[1] Whether the latter part of Article 368(2) of the Civil Act may apply mutatis mutandis to a mortgagee in cases where part of a number of real estate owned by the employer was sold first and the senior wage creditors received preferential payment from such auction proceeds and the mortgagee was at a disadvantage than where a claim for wages is distributed simultaneously (affirmative)

[2] Whether a mortgagee shall make a demand for distribution by the auction date in order to receive a distribution by subrogation of a senior wage creditor under the latter part of Article 368(2) of the Civil Code (affirmative), and in case where the amount which was not distributed to the mortgagee by failing to make such demand for distribution has been distributed to a junior creditor, whether there is no legal ground therefor (negative)

[1] The lien on wages, etc. under the Labor Standards Act is the so-called statutory security right which can be paid preferentially to claims secured by mortgages, taxes, etc. on the whole property of the employer, and where part of the number of real estate owned by the employer is sold first and the wage creditors have received preferential payment from the auction proceeds in accordance with the lien, and where the mortgagee of the real estate at auction was at a disadvantage than the simultaneous distribution of wage claims from the above number of real estate in accordance with Article 368(1) of the Civil Act, the latter part of Article 368(2) of the Civil Act shall apply mutatis mutandis. If the wage creditors have received simultaneous dividends from the above number of real estate, the said mortgagee may be paid dividends in preference to other real estate auction procedures by subrogation of the wage creditors who have

[2] Even in cases where the mortgagee is entitled to receive a distribution by subrogation of the senior wage obligee under the latter part of Article 368(2) of the Civil Code, he/she may receive a distribution only in cases where he/she has made a distribution by the auction date, which applies mutatis mutandis to the auction procedure to exercise the security right pursuant to Article 728 of the Civil Procedure Act. In cases where a legitimate distribution is not made, even if he/she has the right to demand a preferential payment pursuant to the substantive law, he/she cannot receive a distribution even if he/she is a creditor who has the right to demand a preferential payment pursuant to the substantive law, and thus, he/she excluded the distribution from the distribution because he/she did not make a lawful demand for a distribution, and if the distribution has been made in accordance with the final distribution schedule, the amount equivalent to the amount that could have been received by him/her

[1] Article 37 of the Labor Standards Act, Article 368 of the Civil Act / [2] Article 37 of the Labor Standards Act, Articles 368 and 741 of the Civil Act, Articles 605(1) and 728 of the Civil Procedure Act

[1] Supreme Court Decision 94Da21160 delivered on February 23, 1996 (Gong1996Sang, 1031), Supreme Court Decision 97Da9352 delivered on December 22, 1998 (Gong199Sang, 183) / [2] Supreme Court Decision 95Da28304 delivered on December 20, 1996 (Gong197Sang, 342 delivered on February 25, 1997)

Industrial Bank of Korea (Law Firm Shin & Yang, Attorney Kang Jae-hoon, Counsel for defendant-appellant)

Korea Asset Management Corporation (Korean Asset Management Corporation (Law Firm Sejong, Attorneys Choi Jong-min et al., Counsel for the plaintiff-appellant)

Seoul High Court Decision 99Na66399 delivered on May 17, 2000

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

We examine the grounds of appeal.

The lien on wages, etc. stipulated in the Labor Standards Act is the so-called statutory collateral right which can be paid preferentially to claims secured by mortgages and taxes, etc. on the whole property of the employer. In such a case, where part of the number of real estate owned by the employer was first sold at auction and wage creditors have received preferential payment from the above number of real estate under Article 368(1) of the Civil Act as the result of the preferential repayment of the lien, the latter part of paragraph (2) of the same Article shall apply mutatis mutandis to the case where the mortgagee of the auction property was at a disadvantage than the case where the wage claims are simultaneously distributed from the above number of real estate under Article 368(1) of the Civil Act. If the wage creditors have received simultaneous dividends from the above number of real estate, the wage creditors who have the highest priority to receive reimbursement from the auction price of other real estate may receive preferential payment in the auction procedure (see Supreme Court Decision 97Da9352, Dec. 22, 198).

In this case, on June 26, 1998, the date of the voluntary auction procedure for the real estate No. 1 in this case owned by the non-party company's identity, the plaintiff received only KRW 172,63,951 in the order of third priority in receiving the distribution of KRW 327,267,057, which was the date of distribution of the above company's wage creditors to the above company's first real estate No. 1 in the order of priority, and thereafter, the defendant received the total of KRW 143,35,343 on May 27, 1999, the date of distribution of the voluntary auction procedure for the real estate No. 3 in this case owned by the above company's third real estate No. 3 in subrogation of the above wage creditors, and as long as the plaintiff did not make a lawful demand for distribution in subrogation of the wage creditors in the above auction procedure, the court below's rejection of the plaintiff's measures against the principle of equity in interpreting and applying the law of unjust enrichment.

Therefore, the appeal is dismissed. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Yoon Jae-sik (Presiding Justice)