[1] Whether a mortgagee is a rehabilitation secured creditor under Article 141 of the Debtor Rehabilitation and Bankruptcy Act in a case where the real estate owned by the debtor was sold at the real estate auction procedure and the buyer paid the proceeds of sale and the mortgage on the sold real estate was extinguished but the decision was made before the distribution procedure reaches the distribution procedure (affirmative)

[2] In a case where the auction procedure for real estate owned by the debtor was sold and the proceeds from sale were paid, but the rehabilitation procedure was commenced against the debtor before the date of distribution, whether the execution procedure is suspended (affirmative), and whether the execution procedure becomes invalid when the rehabilitation plan approval order for the debtor is issued after the date of distribution (affirmative)

[3] The meaning of "Immunity" of rehabilitation claims, etc. under Article 251 of the Debtor Rehabilitation and Bankruptcy Act by the effect of the rehabilitation plan approval plan and the meaning of "change of rights" of rehabilitation creditors, etc. under Article 252 (1) of the same Act

[4] Whether a debt repayment by compulsory execution is established (negative)

[5] The case holding that in a case where Company B was obligated to return the amount equivalent to the dividends received from Company A as unjust enrichment in a case where Company B received a deposit after the rehabilitation plan was approved, where the auction procedure for exercising the right was commenced upon the application of Company B, which was conducted upon the application of Company B, as to the real estate owned by Company A, and the sale price was fully paid upon the sale of the real estate, but Company A filed an application for commencing the rehabilitation procedure before the date of distribution date, and the rehabilitation court decided to commence the rehabilitation procedure, and Company B did not report the rehabilitation security right secured by the right to collateral security in the rehabilitation procedure, and Company B did not report the rehabilitation right secured by the right to collateral security.

[1] Even if the purchaser acquired the ownership of the real estate sold and extinguished the mortgage above the sold real estate in accordance with Articles 135 and 91(2) of the Civil Execution Act, the mortgagee is entitled to preferential repayment of the secured claim from the proceeds of sale equivalent to the exchange value of the mortgaged real estate in the subsequent distribution procedure according to the order and content of the mortgage.

Therefore, even if the real estate owned by the debtor was sold in the real estate auction procedure and the buyer paid the sale price in advance and the mortgage on the sold real estate was extinguished, if a decision was made to commence the rehabilitation procedure for the debtor before reaching the distribution procedure, it is reasonable to view the mortgagee as a rehabilitation secured creditor under Article 141 of the Debtor Rehabilitation and Bankruptcy Act, who holds a claim secured by mortgage at

[2] After the completion of individual compulsory execution procedure, the procedure may not be suspended. The execution of money for real estate shall be terminated only when the proceeds of sale are delivered to the creditor or distributed to him.

Therefore, if the auction procedure for real estate owned by the debtor was in progress and the sale price was paid, but the rehabilitation procedure was commenced for the debtor before the date of distribution, the execution procedure is suspended, and if the execution was carried out contrary to this, it is null and void. The execution procedure suspended at the time of approval of rehabilitation plan for the debtor becomes null and void.

[3] When the rehabilitation plan is authorized, the debtor is exempted from liability for all rehabilitation claims and rehabilitation security rights except for the rights recognized by the rehabilitation plan or the Debtor Rehabilitation and Bankruptcy Act (hereinafter “Rehabilitation Act”), and the rights of rehabilitation creditors and rehabilitation secured creditors are modified according to the rehabilitation plan (Article 251 of the Debtor Rehabilitation Act). The term “liability” in this context means, although the debtor still exists a debt, it is impossible to enforce the performance of the debtor, and the alteration of rights means that the rights are not changed in accordance with the rehabilitation plan, but are practically changed according to the contents of the rehabilitation plan.

[4] The satisfaction of a claim by compulsory execution does not lead to non-performance, which is performed without the consent of the person performing the obligation.

[5] The case holding that in a case where Company A, a mortgagee of a collective security right, established an auction procedure for exercising the right to real estate owned by Company B upon the application of Company B, and the proceeds from sale of real estate were fully paid, the company A applied for commencement of the rehabilitation procedure before the date of distribution date, and the rehabilitation court decided to commence the rehabilitation procedure, and Company B did not report rehabilitation security right secured by the collective security right in the rehabilitation procedure, and the dividends were deposited in the name of Company B after the commencement of the rehabilitation procedure, and Company B received the deposit after the commencement of the rehabilitation procedure before the date of distribution date, it is reasonable to view that Company B, a mortgagee of a collective security right, was the rehabilitation secured creditor who had the right to the rehabilitation security right under Article 141 of the Debtor Rehabilitation and Bankruptcy Act within the scope that is secured by the collective security right at the time of the commencement of the rehabilitation procedure, and the above auction procedure was suspended by the comprehensive prohibition order and the rehabilitation procedure approval order becomes void due to the alteration of the right, which was not received by the comprehensive rehabilitation procedure, and thus, it can not be viewed from the rehabilitation procedure.

[1] Article 141(1) of the Debtor Rehabilitation and Bankruptcy Act; Article 356 of the Civil Act; Articles 91(2), 135, 145(2), and 148 subparag. 4 of the Civil Execution Act / [2] Articles 45(3), 58(2), and 256(1) of the Debtor Rehabilitation and Bankruptcy Act / [3] Articles 251 and 252(1) of the Debtor Rehabilitation and Bankruptcy Act / [4] Article 742 of the Civil Act / [5] Articles 45(3), 58(2), 141(1), 251, 252(1), and 256(1) of the Debtor Rehabilitation and Bankruptcy Act; Articles 91(2), 135(2), and 135(2), and 254(1) of the Civil Act

[2] Supreme Court Order 68Ma1036 Decided October 1, 1968 / [3] Supreme Court Decision 2001Da3122 Decided July 24, 2001 (Gong2001Ha, 1919), Supreme Court Decision 2015Da224469 Decided October 26, 2017 (Gong2017Ha, 2171)/ [4] Supreme Court Decision 76Da2212 Decided December 14, 1976 (Gong1977, 9819)

Seoul High Court Decision 200Na14888 decided May 1, 200

Han Bank (Law Firm LLC, Attorneys Kim Nung-hwan et al., Counsel for the plaintiff-appellant)

Seoul High Court Decision 2017Na2005981 decided October 31, 2017

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

The grounds of appeal are examined.

1. Regarding ground of appeal No. 1

A. Property claims against any person other than the debtor arising from rehabilitation claims or causes arising before the commencement of rehabilitation procedures, which fall within the scope secured by lien, pledge, mortgage, security by means of transfer, provisional registration, security right under the Act on Security over Movable Property, Claims, Etc., or security right, lease on a deposit basis, or preferential right under the Act on Security over Movable Property, Claims, Etc., shall be deemed rehabilitation security rights [Article 141(1) of the Debtor Rehabilitation and Bankruptcy Act (hereinafter “Rehabilitation Act”).

In cases where real estate is sold after the auction procedure is in progress, ownership shall be acquired at the time of the buyer’s multi-payment (Article 135 of the Civil Execution Act). All mortgages on real estate sold shall be extinguished by sale (Article 91(2) of the Civil Execution Act). This provision provides that a purchaser may acquire complete ownership without any burden. However, a mortgage is a real right with the purport of receiving repayment of secured claims prior to other creditors, from the exchange value of the mortgaged real estate realized at the auction procedure (see Supreme Court Decision 2005Da3243, Apr. 29, 2005). The Civil Execution Act also provides that when all creditors participating in the auction are not satisfied with the proceeds of sale, the court shall distribute the proceeds of sale in the order of priority under the Civil Act, the Commercial Act, and other Acts (Article 145(2)). Accordingly, even if a purchaser acquires the ownership of the mortgaged real estate from the proceeds of sale and the right to preferential reimbursement under Article 135(2)4 of the Civil Execution Act, the same Act becomes an obligee entitled to receive dividends (Article 148 subparag.

Therefore, even if a real estate owned by the debtor is sold at the real estate auction procedure and the buyer fully pays the sale price and the mortgage on the sold real estate is extinguished, if there was a decision to commence the rehabilitation procedures for the debtor before reaching the distribution procedure, it is reasonable to view that such mortgagee is a rehabilitation secured creditor under Article 141 of the Debtor Rehabilitation Act, who holds a claim or claim secured

B. The record reveals the following facts.

1) On December 2, 2013, upon the application of the Defendant, who is a mortgagee, the Plaintiff-owned real estate, an auction procedure was initiated for the exercise of the right to collateral (hereinafter “instant auction procedure”) and the real estate was sold and the sales price was fully paid on October 21, 2014.

2) However, prior to the date of distribution, the Plaintiff filed an application for commencing rehabilitation procedures, the rehabilitation court rendered a comprehensive prohibition order on November 27, 2014, and decided to commence rehabilitation procedures on December 5, 2014. On June 17, 2015, the rehabilitation plan for the Plaintiff was approved and finalized around that time.

3) After the decision was rendered on December 23, 2014 on the commencement of the rehabilitation procedure against the Plaintiff, the dividend was deposited in the instant auction procedure in the name of the Defendant, who is the mortgagee, and the Defendant received the said deposit on February 3, 2016, which was subsequent to the authorization of the rehabilitation plan against the Plaintiff.

4) Meanwhile, the Defendant did not report the rehabilitation security right secured by the right to collateral security in the rehabilitation procedure against the Plaintiff.

C. We examine these facts in light of the legal principles as seen earlier.

If the instant auction procedure regarding real estate owned by the Plaintiff was commenced and the proceeds from sale were sold and paid, but the rehabilitation procedure against the Plaintiff was commenced prior to the date of distribution, it is reasonable to view that the Defendant, who was the mortgagee, was a rehabilitation secured creditor with the right to a rehabilitation security under Article 141 of the Debtor Rehabilitation Act within the scope secured by the right to collateral security at the time of

Therefore, the lower court did not err by misapprehending the legal doctrine regarding the definition of rehabilitation security rights, contrary to what is alleged in the grounds of appeal.

2. As to the grounds of appeal Nos. 2, 3, and 4

(a) Whether to suspend and invalidate the auction procedure;

1) When a general prohibition order is issued against the debtor or when a decision is made to commence the rehabilitation procedure, compulsory execution based on any rehabilitation claim or rehabilitation security right already taken against the debtor's property and the auction procedure for exercising any security right is suspended (Articles 45(3) and 58(2) of the Debtor Rehabilitation Act). When the rehabilitation plan is decided, compulsory execution suspended when the rehabilitation plan is decided, and the auction procedure for exercising any security right becomes void (Article 256(1) of

After the completion of individual compulsory execution procedure, the procedure cannot be suspended (see Supreme Court Order 68Ma1036, Oct. 1, 1968). The execution of money on immovables shall be terminated only when the proceeds of sale are delivered to the creditor or distributed to the creditor.

Therefore, if the auction procedure for real estate owned by the debtor was in progress and the sale price was paid, but the rehabilitation procedure was commenced for the debtor before the date of distribution, the execution procedure is suspended, and if the execution was completed against this, it is null and void. Thereafter, the execution procedure suspended at the time of approval for rehabilitation plan for the debtor becomes null and void.

2) We examine the facts in light of the aforementioned legal principles. The auction procedure of this case was suspended by the general prohibition order and the rehabilitation decision, which was decided by the rehabilitation court, and lost its validity in accordance with the rehabilitation plan approval order. This cannot be deemed otherwise on the ground that the real estate was sold in the auction procedure of this case and the sales price was fully paid

Therefore, contrary to the allegations in the grounds of appeal, the lower court did not err by misapprehending the legal doctrine on the auction procedure suspended in the rehabilitation procedure or the auction procedure invalidated by the rehabilitation procedure.

B. Whether the right to claim restitution of unjust enrichment is established

1) When the rehabilitation plan is authorized, except for the rights recognized under the rehabilitation plan or the Debtor Rehabilitation Act, the debtor is exempted from liability for all rehabilitation claims and rehabilitation security rights (Article 251 of the Debtor Rehabilitation Act), and the rights of rehabilitation creditors and rehabilitation secured creditors are modified according to the rehabilitation plan (Article 252(1) of the Debtor Rehabilitation Act). Here, the term “liability” means, although the debtor continues to exist in his/her obligation, he/she cannot compel the debtor to perform his/her obligation (see Supreme Court Decision 2001Da3122, Jul. 24, 2001). It means that the change of rights does not change only the liability distinct from the obligation, but also the change of rights is a substantial change in the rights according to the rehabilitation plan (see Supreme Court Decision 2015Da22469, Oct. 26, 2017)

The satisfaction of a claim through compulsory execution is conducted without the consent of the person performing the obligation, and it does not lead to the non-performance (see Supreme Court Decision 76Da2212 delivered on December 14, 1976).

2) In light of the foregoing legal principles, the facts as seen earlier are examined. The Defendant’s receipt of dividends according to the distribution procedure, which was interrupted by the general prohibition order and the decision of rehabilitation procedure, and which was invalidated by the decision of rehabilitation plan, constitutes the gain accrued without any legal cause. Meanwhile, according to the decision of rehabilitation plan, the right of all rehabilitation creditors and rehabilitation secured creditors, including those who participated in and were entitled to receive dividends in the auction procedure for the instant real estate, was substantially modified according to the rehabilitation plan, and the Plaintiff was exempted from liability for the rights not reported as the Defendant’s rehabilitation security right. As such, the Defendant’s receipt of dividends due to the Defendant’s receipt of dividends is the Plaintiff, who is the real estate owner, who is not another rehabilitation creditor or rehabilitation secured creditor. Moreover, the Defendant’s receipt of dividends deposited in the distribution procedure after the decision of rehabilitation procedure is not deemed the performance of the Plaintiff’s obligation at will. Accordingly, the Plaintiff, the real estate owner, who received dividends without any legal cause,

Therefore, the lower court did not err by misapprehending the legal doctrine regarding the requirements for establishing a claim for return of unjust enrichment, contrary to what is alleged in the grounds of

3. As to the fifth ground for appeal

The lower court rejected the Defendant’s assertion that the Plaintiff’s claim for return of unjust enrichment of this case contradicts the good faith principle.

In light of the relevant legal principles and records, the lower court did not err in its judgment by misapprehending the legal principles as to the status of administrator and the good faith principle, contrary to what is alleged in the

4. Conclusion

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 Lee Ki-taik (Presiding Justice)