The validity of the judgment of the first instance sentenced to a judgment in the status of filing a lawsuit against a deceased person (negative) and whether the same applies to cases where a deceased person dies before a duplicate of a complaint is served after filing a lawsuit against the deceased person (affirmative)

The filing of a lawsuit against a deceased person is contrary to the basic principles of the Civil Procedure Act requiring the rescue of the plaintiff and the defendant, and thus, the establishment of a substantial litigation relationship is inappropriate. Thus, even if the judgment of the court of first instance was rendered in such a state, the judgment is null and void. The same shall also apply where the defendant is alive at the time of filing the lawsuit but dies

This legal doctrine also applies to a payment order made for a deceased person as a debtor. In a case where a debtor dies before the original copy is served after filing an application for a payment order with a deceased person as a debtor, the payment order is void. Even if the payment order is formally finalized due to the service of the heir, etc., the payment order made against a deceased person cannot be deemed valid against his heir. In addition, when the decision to discontinue the rehabilitation procedures becomes final and conclusive, the trustee’s authority is extinguished. Thus, even in a case where the decision to discontinue the rehabilitation procedures becomes final and conclusive after the issuance of the payment order made for a debtor, the debtor’s death ought

Articles 233, 237(1), 462, and 469 of the Civil Procedure Act; Article 78 of the Debtor Rehabilitation and Bankruptcy Act

Supreme Court Decision 69Da929 Decided March 24, 1970 (No. 18-1, 246) Supreme Court Decision 2014Da34041 Decided January 29, 2015 (Gong2015Sang, 436)

Plaintiff (Law Firm current, Attorneys Jeon Soo-hee et al., Counsel for the plaintiff-appellant)

Young New Technology Co., Ltd. (Law Firm Anyang, Attorneys Lee Dong-soo et al., Counsel for the defendant-appellant)

Seoul Northern District Court Decision 2015Na35001 decided November 15, 2016

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

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

1. The filing of a lawsuit against the deceased is contrary to the basic principles of the Civil Procedure Act requiring the rescue of the plaintiff and the defendant, and thus, it is inappropriate to establish a substantial litigation relationship. Thus, even if the judgment of the court of first instance was rendered in such a state, such judgment is null and void (see, e.g., Supreme Court Decision 69Da929, Mar. 24, 1970). The same applies to cases where the defendant was alive at the time of filing the lawsuit but died before a duplicate of the complaint is served (see Supreme Court Decision 2014Da34041, Jan. 29, 2015).

This legal doctrine also applies to a payment order with a deceased person as a debtor. In a case where a debtor dies before a payment order is applied with a deceased person as a debtor or a debtor is served with the original copy after the application for a payment order is made, such payment order is void. Even if the payment order was served formally due to the service of the heir, etc., the payment order against the deceased person cannot be deemed valid for the heir. Furthermore, when the decision on discontinuation of rehabilitation procedures becomes final and conclusive, the trustee’s authority is extinguished. As such, even in a case where the decision on discontinuation of rehabilitation procedures becomes final and conclusive after the issuance of the payment order with a custodian as a debtor and the debtor

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

A. On April 22, 2013, the Plaintiff filed an application with Nonparty 1 as the debtor for a payment order seeking payment of KRW 674 million and delay damages for the number of units issued by the Guro District Court Decision 2013 tea 2160,000 issued by the Guro District Court (hereinafter “Seoul Northern District Court”) for the payment order. Upon receipt of the above court’s order of correction to specify whether the debtor is Nonparty 1’s identification card, the Plaintiff submitted the register of the members system and specified the membership system as the debtor on May 2, 2013 when submitting the register of the members system.

B. However, on August 31, 2012, the member system received a decision to commence rehabilitation procedures from Daejeon District Court 2012 Ma21, and appointed Nonparty 1, the representative director, etc. as co-manager, and on which the contents were recorded in the corporate register, the court issued a payment order on May 7, 2013, stating the debtor as “ Nonparty 1 and Nonparty 2, the co-management of the members of the rehabilitation corporation system” (hereinafter “instant payment order”), and the payment order was served by Nonparty 1’s spouse on May 10, 2013.

C. However, the member system was decided to discontinue the rehabilitation procedures on April 25, 2013, and the decision was finalized on May 9, 2013, before the date of service of the payment order in this case.

D. On July 3, 2013, the Plaintiff issued an assignment order (hereinafter “instant assignment order”) with the title of execution of the instant payment order, by stating the debtor’s “Gwon System”, the attachment and assignment of the entire claim as “the purchase price claim held by the Defendant,” and applying for an attachment and assignment order with the Daejeon District Court Decision 2013TTTTY 2013TTY 5249. On July 18, 2013, the court issued an assignment order with the creditor, the debtor, the debtor, the Defendant, the third debtor, the Defendant, the claim amounting to KRW 33,586,205 (hereinafter “instant assignment order”). The instant assignment order was served on the Defendant on July 22, 2013.

E. After that, the Plaintiff filed an application with the respondent to rectify Nonparty 1 and Nonparty 2, who is the joint management of the members of the rehabilitation corporation, to Nonparty 1 and Nonparty 2, who indicated the debtor of the instant payment order as Seoul Northern District Court No. 2017KaKa16, to “Nonindicted 1, who is the joint management of the members of the corporate rehabilitation corporation,” and received the decision of correction on January 16, 2017, and this decision was served on the member system on January 23, 2017.

3. Based on the aforementioned factual basis, the lower court determined that the instant assignment order was null and void on the ground that the instant payment order procedure was interrupted when the decision to discontinue the rehabilitation procedures was finalized, and that the instant payment order was suspended and its objection period was not finalized.

4. In light of the legal principles as seen earlier, the reasoning of the judgment below cannot be deemed appropriate. In other words, the instant payment order was issued to the debtor as “ Nonparty 1 and Nonparty 2, who is a joint management of the members system of a rehabilitation corporation,” and the rehabilitation procedure for the members system was continued at the time of the application and issuance, but the trustee’s authority became final and conclusive before the debtor was served on the debtor, and thus, the instant payment order, which was issued to the debtor, shall be deemed null and void as it was against the person whose status was lost. This is also the same as the instant payment order, which was served on the premise that the non-party 1, who was served on the debtor, was the manager of the rehabilitation corporation, was the representative of the system that restored the original legal status through the discontinuation of rehabilitation procedures. Accordingly, the instant payment order is also null and void. Furthermore, even if the Plaintiff was corrected by the members system, it cannot be recognized that the instant payment order was valid.

Ultimately, the reasoning of the judgment below is inappropriate, but the conclusion that the entire order of this case is null and void is justifiable. Supreme Court Decision 95Da15667 Decided February 13, 1998, which was invoked in the ground of appeal by the Plaintiff, is related to the case, which is indicated as a person who died of a third party debtor, not the direct party to the attachment and assignment order, and thus, the case cannot be invoked in this case. The court below did not err by misapprehending the legal principles as alleged in the ground of appeal,

5. The appeal is dismissed. 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 Kwon Soon-il (Presiding Justice)