The Korea Development Bank of Korea (Law Firm Apana, Attorneys Lee Ho-ho et al., Counsel for the plaintiff-appellant)

Defendant

November 6, 2014

1. The plaintiff's claim is dismissed.

2. The costs of lawsuit shall be borne by the Plaintiff.

The defendant shall implement the procedure for registration of cancellation of ownership transfer registration completed on March 31, 2014 with the receipt of No. 19580 as to the real estate stated in the attached list to the plaintiff.

1. Basic facts

A. The Plaintiff is a social welfare foundation established in accordance with the procedures prescribed by the Social Welfare Services Act.

B. On September 8, 2004, the Plaintiff completed the registration of ownership transfer on the land listed in the [Attachment List No. 1 (hereinafter “instant land”). On September 2, 2004, the Plaintiff borrowed money from the Bank of Korea (hereinafter “Korea Bank”) and completed the registration of ownership transfer on the ground of donation on September 2, 2004. After that, on August 11, 2005, the Plaintiff completed the registration of ownership transfer on the land with respect to the land listed in the annexed List No. 1 (hereinafter “instant land”). On August 12, 2005, the Plaintiff completed the registration of the establishment of a mortgage on each of the instant real property with respect to the registration of the establishment of a mortgage amount of KRW 139,200,000 on the same date, and completed on August 16, 2005, the registration of the modification of the maximum debt amount of KRW 150,800,000 on each of the instant real property due to the contract to modify the right.

C. On September 6, 2006, the Plaintiff completed the registration of preservation of ownership of the building listed in attached Table 2 (hereinafter “instant building”) on the instant land. On March 3, 2010, the Plaintiff entered into a mortgage agreement with our bank to add the instant building to the Plaintiff as a security for the foregoing loan obligation, and on the same day, the Plaintiff completed the registration of establishment of a mortgage over the maximum debt amount of KRW 150,800,000 for the instant building based on the said additional contract.

D. On July 4, 2013, a limited liability company specializing in the re-backed securitization acquired loans, claims, etc. against the Plaintiff of a bank pursuant to the Asset-Backed Securitization Act. On July 4, 2013, upon filing an application for voluntary auction of the instant land and buildings with the court No. 17001, Jul. 5, 2013, a voluntary auction decision was rendered on July 2013.

E. On February 11, 2014, the Defendant participated in the above voluntary auction procedure and received the decision to permit sale of the instant land and buildings, and completed the registration of ownership transfer on March 31, 2014.

[Ground for Recognition: Facts without dispute, Gap evidence 1, Eul evidence 2, purport of whole pleadings]

2. The plaintiff's assertion and judgment

A. The plaintiff's assertion

1) The instant land and buildings are the Plaintiff’s fundamental property, which is a social welfare foundation, and where a social welfare foundation sells fundamental property, it is subject to the approval of the Minister of Health and Welfare pursuant to the relevant statutes, and the same applies to the sale through the auction procedure. Since the auction procedure was conducted without the approval of the Minister of Health and Welfare with respect to the instant land and buildings, the said decision to commence

2) Although the Mayor of Seoul Special Metropolitan City has permitted the creation of a mortgage on the instant land and buildings, there was no ground provision that the provisions on delegation and entrustment of administrative authority at the time may delegate the authority of the Minister of Health and Welfare on the above approval to the Mayor of Seoul Special Metropolitan City, so the said mortgage is null and void without approval of the Minister of Health

3) Even if the permission of the Mayor of Seoul Special Metropolitan City on domestic affairs is valid, the permission of the Minister of Health and Welfare is separately required to sell the instant land and buildings in the auction procedure. Since the auction procedure was conducted without the approval of the Minister of Health and Welfare, the above decision on commencing auction and the transfer of ownership in

B. Determination

1) A social welfare foundation shall obtain permission from the competent authority to sell its fundamental property, and the same applies to sale by auction (see Supreme Court Order 2005Ma1193, Jun. 18, 2007). However, in cases where the competent authority grants permission to sell the fundamental property of a social welfare foundation at the time of offering the collateral, the permission from the competent authority cannot be deemed necessary again when the sale by auction is conducted (see Supreme Court Order 65Ma166, Feb. 8, 1966; Supreme Court Order 93Da2094, Jul. 16, 193, etc.).

2) Article 23 (3) 1 of the former Social Welfare Services Act (amended by Act No. 1097 of Aug. 4, 201) provides that "a corporation shall obtain permission from the Minister of Health and Welfare when it intends to sell, donate, exchange, provide security, or change its use with respect to its basic property." Article 52 (1) of the same Act provides that "the Minister of Health and Welfare or the Mayor/Do Governor may delegate part of his/her authority under this Act to the Mayor/Do Governor or the head of a Si/Gun/Gu as prescribed by the Presidential Decree." Article 25 (1) 7 of the Enforcement Decree of the same Act (amended by Presidential Decree No. 24020 of Aug. 3, 2012) provides that "the head of the Si/Gun/Gu who has jurisdiction over the location of the office of the Seoul Special Metropolitan City and the head of the Si/Gun/Gu who has jurisdiction over the location of its basic property after obtaining permission for the sale of the above basic property as security."

3) Around February 25, 2010, the Seoul Special Metropolitan City Mayor permitted the disposition of fundamental property concerning the provision of the instant land and buildings as security as seen earlier. Article 36 of the former Regulations on Delegation and Entrustment of Administrative Authority (amended by Presidential Decree No. 22075, Mar. 19, 2010) does not delegate the authority to approve the transfer, exchange, lease, and provision of security to a corporation subsidized under the Social Welfare Services Act to the Special Metropolitan City Mayor, etc. The provisions on delegation and entrustment of administrative authority are amended on February 18, 2014 (Presidential Decree No. 25187, Feb. 18, 2014). However, as long as the Seoul Special Metropolitan City Mayor delegated the disposition of fundamental property by the Minister of Health and Welfare under the Act and subordinate statutes at the time of delegation and entrustment of fundamental property, the Minister of Health and Welfare has no reason to delegate the above disposition of fundamental property to the Special Metropolitan City Mayor, etc., regardless of whether the above disposition of fundamental property is legitimate and reasonable.

3. Conclusion

Therefore, the plaintiff's claim is dismissed as it is without merit. It is so decided as per Disposition.

[Attachment List omitted]

Judges Kim Tae-ok