[1] Whether it is a fraudulent act where an obligor in excess of his/her obligation provides the only preferential right of payment to a creditor who has the sole preferential right of payment (negative)

[2] In a case where the amount of secured claim of a mortgage exceeds the value of the secured property, whether the transfer of the property becomes a fraudulent act against the creditor entitled to receive dividends prior to the secured claim of the mortgage (negative)

[1] Where the debtor's property is insufficient to fully repay his/her obligation, the debtor's act of offering his/her sole property to a certain creditor as payment in kind constitutes a fraudulent act in relation to other creditors, barring any special circumstances. However, the creditor who has the right to preferential repayment over other creditors with respect to the debtor's whole property as joint security is in a position to receive dividends in preference to other creditors in the realization procedure of the debtor's property from the beginning. Thus, the act of offering payment in kind to the creditor with such preferential right to payment does not constitute a fraudulent act, barring special circumstances.

[2] In a case where an asset on which a mortgage is established is transferred by a fraudulent act, such fraudulent act is established within the scope of the value of the asset, that is, the balance obtained by deducting the secured claim amount of the mortgage in the market value, and if the secured claim amount exceeds the value of the asset, the transfer of the asset concerned cannot be deemed a fraudulent act. The same legal principle applies to cases where creditors among themselves have creditors, who are entitled to receive dividends prior to the claims secured by the mortgage in the realization procedure, such as an auction, against the debtor. Therefore, it cannot be said that the act of transferring the asset exceeding the value of the secured claim becomes a fraudulent act in relation to the creditors who can receive dividends prior to the secured claim

[1] Article 406 (1) of the Civil Act / [2] Articles 406 (1) and 407 of the Civil Act

[1] Supreme Court Decision 97Da57320 decided May 12, 1998 (Gong1998Sang, 1615), Supreme Court Decision 99Da29916 decided Nov. 12, 199 (Gong1999Ha, 2490), Supreme Court Decision 2004Da7873 decided Nov. 10, 2005 (Gong2005Ha, 1945) / [2] Supreme Court Decision 2000Da42618 decided Oct. 9, 2001 (Gong201Ha, 2424), Supreme Court Decision 2005Da7090 decided Apr. 13, 2006 (Gong2006Sang, 7091)

Korea Workers' Compensation and Welfare Service (Law Firm two others, Attorneys Park Jeon-young et al., Counsel for the plaintiff-appellant)

Defendant (Attorney Clinical Han-soo, Counsel for defendant-appellant)

Seoul High Court Decision 2005Na49609 Delivered on April 27, 2006

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

The grounds of appeal are examined.

1. The court below acknowledged that the transfer contract of this case signed by the defendant on behalf of workers in the Dongnam Transport Co., Ltd. (hereinafter referred to as the "Dongnam Transport"), on behalf of the employees in the Dongnam Transport (hereinafter referred to as the "Dongnam Transport"), was in accord with the instant bus for the payment of overdue wages, etc. to its employees, and most Dongnam Transport workers knew that the sales price of the instant bus was distributed to Hyundai Motor Co., Ltd. at the time of the transfer contract of this case, and agreed to it. In light of the records, the court below's findings of fact and its determination are just, and there is no violation

2. Where the debtor's property is insufficient to repay the whole debt, if the debtor provided the only property to a certain creditor as payment in kind, the creditor obtains satisfaction of the creditor's claim prior to other creditors, while the joint security is reduced within the scope of the joint security, and thus, it is no longer unfavorable for other creditors. Therefore, the debtor's act of offering his/her exclusive property to any one of the creditors in kind constitutes a fraudulent act in relation to other creditors, unless there are special circumstances (see Supreme Court Decision 2004Da7873, Nov. 10, 2005, etc.). However, since the creditor who has the right to preferential repayment of the debtor's whole property as the creditor's joint security is in a position to receive preferential payment to other creditors in the realization procedure of the debtor's property from the beginning, the act of offering payment in kind to the creditor with such preferential right to payment cannot be viewed as a fraudulent act, barring any special circumstances.

In addition, in case where an asset on which a mortgage is established is transferred by a fraudulent act, such fraudulent act shall be established within the scope of the value of the asset, that is, the balance obtained by deducting the secured claim amount of the mortgage from the market value, and if the secured claim amount exceeds the value of the asset, the transfer of the asset concerned shall not be deemed a fraudulent act (see Supreme Court Decision 2000Da42618, Oct. 9, 201, etc.). This legal principle applies to cases where creditors among themselves have creditors who are entitled to receive dividends in preference to the claims secured by the mortgage in the realization procedure, such as an auction, against the debtor, even if there is a creditor who is entitled to receive dividends in preference to the claims secured by the mortgage, so the transfer of the asset in excess of the value of the secured claim amount cannot be deemed a fraudulent act only in relation to the creditor who is entitled to receive dividends prior to the secured claim (see Supreme Court Decision 2005Da7090, Apr. 13,

In the same purport, the court below is just in holding that even if the bus of this case, which is the only property of the company in excess of the debt, was provided as payment in kind to the male transport workers, the act of giving payment in kind to the above workers, such as wages with preferential payment right, does not constitute a fraudulent act, and there is no violation of the rules of evidence or misunderstanding of the legal principles as to fraudulent act as

3. It is also a fraudulent act, barring special circumstances, to change the sale of real estate, which is the only property of the debtor, into money easily consumed (see, e.g., Supreme Court Decision 9Da2515, Apr. 9, 199). However, according to the facts and records acknowledged by the court below, even if the defendant paid KRW 300,00 to the south traffic at the time of the transfer contract of this case, it is merely a fraudulent act with the content that the transfer contract of this case constitutes a fraudulent act with the content that the defendant would change into money easily for consumption of the bus of this case, since it is merely a separate cause that is irrelevant to the price for the transfer of the bus of this case, by selling the bus of this case, which is provided by the Gangnam traffic workers in accord with the payment for the loan to the non-party.

In the same purport, the judgment of the court below which judged that the transfer contract of this case does not constitute a fraudulent act is just, and there is no violation of the rules of evidence or misapprehension of the legal principles as to responsible property

4. According to the facts and records acknowledged by the court below, the bus of this case was established with the first priority right of 1.73,200,000 won in total under the name of Hyundai Automobile Co., Ltd., and the second priority right of 1.100,000 won in total under the name of the defendant, and the south Traffic provided the employees of this case with payment in kind for 643,081,080 won out of the claim for overdue wages, etc. according to the transfer contract of this case. Accordingly, the defendant sold the bus of this case to the future Automobile Sales Co., Ltd., Ltd., and the defendant's share of 1.32,00,000 won in total after deducting the claim of each collateral right of the above collateral right on the bus of this case from the value of the bus of this case at the time of the transfer contract of this case, it cannot be accepted as an appraisal of 643,081,000 won in kind to the employees of this case.

In addition, according to the records, the court below acknowledged the facts as stated in its reasoning based on the evidence of its employment, and judged that the value of the bus was properly assessed when it provides the employees with the instant bus as payment in kind, and there is no violation of the rules of evidence or any violation of the law of incomplete reasoning or inconsistent reasoning, as alleged in the grounds of appeal.

5. Therefore, the appeal is 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.

Justices Kim Young-ran (Presiding Justice)