Whether the effect of the mortgage by the Factory Mortgage Act on the movable property which was already provided by the method of possession alteration to a third party prior to being entered in the list of factory mortgage (negative)

Articles 4, 5, 7, and 10 of the Factory Mortgage Act; Article 189 of the Civil Act

Supreme Court Order 92Ma576 dated August 29, 1992 (Gong1992, 2838) Supreme Court Order 98Da64 dated October 12, 1998 (Gong1998Ha, 2823)

Jung-hee (Law Firm Kim & Shind Co., Ltd., Counsel for the plaintiff-appellant-appellant)

National Agricultural Cooperative Federation (Attorney Lee Chang-chul, Counsel for defendant-appellant)

Seoul High Court Decision 2002Na53683 delivered on April 24, 2003

Of the judgment of the court of first instance, the part against the defendant as to damages for delay that is revoked below shall be reversed. Of the judgment of the court of first instance, the part against the defendant as to the amount of 178,692,922 won per annum from November 12, 200 to May 31, 200, and the part ordering payment in excess of the amount of 20 percent per annum from the next day to the date of full payment, shall be revoked, and the part as to the plaintiff's claim shall be dismissed. The plaintiff's appeal and the remaining appeal by the defendant shall be dismissed. The total costs of the lawsuit shall be four minutes, and the remainder shall be borne by the plaintiff and the defendant

1. Plaintiff’s ground of appeal

Examining the relevant evidence in light of the records, the court below is just in holding that the defendant knew or could have known the fact that the movable of this case had already been provided as a security for securing the plaintiff's claim at the time of acquiring factory mortgage on the movable of this case, and even if not, the defendant could have known or could have easily known the fact that the movable of this case was provided as a security for securing the plaintiff's claim, and rather, the defendant could not easily understand whether the plaintiff's claim was actually established, and there is no error of law such as misunderstanding of facts or misunderstanding of legal principles as argued in the Grounds for Appeal.

2. As to the Defendant’s ground of appeal

A. On the first ground for appeal

Even if it is a movable listed in the list as the object of a mortgage under the provisions of the Factory Mortgage Act, if it is owned by a third party who is not a mortgager, the mortgage cannot be effective, and even if the movable mentioned in the list is already provided by the method of possession or alteration, it belongs to the mortgagee in relation to the third party, and thus, it shall not have the effect of a mortgage under the Factory Mortgage Act (see Supreme Court Order 98Da64, Oct. 12, 1998, etc.). In this case, it shall not be deemed that the mortgagee has the same separate method of publication as a nominal person in order to claim the ownership of the mortgagee. From the contrary, the prior argument in the grounds of appeal cannot be accepted, and there is no error of omission of judgment that affected the conclusion of the judgment of the court below.

B. On the second ground for appeal

Based on its adopted evidence, the court below recognized the fact that the plaintiff lent KRW 500 million to Hongk Agricultural Cooperative on November 27, 1998, and the above corporation transferred the movable property of this case to the plaintiff by possession revision in order to guarantee the plaintiff's obligation to the plaintiff twice on December 30, 1998 and February 24, 199. In light of the records, the court below's finding of facts is just and there is no error of law such as misunderstanding of facts as otherwise alleged in the ground of appeal.

C. On the third ground for appeal

In light of the records, the plaintiff's claim for unjust enrichment of this case is against the principle of good faith and cannot be viewed as abuse of rights.

D. On the fourth ground for appeal

The court below affirmed the judgment of the court of first instance which ordered the payment of damages for delay at the rate of 25 percent per annum under the Act on Special Cases concerning the Promotion, etc. of Legal Proceedings (amended by Act No. 6868 of May 10, 2003) from September 4, 2002 to the date of full payment on the unjust enrichment of this case from September 4, 2002.

However, with respect to the portion of "interest rate prescribed by Presidential Decree" in the main text of Article 3 (1) of the Act on Special Cases Concerning the Promotion, etc. of Legal Proceedings before the above amendment, the Constitutional Court rendered a decision of unconstitutionality on April 24, 2003, and the amended provisions of the above Act and the main text of Article 3 (1) of the Act on Special Cases Concerning the Promotion, etc. of Legal Proceedings (amended by Presidential Decree No. 17981 of May 29, 2003) provide that the statutory interest rate applicable after June 1, 2003 shall be 20 per annum for cases pending before the court at the time of the enforcement of the above amended Act. Thus, the court below maintained the judgment of the first instance court that applied the above provisions to the above period, which affected the conclusion of the judgment by erroneously applying the statutory interest rate for delay damages, and the allegation in the grounds of appeal on this point has merit.

Therefore, although the part of the judgment of the court below on the damages for delay cannot be exempted from reversal, this part is sufficient for this court to directly judge, and therefore, it shall be reversed and remanded in accordance with Article 437 of the Civil Procedure Act as follows.

As legally determined by the court below, the defendant is obligated to pay the plaintiff 178,692,922 of unjust enrichment. However, the damages for delay shall be paid at the rate of five percent per annum, which is a civil interest rate from November 12, 2000 following the delivery day of a copy of the complaint of this case to May 31, 2003 before the enforcement day of the above amended Act, and at the rate of twenty percent per annum under the above amended Act, from June 1, 2003 to the full payment day. Thus, the plaintiff's damages for delay shall be accepted within the extent of the above recognition, and the remaining claims shall be dismissed for this reason. The part of the judgment of the court of first instance which maintained the judgment of the court of first instance ordering payment exceeding the above cited amount shall be reversed, and the judgment of first instance corresponding to the above reversed part shall be revoked, and the plaintiff's claims corresponding to this part shall be dismissed.

3. Therefore, this Court has rendered a final judgment with respect to the above part of the plaintiff's claim. The plaintiff's appeal and the defendant's remaining appeal are without merit. Thus, the plaintiff's total costs of lawsuit are four minutes, and the plaintiff's remaining costs of lawsuit are assessed against the defendant. It is so decided as per Disposition with the assent of all participating Justices.

Justices Byun Jae-chul (Presiding Justice)