[1] In a case where a right to lease on a deposit is established after the registration of the establishment of a right to lease on a deposit basis was completed for the purpose of securing the right to lease on a deposit basis without a contract establishing a right to lease on a deposit basis, whether the lessor may assert that the right to lease on a deposit is invalid on the ground that the contract constitutes a false declaration

[2] Method of executing a mortgage which was established on the right of lease on a deposit basis after the expiration of the term of chonsegwon and its execution effect

[3] In a case where the settlor of chonsegwon has another claim against the person having chonsegwon other than the damage claim under Article 315 of the Civil Act, whether it may be asserted against the mortgagee having chonsegwon who exercised the subrogation right against the claim for the return of deposit money (negative)

[1] In a case where a right to lease on a deposit basis has been registered in the name of a tenant for the purpose of securing the right to return the deposit under a lease agreement even though there is no contract establishing a right to lease on a deposit basis, and the right to lease on a deposit basis has been established as a right to lease on a deposit basis under an agreement between the tenant and the lessor, even if the right to lease on a deposit was established based on false representation in light of only the contract establishing the right to lease on a deposit and thus becomes null and void, the right to lease on

[2] Since the right of lease on a deposit basis is extinguished upon the expiration of the duration of the right of lease on a deposit basis, the mortgagee on the right of lease on a deposit basis is no longer able to exercise the mortgage on the right of lease on a deposit basis. In such a case, the mortgagee on the right of lease on a deposit basis may exercise his right by either receiving a collection order or an order in whole with respect to the claim for lease on a deposit basis which can be deemed to exist in lieu of the right of lease on a deposit basis under Articles 370 and 342 of the Civil Act, and Article 273 of the Civil Execution Act, or demanding a third party to demand a distribution in the compulsory execution procedure against the claim for lease on a deposit basis. The proviso of Article 370 and Article 342 of the Civil Act provides that the mortgagee shall attach the money or other things to be received by the mortgagee in order to exercise the right of subrogation and preserve the effect by maintaining the specification of the claim that is the object of subrogation and not causing any damage to the third party.

[3] In light of the nature of the deposit money, it cannot be deemed that the settlor of chonsegwon guarantees the right to lease on a deposit basis, other than the damage claim against the person having chonsegwon, as stipulated under Article 315 of the Civil Act. Thus, even if the settlor of chonsegwon has another claim against the person having chonsegwon other than the above damage claim, it cannot be asserted against the person having chonsegwon who has the right to lease on a deposit basis against set-off

[1] Articles 108(2), 303, and 371 of the Civil Act / [2] Articles 342, 370, and 371 of the Civil Act; Article 273 of the Civil Execution Act / [3] Articles 303 and 315 of the Civil Act

[1] Supreme Court Decision 98Da20981 delivered on September 4, 1998 (Gong1998Ha, 2396), Supreme Court Decision 2005Da59864 Delivered on February 9, 2006 / [2] Supreme Court Decision 94Da25728 delivered on January 22, 1994 (Gong1995Sang, 71) Decision 95Ma684 delivered on September 18, 1995 (Gong195Ha, 3504), Supreme Court Decision 98Da31301 delivered on September 17, 199 (Gong199Ha, 2178)

Plaintiff 1 and one other (Attorney Seo-hee et al., Counsel for the plaintiff-appellant)

Gayang 2-dong community credit cooperatives (Attorney Shin Young-chul et al., Counsel for defendant-appellant)

Daejeon High Court Decision 2005Na5698, 10409 decided April 20, 2006

The part concerning the claim for confirmation of existence of the principal lawsuit and the counterclaim shall be reversed, and that part of the case shall be remanded to the Daejeon High Court.

We examine the grounds of appeal.

1. The court below acknowledged the following facts in full view of the admitted evidence.

A. On April 22, 2002, Plaintiff 1 entered into a lease agreement with Co-Defendant 1 of the first instance trial ( Nonparty 1) on each of the terms that the building listed in the attached list of the lower judgment (hereinafter “instant building”) jointly owned by Plaintiff 2 as KRW 100,00,000 (i.e., January 1, 2004 to increase the deposit to KRW 200,000), the lease period from January 1, 2003 to 36 months, the lease period from January 1, 2003, and KRW 12,300,000 (i.e., the first payment of the rent, and the late payment of the rent by adding the amount to 10%).

B. On the other hand, when the above lease contract is concluded, public charges, such as value added tax amounting to KRW 600,00 per month, management expenses, KRW 1,188,627 per month, and electricity and water supply fees, etc. may be borne by the lessee, and when the lessee fails to pay the rent at least once, the lessor may immediately terminate the lease contract. Upon the termination of the lease contract, the lessee shall restore the building of this case to its original state and order the lessee to compensate for damages. However, the lessee agreed to pay the amount equivalent to twice the sum of the rent and management expenses from the termination date of the lease to the restoration to original

C. On January 14, 2003, the Plaintiff 1 and the Nonparty entered into an additional agreement with the purport that monthly rent of KRW 12,000,000 shall be changed to KRW 20,000,000, and the extended portion shall be paid up to June 1, 2003.

D. Around January 2003, the Nonparty paid KRW 100,000,000 to Plaintiff 1, and KRW 20,000,000,000, which was to be paid by June 1, 2003, was paid to Plaintiff 1 on January 20, 204.

E. The Plaintiffs and the Nonparty agreed to complete the registration of the establishment of chonsegwon for the purpose of securing the claim for the return of the lease deposit. The registration of the establishment of chonsegwon, which was completed from January 1, 2003 to December 31, 2005, with the Daejeon District Court No. 14075, Feb. 10, 2003, as to the instant building, was the Plaintiffs, the Nonparty, the person having chonsegwon, the person having chonsegwon, the deposit money, KRW 100,000, and the scope of the instant building, the instant building, and the period.

F. On February 21, 2003, the Nonparty borrowed KRW 70,000,000 from the Defendant who was unaware of the developments leading up to the completion of the registration of chonsegwon on February 21, 2003, and completed the registration of the establishment of the right to lease on a deposit basis with the Defendant as security by the Daejeon District Court No. 20677, Feb. 21, 2003.

G. On January 1, 2004, Plaintiff 1 notified the Nonparty that the lease contract will be terminated on February 12, 2004, the Nonparty would not pay the rent of KRW 100,000,000, and the rent, value-added tax, and management expenses after January 1, 2004. The notification reached the Nonparty around that time.

H. The Defendant did not pay interest on loans after March 5, 2004. As to KRW 72,278,610 among the claims for the return of security deposit against the Plaintiffs of the Nonparty, the Defendant received the Daejeon District Court Decision 2004TTTT2443, which received the seizure and collection order by subrogation, and the above collection order reached the Plaintiffs on June 21, 2004.

2. The judgment of the court below

If the duration of chonsegwon expires, the mortgage cannot be executed on the right to use the right to lease on a deposit basis because the right to use the right to lease on a deposit basis is extinguished. In such a case, the right can only be exercised by means of receiving a collection order with respect to the claim for the return of lease on a deposit basis, which can be deemed to exist in lieu of the object of the mortgage. On the other hand, the settlor of chonsegwon, who is the garnishee, may oppose the execution creditor against all defenses arising between the debtor and the debtor, based on the time when the seizure and collection order was served in accordance with the general law of execution of the claim (see Supreme Court Decision 2003Da46260, 53879, Jun. 25, 2004, etc.). Thus, the plaintiffs may set off against the defendant rent, etc. against the non-party until June 21, 2004, which was delivered to the defendant by the seizure and collection order against the non-party.

However, it is obvious that the claims such as overdue rent against the non-party who was due until the seizure order is served, including the non-party, should exceed the claims for the return of the deposit money by the non-party. Thus, the claims for the return of the deposit money are all extinguished according to the plaintiff 1's declaration of offset. Therefore, as long as the plaintiffs did not exist and the defendant contests the collection amount to the defendant, the plaintiffs' claim for the confirmation of the existence of the obligation for the repayment of the deposit money by the plaintiff 1 is reasonable, and the defendant's claim for the collection money against the plaintiffs is groundless.

3. Judgment of party members

In fact, where a right to lease on a deposit basis has been registered in the name of a lessee pursuant to an agreement between a lessee and a lessor for the purpose of securing the right to lease on a deposit basis, and the right to lease on a deposit basis has been established as a right to lease on a deposit basis, even if only the right to lease on a deposit basis is deemed to be established as a prior agreement and thus becomes null and void, a right to lease on a deposit basis may be asserted as null and void only if the right to lease on a deposit was aware of a new legal interest due to a separate legal cause based on the legal relationship formed by the said right to lease on a deposit basis (see Supreme Court Decisions 98Da20981, Sept. 4, 1998; 2005Da59864, Feb. 9,

Meanwhile, since the term of chonsegwon expires, the mortgage cannot be executed on the chonsegwon itself because the right to use the right to lease on a deposit basis is no longer effective. In such a case, Articles 370 and 342 of the Civil Act may be deemed to exist in lieu of the right to lease on a deposit basis under Article 273 of the Civil Execution Act, or may exercise its right by means of issuing a collection order or an order, demanding a distribution in compulsory execution procedure conducted by a third party with regard to the right to lease on a deposit basis (see Supreme Court Decisions 95Ma684, Sept. 18, 1995; 98Da31301, Sept. 17, 199). Since the proviso of Articles 370 and 342 of the Civil Act provides for the payment or seizure of money or other things to be received by the mortgagee for the purpose of exercising the right to lease on a deposit basis, the mortgagee may not be deemed to have any specific purpose of setting off the right to lease on a deposit basis against the third party within 25 years of the right to claim for subrogation.

Examining the facts acknowledged by the court below in light of the above legal principles, even if the non-party can claim that the contract to establish a right to lease on a deposit basis is null and void, the plaintiff cannot claim that the defendant who established the right to lease on a deposit basis against the non-party, without knowledge of such circumstances. Thus, it is reasonable to view that the plaintiff 1's non-party who suffered from the above contract that cannot be compatible with the contract to establish a right to lease on a deposit basis can not claim the invalidity of the right to lease on a deposit basis, such as overdue rent, management fee, compensation for damages, etc.

On the other hand, Supreme Court Decision 2003Da46260, 53879 Decided June 25, 2004 cited by the court below is known to the mortgagee of chonsegwon that his right to lease on a deposit basis is to secure the deposit, and it is related to the issue that the settlor of chonsegwon may claim the invalidation of the contract to lease on a deposit basis against the mortgagee of right to lease on a deposit basis and the effect of the lease agreement. Thus, it cannot be invoked in the case that the mortgagee of right to lease on a deposit basis knew that his right to lease on a deposit basis was to secure the

Nevertheless, the court below decided that the plaintiffs' claims can be offset against the claims for return of lease money that the defendant seized and collected. The court below erred in the misapprehension of legal principles as to the effect of a third party in good faith and the effect of a right to collateral lease on a deposit basis established to secure lease deposit, which affected the conclusion of the judgment. The ground of appeal pointing this out has merit.

4. Conclusion

Therefore, the part concerning the claim for confirmation of the existence of the principal lawsuit and the counterclaim part among the judgment below shall be reversed, and this part of the case shall be remanded to the court below for a new trial and determination. It is so decided as per Disposition by the assent of all participating Justices.

Justices Lee Hong-hoon (Presiding Justice)