In case where the mortgaged real estate is transferred from the mortgager to a third party, and the acquisition of a contract by the transferor under the contract and the lender under the agreement of the third party such as the transferor, transferee and mortgagee will succeed to the status of the assignee, whether the national or local tax imposed on the third party who is the transferee may be collected in preference to the above mortgaged claim prior to the statutory due date or the pertinent tax (negative)

Under the provisions of Article 35(1)3 of the Framework Act on National Taxes or Article 31(2)3 of the Local Tax Act, a mortgage-backed claim that is preferentially protected on a national tax or local tax under the provisions of Article 35(1)3 of the same Act is interpreted to be based on a tax liability of the mortgagee on the basis of the relationship with the mortgagee at the time of establishing the mortgage. A mortgage-backed claim that is excluded from preferential collection of such national tax or local tax is excluded from the preferential collection of the mortgaged real estate to a third party, and even if the mortgagee transferred the mortgaged real estate to the third party and the transferee was in default of national tax or local tax, the eligibility for protection is not lost under the current law without special provisions. Therefore, if the mortgaged real estate is transferred from the mortgage-backed real estate to a third party and if there is no tax delinquency prior to the above mortgagee, the national tax or local tax imposed on the third party cannot be collected prior to the statutory due date or by the transferee, the transferor, the mortgagee, and the mortgagee, it cannot be deemed that the transferee is a contractual transferee and transferee under a contract.

Article 35 (1) 3 of the Framework Act on National Taxes and Article 31 (2) 3 of the Local Tax Act

Supreme Court Decision 88Da49581 delivered on September 24, 1991 (Gong1991, 2589), Supreme Court Decision 88Da105 delivered on October 8, 1991 (Gong1991, 2670), Supreme Court Decision 93Da49581 delivered on March 22, 1994 (Gong1994, 1313), Supreme Court Decision 96Da5204 delivered on May 9, 197 (Gong197Sang, 1729)

National Bank of Korea (Law Firm Gyeong & Yang, Attorneys Kim Jong-seok, Counsel for the defendant-appellant)

Masan City and two others (Attorney Tae-yang, Counsel for the defendant-appellant)

Busan High Court Decision 2004Na2083 delivered on August 26, 2004

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

We examine the grounds of appeal.

1. The judgment of the court below

According to the reasoning of the judgment below, the Korea Housing and Commercial Bank (hereinafter referred to as the "Plaintiff") established on October 30, 200, based on its adopted evidence, concluded a mortgage agreement with the non-party 1 with respect to the real estate of this case, which was owned by the non-party 2, and completed the registration of establishment of mortgage on the same day. The non-party 1 sold the real estate of this case to the non-party 2 on November 27, 200 and completed the registration of transfer of ownership on the following day. The non-party 1 and the non-party 2 and the plaintiff acquired the status of the debtor of the above mortgage agreement on February 2, 201, the non-party 1 acquired all obligations of the non-party 1 to the above mortgage agreement on the non-party 2, and the non-party 2 acquired all obligations of the non-party 1 to the above mortgage agreement on the non-party 2 and the non-party 2 acquired the above mortgage agreement on the non-party 2, which had been established on the above mortgage agreement.

2. Judgment of the Supreme Court

However, the judgment of the court below is not acceptable.

Article 35(1)3 of the Framework Act on National Taxes or Article 31(2)3 of the Local Tax Act provides that a mortgage-backed claim that is protected preferentially with respect to a national tax or local tax shall be interpreted to be based on the mortgagee's liability for tax payment, based on the relationship with the mortgagee at the time of the relevant mortgage-backed claim. Even if the mortgagee transferred the mortgaged property to a third party and the transferee was in arrears with national tax or local tax, the eligibility for protection shall not be lost under the current law without any special provision. Thus, if the mortgaged real estate is transferred from the mortgagee to the third party and any tax is collected preferentially with respect to the said lender, the mortgage-backed claim that is excluded from the priority collection of the national tax or local tax is transferred before the statutory due date for national tax or local tax imposed upon the third party who was the transferee or the transferee cannot be collected preferentially (see Supreme Court Decisions 88Da8385, Sep. 24, 191; 2009Da3834, Mar. 29, 1994).

Ultimately, the court below erred in the misapprehension of legal principles as to the right to collateral security that is preferentially protected against taxes. Therefore, the ground of appeal pointing this out is justified.

3. Conclusion

Therefore, 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.

Justices Kim Young-ran (Presiding Justice)