Whether the claim can be viewed as "claim secured by a pledge related to attached property" under Article 81 subparagraph 3 of the National Tax Collection Act in the case of a pledge of claim which fails to meet the requirements for setting up against a third party (negative)

Article 80(1), Article 81(1), and Article 81(3) of the National Tax Collection Act regarding liquidation performed as one of the procedures for disposition on default, including the legislative intent that only the secured party who can easily determine the existence, amount, and effect of the claim, and the execution agency of the procedure for disposition on default, as well as the legislative intent that provides for the obligation to distribute only to the secured party. Unlike the right of lease on a deposit basis, mortgage, movable property, or pledge, a claim pledge regarding a nominative claim, unlike the requirements for establishment of pledge, can be set up against a third party, including the third party obligor, unless the requirements for counterclaim as prescribed by Article 349 of the Civil Act are satisfied. A claim pledgee who fails to meet the requirements for counterclaim against a third party under the Civil Act, is in the same position as the general obligee in civil execution procedure. If it is recognized that a claim pledgee who fails to meet the requirements for counterclaim in the procedure for disposition on default under the National Tax Collection Act is in accord with equity and the purport of the National Tax Collection Act provisions, and if it cannot be viewed as a claim attachment against a third party.

Articles 80(1), 81(1) and (3) of the National Tax Collection Act

Co., Ltd. (Law Firm Seosung, Attorneys Lee Jae-do et al., Counsel for the plaintiff-appellant)

Korea Asset Management Corporation

Seoul High Court Decision 2008Nu37093 decided September 11, 2009

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

The grounds of appeal are also examined.

1. Articles 80(1) and 81(1) of the National Tax Collection Act related to liquidation conducted as part of the procedure for disposition on default under the National Tax Collection Act provide that the money received from a delinquent taxpayer or a third party obligor due to the seizure of bonds, securities, intangible property rights, etc., and the deposit interest in the sale price thereof shall be allocated to the following national taxes, additional dues, disposition fees for arrears, and other claims: “national taxes, additional dues, disposition fees for arrears, local taxes, or public charges related to the seizure” under subparagraph 1; “national taxes, additional dues, disposition fees for arrears, local taxes, or public charges related to the seizure” under subparagraph 2; and “bonds secured by the right of lease on a deposit basis, pledge, or mortgage related to the attached property” under subparagraph 3 of Article 81(3) of the National Tax Collection Act. Meanwhile, Article 81(3) of the National Tax Collection Act provides that if there is any balance in money distributed pursuant to

Unlike lease on a deposit basis, mortgage, or pledge on movable property, unlike the content and form of each provision of the National Tax Collection Act, and the legislative purport that the enforcement agency of the procedure for disposition on default only provides for the duty of allocation for the secured party who can easily determine the existence, amount, and validity of the claim. Unlike the right of lease on a deposit basis, mortgage, or pledge on movable property, a claim pledge on a nominative claim may be set up against a third party, including a third party obligor, only if it meets the requisite for setting up a requisite for setting up a pledge under Article 349 of the Civil Act, in addition to the agreement of pledge, and a claim pledgee who fails to meet the requisite for setting up against a third party under the Civil Act is not entitled to preferential repayment to a third party. As such, if a claim pledgee who fails to meet the requirements for setting up against a third party under the Civil Act is recognized as having the same status as that of general creditors in the civil execution procedure, it is unreasonable to interpret the right to preferential allocation to a pledgee who fails to meet the requirements for setting up against a third party as a pledge under the National Tax Collection Act.

2. According to the reasoning of the lower judgment and the reasoning of the first instance judgment partially admitted by the lower court, the lower court acknowledged the facts as indicated in its reasoning after comprehensively taking account of the adopted evidence, and determined that the instant pledge against the Plaintiff 00 U.S. P. did not meet the requirements for setting up against a third party, such as notification or consent to the third party obligor by a certificate with a fixed date, and thus, did not constitute an object of distribution of the proceeds

In light of the above legal principles and records, such fact-finding and determination by the court below are justifiable. Contrary to the allegations in the grounds of appeal, there are no errors in the misapprehension of legal principles as to Article 81 of the National Tax Collection Act, failure to exhaust all necessary deliberations, thereby violating logical and empirical rules and violating the principle of free evaluation of evidence

3. 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 Min Il-young (Presiding Justice)