The judgment below is reversed, and the case is remanded to the Daegu High Court.

The grounds of appeal are examined.

1. Where a joint mortgagee has received preferential dividends by participating in the auction procedure requested by a third party on certain real estate among the subject real estate, the secured debt of the right to collateral security on the pertinent real estate is finalized only when the right to collateral security ceases to exist, i.e., when the purchaser pays the proceeds of the sale (see Supreme Court Decision 9Da26085, Sept. 21, 199). The secured debt of the right to collateral security on the remaining subject real estate is not finalized unless there are other finalized causes, such as termination of the basic transaction or bankruptcy of the debtor or the person who has pledged his/her property.

The circumstance that a joint mortgagee participated passively in the auction procedure requested by a third party and received preferential dividends does not necessarily mean that the basic transaction between the creditor and the debtor is terminated. While the basic transaction continues, it is necessary to allow the joint mortgagee to use the collateral value of the remaining real estate as much as possible. As such, the amount of preferential dividends received cannot be again exercised the right to preferential reimbursement as a joint mortgagee in the auction procedure for the remaining real estate (see, e.g., Supreme Court Decisions 2005Da14502, Oct. 27, 2006; 2011Da68012, Jan. 12, 2012). Thus, even if the amount of the secured claim increases after the auction procedure for the remaining real estate, the scope of the right to preferential reimbursement as to the remaining real estate by the joint mortgagee is limited to the maximum debt amount so deducted, so it cannot be deemed that the joint mortgagee or other creditors incur unexpected damages.

2. According to the reasoning of the first instance judgment as cited by the lower court and the evidence duly admitted, the following facts are revealed.

The North Agricultural Cooperative Co., Ltd. (hereinafter referred to as the "Seoul Agricultural Cooperative") shall be KRW 350 million to D on December 23, 2005.