[1] In a case where the amount of secured debt established on the object disposed of by the debtor exceeds the price of the object, whether the disposition of the object constitutes a fraudulent act (negative)

[2] The method of calculating the amount of the secured debt in determining whether the amount of the secured debt on the transferred real estate exceeds the amount of the real estate in case where some of the real estate is transferred, for which a joint mortgage is established

[3] In case where an auction is conducted on the real estate owned by the debtor and the real estate owned by the debtor among the real estate owned by the debtor which is the object of the joint mortgage, and the joint mortgagee has been repaid once, whether the junior mortgagee on the real estate owned by the debtor can exercise the mortgage on the real estate owned by the debtor in subrogation of

[1] Article 406 (1) of the Civil Act / [2] Articles 368, 406 (1), 481, and 482 of the Civil Act / [3] Article 368 (2) of the Civil Act

[1] [2] Supreme Court Decision 2003Da39989 decided Nov. 13, 2003 (Gong2003Ha, 2320) / [1] Supreme Court Decision 2005Da70090 decided Apr. 13, 2006 (Gong2006Sang, 791) / [3] Supreme Court Order 95Ma500 decided Jun. 13, 1995 (Gong195Ha, 2493) 95Da36596 decided Mar. 8, 1996 (Gong196Sang, 1209)

Plaintiff 1 and two others (Law Firm Han, Attorney Lee-dilution, Counsel for the plaintiff-appellant)

Defendant (Law Firm Doksan, Attorneys Park Gi-hoon et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2007Na7234 Decided October 16, 2007

All appeals are dismissed.

The costs of appeal are assessed against the plaintiffs.

We examine the grounds of appeal.

1. As to whether there is false conspiracy

According to the reasoning of the judgment below, the court below rejected the plaintiffs' claims against the plaintiffs' claims seeking the cancellation of the registration of the establishment of the mortgage of this case against the non-party and the defendant by asserting that the mortgage contract of this case was null and void by means of false conspiracy, on the ground that there is no evidence to conclude that the mortgage contract of this case constitutes a false conspiracy. In light of the records, the court below's findings of facts and decision are just and there is no error of law such as incomplete hearing and non-exercise of right

2. As to the establishment of a fraudulent act

A. If a security right has been established on an object disposed of by a debtor, the amount of the secured debt shall be limited to the portion remaining after the amount of the secured debt has been deducted, and if the amount of the secured debt exceeds the price of the object, the disposal of the object shall not be deemed a fraudulent act (see Supreme Court Decision 2005Da70090, Apr. 13, 2006, etc.).

However, in the case of partial disposal of real estate on which a joint mortgage is established, the amount of the secured debt should, in principle, be the amount calculated by dividing the amount of the secured debt of the joint mortgage in proportion to the value of each real estate which is the object of the joint mortgage in accordance with the purport of Article 368 of the Civil Act (see Supreme Court Decision 2003Da3989, Nov. 13, 2003). However, in the case where part of several real estate is owned by the debtor and the property of the surety is owned by the debtor, it is reasonable to view that the secured debt amount of the real estate owned by the debtor as the total amount of the secured debt of the joint mortgage is the amount of the secured debt of the joint mortgage.

In the same purport, the court below is just in light of the legal principles as seen earlier, and there is no error in the misapprehension of legal principles as to subrogation and fraudulent act by the person liable for reimbursement, as otherwise alleged in the ground of appeal. It did not err in the misapprehension of legal principles as otherwise alleged in the ground of appeal.

B. According to Article 368 of the Civil Act, if the proceeds of the auction of some of several real estate on which a mortgage has been established as security of the same claim are distributed first, and all of the claims are paid out of the proceeds, the mortgagee next in priority can exercise the mortgage by subrogation to the extent of the amount stipulated in Article 368 (1) of the same Act.

However, even if an auction is conducted first on the real estate owned by the debtor among the real estate owned by the debtor and the real estate owned by the debtor which is the object of the joint mortgage, and the joint mortgagee is repaid once by the delivery of the auction proceeds, the junior mortgagee on the real estate owned by the debtor cannot exercise the mortgage on the real estate owned by the debtor by subrogation of the joint mortgagee on behalf of the first under the latter part of Article 368(2) of the Civil Code (see Supreme Court Order 95Ma500, Jun. 13, 1995; Supreme Court Decision 95Da36596, Mar. 8, 1996).

Examining the record in light of the above legal principles, when an auction is conducted first for the real estate of this case and a new bank is to repay the secured debt, the plaintiffs are not in the position of junior mortgagee who is entitled to exercise the right to collateral security against the hospital buildings, etc. by subrogation of the new bank regardless of whether the real estate of this case was provisionally seized as a general creditor, and even if the plaintiffs are subordinate mortgagee, the new bank buildings, etc. owned by the person who has pledged his/her property to secure collateral cannot exercise the right to collateral security in the name of the new bank.

In the same purport, the lower court is justifiable to have determined that the instant mortgage contract does not constitute a fraudulent act, and thus, we cannot accept the allegation in the grounds of appeal on this point.

3. Conclusion

Therefore, all appeals are dismissed, and the 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 Lee Hong-hoon (Presiding Justice)