[1] The case affirming the judgment of the court below which held that the right of subrogation of the subordinate mortgagee pursuant to the latter part of Article 368 (2) of the Civil Code is only recognized as a case where the senior mortgagee actually received the repayment of the secured debt in the auction price, but the subordinate mortgagee has the expectation interest that the senior mortgagee may subrogate the other joint mortgagee in case where the auction is executed by the senior joint mortgagee even before the senior joint mortgagee receives the repayment and the repayment is made by the senior joint mortgagee, and that the expectation interest of the subordinate mortgagee should be protected

[2] Whether the secured debt within the scope of liability is all extinguished solely on the basis that the aggregate amount of the principal and interest for arrears distributed to the mortgagee exceeds the maximum debt amount resulting from the auction conducted by dividing part of the real estate, in order, the object of the joint collateral security was partially extinguished (negative)

[1] Article 368 of the Civil Code / [2] Article 357 of the Civil Code

Moo Bank Co., Ltd. (Law Firm National Law Firm, Attorneys Kim Hong-seok et al., Counsel for the plaintiff-appellant)

Defendant Co., Ltd. (Law Firm Mail, Attorneys Gi-science et al., Counsel for the defendant-appellant)

Supreme Court Decision 2006Da61925 Decided December 27, 2007

Seoul High Court Decision 2008Na6566 decided September 11, 2008

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

The grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed).

1. On the first ground for appeal

In the case of so-called simultaneous dividends, which sell all immovable property which is the object of joint mortgages and distribute the proceeds of the auction at the same time, the sharing of claims is determined in proportion to the proceeds of the auction, and in the case of so-called temporary dividends which sell only part of them by auction and distribute the proceeds of the auction in preference to the proceeds of the auction, the joint mortgagee may be paid all the claims out of the proceeds of the auction (Article 368(1) and (2) of the Civil Act). However, in the case of the above temporary dividends, the Civil Act stipulates that if other immovable property was distributed at the same time to protect the subordinated mortgagee, the junior mortgagee may exercise the mortgage by subrogation of the joint mortgagee to the extent of the amount of the joint mortgagee's

The court below stated that the right of subrogation of a junior mortgagee is recognized only when the senior mortgagee actually received the repayment of the secured debt from the auction price, but it is reasonable to view that the junior mortgagee has the expectation interest that the senior mortgagee would be subrogated to the other joint mortgagee if the auction is held even before the repayment is made by the senior mortgagee and the repayment is made by the senior mortgagee, and that the expectation interest of the subordinate mortgagee should be protected. In this context, the court below stated that the subordinate mortgagee is entitled to exercise the right of subrogation of the mortgagee if the real estate is sold by auction, and therefore, the status of the senior mortgagee should be legally protected pursuant to the above Civil Act, and it does not mean that such a right should be legally protected, and it does not mean that there is no special type of real right such as the expectation interest of the succeeding mortgagee, and there is no error of law by misunderstanding legal principles.

Therefore, we cannot accept this part of the ground of appeal that the court below's recognition of the above expectation interest violates the legal principle of real right.

2. On the second ground for appeal

The Defendant asserts that, at the auction of other joint collateral-backed objects already implemented by the Plaintiff, the secured debt secured by the instant real estate was already extinguished and thus did not incur any damage to the Plaintiff, since the Defendant was apportioned a total of KRW 3,676,638,080, which exceeds the maximum debt amount of the joint collateral-backed claims.

However, interest in arrears, among the claims secured by the right to collateral security, is guaranteed within the scope of the maximum debt amount of the right to collateral security. Thus, even if an auction was conducted for part of the immovable property, and the proceeds of the auction were to be paid in return for the repayment of part of the secured debt, if interest in arrears for the remaining principal were to be incurred again, the interest in arrears shall also be paid in advance to the principal within the extent of the maximum debt amount. Thus, even if the sum of the principal and interest in arrears apportioned to the mortgagee as a result of the execution of the auction by dividing part of the immovable property, exceeds the amount set forth as the maximum debt amount, it cannot be deemed that all the secured debt within the scope of the liability limit expires

This part of the grounds of appeal cannot be accepted.

3. Conclusion

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.

Justices Jeon Soo-ahn (Presiding Justice)