In case where a general creditor has requested a compulsory execution against a movable provided as security by a debtor to a third party, and received a distribution, whether he/she has obligation to return unjust enrichment to a mortgagee (affirmative)

Even if the debtor is not the ownership of the execution debtor, the successful bidder who has received the successful bid price after receiving the successful bid price in the compulsory execution procedure shall bona fide acquire the ownership of the movable property, and in case where the general creditor has received a distribution by applying for compulsory execution against the movable property provided as security to a third party, the successful bidder acquired the ownership by bona fide acquisition, and accordingly the mortgagee loses its ownership, as a result of the successful bid, the general creditor gains a profit without any legal cause by receiving the successful bid price for the movable property owned by a third party, not the debtor, and thereby causes damage to the mortgagee, and thus, he is obligated to return it as unjust enrichment to the mortgagee.

Articles 372 [Transfer for Security] and 741 of the Civil Act

Korea Technology Credit Guarantee Fund (Attorney Jeong-il et al., Counsel for the defendant-appellant)

Aeronautical Heavy Industries Co., Ltd. (former Trade Name: Aeronautical Industrial Co., Ltd.)

Daegu District Court Decision 96Na7951 delivered on October 23, 1996

The judgment below is reversed, and the case is remanded to the Daegu District Court Panel Division.

We examine the grounds of appeal.

1. According to the reasoning of the lower judgment, the lower court determined the following facts-finding and determination by comprehensively taking account of the admitted evidence.

A. Facts found by the court below

On August 10, 1993, the non-party entered into a credit guarantee agreement with the plaintiff on June 20, 1998 with the guarantee period of US$86,175, and entered into a credit guarantee agreement with the non-party 86,515,00,000 as machinery purchase price, and entered the credit guarantee agreement with the non-party 88,000,000,000 as to the machinery listed in the separate sheet at the time of original adjudication on August 14, 1993. The non-party entered into a credit guarantee agreement with the plaintiff on April 28, 1994, and entered the credit guarantee agreement with the non-party 86,515,00,000,000,000 won as the principal amount until March 17, 200, the non-party 190,000 won as to the non-party 2,50,000,000 won prior to the loan.

On July 8, 1994, in order to secure the Defendant’s obligation amounting to KRW 90,525,600, the Nonparty entered into a security transfer agreement with respect to the machinery listed in the attached Table 1 and 2 (hereinafter “the machinery of this case”) at the time of original adjudication, and transferred its possession by means of possession amendment, and the notary public entered into a notarial deed on the repayment contract of obligation with the security transfer by means of document No. 2437 of the attached Table 94 at the same law office. The Defendant applied for a compulsory execution with respect to the machinery of this case to the Daegu District Court on December 26, 1994 upon the Nonparty’s non-party’s failure to perform his obligation, and received dividends of KRW 28,840,180,00 after deducting the execution cost from the successful bid price on March 29, 1995.

On the other hand, on June 29, 1995, the Plaintiff, as the Nonparty did not pay the principal and interest of the Daegu Bank and the National Bank, received 59,39,570 won of the principal and interest of the loan, and 52,130,822 won of the principal and interest of the loan to the National Bank on the 30th of the same month, respectively, on the 30th of the same month, by subrogation from the Daegu Bank, and at the same time from the Daegu Bank, the right to transfer a security for the machinery of subparagraph 1 in the attached Table at the time of original adjudication, and from the National Bank, the right to transfer a security for the machinery of subparagraphs 2 and 3 in the attached

B. The judgment of the court below

Where the owner of movable property transfers movable property twice and the transferor continues possession by way of the revision of possession, the transferee shall acquire ownership by taking over the real estate first. As to the instant machinery, the Nonparty, the owner of the instant machinery, entered into a double security agreement with the two banks and the Defendant, and continued possession by way of the revision of possession. However, as the Defendant first acquired the ownership of the instant machinery by taking over the real estate after seizing the instant machinery, the two banks cannot assert the ownership of the instant machinery, and the Plaintiff, the transferee of the security interest by transfer from the two banks, cannot assert the ownership of the instant machinery. Thus, the Defendant cannot be said to have received the distribution in the auction procedure for the instant machinery, and thus, it cannot be said that there is no legal ground.

For the foregoing reasons, the lower court rejected the Plaintiff’s claim for restitution of unjust enrichment against the Defendant, premised on the Plaintiff’s being the owner of the instant machine.

2. The judgment of this Court

However, according to the records, among the facts acknowledged by the court below, it is clear that the part of the court below's finding that the transfer contract was concluded between the defendant and the non-party with respect to the instant machinery. In other words, between them, the transfer security contract was concluded for other machinery that is not the instant machinery, and a notarial deed was only prepared (Evidence 1). The defendant deemed as a general creditor and the non-party, who is the debtor, enforced compulsory execution on the instant machinery.

Even in cases where a debtor is not owned, the successful bidder who paid the successful bid price for the corporeal movables in the compulsory execution procedure and paid them in good faith shall acquire the ownership of the corporeal movables, barring any special circumstances. Among those owned by the Daegu Bank or the National Bank, among those owned by the mortgagee, the successful bidder who was paid the successful bid price and delivered the auction price due to the successful bid in the compulsory execution procedure against it, shall acquire the ownership in good faith, and accordingly the two mortgagees lose their ownership. As a result, the defendant shall obtain profits without any legal cause and thereby suffered losses from the payment of the successful bid price for the instant machinery owned by a third party, not the debtor, and the two banks suffered losses. Accordingly, the defendant is obligated to return it as unjust enrichment to the bank, and the plaintiff who has a legitimate interest in repayment of the non-party's bank loan obligation under a credit guarantee contract may subrogate the right of the creditor bank against the instant machinery, the creditor bank by subrogationing the defendant bank.

Nevertheless, the court below's rejection of the plaintiff's claim for return of unjust enrichment based on erroneous fact-finding is an unlawful act that affected the conclusion of the judgment by misunderstanding the facts against the rules of evidence, which affected the conclusion of the judgment. Therefore, the appeal pointing this out has merit.

3. Therefore, without examining the remaining grounds of appeal, the judgment of the court below is reversed, and the case is remanded to the court below for a new trial and determination. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Cho Chang-hun (Presiding Justice)