In determining the debtor's insolvency as a requirement for subrogation, whether the real estate for which provisional registration for preserving the right to claim ownership transfer has been completed in the name of a third party should be excluded from the active property (affirmative in principle)

In a case where the obligee’s right to the obligor to be preserved by subrogation is a monetary claim in the event that the obligee’s right to the obligor is a monetary claim, that is, the obligee may exercise the obligee’s right to the third obligor by subrogation of the obligor only when the obligor is insolvent. Thus, the obligee’s insolvency as a requirement for subrogation of the obligee means that the obligor does not have the obligor’s ability to perform, and in a case where it is not possible to expect voluntary repayment, the repayment through compulsory execution should be taken into account. Therefore, the existence of the obligor’s ability to perform should be considered. Therefore, in a case where a provisional registration for the preservation of the right to claim transfer of ownership has already been completed in the name of a third party in the name of the obligor’s active property, it is practically impossible to perform the obligation through compulsory execution. Thus, barring any special circumstance such as the provisional registration is possible as a provisional registration for security as prescribed by the Act on Provisional Registration, etc., the said real property should be excluded

Article 404 of the Civil Act

Supreme Court Decision 93Da28867 delivered on October 8, 1993 (Gong1993Ha, 3050) Supreme Court Decision 2004Da2564 Delivered on February 10, 2006 (Gong2006Sang, 411)

Korea

Defendant

Seoul Central District Court Decision 2008Na3656 Decided September 23, 2008

The judgment below is reversed, and the case is remanded to Seoul Central District Court Panel Division.

The grounds of appeal are examined.

In a case where a creditor's right to a debtor to be preserved by subrogation in subrogation of a debtor is a monetary claim, that is, the need to preserve the creditor's right to a third party debtor on behalf of the debtor only when the debtor is insolvent (see Supreme Court Decision 93Da28867, Oct. 8, 1993, etc.). Thus, in a case where a debtor's active property has already been preserved in the name of a third party, provisional registration is practically impossible, and where a creditor's insolvency as a requirement for subrogation cannot be expected, repayment through compulsory execution should be considered. In particular, in a case where a creditor's repayment cannot be expected, the repayment through compulsory execution should be considered. Thus, it should be an important factor to determine whether a creditor has the ability to pay (negative) or not, and whether a debtor's active property or a property that can meet the above purpose should be considered as having the ability to pay (see Supreme Court Decision 2004Da2564, Feb. 10, 2006).

According to the records, the non-party is liable to pay taxes of KRW 63,769,880 to the plaintiff as of October 8, 2007, and the plaintiff completed the attachment registration on each of the real estate of this case on August 14, 2002. However, the non-party already entered into a promise to sell and purchase each of the real estate of this case with the defendant, who is its wife, and completed the registration of the right to claim ownership transfer on February 21, 2000. The non-party owns seven parcels of real estate other than the real estate of this case, and the total officially announced value of all the real estate owned by the non-party reaches KRW 84,004,860, only if the total amount of the real estate owned by the non-party reaches KRW 84,00,860, the provisional registration of the right to claim ownership transfer in his relative name is

According to the reasoning of the judgment below, since the pre-sale agreement between the non-party and the defendant regarding each of the instant real estate is null and void as the pre-sale agreement between the non-party and the defendant is invalid, the plaintiff's claim that the plaintiff seeks the cancellation of each of the above provisional registration by subrogation of the non-party is dismissed. The court below rejected the plaintiff's claim on the ground that the non-party's claim on behalf of the non-party cannot claim cancellation of provisional registration on behalf of the non-party, on the ground that there is no evidence to recognize that the non-party is insolvent.

However, in light of the above legal principles and records, each real estate owned by the non-party has been registered provisionally, and the existence of special circumstances such as that the above provisional registration constitutes a provisional registration for security, unless proved by the defendant on the part of the defendant, shall be excluded from calculating the non-party's active property. Nevertheless, the court below, which included all real estate, the provisional registration of which has been made in determining the non-party's insolvency, is erroneous in the misunderstanding of legal principles as to insolvency, which is a requirement for exercise of creditor's right of subrogation, which affected the conclusion of the judgment.

Therefore, 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 Yang Chang-soo (Presiding Justice)