National Bank of Korea (Law Firm Sejong, Attorneys Yu Sung-hoon et al., Counsel for defendant-appellant)

Defendant 1 and 11 others (Attorney already-Appellee et al., Counsel for the defendant-appellant)

October 13, 2007 (Defendant 1, 3, 5, 9, 11, and 12) and October 27, 2017 (Defendant 2, 4, 6, 7, 8, and 10)

Seoul Southern District Court Decision 2015Gahap7382 Decided September 12, 2016

1. The part of the judgment of the court of first instance against the Defendants shall be revoked.

The Seoul Southern District Court Decision 20110Ma1108 [209Ma4913 (Dudu4913), 2010 Magi2782, 2011 Magi21799, 2012 Magi 16169 (Joint), 2012 Magi24818 (Joint), 2012] with respect to compulsory auction of real estate, the amount of dividends under attached Table 1 as stated in attached Table 1 among the distribution schedule prepared on December 3, 2015 by the above court against the Defendants listed in attached Table 1 shall be deemed to be the amount of dividends after correction under each paragraph (3). The amount of dividends for the Plaintiff shall be corrected to KRW 1,275,200,730, respectively.

2. All costs of the lawsuit are borne by the Defendants.

The decision is as follows (the plaintiff has been reduced within the scope of the purport of the appeal by reducing the purport of the claim). Preliminaryly, Seoul Southern District Court No. 201108 [209, 4913, 2010, 2782, 2011, 21799, 2011, 26169, 2012, 2012, 24818 (Joint), 2012, 2012, 24818, 2012, and 24818, hereinafter referred to as "auction of this case") against the Defendants listed in attached Table 1 of the distribution schedule prepared by the above court on December 3, 2015 (hereinafter referred to as "amount of dividends in accordance with each distribution schedule"), and the amount of dividends against the plaintiff shall be corrected to the court as the "amount of dividends after correction, 81, 725, 174, 1083, 48615.

1. Basic facts

A. The sectional owners of the Yangcheon-gu Seoul ( Address omitted) ○○○ Housing (hereinafter “the building before its destruction”) established the reconstruction association (hereinafter “the reconstruction association of this case”) for the purpose of removing the building before its destruction and constructing new apartment units on the site (hereinafter “the reconstruction association of this case”). The head of Yangcheon-gu Seoul (hereinafter “the reconstruction association of this case”). On June 23, 2003, the reconstruction association of this case obtained approval of the project plan on June 30, 2003 and implemented the reconstruction project of this case.

B. On July 23, 2003 and October 1, 2003, the Plaintiff leased the relocation expenses to the sectional owners of the building (the number 1 omitted), (the number 2 omitted), (the number 5 omitted), (the number 3 omitted), (the number 3 omitted), (the number 4 omitted), (the number 9 omitted), (the number 5 omitted), (the number 8 omitted), (the number 6 omitted), (the number 6 omitted), (the number 7 omitted), (the number 7 omitted), (the number 8 omitted) (the number 2 omitted), (the number 7 omitted), (the number 8 omitted) (the number 8 omitted), and (the above 8 household units (the above 8 household units are referred to as "each sectional ownership building before the destruction), and completed the registration of creation of a mortgage (the registration of creation of a mortgage of this case) with respect to each sectional ownership before the destruction.

C. The registration of the establishment of a neighboring building of this case, which was completed on each sectional ownership before the destruction due to the removal of the building before the completion of the reconstruction project of this case, was transferred to the registry of Yangcheon-gu Seoul Special Metropolitan City (location omitted) 9,261 square meters (hereinafter “instant land”) pursuant to Article 102-4(2) of the former Registration of Real Estate Act (amended by Act No. 8922, Mar. 21, 2008) on June 4, 2004.

D. Since then, △△△△ apartment (hereinafter referred to as the “new building of this case”) was newly constructed on the land of this case in around 2007, and registration of preservation of ownership was completed in the name of the reconstruction association of this case as to each section of exclusive ownership of the new building of this case on February 20, 2008 upon the commission of the creditors of the registration of provisional attachment or provisional injunction against the reconstruction association of this case.

E. Each sectional owner of the building (number 1 omitted), (number 2 omitted), number 3 omitted, (number 4 omitted), number 5 omitted, (number 6 omitted), number 7 omitted, (number 8 omitted), and (number 8 omitted) of the newly constructed building of this case prior to the destruction which was the object of the instant right to collateral security, was allocated each of the sectional owners of the newly constructed building of this case (number 13 omitted), (number 12 omitted), number 12 omitted, (number 16 omitted), number 15 omitted, (number 10 omitted), number 14, number 11 omitted, (number 14 omitted), (number 11 omitted), among the newly constructed buildings of this case, and each of the sectional owners of the newly owned buildings of this case (hereinafter referred to as "newly owned buildings of this case"), among the newly owned buildings of this case, was conducting auction of each of the sectional owners of this case including 20 households (hereinafter referred to as "newly owned buildings of this case").

F. On December 3, 2015, the Plaintiff: (a) based on the premise that the instant right to collateral security held by the Plaintiff as to each sectional ownership before the destruction was established on each sectional ownership building; (b) and (c) based on the guarantee claim for moving expenses to the reconstruction association of the instant case, the Plaintiff submitted a claim statement stating the amount to be distributed as a provisional seizure right holder for each sectional ownership of 20 households subject to auction; (c) on the same day, the executing court did not recognize the Plaintiff’s status as a person holding a provisional seizure but only recognizes the status as a person holding a right to collateral security; and (d) only distributes part of the amount of KRW 2,915,906,759 for each sectional ownership of 20 households subject to auction to the small lessee and the person holding a provisional seizure right, including the Plaintiff and the Defendants, to distribute the remainder in that order (hereinafter “instant distribution schedule”). Of the instant distribution schedule, each of the dividend amount against the Plaintiff and the Defendants is the same as the dividend table in attached Table 1.

G. On December 3, 2015, on the date of distribution of the instant auction, the Plaintiff filed an objection as to each of the dividend amounts against the Plaintiff and the Defendants in attached Table 1, as stated in attached Table 2, on the date of distribution of the instant auction, and filed the instant lawsuit on December 9, 2015.

H. On December 6, 2016, approval for use was granted for the instant newly constructed building. However, the instant reconstruction association did not go through the procedures such as the authorization of the management and disposal plan and the announcement or transfer notification while implementing the instant reconstruction project.

[Grounds for Recognition] The facts without dispute, Gap 1 through 14, 16 through 19 (including each number; hereinafter the same shall apply), the fact inquiry results to the head of Yangcheon-gu Seoul Metropolitan Government, the purport of the entire pleadings

2. Relevant statutes;

Attached Form 2 shall be as shown in attached Table 2.

3. Determination as to the cause of action

A. The plaintiff's assertion

1) Under Article 44-3(5) of the former Housing Construction Promotion Act (hereinafter “instant provision”), the right to collateral security established on each sectional ownership of the instant building prior to its destruction shall be deemed to have been established on each sectional ownership building. As such, the Plaintiff shall be paid dividends as to the proceeds from the sale of each sectional ownership of the instant building in the distribution procedure for the instant auction in preference to the Defendants, etc. or the general right to demand a distribution in the position of the mortgagee (in such case, the amount of dividends received by the Plaintiff in the position of the right to demand a provisional seizure against each sectional ownership of 20

2) Even if the instant reconstruction association did not go through the procedures such as the approval of the management and disposition plan and the announcement or the announcement of the transfer of the sale disposition, it cannot be deemed that the instant mortgage was established on each sectional ownership building, the instant mortgage still remains effective in the instant land. Therefore, as to the amount equivalent to the right to a site at least out of the proceeds from the sale of each sectional ownership of 20 households subject to auction, the Plaintiff should be paid dividends in preference to the Defendants, etc

B. Determination

1) Applicable legislation

The Urban Improvement Act was enacted and promulgated by Act No. 6852 of Dec. 30, 2002 and enforced on July 1, 2003 after six months from the date of its promulgation. Article 7(1) of the Addenda of the same Act provides that the transitional measures for the implementation of a project shall be governed by the previous provisions, and the implementation of a project by obtaining approval of a project plan or an authorization for the implementation of a project under the previous Acts shall be governed by the previous provisions. In this context, “project implementation method” shall be deemed to include all the methods or procedures prescribed in Chapter 3 of the Urban Improvement Act in the implementation of a rearrangement project (see Supreme Court Decision 2006Da64559, Jun. 25, 2009).

As seen earlier, the reconstruction association of this case obtained authorization of June 23, 2003, which was prior to the enforcement of the Urban Improvement Act, and obtained approval of the project plan for the reconstruction project of this case on June 30, 2003 under the former Housing Construction Promotion Act. In light of the aforementioned legal principles, the method of implementing the reconstruction project of this case should not be governed by the Urban Improvement Act, but by the former Housing Construction Promotion Act, which is the previous provision.

2) Whether the instant right to collateral security ought to be deemed a new sectional ownership building

A) The main text of the instant provision provides that “The rights registered, such as old and poor housing subject to reconstruction, or mortgage, provisional registration, provisional seizure, lease on a deposit basis, superficies, etc. established on the site thereof shall be deemed to have been newly constructed after the approval of the housing construction project plan under Article 33 is granted, or to have been established on the site thereof.” The latter part of the instant provision provides that “In this case, the provisions of Articles 33 through 45 of the Urban Redevelopment Act shall apply mutatis mutandis.”

First of all, in order to determine whether the right to collateral security established on each sectionally owned building prior to the destruction is established on each sectionally owned building, and whether the Plaintiff should receive dividends in preference to the Defendants in the position of the mortgagee with respect to each sectionally owned building in the distribution procedure of the auction of this case as to each sectionally owned building, according to the latter part of the provisions of this case, the legal fiction provision of the former Urban Redevelopment Act shall be applied only to a reconstruction project to which the former Housing Construction Promotion Act applies through the procedures such as the authorization of the management and disposal plan under Articles 38(3) and (4), and 39(1) and the notification of the sale disposition pursuant thereto.

B) Where a reconstruction association has sold a new house or building site to its members through the procedures, such as authorization of a management and disposal plan under the former Urban Redevelopment Act applied mutatis mutandis by the latter part of the provisions of this case, public announcement of the sale disposal plan therefor, etc., or through the procedures, such as authorization of a management and disposal plan under the Urban Redevelopment Act and public announcement of the transfer thereof, etc., it may be deemed that the rights to the old house or building site were legally exchanged or modified for a new house or building site, regardless of the intent of the right holder. However, in cases where a new house or building site was sold to its members without following the procedures, such as announcement of the sale disposal plan and the public announcement of the sale disposal plan, the association members can only acquire the ownership of another house or building site from the old house or building site by the association regulations or the sale contract, and it cannot be deemed that the ownership of the old house or building site has been jointly exchanged or modified with the ownership of a new house or building site, and thus, it cannot be deemed as maintaining its consistency (see Supreme Court Decision 2008Da1362, etc.).

C) However, compared to the fact that redevelopment projects prior to the enactment of the Urban Improvement Act and the integrated regulation of redevelopment projects and reconstruction projects were subject to public law regulations, such as approval of the basic plan from the beginning of the implementation of the project, and the redevelopment association, which is the developer, used the method of public refund rights as a corporation under public law, the reconstruction association, which was the developer, was a non-corporate association under the Civil Act, and had no right to use common refund rights in the implementation of the project. As such, the previous redevelopment project and reconstruction project differ from the basic legal relationship, such as the relevant laws and regulations and the nature of the project, and the subsequent detailed implementation process. Accordingly, with respect to the reconstruction association which obtained approval of the housing construction project under the former Housing Construction Promotion Act, the approval of the management disposal plan, which is the implementation method of the reconstruction project under the Urban Improvement Act, as well as the provisions on the transfer notification, are not applied to the approval of the project plan, and thus, the association members are generally entitled to participate in the reconstruction project with the approval of the project plan.

The latter part of the instant provision provides that the provisions of Articles 33 through 45 of the former Urban Redevelopment Act shall apply mutatis mutandis to a housing reconstruction project to which the former Housing Construction Promotion Act applies. However, in practice, there was little cases where the authorization of the management and disposal plan prescribed by the above provisions and the notification of sale disposal pursuant to the above provisions in addition to the project plan for a housing reconstruction project to which the former Housing Construction Promotion Act applies, and there was no case where the registration of ownership and mortgage, etc. pursuant to Article 40 of the former Urban Redevelopment Act and Article 5 of the former Rules on the Registration of Urban Redevelopment Registration. Therefore, there was almost no case where the Ministry of Land, Infrastructure and Transport enacted for a housing reconstruction project to which the approval of the project plan was granted pursuant to the former Housing Construction Promotion Act after the implementation of the Urban Redevelopment Act, and Article 3-2 of the former Rules on the Business Standards for the Housing Redevelopment Projects to which the previous approval of the project plan was made does not require the approval of the management and disposal plan under the former Act. However, it is only stipulated that the

Therefore, even in a case of a reconstruction project to which the former Housing Construction Promotion Act applies under the latter part of the provisions of this case, if interpreting the legal fiction provision of the former Urban Redevelopment Act only in cases where it has gone through procedures such as the authorization of the management and disposal plan prescribed by the former Urban Redevelopment Act and the notification of sale in lots pursuant thereto, etc., the provisions of this case cannot be protected at all by all those who have been registered rights, such as mortgages, security rights, provisional seizure, lease on a deposit basis, superficies, etc. established on the former old, inferior

However, the provision of this case prevents cases where a reconstruction project is delayed due to delayed procedures, such as cancellation of registered rights, such as mortgage, provisional seizure, provisional seizure, lease on a deposit basis, superficies, etc. established on a old house or building site, and also prevents a person who has an interest in the old house or building site from causing damages to the old house or building site due to the alteration of ownership of a new house or building site by a reconstruction project into ownership of a new house or building site. Accordingly, after the approval of the housing construction project, the provisions of this case stipulate that the registered rights, such as mortgage, provisional seizure, lease on a deposit basis, superficies, etc. established on the old house or building site shall be naturally excessive to the new house or building site that is not identical to those of the old house or building site (where the provisions of this case of this case maintain its identity between the old house or building site by being converted to ownership of a new house or building site and thus maintain its identity, it seems that the new house or building site or right to be established on a new house or building site without going through the registration or provisional seizure procedure of a new house or building site, etc.

Meanwhile, in a case where a reconstruction association does not obtain the above approval of the management and disposal plan and the procedures for the public announcement of the sale disposal plan pursuant thereto, the registration of a new house or site may not be applied for by applying mutatis mutandis the procedure for registration of urban redevelopment under the former Urban Redevelopment Act and the Rules on the Registration of Urban Redevelopment. In order to register the registration of a new house or site, the registration of a mortgage on the old house or site shall be applied independently by either the mortgagee and mortgager, etc., or by obtaining a judgment ordering the execution of the registration procedure in accordance with the general procedure for application for registration. The person liable for the registration cost shall also be identical to the general registration procedure. However, in this case, the application shall be stated as the “O○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○.”

D) According to the contents and form and purport of the provision of this case, the nature of the reconstruction project to which the former Housing Construction Promotion Act applies, detailed process of implementation, practical practices thereof, etc., the above evidence can be acknowledged that the registration of ownership transfer for the reason of trust in the future of the reconstruction association of this case was completed between August 11, 2003 and January 8, 2004 from the sectional owners of each sectional ownership building before the destruction of the building before the removal of the building before the destruction, and the fact that the registration of ownership transfer was completed on February 20, 208 with respect to each sectional ownership of the newly constructed building including each sectional ownership building of this case, including each sectional ownership building of this case, the ownership preservation registration was completed on February 20, 208, considering that the ownership ownership ownership ownership of each sectional ownership of this case was consistent with the ownership of each sectional ownership building before the destruction of the right to collateral ownership of this case, and thus, it is reasonable to view the plaintiff's assertion that each of the sectional ownership of this case had been established after the new reconstruction plan of this case.

3) Correction of the instant distribution schedule

A) Even in cases of a blanket auction of several goods, the distribution procedure is basically different from the case of individual auction, so even in cases where a distribution schedule is formulated as a single set of goods, it is limited to the sum of the dividend amounts for each creditor. Of them, in cases where a senior creditor, who is entitled to preferential dividends from one of the goods, receives a distribution in preference to other creditors instead of receiving a distribution, a senior creditor may file a claim for objection against distribution or a claim for return of unjust enrichment against the junior creditor (see Supreme Court Decision 2003Da17682, Feb. 27, 2004).

The instant dividend table, on the premise that the Plaintiff is in the position of the person holding the right of provisional seizure as to each of the buildings newly owned by the same household, shall be prepared by adding the amount to be distributed to each obligee after calculating the amount to be apportioned to each of the creditors, including the Plaintiff, for each of the buildings owned by 20 households subject to provisional seizure. However, the status of the Plaintiff as the person holding the right to collateral security as to each of the newly owned buildings shall be acknowledged, and the amount of actual dividends which is deducted from the proceeds of sale and the interest accrued therefrom shall be the relevant tax in Yangcheon-gu, Seoul, the amount to be apportioned to the Plaintiff prior to the provisional seizure or the person holding the right to demand distribution (whichever is the smaller between the maximum debt amount of the instant right to collateral security and the secured debt amount) and the amount of dividends that the Plaintiff would be entitled to be apportioned to each of the creditors of the instant building, including the Plaintiff, to be apportioned to each of the newly owned houses owned by each of the creditors of the instant case, shall not be deemed to have been apportioned to the amount of dividends from each of the Plaintiff's new divided ownership.

B) Therefore, among the instant dividend table, the Defendants listed in the separate sheet No. 1 as stated in the separate sheet No. 3, each of the “amount of dividends under the dividend table” as stated in each of the instant dividend table and the amount of dividends of KRW 811,725,174 against the Plaintiff should be revised as KRW 1,275,200,730, respectively.

4. Conclusion

The plaintiff's claim should be accepted on the grounds of its reasoning. Since the part against the defendants in the judgment of the court of first instance concerning the defendants is unfair, it is revoked, and the correction of the distribution schedule of this case is made as above.

(attached Form omitted)

Judge Ori-do (Presiding Judge)

1) The Plaintiff, in addition to the sectional owners of each sectional ownership of the building before its destruction, lent the relocation expenses to the remaining sectional owners of the building before its destruction, and the instant reconstruction association guaranteed the debt of the loan.

2) Of each sectional ownership building of 20 households subject to auction, new sectional ownership buildings are real estate Nos. 4, 6-8, 10, 13, 14, and 16 among the sold real estate listed in the attached Table of the instant distribution schedule.

3) Where a reconstruction association has obtained approval of a project plan, it shall be deemed that it has received permission, authorization, decision, approval, or report under other Acts including building permission under the Building Act, determination of an urban management plan under the National Land Planning and Utilization Act, authorization of an implementation plan (Article 33(4) of the former Housing Construction Promotion Act). Article 42(8) of the former Enforcement Decree of the Housing Construction Promotion Act (amended by Presidential Decree No. 18046, Jun. 30, 2003) shall not replace its members or newly allow its members to join, except in the case of the death of its members, transfer of status of being selected as residents, etc. after the

4) The provisions on the authorization of the management and disposal plan, its standards, etc. (Articles 34 and 35), the completion inspection and disposal disposition, the confirmation of rights to the site and constructed facilities, the registration procedure, etc. (Articles 38 through 40), and the provisions on the collection and payment of liquidation money (Articles 42 and 43) are included therein.

Note 5) Court Administration, Court practice (III), Real Estate Registration Practice (III), 303 pages 17