[1] The interest in confirmation in a lawsuit for confirmation

[2] Whether the pledgee's consent is necessary for the transfer of the claim that is the object of the pledge (negative)

[3] The nature of the trustee's right to claim reimbursement of expenses under Article 42 of the Trust Act, and whether the trustee's right to claim reimbursement of expenses can be the object of right (affirmative)

[4] Whether a pledgee of the trustee's right to claim reimbursement of expenses can directly exercise the right to sell self-help trust property under Article 42 (1) of the Trust Act (negative)

[5] Details and legal basis of the fiduciary's duty of loyalty

[6] The scope of the exercise of the right to set aside under the Bankruptcy Act

[1] A lawsuit for confirmation is recognized in cases where it is the most effective and appropriate means to determine the plaintiff's legal status as a confirmation judgment to eliminate such apprehension and danger when the plaintiff's legal status is unstable and dangerous.

[2] The assignment of a claim, which is the object of a pledge, does not constitute a change to the pledgee's interest under Article 352 of the Civil Code, so the pledgee's consent is not required.

[3] Taxes on trust property, public administration, and other expenses incurred in performing trust affairs shall be borne by the trustee, who is the nominal owner and the manager of the trust property, to a third party. The trustee may repay the above expenses with the trust property, and may pay them in money belonging to his/her own property. The trustee who has repaid the expenses with his/her own property is entitled to receive compensation from the trust property because the above expenses incurred by the trust affairs are substantially a debt of the trust property. Thus, the trustee's right to claim reimbursement of expenses under Article 42 of the Trust Act shall be entitled to claim compensation from the trust property or the beneficiary for damages incurred without the trustee's legitimate expenses or negligence in performing the trust affairs. While the trustee is in office, the trustee cannot exercise his/her right to claim reimbursement against the trust property in the same way as compulsory execution is not possible (after the trustee's duties are completed, compulsory execution may be conducted against the trust property by exercising the right to claim reimbursement against the new trustee). Thus, the trustee's right to claim reimbursement of expenses can be acknowledged as a right to claim reimbursement from the trust property in preference to the trust property.

[4] The so-called right to sell self-helpd trust property under Article 42(1) of the Trust Act is based on the fact that the trustee holds the right to manage and dispose of the trust property as a title holder of the trust property, and when the trustee exercises the right to self-helpd trust property, it is subject to the limitation that the trustee should dispose of the trust property in accordance with the purpose of the trust property. Therefore, even if the individual trustee is the pledgee of the right to claim the redemption of expenses against the trust property, the right to self-helpd

[5] The trustee’s duty to loyalty is a duty to manage the trust property in accordance with the trust purpose and to make maximum efforts for the benefit of the trust property. In general, it is recognized as a basis for Article 31 of the Trust Act that limits the trustee’s acquisition of the right to the trust property.

[6] The right to set aside under the Bankruptcy Act is a system that is recognized to restore the general property of the bankrupt who is a joint security of the bankruptcy creditor to the bankrupt estate. If the bankruptcy trustee exercises the right to set aside, the effect of exercising the right to set aside is relatively relative between the bankruptcy estate and the other party, and it does not extend to

[1] Article 250 of the Civil Procedure Act / [2] Article 352 of the Civil Act / [3] Article 42 of the Trust Act, Articles 331, 345, and 355 of the Civil Act / [4] Article 42 (1) of the Trust Act, Article 353 of the Civil Act / [5] Articles 28 and 31 of the Trust Act / [6] Articles 64 and 69 of the Bankruptcy Act

[1] Supreme Court Decision 93Da40089 delivered on November 22, 1994 (Gong1995Sang, 57) Supreme Court Decision 97Da54024 delivered on September 17, 1999 (Gong1999Ha, 2170) Supreme Court Decision 2001Da25078 delivered on June 28, 2002 (Gong2002Ha, 1794)

Dongyang Total Financial Securities Co., Ltd. (Law Firm Namsan, Attorneys Jeon Dong-jin et al., Counsel for the plaintiff-appellant)

National Asset Trust Co., Ltd. (Law Firm Gyeong & Yang, Attorneys Park Dong-dong, Counsel for the defendant-appellant)

New Bank Co., Ltd. and 7 others (Law Firm Gyeong & Yang, Attorneys Park Dong-dong, Counsel for the plaintiff-appellant)

Seoul High Court Decision 2002Na51106 delivered on August 29, 2003

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

The grounds of appeal are examined.

1. Regarding ground of appeal No. 1

A lawsuit for confirmation is recognized in cases where it is the most effective and appropriate means to determine the legal status of the plaintiff as a confirmation judgment to eliminate such apprehension and danger when the legal status of the plaintiff is unstable and dangerous (see Supreme Court Decision 93Da40089 delivered on November 22, 1994, etc.).

According to the facts acknowledged by the court below, (A) on July 1, 1998, Cret Trust (hereinafter “Cret Trust”) entered into a pledge agreement on the right to claim reimbursement of expenses and damages against trust property (hereinafter “right to claim reimbursement of expenses”) under the relevant trust agreement and Article 42 of the Trust Act at the time of termination of the trust with 25 Cret Trust as secured claims between 14 financial institutions including the plaintiff and 14 financial institutions. While the defendant takes over seven of the above trust businesses from Cret Trust and takes over the right to claim reimbursement of expenses of Cret Trust from the above trust, the claims of the plaintiff et al. related to the right to claim reimbursement of expenses of Cret Trust were divided into and transferred to the defendant, but the method of settlement after the completion of the relevant trust is based on the corporate improvement program of Cret Trust, etc. of Cret Trust, which is the most effective measure of the plaintiff's right to claim reimbursement of expenses and the right to claim reimbursement against the above pledgee is not valid.

The decision of the court below to the same purport is just, and there is no error of law as to the interest in confirmation as otherwise alleged in the ground of appeal.

In addition, the assignment of the claim, which is the object of the pledge, does not constitute a change detrimental to the pledgee's interest under Article 352 of the Civil Code, and therefore the pledgee's consent is not required, and the ground of appeal that there is no interest in the confirmation of the lawsuit in this case under the premise that the claim for reimbursement of expenses of the Crererereret Trust cannot be transferred to the defendant

2. As to the grounds of appeal Nos. 2 and 3

The trustee, who is the nominal owner and the manager of the trust property, shall be entitled to receive compensation from the trust property due to the fact that the above debt may be repaid with the trust property, and the trustee, who has been duly entrusted with the trust property, shall be entitled to receive compensation from the trust property. The trustee's right to claim reimbursement of expenses under Article 42 of the Trust Act is the right to claim compensation from the trust property or the beneficiary for any loss incurred without any reasonable expense or negligence that the trustee has incurred in the course of performing the trust affairs. While the trustee is in office, he/she cannot exercise the right to claim reimbursement against the trust property in the same way as the right to claim reimbursement of expenses (after the trustee's duties have been terminated, a compulsory execution may be made against the trust property by exercising the right to claim compensation against the new trustee). The trustee may exercise the right to claim reimbursement against the trust property in preference to other rights-holder's right to claim reimbursement of expenses, as provided in paragraph (1) of the same Article.

However, the so-called right to self-help sale of the trust property by the trustee under Article 42 (1) of the Trust Act is based on the fact that the trustee has the right to manage and dispose of the trust property as a title holder of the trust property, and when the trustee exercises the right to self-help sale of the trust property, it is subject to the limitation that the trustee should dispose of the trust property in accordance with the purpose of the trust as a trustee of the trust property. Therefore, even if the individual trustee is the pledgee of the right to claim the reimbursement of expenses

In the same purport, the judgment of the court below that the contract to establish a pledge of this case is valid at the time of termination of the trust is just, and there is no error of law that affected the conclusion of the judgment due to the misunderstanding of the legal principles as to the nature of the trustee's right to claim reimbursement of expenses and the establishment of a pledge of this case, as otherwise alleged in the ground of appeal, and that the trustee's right to claim reimbursement of expenses under Article 42 of the Trust Act is merely a kind of formation right or a right to deduction that merely covers the trustee's right to claim self-help sale of the trust property and the right to preferential appropriation of payment of expenses, and thus,

3. As to the fourth ground for appeal

The duty of loyalty of the trustee is a duty to manage the trust property in accordance with the purpose of the trust and to make the interest of the trust property to the maximum extent possible, and it is recognized as a basis of Article 31 of the Trust Act that limits the acquisition of the right to the trust property of the trustee, although it is not stipulated in the Trust Act.

In this case, the act of establishing a pledge on the right to claim reimbursement of expenses, which is one's own property, cannot be deemed as an act in violation of the duty of loyalty as a trustee, as it does not conflict with the interests of trust property or beneficiary and the interests of the trustee.

The judgment of the court below to the same purport is just, and it is not erroneous in the misapprehension of legal principles as to a trustee's duty of loyalty.

4. As to the fifth ground for appeal

The right to set aside under the Bankruptcy Act is a system that is recognized in order to restore the general property of the bankrupt who is a joint security of any bankruptcy creditor to the bankrupt estate, and if the bankruptcy trustee exercises the right to set aside, the effect of exercising the right to set aside is relatively less than that between the bankrupt estate and the other party,

In the same purport, the court below's rejection of the defendant's assertion that the contract of this case between the plaintiff et al. and Cret Trust constitutes an act of denying the right to set aside under Article 64 subparagraph 1 of the Bankruptcy Act and that the trustee in bankruptcy of Cret Trust exercises the right to set aside. Thus, the court below's rejection of the defendant's argument that the validity of the contract of this case as to the right to set aside expenses of Cret Trust related to the trust business acquired by the defendant should be denied. It is not erroneous in the misapprehension of legal principles as to the effect of the right to set aside

5. Regarding ground of appeal No. 6

In this case, the right to claim reimbursement of expenses that the Plaintiff can exercise against the Defendant is related to the trust business that the Defendant acquired from the Crereret Trust, and the right to claim reimbursement of expenses against the Cret Trust, which the Plaintiff exercised against the Defendant, is related to the trust business that is not transferred to the Defendant, and its contents are different. The details of the rights asserted by the Plaintiff in the bankruptcy procedure of Cret Trust, among the right to claim reimbursement of expenses against the trust property of Cret Trust, appears to be a claim for the amount that the Plaintiff can exercise in relation to the other co-ne holders, and therefore, the scope of the pledge that the Plaintiff may exercise against the Defendant’s right to claim reimbursement of expenses is limited to

The court below did not make an explicit decision as to the defendant's assertion that the claim for confirmation of this case should be limited to the above scope, because the plaintiff reported the amount of the claim which can be recovered as the pledgee for the right to claim reimbursement of expenses of the Crerererererererererererererererererererererererererererererererererererererererererererererererererererererererererererererererererererererererererererererererererererererererererererererererererererererererererererererererererererererererererererererererererererererererererererererererererererererererererererererererere

6. Conclusion

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 Sung-tae (Presiding Justice)