Whether the scope of the obligation or the change of the obligor is possible before the secured obligation of the right to collateral security becomes final and conclusive (affirmative), and whether the scope of the obligation of the right to collateral security or the obligor’s change is excluded from the secured obligation of the right to collateral security (affirmative)

A collateral security may change the scope of an obligation, or a debtor, in the event of a mortgage securing a remaining obligation within a certain limit which remains after calculating an unspecified claim arising from a continuous transaction between the parties concerned at a certain time, unlike ordinary mortgage, if the secured obligation becomes final and conclusive as a result of the easing relationship with respect to the secured obligation. Where the scope of an obligation or the debtor is changed, only a claim that falls within the scope of the change or the debtor shall be secured by the relevant collateral security, and a claim that falls within the scope of an obligation before change or a claim that falls within the scope of an obligation that is secured by the said collateral security

Articles 357 and 360 of the Civil Act

[Plaintiff-Appellant] Plaintiff 1 and 2 others (Law Firm Gyeong, Attorneys Park Jong-soo et al., Counsel for plaintiff-appellant)

Kangwon Bank Co., Ltd. (Law Office, Attorneys Ji-hun et al., Counsel for the plaintiff-appellant-appellee)

Korea Mutual Savings and Finance Company (Attorney Dong Sang-sung, Counsel for defendant-appellee)

Seoul High Court Decision 96Na33596, 33602 delivered on February 28, 1997

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

The grounds of appeal are examined.

The right to collateral security is a mortgage that guarantees an unspecified claim arising from a continuous transaction between the parties concerned within a certain limit, and unlike ordinary mortgages, if the secured obligation becomes final and conclusive as a result of the easing relationship with respect to the secured obligation, then the scope of the obligation or the debtor may be changed. Where the scope of the obligation or the debtor is changed, only a claim or a claim against the debtor, which naturally falls within the scope of the change, is secured by the relevant right to collateral security, and a claim or a claim against the debtor, which falls within the scope of the previous change, is excluded from the scope of the obligation secured by the right to collateral security (see Supreme Court Decision 92Da48567, Mar. 12, 1993).

According to the reasoning of the judgment below, the court below acknowledged the facts as stated in its reasoning, and rejected the plaintiff's claim of this case on the premise that the registration of change of each of the right to collateral in this case is null and void or the defendant's claim against the above non-party 2 is not a secured debt of each of the right to collateral in this case, since the defendant of each of the right to collateral in this case and the non-party 2, a surety, were changed to the debtor of the right to collateral in this case to the non-party 2 in accordance with the agreement to continue loan transaction. Thus, each of the right to collateral in this case changed to the debtor of this case, which is the changed debtor, remains effective as the secured debt of the above non-party 2, which is the changed debtor of the above non-party 2. The court below rejected the plaintiff's claim of this case on the premise that the claim against the above non-party 2 in this case was not a secured debt of each of the right to collateral in this case. The above facts and judgment of the court below are just and there are no errors in law.

In addition, as seen above, the above non-party 1 et al.'s debt goes beyond the scope of each of the instant collateral security rights due to a modified contract following the replacement of the debtor, and each of the instant collateral security rights remains effective to secure only the debt of the above non-party 2, which belongs to the scope of the newly secured debt. As such, as long as each of the instant collateral security rights remains effective, there is no room for a problem about usefulness of invalidation registration as pointed out in the grounds of appeal. Accordingly, this part of the grounds of appeal is without merit without further review

The grounds of appeal cannot be accepted.

Therefore, the appeal is dismissed, and all costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices.

Justices Song Jin-hun (Presiding Justice)