[1] Whether the mortgage has an effect on the rent claim, etc. on the mortgaged property of the mortgagee after the seizure of the mortgaged property (affirmative), and the method of executing the mortgage on the rent claim, etc. which has an effect on the mortgage (affirmative)

[2] The legal nature of the real estate lease deposit and whether the amount equivalent to the secured debt is naturally deducted from the deposit without any separate declaration of intent when the object is returned after the termination of the lease relationship (affirmative in principle)

[3] Where the lease contract on the mortgaged real estate for which the deposit was received has been terminated by auction on the mortgaged real estate, and where the mortgagee fails to separately execute the mortgage on the rent claim, etc., whether the overdue rent, etc. is naturally deducted from the deposit (affirmative), and where the mortgagee separately executes the mortgage on the rent claim, etc., whether the remaining rent claim, etc. are naturally deducted from the deposit due to the lessee's failure to pay or deposit the rent claim in the procedure for the execution of the claim (affirmative)

[1] The first sentence of Article 359 of the Civil Code provides that "a mortgage shall be effective only against the fruits which the mortgager has received or can obtain from the mortgaged real estate after the seizure of the mortgaged real estate." The above provision provides that "the fruits include not only natural fruits but also legal fruits." Thus, if there is a seizure of the mortgaged real estate, the mortgage shall also have the effect on the rent claim, etc. for the mortgaged real estate of the mortgager after the seizure.

However, in the auction procedure for the mortgaged real estate, there is no system that can collect the rent claims, etc. on the mortgaged real estate or sell them together with the mortgaged real estate. Therefore, the execution of mortgage on the rent claims, etc. on the effect of the mortgage cannot be made by the auction procedure for the mortgaged real estate. The execution of mortgage can only be made separately from the auction procedure for the mortgaged real estate by means of bond execution under Article 273 of the Civil Execution Act, which provides for the exercise of security right on claims during the existence of the effect of the mortgage.

[2] The security deposit received from the lease of real estate provides a lessee with a security for all the obligations of the lessee due to the lease, such as rent, damage liability due to the loss, damage, etc. of the object, and the amount equivalent to such secured obligation shall be naturally deducted from the security deposit without any separate declaration of intention, unless special circumstances exist to the return of the object after the termination

[3] The lease contract on the mortgaged real estate for which the deposit was received was terminated by the auction on the mortgaged real estate. If the mortgagee fails to separately execute the mortgage on the mortgaged real estate by the method of credit execution pursuant to Article 273 of the Civil Execution Act, regardless of the before and after seizure on the mortgaged real estate, the amount equivalent to the rent, etc. overdue by the lessee shall be naturally deducted from the deposit to be distributed by the lessee, and even if the mortgagee separately executes the mortgage on the rent claim, etc. by the above method, even if the mortgagee separately executes the mortgage by the above method, the amount equivalent to the remaining rent claim, etc. shall be naturally deducted from the deposit to be distributed by the lessee.

[1] Article 359 of the Civil Act, Article 273 of the Civil Execution Act / [2] Article 618 of the Civil Act / [3] Articles 359 and 618 of the Civil Act, Article 273 of the Civil Execution Act

[2] [3] Supreme Court Decision 2004Da5654, 56561, 56578, 5658, 5655, 5692, 5608, 5615, 5622, 56639, 5646, 5653, 56660 decided December 23, 2004 (Gong2005Sang, 187), Supreme Court Decision 2013Da725 Decided March 26, 2015 (Gong2015Sang, 619) / [2] Supreme Court Decision 99Da50729 decided December 7, 199 (Gong200, 147)

United Nations Es.S. Specialized Co., Ltd. (Law Firm Han-gu, Attorneys Kim Jong-min et al., Counsel for the plaintiff-appellant)

Defendant

Suwon District Court Decision 2014Na40302 decided July 2, 2015

The appeal is dismissed. The costs of appeal are assessed against the defendant.

The grounds of appeal are examined.

1. The first sentence of Article 359 of the Civil Act provides that "a mortgage shall be effective against the fruits which the mortgager has obtained or can obtain from the mortgaged real property after the seizure thereof." Since the above provision provides that "the fruits shall include not only natural fruits but also legal fruits." Thus, if there is a seizure on mortgaged real property, the mortgage shall also have effect on the rent claim, etc. for the mortgaged real property of the mortgager after the seizure thereof.

However, in the auction procedure for the mortgaged real estate, there is no system that can collect the rent claims, etc. on the mortgaged real estate or sell them together with the mortgaged real estate. Therefore, the execution of mortgage on the rent claims, etc. on the effect of the mortgage cannot be made by the auction procedure for the mortgaged real estate, and the execution of such mortgage can only be made separately from the auction procedure for the mortgaged real estate by means of bond execution under Article 273 of the Civil Execution Act, which provides for the exercise of security right on claims during the existence of the effect of the mortgage.

Meanwhile, the security deposit received from the lease of real estate guarantees all the lessee’s obligations arising from the lease, such as rent obligations, liability for damages arising from the loss of, damage to, etc., and the amount equivalent to such secured obligation is naturally deducted from the security deposit without any separate declaration of intention unless special circumstances exist when the object is returned after the termination of the lease relationship (see, e.g., Supreme Court Decision 9Da50729, Dec. 7, 199).

Therefore, the lease contract on the mortgaged real estate on which the deposit was received was concluded as an auction on the mortgaged real estate. In the event that the mortgagee fails to separately execute the mortgage by way of the execution of the claim pursuant to Article 273 of the Civil Execution Act, the amount equivalent to the rent, etc. in arrears, etc., which the lessee is still deducted from the deposit to be distributed to the lessee, regardless of whether it was before or after the seizure on the mortgaged real estate, as well as in the case where the mortgagee separately executes the mortgage by the above method, even in the case where the mortgagee separately executes the mortgage on the rent, etc., the amount equivalent to the remaining rent, etc., if the lessee did not actually pay or deposit the rent, etc. in the course of execution of the claim, is naturally deducted from the deposit to be apportioned by the lessee (see, e.g., Supreme Court Decisions 2004Da5654, Dec. 23, 2004; 2013Da725, Mar. 26, 201

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

A. On January 16, 2009, the Industrial Bank of Korea completed the registration of creation of a neighboring mortgage of KRW 950,400,000 on the maximum debt amount with respect to Overcheon-si ( Address omitted) owned by the Nonparty, ○○○○○○○ 329 Dong 803 (hereinafter “instant apartment”).

B. On May 7, 2011, the Defendant: (a) leased the instant apartment from the Nonparty with the lease deposit of KRW 50,000,000; (b) monthly rent of KRW 3,300,000; and (c) paid only the rent from June 30, 201 to June 29, 201; and (b) continued to reside in the instant apartment without having paid only the rent from May 29, 201.

C. On November 15, 2012, the Industrial Bank of Korea applied for a voluntary auction on the instant apartment, and issued a ruling to commence auction on November 16, 2012, and registered the entries thereof. Since then, the Plaintiff acquired the right to collateral security from the Industrial Bank of Korea and was transferred the said right to collateral security.

D. In the above auction procedure, when the apartment house of this case was sold and the price was paid on December 12, 2013, the auction court prepared a distribution schedule with the content that “The court distributes KRW 20,000,000 to the Defendant, who is the lessee of small claims, and distributes KRW 83,077,552 to the Plaintiff, who is the mortgagee,” etc.

E. On January 20, 2014, the Plaintiff raised an objection against the entire amount of dividends to the Defendant on the date of distribution, and filed a lawsuit of demurrer against distribution on January 27, 2014.

F. Meanwhile, the Industrial Bank of Korea or the Plaintiff did not effect mortgage against the Defendant of the Nonparty separately by way of credit execution under Article 273 of the Civil Execution Act, as to the claim for rent or claim for return of unjust enrichment equivalent to rent after the registration of the said decision on commencement of auction was entered.

3. Examining these facts in light of the legal principles as seen earlier, regardless of whether the Defendant was before or after the registration of the entry in the order to commence the auction, the total amount of rent or unjust enrichment equivalent to the rent from May 30, 2012, to the time before the sale price was paid at the above auction procedure, is naturally deducted from the lease deposit to be distributed to the Defendant. Since the total sum exceeds KRW 50,000,000, there is no lease deposit to be distributed to the Defendant.

Therefore, the judgment of the court below with the same conclusion is just, and contrary to the allegations in the grounds of appeal, there were no errors by misapprehending the legal principles on the deduction of rent in the auction procedure for prohibited bonds or mortgaged real estate, or by failing to exhaust all necessary deliberations.

4. 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 Park Sang-ok (Presiding Justice)