Whether a third party obligor in a subrogation lawsuit may invoke the defense of extinctive prescription against the obligee by the obligor (negative)

In a claim against a third party by exercising a creditor's subrogation right, the third party obligor cannot set up against the obligee any defense against the obligee. Thus, in principle, where the extinctive prescription of the claim is completed, the person who is entitled to invoke it is only the person who is entitled to benefit of prescription and the third party obligor cannot exercise it.

Article 404 of the Civil Act

Supreme Court Decision 92Da35899 delivered on November 10, 1992 (Gong1993Sang, 90) Supreme Court Decision 92Da25472 delivered on March 26, 1993 (Gong1993Sang, 1288) Supreme Court Decision 93Da59502 delivered on May 12, 1995 (Gong195Sang, 2094)

Reinforcement Farmland Cooperatives (Attorney Park Jong-chul, Counsel for the defendant-appellant)

Defendant 1 and one other (Attorney Kim Jong-soo, Counsel for the defendant-appellant)

Incheon District Court Decision 95Na3121 delivered on December 20, 1996

The part of the judgment of the court below against Defendant 1 and the part concerning the land indicated in the attached table No. 5 of the land list against Defendant 2 is reversed, and this part of the case is remanded to the Incheon District Court Panel Division. The remaining appeals against Defendant 2 are dismissed. The costs of appeal against the dismissed judgment are assessed against the plaintiff.

We examine the grounds of appeal.

1. As to the part of the land listed in the attached list Nos. 3 through 5 of the judgment of the court below (hereinafter referred to as “land Nos. 3 through 5”),

A. Summary of the reasoning of the judgment below

(1) The lower court acknowledged the following facts.

The land before subdivision was originally owned by the deceased non-party 1, and was distributed farmland to the deceased non-party 2 and non-party 3 by implementing the Farmland Reform Act. The plaintiff union (which was the original strengthening and repair cooperative, but became the current plaintiff union after going through the process of change of name, separation, and merger) purchased the above distributed land from the above non-party 2 and non-party 3 for the purpose of expanding the existing waterway as part of the repair adjustment business on January 17, 1956, and the repayment was completed on or around December 1958 after repayment was continued in their names. However, the court below's co-defendant 4 and non-party 5, who was the inheritor of the non-party 1, had the ownership transfer registration for the land in the name of the non-party 1, who was its owner on the land cadastre, and the ownership registration for the land in the name of the defendant 1 was made on July 5, 199; and the ownership registration was made on September 25, 1989.

(2) The lower court determined as follows on the Plaintiff’s primary assertion.

(A) On January 17, 1956, the Plaintiff Union purchased the land Nos. 3 and 4 of this case from Nonparty 2 and from Nonparty 3 respectively, the Plaintiff Union has the right to claim for ownership transfer registration on the land Nos. 3 and 4 of this case against Nonparty 2’s inheritor, and on the land No. 5, against Nonparty 3, the right to claim ownership transfer registration on the land No. 3 and 4 of this case. However, Nonparty 2 lost ownership and Nonparty 2 and Nonparty 3 did not complete the registration pursuant to Article 187 of the Civil Act. Accordingly, the Plaintiff Union may claim ownership transfer registration on the land of this case on April 15, 1987 by subrogation of Nonparty 5’s heir’s right to claim ownership transfer registration on the land of this case on the land of this case, which was owned by Nonparty 3 and Nonparty 4 of this case’s heir’s ownership registration on the land of this case. Accordingly, the Plaintiff Association’s right to claim ownership transfer registration on the land of this case was made under Nonparty 2’s title No. 4 of this case.

(B) The Defendants asserted that the claim for the registration of transfer based on the Plaintiff’s above sale had already expired. Thus, even if each of the above lands was purchased on January 17, 1956 at the time of the enforcement of the former Civil Act, the Plaintiff Union lost the right to claim the registration of transfer as a real right pursuant to Article 10 of the Addenda of the Civil Act because the registration was not completed within six years from the enforcement date of the Civil Act, i.e., December 31, 1965, and even until ten years have passed from January 1, 1966, the Plaintiff Union had already expired the extinctive prescription.

B. Judgment on the grounds of appeal

In a claim filed by a creditor against a third party by exercising a creditor's subrogation right, the third party obligor cannot set up a defense against the creditor, and in principle, the person who is entitled to invoke it when the extinctive prescription of the claim is completed is only the person who is entitled to benefit of prescription, and the third party obligor in the creditor subrogation lawsuit cannot exercise it (see Supreme Court Decisions 92Da35899 delivered on November 10, 1992; 92Da25472 delivered on March 26, 1993, etc.).

According to this case, in order to preserve the right to claim ownership transfer registration on the ground that the Plaintiff purchased the land Nos. 3 through 5 from the deceased non-party 2 and the non-party 3, a farmland distributor, on behalf of the inheritor and the non-party 2, a debtor, in order to preserve the right to claim ownership transfer registration on the ground that he purchased the land of this case from the deceased non-party 2 and the non-party 3, the debtor, and the non-party 4 and the non-party 5, who again received the ownership transfer registration from the non-party 5, are seeking implementation of the ownership transfer registration registration on the ground of "the restoration of the registered name in lieu of the cancellation registration." Thus, the defendants who are the third debtor cannot oppose the plaintiff due to the defense of the extinctive prescription against the plaintiff, the non-party 2 and his heir, and the non-party 3, etc. who received direct profits due to the expiration of the extinctive prescription against the right to claim ownership transfer registration held by the plaintiff. Thus, the defendants cannot be viewed as a direct beneficiary.

Nevertheless, the court below erred by misapprehending the legal principles as to the person who can invoke the benefit of extinctive prescription in the protocol where the court below accepted the defendants' defense of extinctive prescription and determined that the plaintiff's claim for transfer registration expired, and it is clear that such illegality affected the judgment. Therefore, the ground of appeal pointing this out has merit.

2. As to the part of the land listed in the attached Table 6 of the judgment below against Defendant 2

The appeal on this part does not contain any indication in the grounds of appeal even after examining the petition of appeal or the grounds of appeal, and this part of the appeal is not acceptable.

3. Therefore, without examining the part of the judgment below as to Defendant 1 and the part concerning Defendant 5’s land of this case against Defendant 2, the judgment of the court below is reversed, and this part of the case is remanded to the court below for further proceedings consistent with this Opinion. The remaining appeals against Defendant 2 are dismissed. The costs of appeal against the dismissed part are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench

Justices Lee Im-soo (Presiding Justice)