[1] In a case where a subordinate mortgage has been established on the real estate owned by the property owned by the property pledged as a joint collateral, which is the object of the joint mortgage, and the first priority mortgagee has been sold at auction and repaid by the joint mortgagee, whether the senior mortgagee may subrogate the mortgage on the real estate owned by the property owned by the property pledged as a joint mortgagee (affirmative in principle)

[2] In a case where a real debtor and a real person who has pledged his/her property to secure another's property jointly offered a loan, and the person who has pledged his/her property to register the property as a debtor at the registration of the establishment of a mortgage, whether the person who has pledged his/her property to secure another's property has acquired the security right to the debtor who is the actual debtor on behalf of the creditor (negative), and whether such a legal principle applies even in a case where the joint mortgage is established on each real property owned by the person who has pledged the property to secure another's property, which is the actual debtor and the actual debtor, and a subordinate mortgage is established on each real estate owned by the person who has pledged the property to secure another's property (affirmative)

[1] In the event a subordinate mortgage is established on the real estate owned by the property owned by the property owned by the property owned by the property pledged, if the property owned by the property owned by the property pledged is sold by auction and paid out from the auction proceeds, the property pledged by the property pledged, barring any special circumstance, shall acquire the right to indemnity against the debtor, and at the same time acquire the mortgage against the property owned by the property owned by the property pledged by the property pledged by the property pledged by the property pledged by the property pledged by the property pledged by the property mortgagee by subrogation under Articles 481 and 482 of the Civil Code on Subrogation, and the property owned

[2] According to Articles 481 and 482 of the Civil Code on Subrogation, a person who has pledged his/her property to secure another's property may exercise his/her rights on claims and collateral to the extent that the person who has pledged his/her property to secure another's property can be indemnified by his/her own rights. Thus, even if a person who has pledged his/her property to secure another's property has discharged his/her property to secure another's property or lost his/her ownership on the mortgaged property due to the execution of mortgage, the person who has secured another's property cannot exercise his/her rights on claims and collateral on behalf of the creditor. Therefore, in cases where a person who has pledged his/her property to secure another's property jointly provided a security to secure another's property and a person who has secured another's property to secure another's property has made a registration on his/her property at the time of the establishment of a mortgage, regardless of whether the person who has secured another's property to secure another's property is liable to compensate the creditor, the actual debtor is not liable to compensate.

In the event that a person who has pledged his/her property to secure another's property is unable to obtain by subrogation the mortgage on the real property owned by the debtor because the person who has pledged his/her property to secure another's property has no right to indemnity on the debtor, the mortgagee on the real property owned by the person who has pledged his/her property to secure another's property

[1] Articles 368(2), 370, 481, and 482 of the Civil Act / [2] Articles 341, 342, 368(2), 370, 481, and 482 of the Civil Act

[1] Supreme Court Decision 93Da25417 Decided May 10, 1994 (Gong1994Sang, 1638), Supreme Court Order 2008Ma109 Decided May 28, 2009 (Gong2009Ha, 1004) / [2] Supreme Court Decision 2013Da80429, 80436 Decided April 30, 2014 (Gong2014Sang, 1105)

Plaintiff (Counter-Defendant) (Attorney Lee Hun-hoon, Counsel for the plaintiff-appellant)

Defendant-Counterclaim Plaintiff (Attorney Im Jong-tae et al., Counsel for the defendant-Counterclaim plaintiff-appellant)

Suwon District Court Decision 2012Na31823, 31830 decided April 25, 2013

The appeal is dismissed. The costs of appeal are assessed against the Defendant (Counterclaim Plaintiff).

The grounds of appeal are examined.

1. Where subordinated mortgage has been established on the real estate owned by a person who has pledged the property to secure another's property, the person who has pledged the property to secure another's property shall first sell the real estate owned by the person who has pledged the property to secure another's property at auction price, and the person who has pledged the property to secure another's property shall acquire the right to indemnity against the debtor unless there are special circumstances, and at the same time the person who has pledged the property to secure another's property acquired the mortgage on the real estate owned by the person who has pledged the property to secure another's property by subrogation in accordance with the provisions of Articles 481 and 482 of the Civil Code on Subrogation, and the person who has pledged the property owned by the person who has pledged the property to secure another's property by subrogation can substitute the mortgage on the real estate owned by the person who has pledged the property (see Supreme Court Decisions 93Da25417

However, according to the provisions of Articles 481 and 482 of the Civil Act on subrogation, a person who has pledged his/her property to secure another's property may exercise his/her rights on claims and collateral to the extent that he/she can be indemnified with his/her own rights. Therefore, even if a person who has pledged his/her property to secure another's property has discharged his/her property or lost his/her ownership on the mortgaged property due to the execution of mortgage, the person who has pledged his/her property cannot exercise his/her rights on claims and collateral on behalf of the creditor (see Supreme Court Decision 2013Da80429, 80436, April 30, 201). Therefore, in cases where a person who has pledged his/her property to secure another's property jointly provided a security to secure another's property and a person who has pledged his/her property to secure another's property to secure another's property, regardless of whether the person who has pledged his/her property to secure another's property is liable as a debtor, even if the person who has actually acquired the property to secure another's property.

In the event that a person who has pledged his/her property to secure another's property cannot obtain by subrogation the mortgage of the person who has pledged his/her property owned by the debtor because the person who has pledged his/her property to secure another's property has no right to indemnity against the debtor, the person who has pledged his/her property to secure another's property shall not be subrogated.

2. According to the reasoning of the first instance judgment cited by the lower court, based on the facts and circumstances as indicated in its reasoning, the lower court determined that the Plaintiff, the title holder of the instant real estate, did not bear a liability for compensation against the Nonparty, the actual debtor, who was the loaner, even if the Nonparty lost its ownership due to the enforcement of the instant mortgage on the non-party’s share among the instant real estate, on the grounds that the actual debtor of the secured obligation under the instant 9, which was established with the mortgagee, the Plaintiff, the debtor, and the maximum debt amount as KRW 260,000,000,000, was not the Plaintiff, the title holder of the loan, but the non-party.

Furthermore, the lower court determined that the Nonparty, who did not have the right to indemnity against the Plaintiff, could not make subrogation against the mortgagee’s right to collateral security against the Plaintiff’s share out of the instant real estate pursuant to the provisions of Articles 481 and 482 of the Civil Act regarding the mortgagee’s right to collateral security against the Plaintiff’s share, and accordingly, the Defendant (Counterclaim) who was the subordinate mortgagee against the Nonparty’s share out of the instant real estate could not acquire any right or subrogation against the Plaintiff’s share among the instant real estate.

Examining the aforementioned legal principles and records, the lower court’s aforementioned recognition and determination is justifiable. In so doing, the lower court did not err by misapprehending the legal doctrine regarding subrogation by subordinate mortgagee under Article 368(2) of the Civil Act, subrogation and subrogation by the person who has pledged the property to secure another’s obligation, or by exceeding the bounds of the principle

3. 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 Lee Sang-hoon (Presiding Justice)