, 1981, by making a provisional registration of the transfer of ownership transfer principal on the basis of provisional registration. This point is with merit.

Therefore, the judgment of the court below is reversed, and the case is remanded to the Seoul High Court, which is the court below, and it is so decided as per Disposition by the assent of all participating Justices.

Justices O Sung-sung(Presiding Justice)