[1] Whether an auction under a lien under Article 322(1) of the Civil Act is implemented under the conditions of statutory sale to extinguish the burden on the real estate subject to the lien (affirmative), and whether the lien holder’s distribution order (i.e., the same order as the general creditor), and whether the executing court may determine that the purchaser of the real estate subject to the lien may take over the burden on the real estate subject to the sale through a change in the

[2] In an auction under a lien, whether the executing court shall state the fact that the purchaser takes over the target real estate without extinguishing the burden on the target real estate in the public notice of the date of sale or the specification of the sold goods (negative in principle)

[3] In a case where the court of execution rejected the sale on the grounds that there was a serious fault that the purchaser did not notify to the applicant for purchase as to the existence of the burden to be taken over in the auction procedure under the lien, and the court below maintained it as it is, the case holding that the judgment of the court of execution which rejected the sale on the premise that the auction under the lien takes place as the principle of acceptance is erroneous in the misapprehension of legal principles as to the auction under

[1] Articles 91(2), 91(3), and 268 of the Civil Execution Act provide for the principle of extinction in the compulsory auction for most of the auction and the auction for exercising a security right, and on this premise, detailed provisions are provided for the completion period of demand for distribution, notification of claims, peremptory notice, demand for distribution, distribution procedure, etc. under the premise. Article 322(1) of the Civil Act provides that "the lien holder may sell the seized objects to obtain satisfaction of claims." On the other hand, an auction under the lien provides an auction for realizing and satisfaction of claims under the premise that the creditor and debtor exist, and on the other hand, an auction for examining and determining the existence and content of the above secured real estate as seen necessary when acquiring the lien does not have any provision concerning the procedure for examining and determining the existence of the above shares, and there is no provision restricting the scope of the acquired shares, and thus, if the auction under the lien takes place in principle, the legal status of the purchaser becomes very unstable, and how to establish the scope of the acquisition burden, as well as the above general creditor’s right to demand for sale can be determined by auction.

[2] As long as an auction under a lien is conducted with the principle of extinction, the burden on the subject real estate is extinguished, such as a compulsory auction or an auction for exercising a security right, so long as the execution court does not extinguish the burden on the subject real estate and does not require the buyer to take over it by modification of sale conditions differently, it is unnecessary for the execution court to enter the purport that the buyer will take over the subject real estate without extinguishing the burden on the subject real estate in the public notice of the sale date or the statement of sale

[3] In a case where the court of execution did not state the fact that the real estate for the purpose of sale is acquired by the purchaser without extinguishing any obligation such as the limited real right established above even if the real estate is sold in the auction procedure under the lien while public notice of the sale date and preparing a detailed statement of the sale object, and the court of execution rejected the sale for the reason that there was a serious fault that the purchaser did not notify the applicant, etc. of the existence of the burden to be taken over by the purchaser in the auction procedure, and the court below maintained it as it is, the case holding that the court of execution erred in the misapprehension of legal principles as to the auction under the lien, even if the court of execution did not make a modified decision to allow the purchaser to take over the real estate for the reason that the above obligation of the target real estate is not extinguished and that the auction under the lien should be notified to the applicant, etc. as stated in the public notice of sale date or the detailed statement of the sale object

[1] Articles 91(2) and (3), 111, 268, and 274(1) of the Civil Execution Act; Article 322(1) of the Civil Act / [2] Articles 91(2) and (3), 104(1), 105, 106, 111, 268, and 274(1) of the Civil Execution Act; Article 322(1) of the Civil Act / [3] Articles 91(2) and (3), 104(1), 105, 106, 111, 121(7), 123(2), 268, and 274(1) of the Civil Act; Article 322(1) of the Civil Act

[1] Supreme Court Decision 2006Da37908 decided Oct. 29, 2009 (Gong2009Ha, 1963)

JD Construction Co., Ltd. (Law Firm Barun, Attorneys Yoon-Gyeong et al., Counsel for the plaintiff-appellant)

Daegu Industrial Co., Ltd. (LLC, Kim & Lee LLC, Attorneys Bailment-sik et al., Counsel for the defendant-appellant)

Seoul Western District Court Order 2010Ra66 dated June 14, 2010

The order of the court below is reversed, and the case is remanded to the Seoul Western District Court Panel Division.

The grounds of reappeal are examined (to the extent of supplement in case of supplement in the grounds of reappeal).

1. Article 274(1) of the Civil Execution Act provides that “An auction under a lien and an auction under the conditions as prescribed by the Civil Act, the Commercial Act, and other Acts shall be held in accordance with the example of an auction to exercise a security right.” Thus, in an auction under a lien held pursuant to Article 322(1) of the Civil Act, whether a purchaser shall take the principle of extinction to extinguish the burden on the target real estate so that he/she acquires a complete ownership, or whether a purchaser shall take the so-called acquisition principle to take the burden on the target real estate, or not, shall be determined by taking into account the purpose and purpose of the auction, the purport and nature of the substantive law based on which the auction is conducted, the interests of creditors, debtors, owners, and buyers, etc. surrounding the auction (see Supreme Court Decision 2006Da37908, Oct. 29, 2009).

Articles 91(2), 91(3), and 268 of the Civil Execution Act provide the principle of extinguishment in the compulsory auction and the auction for the exercise of a security right. In addition, the principle of extinguishment is not only prescribed in Articles 91(2), 91(3), and 268 of the Civil Execution Act, but also provides for the decision of the completion period to demand a distribution, the peremptory notice to report a claim, the demand for distribution, and the distribution procedure, etc. on this premise. Article 322(1) of the Civil Act provides that "the lien holder may sell the seized objects to obtain satisfaction of claims." On the other hand, an auction under the lien provides an auction for the realization and satisfaction of claims under the premise of the existence of creditors and debtors. On the other hand, if the acquisition principle is taken, there is no provision on the procedure for examining and determining the existence and contents of the above shares of the lien and there is no provision on the scope of the acquired shares, so that the above legal status of the purchaser becomes very unstable, and it is more unfavorable to the above general creditor to exercise the right to demand a distribution.

In addition, as long as an auction under the lien is conducted with the principle of extinction, the burden on the real estate above the target real estate is extinguished as in the case of a compulsory auction or auction to exercise the security right, as long as the execution court does not extinguish the burden on the target real estate through a different change of sale conditions and does not require the buyer to take over the target real estate, it is not necessary for the execution court to enter the purport that the buyer will take over the target real estate without extinguishing the burden on the subject real estate in the public notice of

2. According to the reasoning of the order of the court below and the record, the execution court publicly announced each sale date around May 25, 2009 and October 12, 2009, and the purport of the above public announcement is not included in the purport that the purchaser will take over each real estate of this case without extinguishing the burden, such as the limited real right, etc. on each real estate of this case. The execution court prepared a detailed statement of the sale articles concerning each real estate of this case and stated the "the possessor of each real estate of this case, the title of possession, and the period of possession" as the tenant of the store, and entered the non-party 1, 2, and 3 as the tenant of the store in the column where "the non-party 1, 2, and 3 as the claimant of the right of retention," and stated the "non-party 1, 2, 3 as the creditor of the right of retention and the creditor of each real estate of this case." In the above public auction procedure, even if each of the real estate of this case was sold at each of this case, it did not know that the purchaser did not know that it.

In light of the aforementioned legal principles and facts, in the auction procedure of this case under the lien, insofar as the court of execution did not make a determination on whether to allow the purchaser to take over the real estate of this case without extinguishing the burden on each of the real estate of this case, the court of execution does not have to notify the applicant for purchase of such purport in the auction procedure of this case by publicly announcing the date of sale or entering the sale specification

Nevertheless, the court below maintained the judgment of the court of execution which rejected the sale of this case on the premise that the auction of this case under the lien is in progress as the acquisition principle, and there is an error of law by misunderstanding the legal principles on auction under the lien, which affected the conclusion of the judgment.

3. Therefore, the order 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 Min Il-young (Presiding Justice)