In a case where certain machinery, apparatus and other public goods are included only in the list of factory mortgage which is subordinate and are not entered in the list of factory mortgage which is subordinate, whether such machinery, apparatus and other public goods have the effect of prior factory mortgage (negative)

Articles 4, 5, and 7 of the Factory Mortgage Act; Article 358 of the Civil Act

[Plaintiff-Appellant] Plaintiff 1 and 1515 (Gong198, 508) (Gong198, 508) (Law No. 1993, 1356) (Law No. 1993, 1356) decided April 6, 1993, Supreme Court Decision 94Da20174 Decided June 29, 1995 (Gong195Ha, 2520)

Korea Asset Management Corporation (Law Firm Law Firm, Attorney Lee Young-soo, Counsel for defendant)

(Attorney Choi Byung-hoon, Counsel for the defendant-appellant)

Busan High Court Decision 2004Na7248 delivered on November 4, 2005

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

The grounds of appeal are examined.

1. In full view of the admitted evidence, the court below rejected the defendant's assertion that, even if Busan Bank (hereinafter "Resan Bank") acquired factory mortgage on the existing machinery, apparatus, etc. installed in the factory of this case (hereinafter "the machinery, etc.") and then acquired factory mortgage on the newly installed machinery, etc. in the factory of this case, the Dongnam Bank (hereinafter "Dongnam Bank") did not take measures so that new machinery, etc. can be sold en bloc with the existing machinery, etc. even though the sale price of the new machinery, etc. was cancelled or reduced as a security under the credit guarantee contract between the defendant and Dongnam Bank, the plaintiff's assertion that the sale price of the new machinery, etc. is presumed to have been distributed to Busan Bank, which is a senior factory mortgage, even if the new machinery, etc. was sold en bloc with the existing machinery, etc., as alleged by the defendant, the plaintiff's claim that the new machinery, etc. sales price of the new machinery, etc. will be distributed to the plaintiff.

2. However, we cannot accept the above judgment of the court below.

In full view of the provisions of the Factory Mortgage Act and the Civil Act, the machinery, apparatus and other public objects installed on the land or building of a factory shall have the effect of the factory mortgage only if they are entered on the machinery, apparatus, and apparatus list stipulated in Article 7 of the Factory Mortgage Act (see Supreme Court Order 93Ma116, Apr. 6, 1993, etc.). Therefore, in the case of multiple factory mortgage, where specific machinery, apparatus and other public objects are included only in the list of subordinate factory mortgage due to reasons such as the difference or addition of the list under Article 7 of the Factory Mortgage Act, and where the list of senior factory mortgage is not entered on the list of senior factory mortgage, such machinery, apparatus and other public objects shall have the effect of the senior factory mortgage unless there are special circumstances.

According to the records, the Busan Bank only entered only the existing machinery, etc. in the list under Article 7 of the Factory Mortgage Act, and did not enter the new machinery, etc. on the new machinery, etc. on the other hand, while the new machinery, etc. on the factory mortgage list of the Nam Bank is stated on the new machinery, etc. on the new machinery, etc. on the other hand, if there are circumstances, only the factory mortgage mortgage of the Nam Bank on the new machinery, etc. on the new machinery, etc. is effective, and even if the new machinery, etc. are sold en bloc, the sale price on the new

Nevertheless, the court below rejected the defendant's assertion by concluding that the effect of the factory mortgage of the Busan Bank on the new machinery, etc. extends preferentially to the factory mortgage of the Nam Bank. This decision of the court below is erroneous in the misapprehension of legal principles as to the effect of factory mortgage, which affected the conclusion of the judgment, and the defendant pointed out this issue as the ground for appeal is with merit.

3. Therefore, the lower judgment is reversed, and the case is remanded to the lower court. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Kim Hwang-sik (Presiding Justice)