The appeal is dismissed.

The costs of appeal are assessed against the defendant.

The grounds of appeal are examined.

1. In the case of a contract for construction work on a real estate, ownership of an object completed by the contractor’s effort and withdrawal is, in principle, attributed to the contractor, but the contractor is determined differently by a special agreement between the contractor and the contractor, or if there are other special circumstances, the contractor shall acquire it at the original time. In such a case, Article 66 of the Civil Act provides that the contractor may be paid the construction price preferentially from the object by granting the contractor a right to claim

(See Supreme Court Decision 2007Da78616, 78623 Decided March 27, 2008). In light of the foregoing, in a case where a contractor’s contract for new construction works completed a building with his/her own effort and ex officio and the ownership thereof belongs to the contractor, a subcontractor who has been awarded a contract for new construction works from the contractor shall also have the right to demand mortgage (hereinafter “right to demand mortgage”) under Article 666 of the Civil Act against the contractor.

Meanwhile, pursuant to Article 163 subparag. 3 of the Civil Act, a claim for the construction price of a contracted construction work is subject to a short-term extinctive prescription of three years, and a claim incidental to the construction work is also the same (see, e.g., Supreme Court Decision 2008Da41451, Nov. 12, 2009). The claim for mortgage is a claim seeking the implementation of the procedures for establishing a mortgage in order to secure a claim for the construction cost, and thus, it constitutes a claim incidental to the construction work, and thus,

In the new construction work of a building, a subcontractor's right to demand mortgage is established when the contractor acquires the ownership of the building, and the right can be exercised from that time unless there are special circumstances. However, the subject of ownership of a building is determined according to the terms of the contract entered into between the subcontractor and the contractor without the involvement of the subcontractor.