In a lawsuit of demurrer against distribution, whether the mortgagee of a right to collateral security registered prior to the registration of commencement of a request for auction can assert the existence of other claims that can be the secured debt of the right to collateral security in addition to the secured debt stated in the claim statement (affirmative

The right to collateral security registered prior to the registration of the commencement of a request for auction in the real estate auction procedure for the execution of a security right is naturally entitled to dividends according to the order of priority, even if the mortgagee does not demand a distribution under Article 605 of the Civil Procedure Act, and even if the mortgagee does not demand a distribution, the mortgagee who is naturally entitled to dividends according to the order of priority does not belong to the creditor demanding a distribution under Article 605 (1) of the Civil Procedure Act. Therefore, even though such mortgagee submitted a report of claim and the secured claim stated in the report of claim did not exist, the mortgagee may assert that there are other claims that can be the secured claim of the right to collateral in a lawsuit of demurrer against the distribution filed by other creditors on the ground that there is no secured claim as above, and if it is proved that there are other claims, the distribution to the mortgagee is legitimate.

Articles 587(2), 605, 653(1), and 728 of the Civil Procedure Act; Articles 121-3, 148-3, and 205 of the Rules on Civil Procedure

Cho Heung Bank (Attorney Yu Ho-soo, Counsel for the plaintiff-appellant)

Defendant (Law Firm Sami General Law Office, Attorneys Lee Jong-han et al., Counsel for the defendant-appellant)

Seoul High Court Decision 97Na27031 delivered on December 22, 1997

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

We examine the grounds of appeal.

1. Regarding ground of appeal No. 1

In a lawsuit of demurrer against a distribution filed by another creditor on the ground that there is no secured claim, the mortgagee’s right to collateral security registered prior to the filing of a request for auction in the real estate auction procedure to exercise the security right may, as a matter of course, receive the distribution according to the order of priority even if the mortgagee did not demand a distribution as stipulated in Article 605 of the Civil Procedure Act. Even if the right to collateral security registered prior to the filing of a request for auction in the real estate auction procedure to exercise the security right does not exist, the mortgagee is not included in the creditor to demand a distribution under Article 605(1) of the Civil Procedure Act. Therefore, even if the mortgagee submitted a report of claim by the mortgagee, and there is no secured claim stated in the report of claim, the mortgagee may assert that there is another claim that can be the secured claim of the said right, and if other claims are found to exist, the distribution to the mortgagee is legitimate. Although the right to collateral security registered prior to the filing of a request for auction in the real estate auction procedure to exercise the security right cannot be seen as included in the distribution creditor under Article 605 of the Civil Procedure Act.

2. Regarding ground of appeal No. 2

According to the reasoning of the judgment below, the court below determined that at the time when the plaintiff applied for auction for the exercise of the security right of this case, the defendant had a claim against the non-party for a loan exceeding the amount of the dividend against the defendant. In comparison with the relevant evidence after examining the records, such fact-finding is justified, and there is no error of law of misconception of facts due to the violation of the rules of evidence as discussed in this case.

3. 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 Final Young-young (Presiding Justice)