[1] In a case where a debtor’s act of reducing liability property causes or deepens the shortage of common security for general creditors, the standard for determining whether such act constitutes a fraudulent act, and the standard for determining a fraudulent act in a case where a debtor, who is in a state of excess of liability, transfers other claims that are not the original purpose of the obligation, with respect to the performance of obligation only to

[2] Where the obligor transferred a claim against the garnishee to a specific creditor, but the assignment of the claim became final and conclusive on the ground that it was a fraudulent act, but the obligee receives a seizure and collection order against the pertinent claim, whether it is possible to receive the distribution in the position of the obligee who received the seizure and collection order (affirmative)

[1] In a case where a debtor's act of reducing liability property causes or deepens the shortage of common security for general creditors, whether such act constitutes a fraudulent act subject to revocation shall be determined based on whether the act ultimately constitutes an act detrimental to general creditors, by comprehensively taking into account the following circumstances: (a) the weight of the debtor's entire responsible property in the context of the debtor's insolvency; (b) the degree of insolvency; (c) the justification of the economic purpose of the juristic act; (d) the reasonableness of the pertinent act, which is the means of its realization; (e) the reasonableness of the duty or circumstance of the act; and (e) the degree

In addition, in a case where a debtor in excess of his/her obligation transfers claims, other than the original purpose of the obligation, with respect to the performance of the obligation only to some of the multiple creditors, whether the act constitutes a fraudulent act should be determined based on whether the act can ultimately be seen as an act detrimental to the general creditor in light of the general standard of determination as seen above

[2] In a lawsuit of demurrer against distribution, the Defendant may make all arguments that the Defendant could dismiss the Plaintiff’s claim by means of defense. As such, the Defendant may assert that the amount the Plaintiff raised an objection against distribution was demanded by the Defendant, but should be distributed to other claims excluded from the distribution. The same applies even in cases where the Defendant did not make an objection against distribution based on other claims.

Therefore, even though the debtor transferred the claim to the third debtor to a specific creditor on the ground that the assignment of the claim is a fraudulent act, if the creditor receives a seizure and collection order for the claim in question, in the distribution procedure following the mixed deposit of the third debtor with respect to the claim, the creditor cannot receive dividends in the capacity of the transferee of the claim, who is the beneficiary of the fraudulent act, but it is possible to receive dividends in the position of the creditor who has received the seizure and collection order.

[1] Article 406 (1) of the Civil Act / [2] Articles 223 and 232 of the Civil Execution Act

[1] Supreme Court Decision 2007Da2718 Decided September 30, 2010 (Gong2010Ha, 1967), Supreme Court Decision 201Da28045 Decided October 13, 201 (Gong2011Ha, 2342) / [2] Supreme Court Decision 2008Da29697 Decided September 11, 2008 (Gong2008Ha, 1372)

Gyeongnam Bank Co., Ltd. (Attorney Cho Chang-soo, Counsel for the plaintiff-appellant)

Defendant 1 and one other (Attorney Choi Jae-in et al., Counsel for the defendant-appellant)

Daegu High Court Decision 2011Na2006 decided November 9, 2011

The part of the lower judgment against Defendant 2 is reversed, and that part of the case is remanded to the Daegu High Court. All of the remaining appeals by Defendant 2 and the appeals by Defendant 1 are dismissed. The costs of appeal by Defendant 1 are assessed against Defendant 1.

The grounds of appeal are examined.

1. As to Defendant 1’s ground of appeal and Defendant 2’s ground of appeal No. 1

In a case where a debtor's act of reducing liability property causes or deepens the shortage of common security for general creditors, whether such act constitutes a fraudulent act subject to revocation shall be determined based on whether the act ultimately causes damage to general creditors, by comprehensively taking into account the following circumstances: (a) the proportion of the debtor's entire responsible property among the debtor's property; (b) the degree of insolvency; (c) the justification of economic purpose of a juristic act and its realization; (d) the reasonableness of the act in question; (e) the reasonableness of the act in question; (e) the degree of inevitability of the act in question; and (e) the degree of awareness of the debtor and the beneficiary as to the risk of the shortage of common security. Furthermore, in a case where a debtor in excess of liability transfers other claims that are not the original purpose of the obligation only to some of the creditors, the issue of whether the act constitutes a fraudulent act ought to be determined based on whether the act can ultimately

The lower court determined that each of the instant assignment contracts against the Defendants constituted a fraudulent act in relation to the other creditors of the New Minete Co., Ltd. (hereinafter “New Minete”) including the Plaintiff, etc., and rejected the Defendants’ assertion that they were bona fide beneficiaries.

In light of the above legal principles and records, the above determination by the court below is just, and contrary to the allegations in the grounds of appeal, there were no errors of misapprehending the legal principles regarding the right of revocation or exceeding the bounds of the free evaluation of evidence

2. As to Defendant 2’s ground of appeal No. 2

A. In a lawsuit of demurrer against a distribution, the Defendant may file all arguments that the Defendant could dismiss the Plaintiff’s claim with a defensive method. Thus, the Defendant may assert that the amount the Plaintiff raised an objection against a distribution was demanded by the Defendant, but should be distributed to other claims excluded from the distribution. This also applies even if the Defendant did not raise an objection against a distribution based on other claims (see Supreme Court Decision 2008Da29697, Sept. 11, 2008).

Therefore, even though the debtor transferred the claim to a third party debtor to a specific creditor on the ground that the assignment of the claim is a fraudulent act, if the creditor receives a seizure and collection order for the claim in question, the creditor cannot receive dividends in the distribution procedure following the mixed deposit of the third debtor for the claim, but it is possible to receive dividends in the position of the creditor who has received the seizure and collection order.

B. According to the reasoning of the judgment below and the records, the plaintiff was at least 612,71,88 won in 200, 200, 300 won in 20,000 won in 30,000 won in 20,000 won in 20,000 won in 20,000 won in 27,000 won in 20,000 won in 27,000 won in 20,000 won in 20,000 won in 20,000 won in 27,000 won in 20,000 won in 20,000 won in 27,000 won in 20,000 won in 20,000 won in 27,000 won in 20,000 won in 20,000 won in 27,000 won in 27,000 won in 28,00 won in 36.

In light of the above legal principles in light of the above facts, Defendant 2 had the right to receive dividends as not only as the assignee of the claim, but also as the obligee for seizure and collection in the distribution procedure of this case. Thus, even if Defendant 2 is not recognized as the assignee of the claim due to the cancellation of the above assignment contract by fraudulent act, Defendant 2 may assert that the above amount, which the Plaintiff raised an objection against the Plaintiff, should be distributed to himself as the execution creditor. In this case, the court should revise the distribution schedule by taking into account the dividend order and the amount of the claim of the Plaintiff and Defendant 2.

C. Nevertheless, the lower court rejected Defendant 2’s assertion that the said amount, which was an objection to a distribution, ought to be distributed in proportion to each of the respective claims of the Plaintiff and Defendant 2, and accepted the Plaintiff’s claim for this part of the distribution schedule that requested correction of the distribution schedule to be distributed to the Plaintiff by eliminating all the amount distributed to Defendant 2. In so doing, the lower court erred by misapprehending the legal doctrine as to the obligee’s right of revocation and the lawsuit of demurrer to distribution, thereby adversely affecting the conclusion of the judgment. The allegation in the grounds of

3. Conclusion

Therefore, the part of the judgment of the court below against Defendant 2 is reversed, and that part of the case is remanded to the court below for further proceedings consistent with this Opinion. All of the remaining appeals by Defendant 2 and the appeals by Defendant 1 are dismissed, and the cost of the appeal by Defendant 1 is borne by the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench

Justices Kim Shin (Presiding Justice)