[1] In a case where a creditor acts in subrogation of a debtor's monetary claim in order to preserve his/her own monetary claim, whether a third-party debtor may demand the third-party debtor to perform his/her monetary claim (affirmative), and in a case where a judgment ordering a third-party debtor to pay money to the third-party debtor has become final and conclusive in a creditor subrogation lawsuit, whether other creditors of the debtor may seize and provisionally seize such claim before the repayment, etc. becomes extinct (affirmative

[2] The validity of an assignment order as to a subrogated claim which was instituted after a creditor subrogation lawsuit was instituted and the subrogated creditor notified the obligor of the exercise of the right of subrogation or became aware of the obligor’s knowledge (negative in principle)

[3] The validity of an order of seizure, etc. against the garnishee's right of collection or the right of receiving the repayment against the garnishee, and the validity of an order of seizure, etc. against the claim that the subrogated creditor is to receive from the garnishee by a final and conclusive judgment in a creditor subrogation lawsuit (negative)

[1] Where a creditor acts in subrogation of a debtor's monetary claim in order to preserve his/her own monetary claim, he/she may demand the third party debtor to perform the obligation to pay to the debtor, but he/she may demand the directly subrogated creditor to perform the obligation.

However, even if the judgment ordering the third party obligor to pay money to the subrogated obligee in a creditor subrogation lawsuit becomes final and conclusive, the right which is the object of subrogation, that is, the obligor’s third party obligor’s right to claim exists as an executory claim and the subrogated obligee does not receive the repayment of the subrogated claim on behalf of the obligor on behalf of the obligor, but does not receive the repayment of the subrogated claim. Thus, if the subrogated claim is extinguished prior to its extinction due to repayment, etc., other creditors of the obligor may seize and seize

[2] If a creditor subrogation lawsuit is instituted and the subrogated creditor notifies or becomes aware of the fact of exercising the right of subrogation on the part of the debtor pursuant to Article 405(2) of the Civil Code, the creditor cannot perform an act interfering with the creditor's exercise of the right of subrogation by transferring or abandoning the right of subrogation pursuant to Article 405(2) of the Civil Code, and such effect also extends to the third debtor. Nevertheless, if it is possible for other creditors of the debtor who has equal status with the subrogated creditor to receive an order in whole with respect to the subrogated claim, even though it is common in the collection lawsuit in that it is one of the methods of the creditor's legitimate exercise of the creditor's right of subrogation and the collection of the claim belonging to the debtor, it would be unreasonable for the creditor who received the order in whole to be excluded from the subrogated creditor and obtain exclusive satisfaction, and it would be contrary to the purport of Article 405(2) of the Civil Code that seeks to secure the substantial effect of the right of subrogation on the part of the creditor.

Therefore, once a creditor subrogation lawsuit has been instituted and the subrogated creditor notifies the debtor of the fact of exercising the right of subrogation or becomes aware of such fact, Article 229(5) of the Civil Execution Act applies mutatis mutandis, and an assignment order of the subrogated claim is null and void unless there are special circumstances, such as that it is based on the priority claim.

[3] The subrogated creditor who acts in subrogation of a debtor's monetary claim in order to preserve his/her own monetary claim may request the garnishee to perform the obligation to pay to himself/herself and receive the repayment from the garnishee. However, since the subrogation claim against the third debtor is not transferred or attributed to the subrogated creditor, the subrogation claim against the third debtor is not a transfer or attributable to the subrogated creditor, and thus, it cannot be seized because the subrogated creditor's exercise of the right to collect or the right to receive the repayment against the third debtor cannot be realized by independently disposing of it as his/her own. Therefore, an order of seizure, etc. as to the exercise of the right to collect or the right to receive the repayment is null and void. Furthermore, even if the judgment ordering the third debtor to pay the money directly to the subrogated creditor in a creditor subrogation lawsuit becomes final and conclusive, the payment of money based on the judgment also belongs to the ability to collect the third debtor or the right to receive the repayment against the third debtor. Thus, the seizure order, etc. against the claims that the subrogated creditor

[1] Article 404(1) of the Civil Act, Articles 223 and 276 of the Civil Execution Act / [2] Articles 404(1) and 405(2) of the Civil Act, Article 229(5) of the Civil Execution Act / [3] Article 404(1) of the Civil Act, Article 223 of the Civil Execution Act

[1] Supreme Court Decision 2004Da70024 Decided April 15, 2005 (Gong2005Sang, 743) Supreme Court Decision 2013Da30301, 30325 Decided July 23, 2015 (Gong2015Ha, 1209)/ [3] Supreme Court Decision 96Da54300 Decided March 14, 1997 (Gong197Sang, 1098)

Plaintiff (Attorney Kim Young-young, Counsel for the plaintiff-appellant)

Defendant (Law Firm Si, Attorneys Yyoung-si, Counsel for defendant-appellant)

Seoul High Court Decision 2014Na204230 decided September 1, 2015

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

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

1. A. Where a creditor acts in subrogation of a debtor's monetary claim in order to preserve his/her own monetary claim, he/she may demand the garnishee to perform the payment obligation, but he/she may demand the direct subrogated creditor to perform the payment obligation (see Supreme Court Decision 2004Da70024, Apr. 15, 2005, etc.).

However, even if a judgment ordering a third party obligor to pay money to a subrogation obligee becomes final and conclusive in a creditor subrogation lawsuit, the right which is the object of subrogation, that is, the obligor’s third party obligor’s claim exists as an executory claim of the judgment, and the subrogation obligee does not receive the repayment of the subrogation claim by subrogation of the obligor, but does not receive the repayment of the obligor’s claim (see Supreme Court Decision 2013Da30301, 30325, Jul. 23, 2015, etc.). If the obligor’s subrogation claim is extinguished by repayment, etc., the obligor’s other obligee may seize and seize it.

However, if a creditor subrogation lawsuit is instituted and the subrogated creditor notifies or becomes aware of the fact of exercising the right of subrogation to the debtor pursuant to Article 405(2) of the Civil Act, it is impossible to perform an act interfering with the creditor's exercise of the right of subrogation by transferring or giving up the subrogated claim pursuant to Article 405(2) of the Civil Act, and such effect also extends to the third debtor. Nevertheless, if it is possible for other creditors of the debtor who has equal status with the subrogated creditor to receive an order in whole with respect to the subrogated claim, the creditor subrogation lawsuit is one of the methods of the creditor's legitimate exercise of the right of subrogation and is the collection of the claim belonging to the debtor, even though it is in common with the collection lawsuit, it would be unreasonable for the creditor who received the order in whole to take an opportunity to participate in the claim distribution procedure by means of seizure, provisional seizure or demand for distribution, and thus, it would be contrary to the purport of Article 405(2) of the Civil Act to secure the substantial effect of the creditor subrogation right.

Therefore, it is reasonable to view that an assignment order of a subrogated claim is null and void, barring special circumstances, such as that a creditor subrogation lawsuit is based on a priority claim, after the creditor files a lawsuit for subrogation and the subrogated creditor notifies the debtor of the fact that he/she exercised the right of subrogation or the debtor becomes aware of such fact.

B. The subrogated creditor who acts in subrogation of a debtor's monetary claim in order to preserve his/her own monetary claim may request the garnishee to perform his/her obligation to pay it directly and may receive the repayment from the garnishee. However, since the subrogation claim against the third debtor is not transferred or reverted to the subrogation creditor, the subrogation claim against the third debtor is not a transfer or belong to the subrogation creditor, so it is not possible to seize the subrogated creditor's right to collect or receive the repayment. Therefore, the seizure order, etc. against the third debtor's right to collect or receive the repayment is null and void. And even if the judgment ordering the third debtor to pay the money directly to the subrogation creditor in a subrogation lawsuit becomes final and conclusive, the payment of money based on the judgment also belongs to the subrogation creditor's right to collect or receive the repayment against the third debtor. Thus, the seizure order, etc. against the third debtor's obligation to be paid by the subrogation creditor in accordance with the judgment that became final and conclusive in the creditor subrogation lawsuit should also be deemed null and void (see, e.g., Supreme Court Decision 96Da4054, Mar. 14, 1997).

2. Review of the reasoning of the first instance judgment cited by the lower court reveals the following facts.

A. On October 24, 2012, Nonparty 2, who has a monetary claim against Nonparty 1, filed a lawsuit against the Plaintiff claiming the return of unjust enrichment on behalf of Nonparty 1, and on October 24, 2012, the judgment that “the Plaintiff would pay to Nonparty 2 the amount of money calculated at the rate of 20% per annum from May 9, 2012 to the date of complete payment” (hereinafter “instant judgment”) was sentenced, and the judgment of this case became final and conclusive on August 13, 2013. Nonparty 1 appeared as a witness of the first instance court of the instant lawsuit and testified.

B. On August 12, 2013, based on the executory exemplification of Nonparty 1’s authentic deed with Nonparty 1, Nonparty 3 received an order of seizure and assignment of claim amounting to KRW 230,000,000, out of the claim return of unjust enrichment against Nonparty 1’s Plaintiff. The above order was served on the Plaintiff on August 14, 2013, and became final and conclusive on September 6, 2013.

C. On August 20, 2013, Nonparty 3, based on the original copy of other executory notarial deeds with respect to Nonparty 1, Nonparty 3, on the basis of the original copy of Nonparty 1’s other executory notarial deeds, was issued an order of seizure and assignment of claim amounting to KRW 250,00,000 among the claim return of unjust enrichment against Nonparty 1’s Plaintiff. The said order was finalized on September 6, 2013 after it was served on the Plaintiff on August 22, 2013

D. Meanwhile, on October 11, 2013, based on the executory payment order with Nonparty 2, the Defendant was issued an assignment order of KRW 220,00,000 among the claims that Nonparty 2 would receive from the Plaintiff (hereinafter “instant attachment and assignment order”) pursuant to the instant judgment on October 11, 2013. The instant attachment and assignment order was served on the Plaintiff on October 16, 2013, and became final and conclusive on April 3, 2014.

3. Examining these facts in light of the legal principles as seen earlier, first of all, Nonparty 1 was present at the court of the first instance of the above creditor subrogation lawsuit instituted by Nonparty 2 and testified, and thus, it is deemed that Nonparty 2 was aware of the fact of exercising the right of subrogation of Nonparty 2. Thus, pursuant to Article 405(2) of the Civil Act, the limitation on the right of disposition against Nonparty 1 has been effective, and therefore, Nonparty 3, who has equal status with Nonparty 2, received each of the above assignment orders against Nonparty 1’s claim for return of unjust enrichment against the Plaintiff.

However, according to the judgment of this case, the payment of money by Nonparty 2 from the plaintiff constitutes the subrogation creditor's right to collect the money or the right to receive the repayment against the third debtor. Thus, according to the judgment of this case, the seizure and assignment order of this case where Nonparty 2 claims to be paid by the plaintiff from the plaintiff are null and void. Thus, there is no plaintiff's obligation against the defendant based on the seizure and assignment order of this case.

Nevertheless, unlike this, the lower court determined otherwise, that each of the above assignment orders received by Nonparty 3 is valid, and accordingly, the entire claim for return of unjust enrichment against the Plaintiff by Nonparty 1 and the claim for delay damages from August 15, 2013 (the next day after the first assignment order issued by Nonparty 3 was served on the Plaintiff) was transferred to Nonparty 3. Meanwhile, the attachment and assignment order of this case also remains valid as to the portion not transferred to Nonparty 3 as above, and accordingly, the claim for delay damages until August 14, 2013 was transferred to the Defendant. Accordingly, the lower court determined that this part of the damages for delay existed as the Plaintiff’s obligation against the Defendant based on the attachment and assignment order of this case. In so determining, it erred by misapprehending the legal doctrine on the validity of assignment order as to the subrogated creditor’s collection right or the assignment order as to the subrogated creditor’s repayment right. However, in this case, the lower court’s judgment cannot be reversed, and thus, did not adversely affect the conclusion of the judgment below.

4. 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 on the bench.

Justices Kim Yong-deok (Presiding Justice)