[1] The extinctive prescription period (=10 years) of damages for delay to claim reimbursement of bonds (bonds) and the extinctive prescription period (=5 years) of damages for delay to the interest of bonds

[2] In a case where a creditor who had registered prior to the registration of the first decision to commence the auction and filed a report on the claim at the auction procedure commenced by another creditor upon the application of the other creditor, whether the interruption of extinctive prescription has the effect of suspending the said report (affirmative), and whether the interruption of extinctive prescription due to the said report on the claim becomes extinct upon the

[3] In a case where a creditor who had registered prior to the registration of the first decision to commence the auction and filed a report on a claim in the auction procedure commenced by another creditor at the request of the other creditor, whether the “Peremptory Notice”, which is the ground for suspending extinctive prescription, is recognized (negative), and whether the interruption of extinctive prescription is maintained pursuant to Article 170(2) of the Civil Act if the above creditor files a judicial claim within six months after the withdrawal of such request for auction

[1] Since damages for delay after the due date for payment for a monetary obligation is paid as damages for delay due to delay in the performance of a monetary obligation, the period of extinctive prescription is the same as that for an original claim. Meanwhile, Article 487(1) of the Commercial Act provides that "the extinctive prescription of a bond shall expire if it is not exercised for ten years," and Article 487(3) of the Commercial Act provides that "the claim under Article 487(2) of the interest and the interest of the bond shall expire if it is not exercised for five years, and if the obligor delays the performance of the interest, the damages for delay for the payment of the bond may be claimed as damages for delay." Thus, the damages for delay for the payment of the interest of the bond shall expire if it is not exercised for ten years as for the claim for reimbursement of the bond, and damages for delay

[2] A creditor who had registered prior to the registration of the first decision on commencing the auction and has become extinct by the sale, as a matter of course, may participate in the distribution even if he/she did not demand a distribution in the auction procedure commenced by another creditor’s application. If such creditor filed a report on the existence of a claim, its cause and amount, and exercised his/her right by reporting such claim to the court, the report on such claim shall be equivalent to the seizure under Article 168 subparag. 2 of the Civil Act, and shall have an effect of suspending extinctive prescription for the reported claim. However, Article 175 of the Civil Act provides, “When the seizure, provisional seizure, and provisional disposition is revoked by a claim of the right holder or by failing to comply with the provisions of law, the interruption of prescription shall become null and void if the request for auction is withdrawn” under Article 93(1) of the Civil Execution Act, barring any special circumstance, as seen above, the interruption of extinctive prescription becomes null and void due to the creditor’s report on the claim extinguished by the first decision on commencing the auction.

[3] Even if a creditor, who had registered prior to the registration of the first decision on commencing auction and the extinction due to sale, filed a report on his/her claim in the auction procedure, at the request of another creditor, it is difficult to view that the debtor had expressed his/her intention to demand performance of the obligation directly against the debtor, and since notification procedures for the debtor are not provided, the peremptory notice, which is a ground for interrupting extinctive prescription, is not recognized separately. Thus, even if the creditor, who filed a report on the above claim within six months after the application for auction was withdrawn, filed a judicial claim, such as filing a lawsuit, etc., the interruption of extinctive

[1] Article 487 (1) and (3) of the Commercial Act / [2] Articles 168 (2) and 175 of the Civil Act; Articles 84 (4), 93 (1), 148 subparagraph 4, and 268 of the Civil Execution Act / [3] Articles 168 subparagraph 1, 170 (2), and 174 of the Civil Act; Articles 84 (4), 93 (1), 148 subparagraph 4, and 268 of the Civil Execution Act

[1] Supreme Court Decision 96Da25302 delivered on September 20, 1996 (Gong1996Ha, 3145), Supreme Court Decision 2001Da61869 Delivered on November 14, 2003 (Gong2003Ha, 2327), Supreme Court Decision 2006Da3813 Delivered on April 14, 2006 (Gong2006Da2940 Delivered on March 14, 2008) / [2] Supreme Court Decision 200Da25484 Delivered on February 26, 2002 (Gong2002Sang, 781), Supreme Court Decision 208Da80809 Delivered on March 26, 2009 (Gong2008Da580709 Delivered on March 26, 2009)

Seoul High Court Decision 200Na11448 delivered on August 1, 200

National Bank of Korea (Bae & Yang LLC, Attorneys Im-soo et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2009Na60505 decided March 5, 2010

The part of the lower judgment against the Defendant regarding the claim for cancellation of the registration of creation of a neighboring mortgage (No. 62242), is reversed, and that part of the case is remanded to the Seoul High Court. The remainder of the appeal is dismissed.

The grounds of appeal are examined.

1. Regarding ground of appeal No. 1

Since damages for delay after the due date for repayment of a pecuniary obligation is paid as compensation for damages due to delay in the performance of a monetary obligation, the period of extinctive prescription shall be deemed to be the same as that of an original obligation (see Supreme Court Decisions 2006Da3813, Apr. 14, 2006; 2006Da2940, Mar. 14, 2008). Meanwhile, Article 487(1) of the Commercial Act provides that "the right to demand reimbursement of the bonds shall expire if it is not exercised for ten years," and Article 487(3) of the Commercial Act provides that "the right to demand reimbursement of the bonds shall expire if it is not exercised for five years, and the right to demand reimbursement of the interest and the interest under paragraph (2) of the preceding Article shall expire if the obligor delays the performance of a monetary obligation, and it shall be deemed that the period of extinctive prescription shall expire unless it is exercised for five years as of September 20, 196; see, e.g., Supreme Court Decision 2006Da168.

Nevertheless, the period of extinctive prescription of damages for delay against the principal and interest of the 1 bonds as indicated in the judgment of the court below is five years, and all damages for delay of the 1 bonds as indicated in the judgment of the court below was extinguished by the extinctive prescription under Article 64 of the Commercial Act, there is an error of law by misunderstanding the legal principles as to the period of extinctive prescription

2. Regarding ground of appeal No. 2

Even if the guaranteed obligation is subordinate to the principal obligation, the guaranteed obligation is independent from the principal obligation, so the term of extinctive prescription of the guaranteed obligation and the principal obligation is set separately depending on the nature of the obligation.

The court below maintained the first instance court's decision that the period of extinctive prescription is five years pursuant to Article 64 of the Commercial Act since the joint and several surety obligation for the third debentures as stated in the judgment of the court below is a surety obligation arising from commercial activities. Such judgment of the court below is just in accordance with the above legal principles, and there is no error of law by misunderstanding legal principles as to the period

3. Regarding ground of appeal No. 3

A creditor, who has been registered before the registration of the first decision to commence the auction and has become extinct by sale, can participate in the distribution as a matter of course, even if he/she did not demand a distribution at the auction procedure commenced upon the request of another creditor. If such creditor has reported the existence of a claim, its cause and amount to the court and exercised the right, the report on the claim is equivalent to the seizure under Article 168 subparag. 2 of the Civil Act, and the interruption of extinctive prescription on the reported claim becomes effective (see Supreme Court Decisions 2000Da25484, Feb. 26, 2002; 2008Da89880, Mar. 26, 2009). However, Article 175 of the Civil Act provides that "a seizure, provisional seizure or provisional disposition has no effect of interrupting prescription if it is revoked upon the request of the right holder or because it does not comply with the provisions of law," and Article 93(1) of the Civil Execution Act provides that the first decision to commence the auction becomes void due to the interruption of prescription prior to the auction.

On the other hand, it is difficult to see that the intent to request the performance of the obligation against the obligor is directly expressed, and the notification procedure for the obligor is not provided, so the peremptory notice, a separate cause for interruption of extinctive prescription, is not recognized. Thus, even if the obligee who reported the above claim filed a judicial claim within six months after such application for auction was withdrawn, the interruption of extinctive prescription cannot be deemed as maintaining the effectiveness of the interruption of extinctive prescription pursuant to Article 170(2) of the Civil Act.

According to the reasoning of the judgment below, as to the defendant's defense that the defendant submitted the claim statement and suspended the prescription period as of January 16, 2003 before the expiration of the extinctive prescription period in the case of auction of real estate rent in Seoul District Court Decision 2002ta, 20606, which was in progress with respect to Mapyeong Construction, the court below held that the act of submitting the claim statement in the real estate auction procedure does not recognize the interruption of extinctive prescription period.

However, according to the records, it can be known that the above Seoul District Court's 2002ta-20606 real estate auction case was withdrawn on December 28, 2007 and the registration of the decision on voluntary commencement of auction was cancelled on January 2, 2008. Accordingly, the interruption of extinctive prescription due to the report on the claim becomes extinct, and as long as it cannot be recognized as the validity as a peremptory notice in the report on the claim, the same applies even if the defendant filed a lawsuit within six months from the time of the above withdrawal. Thus, the judgment of the court below did not err in its conclusion.

Therefore, the grounds of appeal disputing this point cannot be accepted.

4. Regarding ground of appeal No. 4

In light of the records, we affirm the judgment of the court below on the appropriation of the first bond as just, and there is no error of law such as misunderstanding of legal principles as alleged in the ground for

5. Conclusion

Therefore, the part of the judgment below against the defendant regarding the claim for cancellation of the registration of creation of a neighboring mortgage as set forth in Article 62242 of the judgment below is reversed, and that part of the case is remanded to the court below for a new trial and determination. The remaining appeal is dismissed. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Shin Young-chul (Presiding Justice)