In a case where a creditor’s commercial lien has already been established with respect to real estate owned by the debtor, whether the commercial lien holder may oppose the creditor’s commercial lien in relation to the purchaser who acquired the real estate in a voluntary auction procedure based on a prior mortgagee or prior mortgage (negative)

Unlike civil lien, it is not necessary that the secured claim has occurred with respect to the subject matter, but the subject matter of the lien is limited to the “debtor’s ownership” (see Article 58 of the Commercial Act, Article 320(1) of the Civil Act). The purport of limiting the subject matter of the commercial lien to the “subject matter owned by the debtor” is that in the case of the commercial lien, the secured claim does not have the nature of public interest costs for the subject matter by relaxing the relationship between the subject matter and the secured claim. Therefore, the secured claim may be unlimitedly extended to all commercial claims arising between the lien holder and the debtor, and accordingly, it is likely that the secured claim may already infringe on the right secured with respect to the subject matter by a third party, and thus, it is difficult to view that only the subject matter owned by the debtor is established with respect to the subject matter at the time of the establishment of the commercial lien, and therefore, it shall not be deemed that there is a limited real right established after the establishment of the existing limited real right by the debtor against the third party who already acquired the subject matter.

Article 58 of the Commercial Act, Article 320(1) of the Civil Act

Plaintiff 1 (Attorney Kim J-jin, Counsel for the plaintiff-appellant)

Plaintiff 2 (Attorney Kim J-jin, Counsel for the plaintiff-appellant)

Future Savings Bank (Law Firm Daejeon Dong, Attorneys Kim-type et al., Counsel for the plaintiff-appellant)

Daejeon District Court Decision 2010Na2839 Decided June 16, 2010

The part of the lower judgment against Plaintiff 2 is reversed, and that part of the case is remanded to the Daejeon District Court Panel Division. Plaintiff 1’s appeal is dismissed. The costs of appeal by Plaintiff 1 are assessed against the said Plaintiff.

The grounds of appeal are examined.

1. As to the Defendant’s appeal against Plaintiff 2

Unlike civil lien, it is not necessary that the secured claim has occurred with respect to the subject matter, but the subject matter of the lien is limited to the ownership of the debtor (see Article 58 of the Commercial Act and Article 320(1) of the Civil Act). The purport of limiting the subject matter of the commercial lien to the "subject matter owned by the debtor" is that in case of the commercial lien, the secured claim does not have the nature of public interest expenses for the subject matter because the relationship between the subject matter and the secured claim is mitigated, so the secured claim may be unlimitedly extended to all commercial claims arising between the lien holder and the debtor, and accordingly, it is likely that the secured claim may already infringe on the right secured with respect to the subject matter, and thus, it may be deemed that the scope of the establishment of the commercial lien or the right secured with respect to the subject matter is limited to the subject matter owned by the debtor. In other words, the subject matter of the prior lien is established only by the creditor who already acquired the subject matter at the time of the establishment of the secured real right, and therefore, it shall not be deemed that the prior real right is established by the debtor.

According to the reasoning of the judgment below and the evidence duly admitted by the court below, the sales contract was concluded on July 7, 2004 by the plaintiff 2 to purchase the above 115 store from P&D Co., Ltd. (hereinafter "S&D"), and on September 3, 2004, the real estate rental business was registered at the location of that store. The plaintiff 2 paid 136,67,000 won out of the sales price of the above 136,67,00 won and delivered to the plaintiff 2 for use in accordance with the purpose of the sales contract. On the other hand, it was impossible for the defendant 1 to register the sale price of the above 70 billion won to secure debts owed to the defendant on September 7, 2006, and it was difficult for the defendant 2 to register the sale price of the above 10.7 billion won to register the sale price of the above 105 billion won for the above 10.7 billion won loan from the defendant 205 billion won.

In light of the above facts in light of the legal principles as seen earlier, in order to establish the commercial lien claimed by Plaintiff 2 against the shop No. 115, the requirements for the secured debt should be met in addition to the requirements for the possession of the said shop No. 115. In addition, in order to oppose the Defendant who is the mortgagee, the time when the commercial lien was established should be earlier than the time when the right to collateral security was established. However, in order to oppose the Defendant, the right to collateral security against Plaintiff 2 is unable to perform the obligation to transfer the ownership of the said shop No. 115 of F&D, and Plaintiff 2’s claim for the compensatory compensation as alleged by F&D against the Defendant due to the impossibility of the performance of the obligation to transfer the ownership of the above 115 shop, the right to collateral security against the Defendant under the above registration shall be deemed to have been transferred on July 30, 207, and otherwise, there is no other evidence that Plaintiff 2 claimed the right to collateral security against the Defendant in the auction procedure.

Nevertheless, the lower court determined that Plaintiff 2 may oppose the Defendant as commercial lien on the store No. 115 of this case. In so doing, it erred by misapprehending the legal doctrine on the scope of opposition against commercial lien, thereby adversely affecting the conclusion of the judgment. The Defendant’s ground of appeal on this point is with merit.

2. As to the plaintiff 1's appeal

The ground of appeal by the plaintiff 1 is that the court below determined that the above plaintiff's commercial lien was extinguished against the store Nos. 1111 and 112 of this case. The court below erred in the misapprehension of legal principles as to the extinction of commercial lien and the violation of the principle of pleading. This is based on the premise that there is plaintiff 1's commercial lien as to the above 111 and 112, and it can be asserted against the defendant.

However, according to the reasoning of the judgment below and the evidence duly admitted by the court below, the plaintiff 1 entered into a sales contract with F&D to purchase the store of this case 11 and 112 from F&D on July 30, 2004, and completed the registration of real estate rental business on August 18, 2004 by making the location of each of the above stores as the location of each of the above stores. On January 27, 2006, after full payment of the sale price was made, the above store was delivered around August 2006. In addition, the F&D's reputation acquired the above 111 and 112 for securing the defendant's loan obligation, and completed the provisional registration of ownership transfer and the establishment registration of mortgage transfer on the whole store of this case including the above 111 and 112, and completed the above 200 million won loan from the defendant on November 7, 2006, and completed the above 1000,000 won.

In light of the above facts in light of the legal principles as seen earlier, in order to oppose the Defendant as the commercial lien against the stores Nos. 111 and 112 of this case, the establishment date of the lien should be prior to the establishment date of the Defendant’s establishment of the mortgage. However, as the sales contract between the Plaintiff 1 and F&D becomes impossible, and Plaintiff 1’s acquisition of the claim for compensatory damages therefrom is about July 30, 2007 by F&D against the Defendant, which brought a lawsuit claiming the settlement amount against the Defendant, unless there is any other evidence to view otherwise in the record, the said claim for compensatory damages as a commercial lien based on the above compensatory damages cannot be asserted against the prior mortgagee and the Defendant who acquired real estate in the course of voluntary auction based on such claim for compensatory damages.

Therefore, this part of the Plaintiff’s ground of appeal on the premise that Plaintiff 1 may oppose the Defendant as commercial lien on the store Nos. 1111 and 112 of this case is without merit, without any need to further examine.

3. Conclusion

Therefore, without further proceeding to decide on the remaining grounds of appeal by the Defendant, the part concerning Plaintiff 2 among the judgment below is reversed, and that part of the case is remanded to the court below for further proceedings consistent with this Opinion. The appeal by Plaintiff 1 is dismissed, and the costs of appeal as to the dismissal of appeal are assessed against Plaintiff 1, the losing party. It is so decided as per Disposition by the assent of all participating Justices

Justices Kim Chang-suk (Presiding Justice)