Plaintiff 1 and one other (Attorney Seo-hee et al., Counsel for the plaintiff-appellant)

Gayang 2-dong community credit cooperatives (Attorneys Shin Young-chul et al., Counsel for the defendant-appellant)

April 6, 2006

Daejeon District Court Decision 2004Gahap10446 Delivered on May 26, 2005

1. Revocation of a judgment of the first instance;

2. The Defendant-Counterclaim Plaintiff (Counterclaim Defendant) performed the procedure for cancelling the registration of cancellation of the right to lease on a deposit basis, which was completed by the Daejeon District Court No. 20677, Feb. 21, 2003, with respect to the building indicated in the attached list against the Plaintiff (Counterclaim Defendant).

3. It is confirmed that Daejeon District Court 2004TTTT 2443 did not exist the debt collection amount of the Plaintiff (Counterclaim Defendant) to the Defendant (Counterclaim Plaintiff) based on the seizure and collection order.

4. The defendant-Counterclaim plaintiff's counterclaim filed in the trial is dismissed.

5. The total costs of the lawsuit are assessed against the Defendant (Counterclaim Plaintiff) by aggregating the principal lawsuit and the counterclaim.

1. Purport of the principal lawsuit and purport of appeal

It is identical to paragraphs (1) through (3) of this Article.

2. Claim for a counterclaim

The Plaintiff (Counterclaim Defendant; hereinafter “Plaintiff”) jointly and severally pays to the Defendant (Counterclaim Plaintiff; hereinafter “Defendant”) an amount equivalent to KRW 72,278,610 and KRW 70,000,00 per annum from the delivery date of the duplicate of the counterclaim to the day of full payment (the Defendant filed a counterclaim for the first time).

A principal lawsuit and a counterclaim shall be deemed simultaneously.

1. Basic facts

On April 2, 200, Plaintiff 1 entered into a lease agreement with Co-Defendant 1 of the first instance trial ( Nonparty 1) on the condition that deposit of KRW 100,00,00 (from January 1, 2004, deposit of KRW 200,000 shall be increased) as to the building indicated in the separate sheet owned by Plaintiff 2 (hereinafter “instant building”). From January 1, 2004 to 36 months, from January 1, 2003 to 12,300,000 monthly rent of KRW 10,000 (the Nonparty shall be paid first on April 1, 200; KRW 10,000 if the rent is late, KRW 10,000,000 shall be paid up to 0,000,000; KRW 20,000,000,000,000 shall be paid immediately after the completion of the lease agreement; and the Nonparty shall be paid at least 10,0,0,0,00,000.

The Plaintiffs and the Nonparty agreed to complete the registration of the establishment of chonsegwon for the purpose of securing the right to claim for the return of lease deposit. The registration of the establishment of chonsegwon was completed from January 1, 2003 to December 31, 2005, as the Daejeon District Court No. 14075, Feb. 10, 2003, as to the instant building, the Plaintiffs, the Nonparty, the person having chonsegwon, the person having chonsegwon, the person having chonsegwon, the deposit money, KRW 100,000, and the scope of the instant building, the instant building, and the period from January

On February 21, 2003, the Nonparty borrowed 70,000,000 won from the Defendant who was unaware of the developments leading up to the completion of the registration of the establishment of chonsegwon on February 21, 2003, and completed the registration of the establishment of the right to lease on a deposit basis with the Defendant as security by Daejeon District Court No. 20677, Feb. 21, 2003.

The Nonparty notified the Nonparty on February 12, 2004 that the lease contract will be terminated on the condition that the Nonparty would pay the Plaintiff 1 a deposit of KRW 100,000,000 and the rent, value-added tax and management expenses after January 1, 2004. The Nonparty notified the Nonparty on February 12, 2004. The notification reached the Nonparty around that time.

The defendant did not pay interest on loans after March 5, 2004. As to KRW 72,278,610 among the claims for the return of deposit money against the plaintiffs of the non-party, the defendant received the seizure and collection order by subrogation as the Daejeon District Court 2004TT2443, and the above collection order reached the plaintiffs on June 21, 2004.

[Reasons for Recognition] Evidence Nos. 1 through 4, Evidence No. 8, Evidence No. 14-1 through 5, Evidence No. 2-3, Evidence No. 4, and the purport of the whole pleadings

2. Regarding cancellation of registration of creation of right to collateral security against chonsegwon

A. The plaintiffs' assertion

(1) The registration of the establishment of the right to lease on a deposit basis was completed for the purpose of securing the claim for the return of the lease deposit under the lease contract. The lease contract was terminated on February 12, 2004, and there is no remainder if the Nonparty deducts the rent, etc. in arrears from the lease deposit. Therefore, the registration of the right to lease on a deposit basis should be cancelled, and the registration of the establishment of the right to lease on a deposit basis should also be cancelled.

(2) On February 12, 2004, Plaintiff 1 filed a claim for extinguishment of the right to lease on a deposit basis under Article 311 (Claim for Termination of Chonsegwon) of the Civil Act on the grounds of the Nonparty’s breach of the contract, and the right to lease on a deposit basis extinguished both by offsetting the Plaintiffs’ claim against the Nonparty regarding the right to lease on a deposit basis. Therefore, the registration of the right to lease on a deposit basis ought to be cancelled, and the registration of the right

(3) Since chonsegwon had expired on December 31, 2005, the registration of creation of a right to lease on a deposit basis must be cancelled.

B. Determination

(1) Even if the lease contract between the plaintiff 1 and the non-party is valid, the plaintiff 1 and the non-party can also assert the effect of the lease contract even if the defendant knew that the lease contract was actually concluded between the plaintiff 1 and the non-party, who acquired the right to collateral security for the right to collateral security for the right to collateral security for the right to collateral security for the right to collateral security. In this case, there is no evidence to deem that the defendant was aware of the fact that the right to collateral security was established and that such circumstance was known, the plaintiff 1 cannot assert the termination of the lease contract or the deduction of the rent in arrears against the defendant. The plaintiffs' assertion of Paragraph 1 is without merit.

(2) The claim for extinguishment of a right to lease on a deposit basis under Article 311 of the Civil Act applies to a case where a person having a right to lease on a deposit basis fails to use or take profits from a contract establishing a right to lease on a deposit basis or a method determined by the nature of the subject matter, and there is no proof as to whether the subject matter satisfies the above requirements, and therefore

(3) Where the period of chonsegwon expires, chonsegwon is extinguished without registration of cancellation of the registration of chonsegwon, and the mortgage is naturally extinguished if the object of chonsegwon is extinguished, so the mortgagee of chonsegwon cannot claim any mortgage any longer than the owner of the object of chonsegwon (see Supreme Court Decision 98Da31301, Sept. 17, 1999, etc.). In this case, it is apparent that the chonsegwon has expired on December 31, 2005. Thus, the mortgage for the purpose of chonsegwon is naturally extinguished. The defendant is obligated to perform the procedure for registration of cancellation of the registration of the right to lease on chonsegwon to the plaintiffs who are the owner of the building in this case.

3. As to the collection amount

A. The parties' assertion

(1) The plaintiffs' assertion

The Defendant’s claim for the return of the security deposit against the Plaintiffs by the Nonparty that was seized and collected by the Defendant was extinguished in entirety by offsetting the Plaintiffs’ claim against the Nonparty, such as overdue rent, etc. The Defendant asserted this claim and sought confirmation of the non-existence of the obligation for collection. In particular, Plaintiff 2 is not a party to a lease agreement, and thus there is no obligation for collection to Plaintiff 2.

(2) The defendant's assertion

Since the Defendant, upon receipt of a seizure and collection order, has the same effect as exercising the right to collateral security, the Plaintiffs cannot oppose the existence of overdue rent, etc. against the Defendant. Even if Plaintiff 2 is not a party to a lease agreement, the Plaintiffs are co-owners of the instant building with Plaintiff 1 as co-owners of the instant building. Therefore, the Plaintiffs are jointly and severally liable to pay to the Defendant the amount collected and the amount of delay compensation.

B. Determination

If the duration of chonsegwon expires, the mortgage cannot be executed on the right of lease on a deposit basis because the right of use in the right of lease on a deposit basis is extinguished. In such a case, the right can only be exercised by means of receiving a collection order, etc. against the claim for the return of lease on a deposit basis, which can be seen as existing in lieu of the right of lease on a deposit basis, which is the object of the mortgage. In regard to the creditor's claim for the collection of lease on a deposit basis based on the seizure and collection order of the claim for the repayment of lease on a deposit basis, which is the claim for the right of lease on a deposit basis, the person establishing the right of lease on a deposit basis, who is the garnishee, may oppose all defenses between the debtor and the execution creditor, based on the time when the seizure and collection order was served in accordance with the legal principles of general execution

By June 21, 2004, the plaintiffs may set up against the defendant a set-off against the non-party's claims such as rents in arrears, etc. (if the automatic claim at the time of seizure is due at the same time as or earlier than the maturity of the several claims, the garnishee may set-off against the execution creditor) until June 21, 2004, which was served on the defendant by the seizure and collection order against the non-party. The details of the claims such as rents in arrears, etc. of the plaintiff 1, the maturity of which has reached the maturity of the seizure order

[Ground of recognition] Evidence No. 2-1 to 3, Evidence No. 6-1 to 7, Evidence No. 11, and the purport of the whole pleadings

Therefore, it is clear that Plaintiff 1’s claim against Nonparty is calculated to exceed the Nonparty’s claim for the return of lease deposit amounting to KRW 145,630,762 in total. According to Plaintiff 1’s declaration of set-off, all claims for the return of lease deposit were extinguished. The Plaintiffs are not liable for the payment of the collection deposit to the Defendant. As long as the Defendant is disputing this, the Plaintiffs’ claim for confirmation of the absence of the Plaintiffs’ claim for the payment of lease deposit is reasonable, but the Defendant’s claim for

4. Conclusion

All of the plaintiffs' claims are reasonable, and the defendant's counterclaim is without merit. The judgment of the court of first instance is revoked because it different conclusions are different. All of the plaintiff's claims are accepted, and the defendant's counterclaim is dismissed. It is so decided as per Disposition.

[Attachment Form 4] The indication of a building and the details of claims

Judges Kim Jong-dae (Presiding Judge)