[1] Whether there exists a legal interest in seeking confirmation of the non-existence of a lien exceeding the scope that can be asserted against a person who reported a lien in an auction procedure against a person who reported a lien (affirmative), and where only a part of the amount claimed as a secured claim by a person who reported a lien can be asserted as a lien in an auction procedure, the court shall take measures against the person who reported a lien (i.e.,

[2] In a lawsuit seeking confirmation of non-existence of a right of retention, the location of the burden of assertion and certification as to the existence of the right of retention and the related claim (=the defendant)

[1] According to Article 91(5) of the Civil Execution Act, which applies mutatis mutandis to the auction procedure to exercise a security right pursuant to Article 268 of the same Act, a lien holder may not claim the successful bidder for the repayment of the secured debt, but may refuse to deliver the real estate, which is the object of the auction, until his/her secured debt is repaid. Accordingly, the bidder in the auction procedure may not easily deliver the object of auction from the lien holder after the successful bid. Accordingly, the real estate for the auction is likely to be successful at a lower price. As can be seen, the risk that the amount of distribution of the mortgagee who applied for the auction due to the successful bid decreases or that the sale itself is impossible due to a large amount of lien reported compared to the value of the object of auction is an unstable legal status of the mortgagee in the auction procedure. Therefore, the mortgagee’s interest to remove the said apprehension cannot be deemed as a mere de facto and economic interest in the auction procedure. Therefore, in cases where there is a legal interest in seeking confirmation against the person who reported the lien, as well as in whole the absence of a lien against the person who claimed only part of the secured claim in the auction.

[2] In a passive confirmation lawsuit, if the plaintiff alleged that the cause of the debt occurred by specifying the plaintiff's claim first, the defendant, the creditor, bears the responsibility to assert and prove the facts required for the legal relationship. Thus, in a lawsuit seeking confirmation of non-existence of the right of retention, the defendant must assert and prove the existence of the subject matter of the right of retention and the related claim.

[1] Article 250 of the Civil Procedure Act, Articles 91(5) and 268 of the Civil Execution Act / [2] Articles 203, 250, and 288 of the Civil Procedure Act, Articles 91(5) and 268 of the Civil Execution Act, Article 320(1) of the Civil Act

[1] Supreme Court Decision 2004Da32848 Delivered on September 23, 2004

Seoul Livestock Industry Cooperatives (Attorney Lee Han-hoon, Counsel for defendant-appellant)

Defendant (Law Firm LLC, Attorneys Gyeong-sik et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2013Na13421 decided November 15, 2013

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

The grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed).

1. Regarding ground of appeal No. 1

A lawsuit for confirmation is recognized in cases where it is the most effective and appropriate means to determine the legal status of the plaintiff as a confirmation judgment to eliminate such apprehension and danger when the legal status of the plaintiff is unstable and dangerous (see Supreme Court Decision 2003Da55059, Dec. 22, 2005, etc.).

According to the reasoning of the judgment of the court below, the court below acknowledged the fact that the defendant reported a lien with the claim for construction price of KRW 3,636,348,300 as the secured claim at the voluntary auction procedure at the request of the plaintiff who is a senior mortgagee, and determined that all of the above claims of the plaintiff are groundless, as long as it cannot be recognized that the defendant had a lien, even if the lien exists, it does not exceed KRW 233,503,375, since the subject matter of the lawsuit of this case is the existence of a lien, since the lien is indivisible, and the scope of the subject matter of the lawsuit of this case does not vary depending on the scope of the secured obligation. Thus, it is not necessary to determine the specific scope of the secured claim of this case, on the grounds of the judgment of the court below.

However, the above determination by the court below is difficult to accept in light of the above legal principles.

According to the records, the total appraisal value of the subject matter of the auction of this case is KRW 4,849,834,640, and the Plaintiff’s claim amount is KRW 4,103,00,000. The Defendant reported a lien of KRW 3.6 billion, and thus, failed to participate in the auction of this case, and thereafter, the auction of this case is postponed at the Plaintiff’s request. According to Article 91(5) of the Civil Execution Act, which applies mutatis mutandis to the auction procedure to exercise the security right pursuant to Article 268 of the Civil Execution Act, the lien holder may not request the successful bidder to transfer the subject matter of the auction until his secured claim is repaid, but the bidder at the auction procedure shall not easily receive the subject matter of the auction from the lien holder after his successful bid, and accordingly, it is likely that real estate at the auction procedure might be bid at the lower price than the Plaintiff’s price of the subject matter of the auction of this case, which is the real estate subject matter of the auction (see Supreme Court Decision 2000Da484, supra, the Plaintiff’s interest in the auction procedure.

Nevertheless, the lower court erred by misapprehending the legal doctrine on the subject of confirmation, etc., contrary to what is alleged in the Plaintiff’s ground of appeal, thereby adversely affecting the conclusion of the judgment, without examining and determining the scope of secured claims in this case.

2. Regarding ground of appeal No. 2

A. In a passive confirmation lawsuit, if the plaintiff alleged to deny the fact that the cause of the debt occurred by specifying the plaintiff's claim first, the defendant, the creditor, bears the burden of assertion and proof as to the facts constituting the requisite of the right relationship. As such, in a lawsuit seeking confirmation of non-existence of the right of retention, the defendant should assert and prove the existence of the subject matter of the right of retention and the related claim.

Based on the contract agreement entered into with the Nonparty, the Defendant: (a) concluded a construction contract with a total of KRW 4,086,348,300 on several occasions from March 31, 2008 to May 10, 201; and (b) received only KRW 450,00,00 from among them, and paid KRW 3,636,348,30.30. However, on April 18, 2008, the Defendant reported the construction amount to KRW 343,636,363; (c) on the other hand, the Nonparty reported the construction amount to the Defendant at KRW 930,930,00 in total; (d) the date on which part of the above contract was prepared; and (d) the Nonparty’s construction work was revised or proposed to be completed; and (d) the Nonparty’s assertion that it was difficult for the Defendant to obtain the total construction amount of KRW 2601,700,000 from the Nonparty’s construction project owner.

Therefore, the court below erred in holding that the claim for construction cost exists in a timely manner in accordance with each of the above contract, although the court below deliberated on the amount of the debt and decided whether to accept part of the claim in this case by demanding proof of the existence of the claim for construction cost as alleged to the defendant. Thus, the ground of appeal assigning this error

B. Examining the relevant legal principles and records, the lower court was justifiable to have determined that the Defendant occupied the instant real estate from January 27, 2012 at the latest on the grounds stated in its reasoning. In so doing, contrary to what is alleged in the grounds of appeal, the lower court did not err by exceeding the bounds of the principle of free evaluation of evidence against logical and empirical rules, or by failing

3. Conclusion

The lower judgment is reversed, and the case is remanded to the lower court for further proceedings consistent with this Opinion. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Lee Ki-taik (Presiding Justice)