[1] In a case where a document establishing a mortgage agreement with a financial institution provides that the so-called comprehensive collateral security to secure all obligations arising from a financial institution’s credit transaction should be interpreted in accordance with the language and text of the document establishing a mortgage agreement (affirmative in principle)

[2] The purport of Article 482(2)1 of the Civil Act, and, in cases where a third party purchaser acquires the right to the subject real estate during the period of the repayment by the guarantor of the obligation, and the registration of mortgage, etc. is not subject to additional registration by subrogation, whether the guarantor may subrogate the creditor against the third party (negative) / Whether the third party purchaser, who acquired the right to the subject real estate and repaid the obligation, may be subrogated even without the additional registration by subrogation (affirmative)

[1] In a case where a financial institution and a mortgagee of a mortgage enter into a contract to establish a so-called comprehensive collateral security agreement which guarantees all obligations arising from a financial institution’s credit transaction, the contract to establish a collateral security agreement is a disposal document, and barring any special circumstance, barring any special circumstance, the contents of the contract should be interpreted in accordance with the language and text of the contract. However, in light of various circumstances such as the formation process and purpose of the contract to establish the collateral security agreement, the amount of the secured obligation, and the mutual relationship between the person establishing the collateral security agreement and the creditor, if it can be deemed that the intent of the parties to the contract was to establish a specific obligation as the secured obligation, unlike the language and text of the contract, the scope of the liability for warranty should

[2] A person who subrogated an obligee pursuant to Articles 480 and 481 of the Civil Act may exercise his/her claim and right as a collateral to the extent that he/she can claim for reimbursement by his/her own right (Article 482(1) of the Civil Act). As to subrogation between the surety and the third acquisitor, Article 482(2)1 of the Civil Act provides, “A surety shall not act on behalf of the obligee against the third party who acquired the right on the leased property or the mortgaged property unless the subrogation is stated in advance by the registration of the right to lease on a deposit basis or the mortgage.”

The purpose of this provision is to protect the third party purchaser who acquired the right to the subject real estate in belief that the mortgage, etc. has been extinguished due to the repayment of the guarantor, from unexpected damages. Therefore, if the third party purchaser acquires the right to the subject real estate while the third party is not subject to additional registration on the registration of the mortgage, etc. after the guarantor has repaid his/her obligation, the guarantor may not subrogate the creditor against the third party.

However, the guarantor who acquired the right to the subject real estate by the third party and paid the obligation to the third party shall be deemed to have subrogated even without the additional registration by subrogation. Since the third party who acquired the right to the subject real estate before the guarantor to repay acquired the right with the knowledge of the existence of mortgage, etc. on the register, the third party who acquired the right to the subject real estate before the guarantor reimburses, there is

[1] Articles 105, 357(1), and 360 of the Civil Act / [2] Article 482(2)1 of the Civil Act

[1] Supreme Court Decision 83Meu2159 Decided June 12, 1984 (Gong1984, 1271), Supreme Court Decision 2001Da12430 Decided April 11, 2003 (Gong2003Sang, 1144) / [2] Supreme Court Decision 2012Da99341 Decided March 20, 2015 (Gong2015Sang, 592)

[Plaintiff-Appellant] Plaintiff 1 and 2 others (Law Firm ELKB Partners, Attorneys Seo-Un et al., Counsel for plaintiff-appellant)

National Agricultural Cooperative Federation

Seoul Central District Court Decision 2018Na32738 Decided February 13, 2019

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

The grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed).

1. Case summary

The reasoning of the lower judgment and the record reveal the following facts.

A. On December 23, 2004, in order to obtain a loan, the Nonparty: (a) registered the establishment of a mortgage of KRW 70 million and KRW 580 million on the real estate listed in [Attachment List 1 and 2 of the lower judgment (hereinafter “real estate Nos. 1 and 2”) owned by the Nonparty to the National Federation of Fisheries Cooperatives (hereinafter “NFC”); (b) on December 23, 2004, the Nonparty obtained a guarantee from the Defendant to provide the loan to NFFC for KRW 423 million; and (c) obtained a loan from NFFC to obtain a security guarantee of KRW 470 million for the recovery of facility damage (hereinafter “loan No. 1”).

On December 9, 2008, the Nonparty entered into a mortgage agreement with NFFF and the Nonparty to secure all the obligations owed to NFFF in the future due to a credit transaction, etc., and registered the creation of a neighboring mortgage (hereinafter “second collateral security agreement”) that is equivalent to KRW 650 million with respect to the real estate listed in [Attachment 3-8] of the lower judgment, which is owned by the Nonparty (hereinafter “third-8 real estate”) to NFC (hereinafter “second collateral security”). On December 16, 2011, the Nonparty obtained an additional loan from NFFF to KRW 50 million with respect to the financial capital (hereinafter “second loan”).

B. On March 9, 2012, the Plaintiff purchased real estate from the Nonparty and completed the registration of ownership transfer on March 19, 2012.

C. From April 3, 2012, the Nonparty did not pay interest on the second loan from August 9, 2012 with respect to the first loan, and from August 24, 2012, NFC applied for a voluntary auction based on the second collateral security (hereinafter “instant auction”). The claim amount was KRW 650 million out of the total amount of KRW 376 million and KRW 2.5 million with respect to the second loan amount.

On August 24, 2012, the defendant repaid to NFFC KRW 342,97,237 out of the loan No. 1 in accordance with the letter of guarantee, and on September 18, 2012, the defendant additionally registered partial transfer of the right to collateral security as to the ground for maximum debt amounting to KRW 580,00,000 among the first right to collateral security.

On November 19, 2012, in order to withdraw the application for auction of the instant case, the Plaintiff paid to NFFC the total of KRW 551,168,720 in 18,805,503 in interest on the first loan, KRW 525,068,491 in interest on the second loan, KRW 525,06 in interest on the second loan, and KRW 7,294,726 in expenses for application for auction, and remitted KRW 150,000 to the Defendant at the request of NFFC. On November 19, 2012, NFFF withdrawn the application for auction of the instant case and cancelled the registration of the establishment of the second neighboring mortgage on the ground

D. Meanwhile, on September 20, 2012, at the request of the National Bank of Korea, Co., Ltd., Ltd., the mortgagee, the first and second real estate, the auction procedure was commenced on September 20, 2012. The Defendant did not exclude KRW 150 million, which was received from the Plaintiff, from the auction procedure, and submitted a claim statement stating KRW 445,526,188, which was the full amount of the claim for reimbursement against the Nonparty. Around August 27, 2014, a distribution schedule was prepared that distributes KRW 315,413,80 to the Defendant, and the Defendant received dividends thereafter.

On June 2, 2016, the Defendant deposited the deposited amount into the non-party, the Plaintiff, NFFF and the Korean National Bank. The reason for deposit is that the Defendant deposited KRW 150 million, which was paid by the Plaintiff on November 19, 2012, and KRW 250,853,086, out of KRW 315,413,80,80, which was paid by the Plaintiff on November 19, 2012, the Defendant appropriated the deposited amount to the Defendant’s claim for reimbursement against the non-party, and the remaining dividends amounting to KRW 64,560,714, which was deducted from the deposit application fees of KRW 264,80,80, which was paid by the Plaintiff.

E. On November 19, 2012, the Plaintiff filed the instant lawsuit seeking the return of unjust enrichment on the ground that the payment of KRW 150 million to the Defendant was not a legal ground.

2. Whether the first loan is included in the secured obligation of the second collateral security (ground of appeal No. 1)

A. In a case where a financial institution and a mortgagee of a mortgage enter into a contract to establish a so-called comprehensive collateral security agreement which covers all obligations arising from a financial institution’s credit transaction, the content of the contract should be interpreted in accordance with the language and text of the contract, barring any special circumstances. However, in a case where the written contract to establish a collateral security agreement is uniformly printed and used in the same form of a general transaction agreement, and it can be recognized that the intent of the parties was intended to establish a specific obligation as a collateral, unlike the language and text of the contract, in light of various circumstances, such as the process and purpose of concluding the contract to establish the collateral security agreement, the amount of the secured obligation, the relationship between the person who created the collateral security, and the creditor, the scope of the liability for warranty should be limited according to the intent of the parties (see Supreme Court Decisions 83Meu2159, Jun. 12, 1984; 2001Da12430, Apr. 11, 2003).

B. For the following reasons, the lower court determined that the Defendant, who partly repaid the first loan, acquired part of the second mortgage by subrogation of the person liable for the repayment, on the ground that the obligation of the first loan is included in the secured obligation of the second mortgage.

(1) At the time of the establishment of the 2-mortgage, the Nonparty was liable for the first loan to NFFC at the time of the establishment of the 2-mortgage. The 2-mortgage was incurred more than three years after the establishment of the 2-mortgage. The 2-mortgage was incurred more than three years after the 2-mortgage was established.

(2) The Plaintiff filed a lawsuit seeking compensation, etc. against NFFC prior to the filing of the instant lawsuit, and the Defendant participated in the lawsuit as a supplementary intervenor by NFFC. The cause of the claim is as follows. The secured obligation of the second collateral security is limited to the second loan, and does not include the first loan. Nevertheless, at the request of NFFFC, the Plaintiff paid KRW 168,803,503 in total, including the first loan of KRW 150 million and the interest interest of KRW 18,805,503. The Plaintiff’s payment of the first loan was made by the Plaintiff. The Plaintiff’s payment of the first loan constitutes an non-debting agreement, unfair legal act, deception, expression of intent by deception, etc., and thus seeking compensation for damages arising from unjust enrichment or tort.

The appellate court dismissed all the Plaintiff’s claim, and the reason is that the first loan is included in the secured debt of the second right to collateral security (Seoul High Court Decision 2015Na21081 Decided December 16, 2015). The appellate court’s judgment was dismissed and finalized as it is (Supreme Court Decision 2016Da201470 Decided April 28, 2016).

(3) It is recognized that the Financial Supervisory Service responded to the Plaintiff’s application for dispute conciliation that “the first loan obligation is not included in the secured obligation of the second collateral security.” However, this alone is insufficient to reverse the judgment that the first loan obligation is included in the secured obligation of the second collateral security.

C. Examining the reasoning of the lower judgment in light of the aforementioned legal principles and records, the lower court’s determination is justifiable. In so doing, it did not err by exceeding the bounds of the principle of free evaluation of evidence inconsistent with logical and empirical rules, or by misapprehending the legal doctrine on the scope of secured debt by collateral security, and the interpretation of contractual terms

3. Whether additional registration is necessary at all times in subrogation by a third party purchaser of a guarantor (ground of appeal No. 2)

A. A person who subrogated an obligee pursuant to Articles 480 and 481 of the Civil Act may exercise his/her claim and right as a collateral to the extent that he/she can claim for reimbursement by his/her own right (Article 482(1) of the Civil Act). As to subrogation between the surety and the third acquisitor, Article 482(2)1 of the Civil Act provides, “A surety shall not act on behalf of the obligee against the third party who has acquired the right on the leased property or the mortgaged property unless the subrogation is stated in advance by the registration of the right to lease on a deposit basis or the mortgage.”

The purpose of this provision is to protect a third party purchaser who has acquired a right to the subject real estate in belief that the mortgage, etc. is extinguished due to the repayment of the guarantor, from unexpected damages (see Supreme Court Decision 2012Da99341, Mar. 20, 2015). Therefore, if the third party purchaser acquires a right to the subject real estate during the period of the repayment of the guarantor's obligation and the additional registration on the registration of the mortgage, etc. is not made by subrogation, the guarantor may not subrogate the creditor against the third party.

However, the guarantor, who acquired the right to the subject real estate by the third party and repaid the obligation, shall be deemed to be subrogated even without the additional registration by the subrogation. Since the third party who acquired the right to the subject real estate before the guarantor to repay acquired the right with the knowledge of the existence of mortgage, etc. on the register, the third party who acquired the right to the subject real estate before the guarantor reimburses, there is no concern

B. The lower court determined as follows.

On March 19, 2012, the Plaintiff acquired the ownership of the third-class-8 real estate which is the object of the right to collateral security, and the Defendant, the guarantor, repaid KRW 342,997,237 out of the first loan to NFFC on August 24, 2012. Accordingly, even if the Defendant did not make a supplementary registration on the second collateral security, NFC may subrogate the Plaintiff as the third acquisitor.

C. Examining the reasoning of the lower judgment in light of the record, the lower court’s determination that the Defendant, a guarantor, may subrogate NFF, a creditor, without a supplementary registration by subrogation, against the Plaintiff, who acquired the object of the right to collateral security prior to the repayment of the obligation is justifiable in accordance with the foregoing legal doctrine. In so determining, contrary to what is alleged in the grounds of

4. The remaining grounds of appeal (ground of appeal Nos. 3 and 4)

A. The lower court determined as follows.

The Plaintiff’s payment of KRW 150 million to the Defendant ought to be deemed as the payment for the withdrawal of the application for auction of this case to the Defendant who acquired part of the second collateral security and the cancellation of the second collateral security. As long as the Plaintiff paid KRW 150 million to the Defendant after the payment of KRW 150 million to the Defendant, the Plaintiff’s application for auction of this case was withdrawn and the second collateral security was revoked, it cannot be deemed that KRW 150 million was paid without any legal cause

B. Examining the reasoning of the lower judgment in light of the record, the lower court did not err by exceeding the bounds of the principle of free evaluation of evidence inconsistent with logical and empirical rules, or by misapprehending the legal doctrine on the principle of pleading and unjust enrichment, etc.

C. The plaintiff asserts that NFC had the plaintiff pay KRW 150 million to the defendant although it was paid most of the first loan claims by the defendant, which constitutes an abuse of rights.

Such assertion is not a legitimate ground of appeal against the lower judgment, on the ground that it was only the first time in the final appeal. Furthermore, even if examining the record in light of the relevant legal principles, the lower court did not err by misapprehending the legal doctrine on abuse of rights, as

5. Conclusion

The Plaintiff’s appeal is dismissed as it is without merit, 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.

Justices Lee Dong-won (Presiding Justice)