Seoul High Court Decision 2008Na112201 (Law No. 30, 2009)

Whether the attribution itself of the subrogated claim is changed where a creditor's subrogation lawsuit becomes final and conclusive in favor of the creditor.

The attachment of a claim by a disposition agency shall be deemed to have attached the above claim against the defendant by the delinquent taxpayer. Therefore, the attachment of the claim in this case is lawful (it does not change the ownership of the subrogated claim even if a creditor subrogation lawsuit is finalized in favor of the creditor), and its effect shall also take place when the notice of attachment was served on the defendant who is the garnishee.

Article 24 of the National Tax Collection Act

209Da68354 Attached Claims, etc.

Korea

XX

Seoul High Court Decision 2008Na112201 Decided July 30, 2009

September 13, 2012

The judgment below is reversed and the case is remanded to Seoul High Court.

The grounds of appeal are examined.

1. On the first ground for appeal

Based on the facts found in the judgment, the court below held that the claims of this case against the defendant of the Korea Deposit Insurance Corporation established by a decision in lieu of conciliation (hereinafter referred to as "resolution decision") and the claims for delay against the defendant of the Korea Deposit Insurance Corporation established by a decision in lieu of conciliation, were claims against the defendant of this case. The court below held that the claims of this case were not effective since the plaintiff merely holds the national tax claims against KimA, and therefore the plaintiff cannot seize the above claims against the defendant of the Korea Deposit Insurance Corporation, the subrogated

However, according to the reasoning of the judgment below and the records, the appellate court of the previous lawsuit filed by the Korea Deposit Insurance Corporation on behalf of the debtor KimA (Seoul High Court 2006Na94552) against the defendant on behalf of the debtor KimA, which confirmed that the decision of adjustment was made by the defendant to pay the amount in the judgment of the Seoul High Court (the plaintiff was involved as the plaintiff's supplementary intervenor in the above lawsuit) and the plaintiff, in order to collect the national taxes, etc. in the judgment against the debtor KimA, seized the delinquent taxpayer under Article 41 (1) of the National Tax Collection Act to KimA, and the third debtor as the defendant in accordance with the above mediation decision. However, in order to clearly specify the seized claim, the plaintiff's attachment report and the notice of the attachment of claims against the defendant on behalf of the plaintiff KimA, "the decision made in lieu of Seoul High Court 2006Na9452, Mar. 10, 2008 (including the plaintiff's supplementary intervenor)" is equivalent to the amount of the judgment and interest in arrears.

In light of the legal principles that the effect of subrogation in a creditor subrogation lawsuit belongs to a debtor (see, e.g., Supreme Court Decision 95Da27998, Feb. 9, 1996), the seizure of the Plaintiff’s claim in this case against the defendant by the delinquent KimA shall be deemed to have attached the above claim. Therefore, the seizure of the claim in this case is lawful (if the creditor subrogation lawsuit becomes final and conclusive in favor of the creditor, the reversion of the subrogation claim itself shall not be changed), and its effect shall also arise when the notice of seizure was served to the defendant who is the garnishee.

Nevertheless, the court below erred by misapprehending the legal principles on the validity of the seizure of claims and failing to exhaust all necessary deliberations, which affected the conclusion of the judgment. The ground of appeal pointing this out is with merit.

2. On the second ground for appeal

Under the current law, the procedure for failure to pay national taxes and civil execution procedure are separate procedures, and there is no provision in the law regulating the relationship between both procedures, so one procedure cannot interfere with the other procedure, while each creditor has to participate in the different procedure by determining different procedures in both procedures (see Supreme Court Decision 8Meu42, Jan. 31, 1989).

Meanwhile, the seizure of claims under Article 41 of the National Tax Collection Act prohibits an obligee and obligor subject to seizure from all acts of disposal, such as repayment, collection, etc. regarding claims, and makes collection on behalf of a delinquent taxpayer. As such, a garnishee cannot repay claims subject to seizure to a delinquent taxpayer, and only can it be performed to the State that is the collection authority (see, e.g., Supreme Court Decisions 86Meu2476, Apr. 12, 198; 9Da3686, May 14, 199).

In light of the nature of the national tax delinquency procedure that takes place as a separate procedure and the validity of the attachment of the claim that takes place as a part of the procedure, if the attachment of the claim in this case is recognized as having its effect as the attachment of the claim against the defendant by the delinquent KimA, such as the time of original adjudication, even if the obligor, whose decision of adjustment has already been determined in the lawsuit prior to the creditor subrogation lawsuit as the time of original adjudication, has res judicata effect on the obligor KimA, and claims re-performance of the same content as that of the previous lawsuit, even if the lawsuit in this case were to be satisfied ultimately through the civil execution procedure, it cannot be deemed that filing a collection lawsuit against the defendant after the attachment of the claim in this case, which is a part of the national tax

Therefore, the lower court’s assumptive judgment erred by misapprehending the legal doctrine on the effect of res judicata in a creditor subrogation lawsuit in a collection lawsuit based on the procedure for default of national taxes. The grounds of appeal assigning this error are with merit.

3. Conclusion

Therefore, without examining the remaining grounds of appeal, the judgment of the court below is reversed, and the case is 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 on the bench.