In cases where a judgment revoking a mortgage contract by fraudulent act becomes final and conclusive first and a lawsuit of demurrer against distribution is pending against the mortgagee, the method of handling the amount of distribution, and whether, at this time, the portion remaining to the mortgagee as a result of the lawsuit shall be additionally distributed to other creditors who have lawfully demanded a distribution in the real estate auction procedure (affirmative)

In a case where a judgment revoking a mortgage contract as a fraudulent act becomes final and conclusive and a lawsuit of demurrer against a distribution is followed by a lawsuit of demurrer against the mortgagee, the amount of dividends against the mortgagee should be deleted to the extent that the creditor’s claims have not been satisfied without taking into account the existence of other creditors who filed the lawsuit of demurrer against the distribution, and the remaining amount should be corrected as the amount of dividends against the creditor and reserved as the amount of dividends against the mortgagee. However, insofar as the contract of establishing the right to collateral has been revoked as fraudulent act, there is an obvious reason that the mortgagee loses the right to receive dividends pursuant to the right to the right to claim the right to claim dividends and could not be distributed to the mortgagee. As such, Article 161 of the Civil Execution Act should be applied by analogy to the auction court, the portion remaining against the mortgagee out of the amount of dividends deposited as the lawsuit of demurrer against the distribution

Articles 406 and 407 of the Civil Act; Articles 151, 154, 160, and 161 of the Civil Execution Act;

Supreme Court Decision 98Da3818 delivered on May 22, 1998 (Gong1998Ha, 1722) Supreme Court Decision 2001Da37613 Delivered on October 12, 2001 (Gong2001Ha, 2460) Supreme Court Decision 2002Da33069 Delivered on September 24, 2002 (Gong2002Ha, 2534)

Plaintiff (Law Firm Scara, Attorneys Lee Jong-soo et al., Counsel for the plaintiff-appellant)

Republic of Korea and two others

Seoul High Court Decision 2011Na7576 decided June 1, 2012

All appeals are dismissed. The costs of appeal are assessed against the Plaintiff.

The grounds of appeal are examined.

1. As to the ground of appeal on the illegality of additional dividends

A. In a case where a judgment revoking a mortgage contract as a fraudulent act becomes final and conclusive, and a lawsuit of demurrer against a distribution is proceeding subsequent to the lawsuit of demurrer against the mortgagee, the court should delete the amount of distribution against the mortgagee only to the extent that the creditor's claims have not been satisfied without considering the existence of other creditors who filed the lawsuit of demurrer against the distribution and correct the amount of distribution against the creditor as the amount of distribution and keep the remainder as the amount of distribution against the mortgagee (see, e.g., Supreme Court Decision 98Da3818, May 22, 1998). However, in the above case, once the contract of mortgage was revoked as a fraudulent act, as long as the contract of establishing the right to collateral security was revoked as a fraudulent act, the mortgagee has lost the right to receive dividends based on the right to receive the right to receive dividends and there is an obvious reason that it is impossible to distribute it to other creditors. Thus, the court of auction should apply Article 161 of the Civil Execution Act by analogy to the deposit of the lawsuit of demurrer against the distribution to the creditor in the real estate auction procedure (see, etc.

B. On the grounds stated in its reasoning, the lower court: (i) recognized the portion of the non-party 3’s debt amount regarding the instant housing exceeding 80,00,000 won out of the mortgage-based contract; and (ii) revoked the portion of the non-party 4’s debt amount exceeding 96,954,652 out of the mortgage-based contract that constitutes 300,000,000; (iii) determined that the non-party 3’s additional amount of debt amount exceeding KRW 632,84,244,54,244 only was corrected to the extent of KRW 675,675,97,9765,97,9765,9765, and the remaining portion of the mortgage-based claim against the non-party 3; and (iv) determined that the remaining portion of the claim against the non-party 465,5765,975,975,97,5765, and 9754,5765, as the amount of dividends against the non-party 3 were subsequently revoked.

C. Examining the reasoning of the lower judgment in light of the evidence duly admitted, the lower court’s determination is based on the legal doctrine as seen earlier. 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 relative effect of a lawsuit of demurrer against distribution, restitution following fraudulent act revocation, etc., and by misapprehending the relevant provisions, such as dividends under

The Supreme Court precedents cited in the grounds of appeal are different from this case, and thus are not inconsistent with the above judgment.

2. As to the allegation in the grounds of appeal on the defects in auction and distribution procedures

The court below held that (1) although the auction court did not notify the plaintiff of the date of distribution for the additional distribution of this case, the additional distribution of this case was just and it could not be accepted by the plaintiff even if the plaintiff raised an objection, and (2) the auction court used the mixed use of each dividend regardless of the deposit number in the process of paying each dividend amount deposited with the separate deposit number by non-party 3, etc. to the right holder, but since it did not infringe upon the plaintiff's right to receive part of the dividend payment claim from non-party 3 or the plaintiff who acquired part of the dividend payment claim from the right holder because the auction court paid only the amount to be received by the right holder, the court below held that the plaintiff could not be said to have suffered any property damage due to the defect

Examining the reasoning of the lower judgment in light of the evidence duly admitted, the lower court did not err in its judgment by misapprehending the legal doctrine on the liability for damages arising from property rights and infringement of rights or the procedures for entrustment of payment of the deposited money to be distributed

3. Conclusion

Therefore, all appeals are 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 Kim Shin (Presiding Justice)