[1] Whether a fraudulent act constitutes a fraudulent act in case where an obligor concludes a loan for consumption to the obligee for the repayment of an existing obligation and accepts a compulsory execution by preparing a notarial deed stating the purport thereof (negative in principle)

[2] In a case where a commercial act such as a sales contract is revoked on the ground that it is a fraudulent act and restitution is made, and the debtor concludes a loan contract for consumption and prepares a notarial deed stating the purport of accepting compulsory execution for the repayment of the obligation for return of unjust enrichment that has been borne by the beneficiary, whether it constitutes a fraudulent act (negative in principle), and in this case, whether the beneficiary has the right to demand a distribution in the compulsory auction procedure

[1] The obligee’s demand for the repayment of an obligation does not interfere with the obligee’s exercise of its right, and the obligor cannot refuse the performance of obligation on the ground that there are other creditors. Thus, in a case where the obligor executes a loan for consumption and approves compulsory execution for the repayment of existing obligation to the obligee at the obligee’s request, and as a whole, does not decrease the obligor’s responsible property as a whole by preparing a notarial deed stating the purport of concluding a loan contract for consumption and accepting compulsory execution for the repayment of existing obligation to the obligee, barring special circumstances to deem that such act does not differ from the actual transfer of the obligor’s responsible property to a specific obligee, it shall not

[2] Even in cases where the debtor, who was liable to return unjust enrichment by means of cancellation of the debtor's commercial act such as a sales contract for real estate and restitution of its original state, prepares a notarial deed stating the purport of concluding a loan agreement with the beneficiary for consumption and accepting compulsory execution for the repayment of the obligation for return of unjust enrichment, it shall not be deemed a new fraudulent act detrimental to other creditors, unless there are special circumstances to deem that such act does not differ from the actual transfer of the responsible property to the beneficiary.

A beneficiary's claim against a debtor is merely a claim acquired after the original fraudulent act, and thus the beneficiary has no right to demand the distribution in the compulsory auction procedure for the property restored to original state.

[1] Article 406 (1) of the Civil Act / [2] Articles 406 (1) and 407 of the Civil Act

[1] Supreme Court Decision 2010Da103376 Decided December 22, 2011, Supreme Court Decision 2011Da34088 Decided November 15, 2012 / [2] Supreme Court Decision 2009Da18502 Decided June 23, 2009 (Gong2009Ha, 1185)

Arboretums Co., Ltd. (former trade name: Lesman Co., Ltd.)

Defendant (Law Firm Il Digital, Attorneys Lee Na-ju et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2011Na13755 decided February 1, 2012

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

The grounds of appeal are examined.

1. A creditor’s demand for the repayment of an obligation is a natural exercise of his/her right, and this does not interfere with the other creditor’s existence, and the debtor cannot refuse the performance of obligation on the ground that there is another creditor. Thus, in cases where the debtor concludes a loan for consumption and approves compulsory execution for the repayment of the existing obligation to the creditor at the creditor’s request and thereby the debtor’s responsible property is not reduced as a whole, it cannot be deemed a fraudulent act detrimental to other creditors unless there are special circumstances to deem that the debtor’s responsible property is different from the actual transfer of the debtor’s responsible property to a specific creditor due to such act (see Supreme Court Decisions 2010Da10376, Dec. 22, 2011; 201Da34088, Nov. 15, 2012).

According to the above legal principles, even in cases where an obligor, who was liable to return unjust enrichment to a beneficiary as a result of cancellation of the obligor’s commercial act such as a sales contract on real estate and restitution thereof, prepares a notarial deed stating the purport of entering into a loan agreement for consumption with the beneficiary and accepting compulsory execution for the repayment of the obligation for return of unjust enrichment, barring special circumstances to deem that one’s own responsible property is not different from the actual transfer to the beneficiary due to such act, it cannot be deemed a new fraudulent act detrimental to other creditors.

A debtor's claim against such beneficiary is merely a claim acquired after the original fraudulent act, and thus the beneficiary does not have the right to demand a distribution in the compulsory auction procedure for the property restored to the original state (see Supreme Court Decision 2009Da18502 delivered on June 23, 2009).

2. According to the reasoning of the judgment below, on October 21, 2006, the non-party 1 sold the land and buildings of this case (hereinafter "the real estate of this case") to the defendant and the non-party 2 (hereinafter "the defendant et al.") and completed the registration of ownership transfer to them. ② The non-party 3 made the damage claim against the non-party 1 as the preserved right, and filed a lawsuit seeking revocation of the above contract against the defendant et al. on April 11, 2008 on the ground that the above contract was fraudulent act, Seoul East East District Court 2007Kahap10458, the above contract was revoked as fraudulent act, and the above judgment was finalized to the plaintiff on April 11, 208, and the transfer registration of ownership in the name of the defendant et al. as to the real estate of this case was finalized as it becomes final and conclusive, and ③ the non-party 1 agreed to refund the unjust enrichment obligation owed by the defendant to the defendant of this case as the non-party 1 as the above revocation.

3. Examining the above facts in light of the legal principles as seen earlier, since the above sales contract was cancelled by fraudulent act and the real estate in this case was restored to its original state, Nonparty 1 is deemed to bear an obligation for return of unjust enrichment against the Defendant. Thus, even if Nonparty 1 entered into the loan contract of this case with the Defendant for the repayment of the obligation for return of unjust enrichment and entered into the notarial deed with the intent to consent to compulsory execution thereof, the entire responsibilities of Nonparty 1 did not decrease, and thereby, it is difficult to view Nonparty 1 to have actually transferred responsibilities property to the Defendant. Accordingly, the loan contract of this case cannot be deemed to constitute a fraudulent act.

Nevertheless, the lower court determined that the instant loan agreement constituted a fraudulent act as an act that further deepens Nonparty 1’s insolvent. In so doing, the lower court erred by misapprehending the legal doctrine on the establishment of a fraudulent act.

4. Therefore, without examining the remaining grounds of appeal, the judgment of the court below is reversed, and the case is remanded to the court below for a new trial and determination. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Lee Sang-hoon (Presiding Justice)