[1] Where a secured creditor under the Act on Security over Movable Property, Claims, Etc. completes the registration of security, and the notification of the transfer of claims by means of a certificate with a fixed date reaches the third obligor, but the notification of the creation of security right is not reached the third obligor, whether the third obligor is exempted from the obligation holder due to repayment to the assignee (affirmative), and whether the third obligor may claim the return of the amount repaid as unjust enrichment to the assignee of the obligation (affirmative) / Where the notification of the creation of security right is delivered to the third obligor, whether the third obligor may oppose the obligee by repayment to the assignee (negative in principle)

[2] In a case where "a creditor has received a benefit" under Article 472 of the Civil Act, whether the receipt of payment by a person without authority is included in cases where it is acknowledged that there is a substantial relation that could be attributable to the creditor's interest, such as when the creditor ratified it later (affirmative), and whether the creditor may claim the return of the receipt of payment by unjust enrichment from the person without authority (affirmative)

[3] Where a person who has a security interest in movable property, claims, etc. under the Act on Security of Movable Property, Claims, etc. has priority over the assignee of claims and the notification of the creation of a security interest has been delivered to the third obligor, but the third obligor has repaid his/her obligations to the assignee on the ground that the notification of the transfer of claims has first arrived, and the third obligor has ratified the receipt of payment by the assignee of claims, the effect of repayment to the third obligor (effective), and whether the third obligor may claim the return of the repayment received as unjust enrichment

[1] The obligor under the Act on Security over Movable Property, Claims, Etc. (hereinafter “The Act on Security over Movable Property”) has completed the registration of collateral and the notification of the assignment of claims by means of a certificate with a fixed date has reached the third obligor. However, even if the notification of the creation of collateral under Article 35(2) of the Act on Security over Movable Property, Claims, Etc. has not arrived at the third obligor, the assignee of the claim has only satisfied the requirements for counterclaim in relation to the third obligor, and thus, the assignee of the claim can be duly discharged from the assignee of the claim and thus is also exempted from the obligor. However, in relation to the obligor’s right of collateral, the assignee of the claim is subordinate to the obligor’s right of preferential reimbursement, and thus, the obligor may claim the return of the claim that he/she received as unjust enrichment from the assignee of the claim.

However, if the notification of the creation of a security right pursuant to Article 35(2) of the Act on Security over Movable Property and Claims reaches the third obligor, even if the notification reaches the third obligor at a later point than the notification of the assignment of claims, the third obligor is obliged to pay the obligation to the third obligor, and thus, barring any special circumstance, it cannot be set up against the third obligor unless there is a special reason to the contrary.

[2] Article 472 of the Civil Act provides that performance with respect to a person who has no authority to receive repayment in order to avoid the formation of legal relations as to the return of unnecessary chain unjust enrichment shall be effective to the extent that the obligee gains profit. Here, in the case of “a creditor’s profit” as referred to in this context, the recipient of performance shall not only deliver the performance he has received to the true creditor, but also include cases where it is deemed that there is a substantial relation that may be attributable to the obligee’s interest, such as when the obligee subsequently ratified the receipt of performance with respect to the person without authority. In addition, where the obligee ratifieds the receipt of performance, the obligee may claim the return of the performance with respect to the person without authority as unjust enrichment.

[3] In a case where a third-party obligor has discharged a debt to the assignee on the ground that the secured right holder under the Act on Security of Movable Property, Claims, Etc. takes precedence over the assignee of the debt and that the notification of creation of a security right has been delivered to the third obligor, but the notification was given earlier than the notification, and where the third-party obligor has ratified the receipt of payment by the assignee of the debt, the third-party obligor’s acceptance of payment by the assignee of the debt is valid by ratification, and on the other hand, the secured right holder may demand the return of the repayment

[1] Article 35 of the Act on Security over Movable Property, Claims, Etc., Articles 450 and 741 of the Civil Act / [2] Articles 472 and 741 of the Civil Act / [3] Article 35 of the Act on Security over Movable Property, Claims, Etc., Articles 450, 472 and 741 of the Civil Act

[2] Supreme Court Decision 92Da1550 Decided September 8, 1992 (Gong1992, 2842), Supreme Court Decision 2001Da44291 Decided November 9, 2001 (Gong2002Sang, 7) Supreme Court Decision 2010Da32214 Decided October 25, 201 (Gong2012Ha, 1894)

E. Burg Furd Co., Ltd. (Law Firm Barun, Attorneys Lee E.S. et al., Counsel for the defendant-appellant)

Green Line Co., Ltd. (Law Firm Yu & Yang, Attorneys Lee Chang-hun et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2015Na10815, 10822 decided October 30, 2015

The judgment below is reversed and the case is remanded to Seoul High Court.

The grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed).

1. A. Article 35(1) of the Act on Security over Movable Property, Claims, Etc. (hereinafter “Act on Security over Movable Property”) provides that “The acquisition or loss of security interest in an obligation under an agreement may be asserted against any third party other than the obligor of a nominative claim (hereinafter “third party obligor”) at the time of registration in the collateral security register,” and Paragraph (2) of the same Article provides that “The person who has created a security interest or security interest (referring to the transferor or transferee in cases of the transfer of security interest over an obligation) shall not oppose the third party obligor unless the third party obligor notifies the third party obligor of the fact by establishing the certificate of registered matters under Article 52, or the third party obligor does not consent thereto,” and Paragraph (3) of the same Article provides that “Where a notification or consent is given pursuant to Article 349 or 450(2) of the Civil Act with respect to the same obligation, the transferee of the security interest or security interest may assert the right after the arrival of the registration and notification or consent of the third party obligor.”

Therefore, after the secured creditor under the Act on Security over Movable Property completes the registration of security, the assignment of claims for the same claim and the notification of the transfer of claims by means of a certificate with a fixed date reaches the third obligor, but the notification of the creation of security right under Article 35(2) of the Act on Security over Movable Property has not arrived at the third obligor, and only the assignee of claims in relation to the third obligor has the requisite to set up against the third obligor, and thus, the third obligor can perform his/her obligations effectively and the third obligor is also exempted from liability to the secured creditor. However, in relation to the secured creditor, the assignee of claims receives profits by infringing on the preferential repayment status of the secured creditor, and thus, the secured creditor can claim the return of the repayment by unjust enrichment against the assignee.

However, if the notification of the creation of a security right pursuant to Article 35(2) of the Act on Security over Movable Property and Claims reaches the third obligor, even if the notification reaches the third obligor at a later point than the notification of the assignment of claims, the third obligor is obliged to pay the obligation to the third obligor, and thus, barring any special circumstance, it cannot be set up against the third obligor unless there is a special reason to the contrary.

B. Article 472 of the Civil Act also provides that performance to a person who has no authority to receive payment in order to avoid the formation of legal relations as to the return of unnecessary chain unjust enrichment shall be effective to the extent that the obligee has received benefits. Here, “a creditor has received benefits” includes not only where the receiver of performance delivers the performance that he/she received to the true obligee, but also where it is deemed that there is a substantial relation that may be attributable to the obligee’s interest, such as when the obligee confirmed the receipt of performance after the fact, (see Supreme Court Decisions 2010Da32214, Oct. 25, 2012). In addition, where the obligee confirms the receipt of performance to a person without authority, the obligee may demand the person without authority to return the payment as unjust enrichment (see, e.g., Supreme Court Decisions 92Da1550, Sept. 8, 199; 201Da42914, Nov. 29, 2001).

Therefore, in the event that a third-party obligor has repaid a debt to the assignee on the ground that the notification of the assignment of claim was given earlier than that of the assignee of the claim and that the notification of the creation of the security right was given earlier than that of the third obligor, and the third-party obligor has confirmed the receipt of payment by the assignee of the claim, if the secured obligee ratified the receipt of payment by the assignee of the claim, the third-party obligor’s acceptance of payment would be valid by such ratification, while the secured obligee of the claim may claim

2. Review of the reasoning of the lower judgment and the record reveals the following facts.

A. On August 13, 2013, the Plaintiff (Counterclaim Defendant; hereinafter “Plaintiff”) entered into a contract with BSEL Co., Ltd. (hereinafter “SSEL”) to set the instant security right as to the instant claim against The Home PSEL Co., Ltd. (hereinafter “The Home PSEL”) with the Plaintiff regarding the instant claim, with a view to securing the Plaintiff’s claim for the payment of goods against BSEL. Accordingly, the registration for the creation of the instant security right was completed on August 14, 2013.

B. On August 28, 2013, non-SEL transferred the instant claim to the Defendant (Counterclaim Plaintiff; hereinafter “Defendant”) and notified the fact of transferring the claim by content-certified mail to the Home Plux on October 1, 2013, and the notification reached the Home Plux on October 2, 2013.

C. On October 14, 2013, the Plaintiff notified the Home Packer of the establishment of the instant security right by attaching a copy of the creation contract and a copy of the registration certificate, and the notification reached the Home Packer on October 15, 2013.

D. However, on October 31, 2013, Home Puss paid KRW 181,347,097 to the Defendant with the repayment of the instant claim.

E. Accordingly, the Plaintiff filed the instant lawsuit against the Defendant and the Home Plus, and filed a claim for the payment of the instant claim against the Defendant by exercising the instant security right. On December 18, 2014, when the first instance court was in progress, the Plaintiff rendered a decision in lieu of conciliation, such as “the Plaintiff waived the claim against the Home Plus, and the Plaintiff and Home Plus shall not make any civil or criminal claims regarding the instant claim.” The said decision became final and conclusive around that time between the Plaintiff and Home Plus.

3. Examining these facts in light of the legal principles as seen earlier, since the Plaintiff, a secured right holder, priority over the Defendant who is the assignee of the claim, and the notification of the creation of a security right reaches the Home Packer, which is the garnishee, the Home Packer could not set up against the Plaintiff by payment to the Defendant thereafter. However, the Plaintiff’s waiver of the claim against the Home Packer pursuant to the decision in lieu of conciliation in the first instance trial, and thus, it is deemed that the Defendant, a person without authority, ratified the receipt of payment to the Defendant by waiver of the claim against the Home Packer. As such ratification, the repayment to the Defendant by the Home Packer is valid, and the Plaintiff can claim the return

Nevertheless, the lower court rejected the Plaintiff’s claim for return of unjust enrichment against the Defendant for reasons indicated in its holding. In so doing, it erred by misapprehending the legal doctrine on the claim for return of unjust enrichment and failing to exhaust all necessary deliberations, which affected the conclusion of the judgment

4. Therefore, the lower judgment is reversed, and the case is remanded to the lower court for further proceedings consistent with this Opinion. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Park Sang-ok (Presiding Justice)