[1] Time when collateral security obligation becomes final and conclusive

[2] Whether the third party purchaser of the mortgaged real estate may invoke the right of the mortgagee of the mortgaged real estate as to the confirmation of the secured obligation (affirmative), and the case where the third party purchaser of the mortgaged real estate expressed an implied intent to terminate the contract of the mortgaged real estate, and it can be deemed that the secured obligation of the mortgagee of the mortgaged real estate becomes final and conclusive in accordance with the provisions of the contract

[3] Whether Article 364 of the Civil Act can be applied to a third party purchaser of mortgaged real estate where the third party purchaser takes over the secured obligation (negative), and whether the third party purchaser loses the right to claim the extinction of a mortgage under Article 364 of the Civil Act by deeming that the third party purchaser takes over the secured obligation when the mortgagee and the third party takes over the balance after deducting the secured obligation from the purchase price when concluding a sales contract (negative)

[1] The term "mortgage" means a mortgage created by reserving only the maximum amount of the debt to be secured and reserving the determination of the debt in the future. In such a case, the extinction or transfer of the debt until the debt to be secured is not affected by the right to the right to the right to the right to the right to the right to the right to the right to the right to the right to the right to the right to the right to the right to the right to the right to the right to the right to the right to the right to the right to the collateral is entitled to claim the extinction of the right to the right to the right to the right to the right to the right to the right to the right to the right to the right to the right to the right to the right to the right to the right to the right to the right to the right to the right to the right to the right to the right to the right to the right to the right to the right to the right to the right to the right to the right to the right to the right to the right to the right to the collateral.

[2] The right to cancel or terminate a contract establishing a collateral may be invoked by a third party who acquired the ownership of the mortgaged real estate. However, while the third party purchaser did not explicitly express intent of termination, the third party purchaser acquired the mortgaged real estate within the scope of the maximum debt amount by subrogation in the future and on the premise that the third party would extinguish the secured debt within the scope of the maximum debt amount and demand the extinction of the mortgaged real estate, the third party purchaser would not allow any change in the amount of the secured debt through the continuation of the existing contract establishing a collateral. If the third party purchaser objectively could have known that the secured debt becomes final by the termination of the contract due to such circumstance, it can be deemed that the third party purchaser made an implied declaration of intent to cancel the contract establishing the collateral, as stipulated in the contract.

[3] In a case where a third party purchaser of mortgaged real estate takes over the secured obligation, the status of the third party purchaser is changed from the time of taking over the secured obligation to the creditor, and therefore there is no room to apply the provisions of Article 364 of the Civil Act. However, since the purport of Article 364 of the Civil Act is the risk of loss of the third party purchaser’s right due to the execution of mortgage in a case where the mortgagee takes over the secured obligation to the mortgagee even though the mortgagee did not repay the secured obligation to the mortgagee while receiving the full payment of the object of the sale from the third party, the third party purchaser cannot be deemed as having paid the secured obligation to the mortgagee in full and made the third party repay the secured obligation to the mortgagee, and thus, the third party purchaser’s protection is sought by allowing the third party purchaser to take over only the balance of the secured obligation or maximum debt amount after deducting the secured obligation from the purchase price to the creditor, and the third party purchaser cannot be deemed as having exercised the secured obligation to the buyer, unless there is any special circumstance as to the third party purchaser’s right to the secured obligation.

[1] Article 357 of the Civil Act / [2] Articles 105, 357, and 364 of the Civil Act / [3] Articles 105, 357, and 364 of the Civil Act

[1] Supreme Court Decision 4294Da1149 delivered on March 22, 1962 (No. 10-1, 239), Supreme Court Decision 66Da68 delivered on March 22, 1966 (No. 14-1, 148), Supreme Court Decision 93Da19047 delivered on April 26, 1994 (Gong1994, 1457), Supreme Court Decision 95Da2494 delivered on October 29, 196 (Gong196Ha, 3509), Supreme Court Decision 201Da47528 delivered on November 9, 201 (Gong2002, 1493, 209, 205Da2084979, Feb. 26, 2005) / [209Da240979, Feb. 26, 2002]

[Judgment of the court below]

The Bank of Korea, Inc.

Gyeonggi Credit Guarantee Foundation (Law Firm Han-ro, Attorneys Jeong Jae-sik et al., Counsel for the defendant-appellant)

Seoul District Court Decision 2001Na32457 Delivered on December 20, 2001

The part of the judgment below against the defendant is reversed, and that part of the case is remanded to the Panel Division of Seoul District Court.

1. The judgment of the court below

According to the reasoning of the judgment below, the non-party, on January 9, 1997, on the ground of a contract to establish a mortgage on the real estate of this case owned by him on December 30, 1996. The non-party, on the ground that the contract was concluded on December 30, 1996, and the non-party, on the ground that the mortgage was established on the non-party's maximum debt amount of KRW 36 million, and the plaintiff purchased the real estate of this case from the non-party on July 12, 1997 and completed the registration of ownership transfer on the ground that it was completed on August 13, 199. The non-party, on the ground that the non-party, on the premise that the non-party, who acquired the mortgage of this case 40,000 won prior to the establishment of the mortgage of this case, 60,000 won and the non-party, on the premise that the non-party, who acquired the mortgage of this case, was 60,000,0,000 million won.

2. The judgment of this Court

A. As to the assertion against the rules of evidence

According to the reasoning of the judgment below, based on Gap evidence No. 2 (written confirmation), the court below acknowledged that the repayment of KRW 30 million on December 21, 1999 is the plaintiff, and rejected the defendant's assertion that the repayment of KRW 30 million was made by the non-party, not by subrogation. The above evidence No. 2 was merely a fact that the non-party's repayment of KRW 30 million on January 18, 1997 was made by the non-party's repayment of the non-party's repayment of KRW 30 million at the middle-dong branch of the defendant bank. The remaining evidence presented by the court below is nothing more than a evidence that has no relation with whom the above repayment is made by the court below. The defendant's interest can be considerably affected by the plaintiff's subrogation. Thus, these evidence alone are not sufficient to deem that the defendant is the plaintiff or the non-party, and thus, the court below's ground for appeal pointing this out is insufficient.

B. As to the determination of secured debt

The term "mortgage" means a mortgage established by reserving only the maximum amount of a claim to be secured and reserving the determination of a debt in the future. In such cases, since the extinction or transfer of a debt until the debt is determined does not affect the right to collateral, a third party who acquired the ownership of a mortgaged real estate shall be entitled to claim the extinction of a mortgaged real estate after the debt is determined within the scope of the maximum amount of the debt. In principle, where a contract for establishing a mortgaged real estate provides for a settlement term in a basic contract secured by the right to collateral, the term of the collateral security contract shall be determined or where in principle, the term of the contract for establishing the right to collateral security comes into existence or a settlement term, but even if the debtor does not wish to continue transactions, such as the whole termination of the claim secured by the right to collateral security and borrowing new funds from the creditor, the mortgagee may terminate the contract and seek the cancellation of the registration of the right to collateral security even if the term of the debt or settlement term expires, and if there is no other agreement on the method of establishing the right to collateral security, it shall be decided at any time by the person who created the right to collateral security.

In addition, the right of rescission or termination of a contract can be invoked by a third party purchaser who acquired the ownership of the mortgaged real estate. However, even though the third party purchaser did not express his/her intent of termination, it shall be deemed that the third party purchaser acquired the mortgaged real estate within the scope of the maximum debt amount by subrogation in the future, and on the premise that the third party would extinguish the secured obligation within the scope of the maximum debt amount and demand the extinction of the mortgaged real estate, a third party purchaser shall not accept any changes in the secured obligation through the continuation of existing mortgage contract, such as commencement of partial repayment of the debtor's obligation to the secured obligation, and if it could objectively be objectively known that the secured obligation becomes final upon the termination of the contract due to such circumstance, the third party purchaser shall be deemed to have made an implied declaration of intent to terminate the mortgage contract, and thus, the secured obligation of the mortgaged real estate shall be deemed to have been established in accordance with the terms and conditions set forth in the contract (see Supreme Court Decision 201Da47528, Nov. 9, 2001).

According to the statement of the contract to establish a mortgage of this case (Evidence B) in December 30, 1996, the non-party and the defendant entered into the contract to establish the duration or settlement period of the mortgage of this case, but the non-party who was the founder at the expiration of three years from the contract date may express his/her intent to terminate the contract, and at the expiration of forty-five days from the date of arrival of his/her intent to terminate the contract, the termination becomes effective. In this case, the non-party may terminate the contract at any time after the lapse of three years from December 30, 1996, which is the date of the above contract to establish a mortgage of this case, and at any time after forty-five days from the time of arrival of his/her intent to terminate the contract to the defendant. The plaintiff who acquired the real property of this case may use such right as partial subrogation of the non-party's obligation to cancel the contract of this case to clarify it with the explicit and implied declaration of intent to cancel the contract.

Therefore, if the plaintiff seeks to file a claim for cancellation of the registration of creation of a mortgage of this case, it should be identified whether the non-party or the plaintiff had determined the secured debt by terminating the mortgage contract of this case in accordance with the above agreement, and if the secured debt is finalized, the amount of the secured debt at the time of determination, the amount of the secured debt at the time of determination, and whether the plaintiff paid the total amount by subrogation. However, without any deliberation on this point, the court below ordered the defendant to cancel the registration of establishment of a mortgage of this case on the sole basis of the fact that the total amount subrogated by the plaintiff exceeds the maximum debt amount of the mortgage of this case. Thus, the court below erred by misapprehending the legal principles as to the determination of the secured debt of this case and the time of confirmation. The ground for appeal pointing this out has merit

C. As to whether the Plaintiff acquired the Nonparty’s debt

In a case where a third party purchaser of mortgaged real estate takes over the secured obligation, the status of the third party purchaser is changed from the time of taking over the secured obligation to the creditor, and therefore there is no room to apply the provisions of Article 364 of the Civil Act: Provided, That the purport of Article 364 of the Civil Act is to: (a) in a case where the mortgager receives the payment of the purchase price of the mortgaged real estate from a third party and fails to repay the secured obligation to the mortgagee, there is a risk that the third party’s right may be lost due to the execution of the mortgage; (b) in a case where the mortgager does not pay the secured obligation to the mortgagee even though he receives the payment of the purchase price of the mortgaged real estate from the third party, the third party would not be deemed to have paid the entire purchase price to the mortgagee, and (c) in order to protect the third party purchaser by allowing the mortgagee to pay the secured obligation directly to the mortgagee, barring any special circumstance that the third party would not be deemed to have exercised the secured obligation to the seller, and thus, the third party cannot be deemed to have exercised the secured obligation.

Therefore, even if the Plaintiff deducted the purchase price equivalent to the maximum debt amount of the instant mortgage from the agreed purchase price in the course of purchasing the instant real estate from the Nonparty, such circumstance alone is insufficient to deem the Plaintiff to have taken over the secured debt of the Nonparty and changed the status of the third acquisitor of the mortgaged real estate from the relationship with the Defendant to the debtor. The allegation in the grounds of appeal on this part is not acceptable.

3. Therefore, the part of the lower judgment against the Defendant is reversed, and that part of the case is remanded to the lower court for a new trial and determination. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Lee Jae-in (Presiding Justice)