(a) Where the same party establishes a different order of priority to secure several obligations arising in the same transaction relations with respect to the same object, the method of determining the obligation to extinguish when the auction proceeds of the security are insufficient;

(b)the measures of the court, in case where there is no specific assertion or proof as to the content and method of appropriation;

A. Even in cases where the same party establishes several different order of priority in order to secure the obligation arising from the same transaction relationship with respect to the same object, each of them is to secure the entire amount of the several obligations arising from the transaction relations stipulated in the contract within the scope of each limit. Therefore, in cases where the auction proceeds of the security fail to satisfy the total amount of the obligation, it is to determine by the method of satisfaction of performance the obligation to be extinguished due to the receipt of the auction proceeds, and it is not necessary to preferentially repay the above auction proceeds to the obligation incurred at the time of priority settlement.

B. If the parties to the lawsuit claim the legal effect of appropriation of performance with respect to the auction proceeds, and the auction proceeds are insufficient to satisfy the entire amount of the secured obligation, the court should decide whether the lawsuit relation is legitimate after exercising the right of explanation, even though the parties do not specifically assert and prove the contents and method of appropriation of performance.

A. Article 357 and Article 476 and Article 477 of the Civil Act

[Defendant-Appellee] Korea Industrial Bank of Korea

Defendant-Appellee (Attorney Park Young-ok, Counsel for the defendant-appellant)

Daegu High Court Decision 86Na829 delivered on November 14, 1986

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

We examine the grounds of appeal.

Based on its reasoning, the court below determined that the plaintiff lent USD 3,309.89 on November 29, 1982, USD 8,266.90 on February 25, 1983, and USD 15,509.01 on the law of the Federal Republic of Germany under the agreement as stated in its reasoning with the defendant's joint and several sureties, and the non-party company completed the registration of establishment of a mortgage on the real estate in the order of 1,200 on December 12, 1985 with the execution of the security right to secure the above loan obligation against the plaintiff, and the non-party company confirmed that the plaintiff received KRW 136,97,900 on December 12, 1985, and each of the above loan claims were repaid in full with the payment of the above auction proceeds.

However, the right to collateral security is not only a debt incurred at the time of the establishment of the right to collateral security but also a set of several obligations arising from the transaction stipulated in the contract, and if the proceeds from the sale of collateral fail to satisfy the entire amount of the secured debt, the secured obligation to be extinguished by the proceeds from the sale of collateral shall be determined according to the method of satisfaction of the obligation. According to the records, although the plaintiff does not clearly assert that the proceeds from the sale of the auction proceeds in its holding are satisfied, according to the plaintiff's correction of the cause of the claim (Records 102 et al.), the above auction proceeds appropriated only a part of the principal of the loan in this case and interest until December 27, 1985. The claim in this case is proved to be the non-party's testimony, the plaintiff does not claim that the proceeds from the auction proceeds in this case be the remainder of the principal of the loan in this case and the amount paid by the non-party's non-party's non-party's claim for the remainder of the secured obligation.

In addition, according to the whole purport of evidence Nos. 1-2, 3 through 6 (Contract for Establishment of Mortgage) and evidence Nos. 10 (Account Statement) as cited by the court below and the testimony and pleadings of the non-party witness of the court of first instance in order to secure the obligation arising from transactions with the plaintiff, the non-party company set up a collateral Nos. 1, 2 and 3, 5 in order other than the set-mortgage No. 1, 3, 4, and 5 in addition to the set-mortgage No. 1, 2 in order to secure the obligation arising from transactions with the plaintiff, and continues financial transactions with the above collateral, it can be known that the total amount of the obligation arising from transactions under the above contract No. 173,084, 350 won as of December 12, 1985, which was submitted by the plaintiff was set forth in the auction procedure for satisfaction of the claim No. 173,000 won, since all of the collateral is set out at the auction procedure for satisfaction of the above obligation No. 3.

Therefore, if the plaintiff asserts the legal effect of appropriation of performance with respect to the above auction proceeds and the auction proceeds fall short of satisfying the entire secured debt, the court below held that even if the plaintiff did not specifically assert and prove the contents and methods of appropriation of performance, the court below should exercise the right of explanation and make a clear decision on the validity thereof, and that the plaintiff's obligation of principal and interest on the loan of this case was extinguished by receiving the above auction proceeds without doing so shall not be deemed to have been affected by the conclusion of the judgment because the plaintiff failed to exhaust all deliberations without exercising the right of explanation, or by misunderstanding the purport of the parties' assertion, which affected the conclusion of the judgment. The argument pointing this out is with merit.

Therefore, the judgment of the court below is reversed, and the case is remanded to the Daegu High Court. It is so decided as per Disposition by the assent of all participating Justices.

Justices Park Jong-hee (Presiding Justice)