Where the debtor filed a lawsuit against the creditor prior to the declaration of bankruptcy seeking confirmation of non-existence of an obligation, but the debtor is declared bankrupt before a duplicate of the complaint is served, whether the lawsuit is legitimate (negative); and in such cases, whether the trustee in bankruptcy's request for resumption of the lawsuit is allowed

A lawsuit by a deceased person under the basic principles of the Civil Procedure Act demanding the rescue of the Plaintiff and the Defendant as the Defendant is unlawful as it does not constitute a substantial litigation relationship. The same applies to the case where the Defendant is alive at the time of filing a lawsuit, but dies before the delivery of a duplicate of the complaint. The filing of a lawsuit by indicating the deceased person as the Plaintiff

Even if a creditor files a lawsuit against a debtor or a debtor files a lawsuit seeking performance against a creditor prior to the declaration of bankruptcy, such legal doctrine applies if a bankruptcy is declared against a creditor or debtor before a duplicate of the lawsuit is served, if the creditor or debtor is declared bankrupt before a copy of the lawsuit is served. In a lawsuit against the bankrupt estate, the lawsuit filed by the debtor as the plaintiff is unlawful and dismissed (Article 359 of the Debtor Rehabilitation and Bankruptcy Act). In such cases, the trustee’s request for resumption of the lawsuit filed by the debtor on the premise that the lawsuit is pending in the court at the time of

Articles 347(1) and 359 of the Debtor Rehabilitation and Bankruptcy Act

Supreme Court Decision 2014Da34041 Decided January 29, 2015 (Gong2015Sang, 436), Supreme Court Decision 2014Da210449 Decided April 29, 2016 (Gong2016Sang, 688), Supreme Court Decision 2016Da274188 Decided May 17, 2017 (Gong2017Sang, 1260)

Medical Corporations, the East Cancer Foundation

A bankrupt medical corporation, the bankruptcy trustee of the East Cancer Foundation, and the plaintiff

Intervenor’s Intervenor to take over the Plaintiff’s lawsuit (Law Firm Barun, Attorneys Kim Flue et al., Counsel for the intervenor-appellant)

Defendant (Attorney Jin-sik et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2017Na2045149 decided November 17, 2017

The appeal is dismissed. The costs of appeal are assessed against the supplementary intervenor by the plaintiff's successor to the lawsuit, and the remainder are assessed against the plaintiff's successor to the lawsuit.

The grounds of appeal are examined.

1. The filing of a lawsuit against a deceased person under the basic principles of the Civil Procedure Act, which requires the rescue of the Plaintiff and the Defendant, is unlawful as it does not constitute a substantial litigation relationship. The same applies to the case where the Defendant is alive at the time of the filing of the lawsuit but died before the delivery of a duplicate of the complaint (see Supreme Court Decisions 2014Da34041, Jan. 29, 2015; 2016Da274188, May 17, 2017). The filing of a lawsuit by indicating the deceased person as the Plaintiff is not lawful except in special circumstances (see Supreme Court Decision 2014Da210449, Apr. 29, 2016).

Even if a creditor files a lawsuit against a debtor or a debtor files a lawsuit seeking performance against a creditor prior to the declaration of bankruptcy, such legal doctrine applies if a bankruptcy is declared against a creditor or debtor before a duplicate of the lawsuit is served, if the creditor or debtor is declared bankrupt before a copy of the lawsuit is served. In a lawsuit against the bankrupt estate, the lawsuit filed by the debtor as the plaintiff is unlawful and dismissed (Article 359 of the Debtor Rehabilitation and Bankruptcy Act). In such cases, the trustee’s request for resumption of the lawsuit filed by the debtor on the premise that the lawsuit is pending in the court at the time of

2. The reasoning of the lower judgment and the record reveal the following facts.

A. On March 25, 2015, the Intervenor of the Plaintiff’s Intervenor for Takeover of Lawsuit (hereinafter “Supplementary Intervenor”) transferred a loan claim against the Plaintiff to the Defendant, etc. Around that time, the Intervenor notified the Plaintiff of the transfer of the claim.

B. On December 5, 2016, the Plaintiff filed the instant lawsuit against the Defendant seeking confirmation of the absence of an obligation under the said assignment contract, and the duplicate of the complaint was served on the Defendant on January 2, 2017. On the other hand, on December 14, 2016, the Plaintiff was declared bankrupt.

C. On February 7, 2017, the Plaintiff’s trustee in bankruptcy filed an application to resume the instant lawsuit.

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

Inasmuch as the Defendant’s claim based on the assignment of claim is a property claim arising from a cause arising prior to the declaration of bankruptcy, the instant lawsuit seeking confirmation of the absence of such obligation against the Defendant is a lawsuit against the bankrupt estate. Since a copy of the instant lawsuit was declared bankrupt before being served to the Defendant, the Plaintiff is not a party qualification. Therefore, the instant lawsuit should be dismissed as it is unlawful and thus, the Plaintiff’s request for the resumption of lawsuit is also unlawful.

In so doing, contrary to what is alleged in the grounds of appeal, the lower court did not err by misapprehending the legal doctrine on the scope of application under Articles 347(1) and 464 of the Debtor Rehabilitation and Bankruptcy Act, or on the litigation procedures and taking-over procedures, thereby adversely affecting

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

Justices Ko Young-han (Presiding Justice)