T. T. M. T. M. L. L. S.

Defendant 1 and two others (Attorney Cho Jae-tae, Counsel for the defendant-appellant)

January 29, 2015

Daegu District Court Decision 2013Na3032 Decided April 23, 2014

1. At the request of exchange change in the trial, each real estate listed in the separate sheet shall be put at auction to distribute to Nonparty 1, Defendant 1, and Defendant 2 the remaining amount after deducting the auction cost from the proceeds thereof, at the rate of 2/9 and 3/9, respectively.

2. The total cost of a lawsuit shall be borne individually by each party.

1. Purport of claim

The real estate listed in the separate sheet (hereinafter referred to as the “instant real estate”) is sold to Nonparty 1, Defendant 1, and Defendant 2 at each ratio of 2/9 and Defendant 3, respectively, in proportion to 3/9 (the Plaintiff changed the purport of the claim from the Plaintiff to Nonparty 1).

2. Purport of appeal

The judgment of the first instance is revoked. The plaintiff's claim is dismissed.

1. Basic facts

A. The Plaintiff filed an application with Nonparty 1 for the payment order with the Seoul Central District Court 2012 tea19185. On April 4, 2012, the said court issued the payment order (hereinafter “instant payment order”) stating that “Non-Party 1 shall pay KRW 30,530,370 and KRW 24,042,634 per annum from April 17, 2012 to the date of complete payment, jointly with Non-Party 2, to the extent that “Non-Party 1 shall not exceed KRW 180,00,000,000 to the Plaintiff.” The instant payment order was finalized on May 1, 2012.

B. As of June 11, 2013, the principal and interest of the claim against Nonparty 1 according to the instant payment order is KRW 35,727,430, and Nonparty 1 is currently insolvent.

C. Meanwhile, Nonparty 1’s father (Divisions) died on June 8, 2009, and the registration of ownership transfer was completed on June 7, 2013 with respect to each of the real estate listed in the separate sheet (hereinafter “instant real estate”) owned by Nonparty 3, the spouse of Nonparty 3, Defendant 3/9, Nonparty 1, Defendant 1, and Defendant 2/9, respectively, based on inheritance.

[Ground of recognition] Unsatisfy, entry of Gap evidence 1 through 4 (including each number; hereinafter the same shall apply), the purport of the whole pleadings

2. Judgment as to whether the partition of co-owned property is available

A. Determination on the cause of the claim

An obligee may exercise the obligor’s right on behalf of the obligor in order to preserve the obligor’s claim. Barring special circumstances, such as where the obligee’s right to preserve and the obligor’s right to exercise on behalf of the obligee is closely related and the obligee’s right to exercise on behalf of the obligor is at risk of not being able to obtain the complete satisfaction of his/her claim unless the obligee exercises on behalf of the obligor’s right, and where it is necessary to ensure the validity and appropriate implementation of his/her claim, the obligee may exercise the obligee’s right by subrogation of the obligor’s right, barring special circumstances, such as the exercise of the obligee’s right to exercise on behalf of the obligor’s right to claim

Therefore, in order to preserve the claim against Nonparty 1 based on the instant payment order against Nonparty 1, barring any special circumstance, the Plaintiff may exercise the right to partition of co-owned property held by Nonparty 1 against the Defendants, thus filing a claim for partition of the instant real estate.

B. Determination as to the defendants' assertion

1) Summary of the assertion

A) Since the Plaintiff may apply for compulsory auction only for Nonparty 2/9’s share out of the instant real estate and obtain satisfaction of the claim, the Plaintiff’s claim for partition of co-owned property as to the entire real estate of this case constitutes abuse of rights.

B) The instant real estate is a house where Defendant 3, the mother of Nonparty 1, was living for several hundreds. The Plaintiff unilaterally completed inheritance registration on behalf of Nonparty 1 and filed a claim for partition of co-owned property in this case with Nonparty 3’s heir, including Nonparty 1, for the purpose of preserving the instant real estate, did not have any possibility to consider the contributory portion, the agreement on division of inherited property, and the renunciation of inheritance by Nonparty 1. Therefore, the Plaintiff’s claim for partition of co-owned property in this respect constitutes abuse of rights

2) Determination

A) Whether the partition of co-owned property itself constitutes abuse of right

In the event of an auction of shares in jointly owned property, the minimum sale price should be determined on the basis of the total appraised value of the jointly owned property (Article 139(2) of the Civil Execution Act), and in the event that a mortgage is created on the jointly owned real property for securing the same claim, it is reasonable to view that each co-owned share is a security obligation for the entire secured debt of the mortgage, barring any special circumstances (see Supreme Court Decision 2005Da44091, Jun. 15, 2006).

In light of the above legal principles, the defendants' arguments were examined. ① The Korea Credit Guarantee Fund holding claims for indemnity against non-party 1 was based on the executory exemplification of the judgment of Seoul Central District Court 2005dan202970, and applied for a compulsory auction for non-party 1-2/9 shares among the real estate of this case, which was forced to commence compulsory auction as of September 2, 2013 (the claim amount 23,694,601 and its delay damages). The non-party 1-2/9 shares among the real estate of this case were appraised as KRW 39,719,600, ③ The real estate of this case was settled as the maximum debt amount 39,00,000, the debtor non-party 3, and the non-party 1-2/9 shares among the above real estate of this case were decided as 500,000 won, and the National Tax Credit Guarantee Fund was decided as 197,2018.

According to the above facts, when the plaintiff files an application for compulsory execution against the non-party 1's 2/9 shares, the above appraised value of KRW 39,719,60, which is expected to be close to the minimum sale price in the event that the plaintiff files an application for compulsory execution against the non-party 1's shares shall not exceed the amount of senior claim to be borne by such shares, and thus, there is a high probability that the auction procedure will be cancelled pursuant to Article 102 of the Civil Execution Act (the compulsory auction case of non-party 1's above 2013ta-4380, which was applied by the Korea Credit Guarantee Fund, was cancelled in accordance with Article 102 of the Civil Execution Act on January 15, 2014). In accordance with Article 368 (1) of the Civil Act on common mortgage and simultaneous distribution, if the whole real estate of this case is put up for auction, it is highly probable that the plaintiff can receive dividends in proportion to the share value of the non-party 1 and the defendants.

Therefore, this part of the defendants' assertion is without merit.

B) Whether the partition of co-owned property constitutes abuse of right in light of living relations

Inasmuch as the Plaintiff’s claim for partition of co-owned property as to the instant real estate cannot be seen as an abuse of rights solely on the ground that the Defendants’ claim does not constitute an abuse of rights, this part of the Defendants’ claim is without merit (see, e.g., Supreme Court Decision 2006Da15488, Apr. 2, 2006).

3. Judgment as to the partition of co-owned property

The partition of co-owned property by judgment shall be made by the method of in-kind division, or even if it is impossible in-kind division or even if it is possible in-kind, if the price might be reduced remarkably due to the auction of the co-owned property, the so-called payment division shall be made by ordering the auction of the co-owned property if the price might be reduced significantly. In this context, the phrase "the price decreases remarkably due to the in-kind division" includes not only the exchange value of the whole co-owned property is significantly reduced due to the in-kind division, but also the co-owners' failure to make a fair partition but also the value of the part to be owned independently by the in-kind division is significantly decreased than the share value before the partition of co-owned property.

Therefore, even if it is possible to divide property in kind formally, in light of the location, area and surrounding road conditions, use value, price, share ratio of co-owners' ownership and use and profit-making situation, if it is not possible to divide property in kind according to the share ratio of each co-owner, it shall not be done in kind, but it shall be divided by the method of payment in kind (see Supreme Court Decision 2002Da4580, Apr. 12, 2002, etc.).

Furthermore, as to the instant case, since the instant real estate is a house and its site, it is difficult to divide it in kind due to its nature, or its value is likely to decrease significantly due to the spot division, it is reasonable to divide the sales price by selling the instant real estate for auction.

Therefore, upon the Plaintiff’s request, the real estate of this case is sold to Nonparty 1 at the auction and the remaining amount after deducting the auction cost from the proceeds of the sale shall be distributed to Nonparty 2/9, Defendant 1, and Defendant 2, respectively, to Defendant 2/9 and Defendant 3 at the ratio of 3/9.

4. Conclusion

Therefore, the plaintiff's claim that has been changed in exchange in the trial is reasonable, and it is so decided as per Disposition (the judgment of the court of first instance was withdrawn from the exchange change in the litigation made in the trial, and the judgment of the court of first instance was invalidated).

[Attachment]

Judges Kim Hyun-chul (Presiding Judge)