In cases where a wage creditor who has the right to preferential payment under the Labor Standards Act has seized real estate for the purpose of auction before the commencement of auction procedure, but fails to vindicate that the right to preferential payment is a right to preferential payment by the time of auction, whether a preferential distribution may be received if it is proved that the right to preferential payment exists before the

Even if a wage creditor having the right to preferential reimbursement under the Labor Standards Act is a wage creditor, he/she shall make a demand for preferential payment not later than the date of a successful bid in the auction procedure. However, even if he/she did not demand a distribution prior to the commencement of the auction procedure, even if he/she did not demand a distribution, he/she should be treated as having demanded a distribution as naturally, and even if he/she did not submit a separate claim statement, he/she shall not be excluded from the distribution. Therefore, in balancing the procedural demand to ensure the stability of civil execution procedure and the substantive legal request to protect the worker's wage claim, if the wage creditor who has the right to preferential payment under the Labor Standards Act did not prove that he/she is a priority claim until the commencement of the auction procedure, even if he/she did not prove that it is a priority claim by the time of the successful bid, it shall

Articles 587, 605(1), 653, and 728 of the Civil Procedure Act; Article 37 of the Labor Standards Act

Plaintiff 1 and four others (Attorney Choi Jae-ho, Counsel for the plaintiff-appellant)

Korea Asset Management Corporation (Law Firm Dudi, Attorneys Kim Jung-chul et al., Counsel for the plaintiff-appellant)

Daegu District Court Decision 2001Na16751 Delivered on December 19, 2001

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

We examine the grounds of appeal.

1. The facts duly established by the court below are as follows.

A. On November 14, 1998, the plaintiffs were employed by the deceased non-party and retired workers without receiving retirement allowances of the same amount as indicated in the attached Form of the judgment below, and on November 14, 1998, the claim amount of KRW 31,303,630 from the Daegu District Court for the sum of the plaintiffs' retirement allowances from the Daegu District Court as the claim amount, and the provisional attachment was made on the land for factory land 1,39m2, its ground warehouse, factory and dormitory (hereinafter "real estate of this case") owned by the deceased non-party, and the provisional attachment was registered on the 17th of the same month.

B. On August 9, 199, at the Defendant’s request, the mortgagee of the instant real estate, the Daegu District Court (Seoul District Court 99Hu73272) commenced a blanket auction procedure for the instant real estate and other real estate on which the joint mortgage was created, and the bid price was awarded.

C. The auction court distributed 2,038,080 won out of 132,97,554 won to be distributed on the date of distribution on April 11, 2001 to the Defendant, who is the mortgagee, in the order of first priority to the Busan Metropolitan City Mayor having priority over the pertinent tax, and distributed the remainder of 130,939,474 won to the Defendant, the mortgagee, in the second order.

D. Although the Plaintiffs did not submit the materials proving that the Plaintiffs’ claims are preferential rights to wage in the auction court by the date of distribution, the Plaintiffs appeared on the date of distribution and asserted that the above claims for provisional seizure were preferential rights to payment as wage claims, and raised an objection on the distribution schedule of the above contents, and thereafter filed a lawsuit of demurrer against distribution seeking rectification of the distribution schedule.

2. Based on the aforementioned factual basis, the lower court determined that the Plaintiffs were automatically admitted to the distribution procedure and that the entire amount of the retirement allowance claim of this case may be distributed preferentially to the Defendant’s claim secured by the right to collateral security, and thus, accepted the Plaintiffs’ claim seeking rectification of the said distribution schedule.

3. First, we examine the first ground for appeal.

Even in cases where a wage creditor who has the right to preferential reimbursement under the Labor Standards Act is entitled to demand a distribution by the auction date during the auction procedure (see Supreme Court Decision 96Da10263, Feb. 25, 1997). However, even if a person having the right to demand a distribution prior to the commencement of the auction procedure did not demand a distribution, he/she is naturally treated as having the right to demand a distribution, and even if he/she did not separately submit a claim statement, he/she shall not be excluded from the distribution (see Supreme Court Decision 94Da57718, Jul. 28, 1995). Accordingly, in balancing the procedural request to ensure the stability of the civil execution procedure and the substantive legal request to protect the worker’s wage claim, even if the wage creditor who has the right to preferential reimbursement under the Labor Standards Act did not vindicate that the right to demand a distribution was a priority claim by the time of the auction, it shall be interpreted that the right to demand a distribution is a priority claim before the distribution schedule becomes final and conclusive.

The court below's decision that recognized the plaintiffs' right to preferential reimbursement in accordance with such legal principles is just and there is no error in the misapprehension of legal principles as to the demand for distribution, as otherwise alleged in the ground of appeal.

3. Next, we examine the second ground for appeal.

According to the records, with respect to the submission of a document evidencing that the claims of this case for the provisional seizure of this case are claims for retirement allowance and that the claims of this case should be paid in preference to the defendant who is a mortgagee in the distribution procedure based on the preferential payment claim under the Labor Standards Act, and that the claims for the provisional seizure are retirement allowance claims and the amount of retirement allowance claims, the defendant submitted a statement of accounts, etc. to the court of auction until the successful bid date, and did not vindicate that the claims are retirement allowance claims with priority, and therefore, the plaintiffs cannot claim a preferential payment claim by the lawsuit of demurrer against the distribution of this case. Therefore, it can be known that the plaintiffs did not dispute the existence and amount of retirement allowance claims of this case or dispute the evidence submitted by the plaintiffs. Therefore, the measures that the court below acknowledged the existence and amount of retirement allowance claims of this case based on the evidence submitted by the plaintiffs are just and it is not erroneous in the misapprehension

4. Therefore, the appeal is dismissed, and all costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Park Jae- Jae (Presiding Justice)