In case where a person who acquired the secured claim together with a mortgage files an application for an auction for the exercise of mortgage, whether the transferee must prove that the transferee satisfied the requirements for setting up against the transfer of claim against the debtor at the time of commencing the auction (negative), and whether the applicant creditor should prove the above reasons in an objection against the ruling on commencing the auction or in an appeal

Article 264 of the Civil Execution Act, Article 192 of the Rules for Civil Execution

Supreme Court Decision 200Ma5110 Decided October 25, 2000, Supreme Court Decision 2004Ma158 Decided July 28, 2004 (Gong2005Ha, 1221) Decided June 23, 2005

Re-appellant

Seoul Central District Court Order 2014Ra372 dated July 30, 2014

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

The grounds of reappeal are examined.

1. In order to exercise a security right, such as a mortgage on real estate, there exists a security right under substantive law, the secured claim exists, and the due date for the secured claim shall arrive. However, the Civil Execution Act is a requirement for the commencement of an auction for the exercise of a security right on real estate, and the creditor, debtor and owner (paragraph 1), the indication of a security right and the secured claim (paragraph 2), the indication of an asset subject to a security right (paragraph 3) and the document proving the existence of a security right under Article 264 of the Civil Execution Act when exercising a security right on part of a secured claim, and the document evidencing the purport and scope (paragraph 4) are submitted. The court of execution shall examine the existence of a security right within the scope of the above document, and it is not required that the secured claim be stated in the application under other substantive law, but it is not required that the transferee of a secured claim prove that it satisfies the requirements for setting up against the obligor at least 20 years prior to the commencement of an auction procedure. Therefore, even if the transferee of a mortgage and the secured claim together meet the requirements for auction commencement of auction.

2. The reasoning of the lower judgment and the record reveal the following facts.

A. As to No. 101, No. 102, No. 102, and No. 101, and No. 101, of the first floor of Seoul (hereinafter collectively referred to as “each of the instant real estate”), each of the registration of initial ownership was completed on March 30, 2004, other than the filing of the application.

B. On May 22, 2006, each of the instant real estate was registered as joint collateral by Han Bank Co., Ltd. (hereinafter “I Bank”), one bank (hereinafter “I Bank”), and the maximum debt amount of 520 million won as the debtor and the person other than the applicant for the establishment of the right to collateral security, respectively.

C. On June 22, 2011, as a special purpose company established under the Asset-Backed Securitization Act, a limited liability company specializing in smart escalator-backed securitization (hereinafter “computerS”) acquired a claim against a person other than the applicant who acquired the right to collateral security from a single bank as securitized assets on April 21, 201, and one bank registered the transfer to the Financial Supervisory Service pursuant to Article 6(1) of the same Act, around June 22, 2011.

D. On April 30, 2013, smart S requested an auction on the instant real estate. On May 1, 2013, the auction court rendered a decision to voluntarily commence the auction and completed the registration of the entry of the decision to commence the auction on May 15, 2013.

E. On May 16, 2013, with respect to shares of 5/100 among each of the instant real estate, each ownership transfer registration was completed on May 16, 2013.

3. Examining the above facts in light of the legal principles as seen earlier, smart E.S., a person holding a right to each of the instant real estate, can file a request for auction even if the fact of transfer is registered pursuant to Article 6(1) of the Asset-Backed Securitization Act and the fact of transfer is not equipped with the requirements for the exercise of mortgage. However, as long as the re-appellant who proves his/her right to each of the instant real estate is an interested party and filed an objection against the decision on commencement of auction, a person holding a right to each of the instant real estate, the applicant for auction, must prove that he/she meets the requirements

Nevertheless, the lower court rejected the Re-Appellant’s assertion that smart Es did not meet the requirements for setting up against the assignment of claims on the sole ground of the fact that the Re-Appellant does not constitute a third party who can assert the defects in the requirements for setting up against the assignment of claims without examining and determining whether the secured claim and the secured claim are satisfied with the requirements for setting up against the assignment of claims.

Therefore, in so determining, the court below erred by misapprehending the legal principles as to the interested parties in the procedure of an objection against the decision on commencement of auction at an auction for the exercise of a security right and the grounds for objection, thereby failing to exhaust all necessary deliberations, which affected the conclusion of the judgment. The

4. 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 Kim So-young (Presiding Justice)