The disposal of the collateral at a price lower than the market price by the mortgagee through the exercise of the security right constitutes a default.

In the so-called transfer of ownership of real estate to a creditor for the purpose of collateral security, when the creditor (mortgagee) realizeds or disposes of collateral in order to obtain satisfaction of the secured claim, the creditor is obligated to settle the collateral. The realization or evaluation of the collateral must be calculated at an objective and fair price. Therefore, when the collateral is converted or appraised at a price lower than the reasonable price, the debtor is not liable.

Article 372 of the Civil Act

Supreme Court Decision 65Da2027 delivered on December 21, 1965, 72Da1633 delivered on November 14, 1972, and 73Da38 delivered on June 5, 1973, and 80Da2688 delivered on May 26, 1981

Plaintiff

Defendant 1 and five others, Defendant 1 et al., Counsel for the defendant-appellant

Daegu High Court Decision 80Na822 delivered on January 28, 1981

The part of the lower judgment against Defendants 1, 2, and 3 is reversed, and that part of the case is remanded to the Daegu High Court.

The plaintiff's appeal is dismissed.

The costs of appeal against the dismissal of an appeal above shall be borne by the plaintiff.

The grounds of appeal are examined.

1. As to the first ground for appeal by Defendant 1, Defendant 2, and Defendant 3’s attorney

The judgment of the court below, based on the evidence of this city, recognized that the registration of transfer of ownership in the name of the defendants with respect to the ownership of 1,035 square meters in Busan Dongdong-gu ( Address omitted), which was owned by the plaintiff (hereinafter the real estate of this case), was made based on the lawsuit telephone, but this was for the security of the claim, and rejected the claim that the plaintiff transferred the real estate of this case owned by the plaintiff to the above defendants, a creditor, for the security of the claim, for the purpose of the security of the claim, was the object of the so-called security transfer, and was made by the payment in kind by the above defendants. In light of the records, the above determination of the court below is acceptable,

2. On the second ground for appeal:

A. According to the judgment below, the court below confirmed that the transfer of ownership in the name of the above defendants with respect to the real estate of this case is the registration for the purpose of the so-called transfer for security and presumed that the above defendants are jointly and severally liable for damages suffered by the plaintiff due to the non-performance of obligation to settle accounts so long as they disposed of the real estate of this case, the court below held that the defendants sold the real estate of this case amounting to KRW 34,896,000 at the time of March 15, 1978 at KRW 11,50,000 after deducting the principal and interest of the bonds of this case (principal principal amount of KRW 8,00,000, interest amount of KRW 2,591,780) from the non-party as joint mortgagee.

B. In the so-called transfer of ownership of real estate for the purpose of collateral security to a creditor, when the creditor (mortgagee) realized or disposes of collateral in order to obtain the satisfaction of the secured claim, the creditor is obligated to settle the collateral. The realization or evaluation must be calculated at an objective and fair price, and therefore, when the realization or evaluation is made at a price lower than the reasonable price, it shall be deemed nonperformance (see Supreme Court Decision 80Da2688, May 26, 1981).

C. The court below's determination that the above 10.3.15 (the defendant's resale of the above 197.1) had no effect on the above 197.10 won and the appraisal of the non-party 18.2 was 197.10 won and the above 197.10 won were 7.10 won and the above 197.10 won were 10.7 won and the above 197.10 won were 10.7 won and the above 197.7 won were 19.7 won were 10.7 won and the above 197.7 won were 10.7 won were 19.7 won and the market price of the above 197.1 billion won was 10.7 won and the above 197.4 won was 197.20 won and there was no difference in the market price of the above 19.27.197.20 won.

3. As to the Plaintiff’s appeal:

The Plaintiff received notice of receipt of the records of trial from the party members, but failed to submit the appellate brief within the statutory period, and the appellate brief does not contain any reasons for the final appeal. Therefore, the Plaintiff cannot escape from the dismissal of final appeal.

4. Therefore, the part of the judgment of the court below against Defendants 1, 2, and 3 is reversed, and that part of the case is remanded to the Daegu High Court which is the court below for further proceedings consistent with this Opinion. The plaintiff's appeal is dismissed, and the costs of the appeal against the dismissal of the appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating judges.

Justices Lee Chang-chul (Presiding Justice)