Where corporeal movables for which an auction procedure under a lien has commenced without the consent of the lien holder are seized by other creditors pursuant to Article 215 of the Civil Execution Act for compulsory execution without the consent of the lien holder pursuant to Article 215 of the same Act, and the auction procedure under a lien is suspended pursuant to Article 274(2) of the Civil Execution Act and the compulsory auction procedure for creditors is in progress, whether the person having the lien has the right to continue to retain the objects even if the objects

Article 189(1) of the Civil Execution Act provides that a seizure of corporeal movables held by a debtor shall be effected by an execution officer in possession of such objects. Article 191 of the same Act provides that any objects in possession of the creditor or a third party who does not refuse to submit such objects may be seized by applying mutatis mutandis the provisions of Article 189. Therefore, a compulsory execution against corporeal movables of the debtor possessed by the lien holder shall be permitted only when the lien holder submits such objects to the execution officer for a compulsory execution by the creditor. Furthermore, even if the lien holder of corporeal movables files an application for an auction pursuant to the lien pursuant to Articles 274(1) and 271 of the Civil Execution Act and submits such objects to the execution officer for submission of the said objects, the lien capacity of the lien holder for corporeal movables shall be maintained even in cases where other creditors have the right to continuously carry out the compulsory execution by means of double seizure as stipulated in Article 215 of the Civil Execution Act, and even if other creditors commence the compulsory execution under Article 25(1) of the same Act, it shall be deemed that other creditors have the right to continue the compulsory execution by auction.

Articles 189(1), 191, 215, 271, and 274(1) and (2) of the Civil Execution Act

SND Co., Ltd. (Law Firm Maritime Co., Ltd., Counsel for the plaintiff-appellant-appellant)

Applicant

Seoul Southern District Court Order 2011Ma1147 dated July 20, 201

The order of the court below is reversed, and the case is remanded to the Seoul Southern District Court.

1. Article 189(1) of the Civil Execution Act provides that a seizure of corporeal movables in possession of a debtor shall be effected by the execution officer in possession of such movables, and Article 191 provides that a seizure of objects in possession of the creditor or a third party who does not refuse to submit the said things may be effected by applying mutatis mutandis the provisions of Article 189. Therefore, compulsory execution against corporeal movables in possession of the debtor by the lien holder shall be permitted only when the lien holder submits such objects to the execution officer for the creditor’s compulsory execution.

In addition, even if the lien holder of corporeal movables files an application for an auction under the lien pursuant to Articles 274(1) and 271 of the Civil Execution Act, and the execution officer files an application for the auction under the lien to submit the said objects to the execution officer, and the lien holder’s lien on the said objects is maintained. Thus, in order for other creditors to enforce a compulsory execution by means of double seizure as stipulated in Article 215 of the Civil Execution Act with respect to corporeal movables for which an auction procedure under the lien has commenced, the consent of the lien holder on the seizure by the creditor should be required.

Nevertheless, if the corporeal movables for which an auction procedure under the lien has commenced without the consent of the lien holder are seized for the compulsory execution by other creditors pursuant to Article 215 of the Civil Execution Act without the consent of the lien holder, and then the auction procedure under the lien is suspended pursuant to Article 274(2) of the Civil Execution Act and the compulsory auction procedure for creditors is in progress, the status of lien holder shall not be affected even if the object was sold during the compulsory auction procedure, and the lien holder shall be deemed to have the right to continue the custody of the object.

2. The record reveals the following facts.

The special appellant, as a creditor of AB B Bable oil Co., Ltd. (hereinafter referred to as “AB Bable oil”), was exercising a lien while possessing the instant corporeal movables owned by ABB Bable oil.

On February 26, 2010, a special appellant filed an application for an auction of the instant corporeal movables pursuant to a lien, and on March 22, 2010, an execution officer seized the instant corporeal movables, which began the auction procedure. The execution officer kept the instant corporeal movables, a seized object, to a special appellant.

In the auction procedure under the above lien, the date of sale was set three times between June 4, 2010 and July 2, 2010, but all failed.

On May 14, 2010, the execution officer attempted to seize the instant corporeal movables upon the application for a compulsory auction for the instant corporeal movables by a debtor, another creditor of Abable milk, but the seizure execution was not effected on the wind that the special appellant refused to deliver.

After that, on July 27, 2010, Salim Co., Ltd., another creditor of Adob B, applied for a compulsory auction for the instant corporeal movables again, and on August 24, 2010, the enforcement officer confirmed that there was no further seizure object and issued an application for compulsory execution to a prior execution officer who seized the instant corporeal movables at the request of a special appellant, pursuant to Article 215 of the Civil Execution Act. Furthermore, the enforcement officer issued a disposition to suspend the auction procedure under the instant lien on the ground that the compulsory auction was commenced.

On May 27, 2011, the instant corporeal movables were sold to the applicant for a subsequent compulsory auction, and the applicant paid KRW 93,410,000 for the proceeds of sale.

The Claimant filed a motion with the enforcement officer to deliver the instant corporeal movables, which are the objects of sale, but the enforcement officer rejected the motion for extradition on June 7, 201 on the grounds that the special appellant asserted the right of retention for the instant corporeal movables and refused to deliver them.

The Claimant filed an objection against the disposition by the enforcement officer, and the lower court accepted an objection by the Claimant and ordered the enforcement officer to deliver the instant corporeal movables to the Claimant.

3. We examine the above facts in light of the legal principles as seen earlier.

For the commencement of the procedure for the subsequent compulsory auction of this case, the corporeal movables of this case is to be seized by the method of double seizure as stipulated in Article 215 of the Civil Execution Act, the special appellant’s consent should be required. However, even though the special appellant explicitly stated his opposition against the seizure of the procedure for the subsequent compulsory auction by refusing the delivery of the corporeal movables of this case, the execution officer conducted the seizure of the corporeal movables of this case pursuant to the provisions of Article 215 of the Civil Execution Act without the special appellant’s consent. The corporeal movables of this case was sold to the applicant on the basis of such unlawful seizure. In such a case, the status of the special appellant holding the right to detain the corporeal movables of this case as the lien holder shall not be affected. Accordingly, the execution officer entrusted by the special appellant and the special appellant with the execution of the corporeal movables of this case by the special appellant shall not transfer the corporeal movables of this case to the applicant as the purchaser of the auction procedure.

Nevertheless, the lower court determined otherwise that the special appellant could not refuse the delivery of the instant corporeal movables, which are the sold objects, and ordered the execution officer to deliver the instant corporeal movables to the applicant. Such a measure by the lower court is deemed to be a violation of the Constitution that affected the judgment by infringing on the right of the special appellant to undergo a trial according to lawful procedures. The allegation of the grounds for special appeal pointing this out has merit.

4. Therefore, the order of the court below is reversed, and the case is remanded to the court below for a new trial and determination. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Park Poe-dae (Presiding Justice)