In cases where a judgment in favor of the creditor on the merits becomes final and conclusive after the amount of dividends has been deposited on the claims of the creditor of provisional seizure in the real estate auction procedure, whether the claims of the creditor of provisional seizure who ordered payment in the final and conclusive judgment on the merits are extinguished at the time the judgment on the merits became final and conclusive within the scope of appropriation by deposited dividends (affirmative in principle) / Whether such legal principle applies likewise to cases where the debtor is declared bankrupt after the judgment on the merits became final and conclusive (affirmative), and whether the dividends deposited by the creditor of provisional seizure received after the debtor’s bankruptcy was declared

All property owned by the debtor at the time that the debtor is declared bankrupt (Article 382(1) of the Debtor Rehabilitation and Bankruptcy Act (hereinafter “the Debtor Rehabilitation Act”)). Any compulsory execution, provisional seizure or provisional disposition, which is effected against the debtor based on any bankruptcy claim, which is a property claim arising before the debtor is declared bankrupt, against the bankrupt estate, shall lose its effect against the bankrupt estate (Articles 423 and 348(1) of the Debtor Rehabilitation Act).

Meanwhile, in the auction procedure against real estate, the distribution court shall deposit the amount of dividends to the creditor of provisional seizure for the claim of the creditor of provisional seizure at the time of distributing dividends, and thereafter, in the event the cause of deposit has ceased to exist as the judgment in favor of the creditor becomes final and conclusive as to the claim in favor of the creditor of the principal claim, the court shall pay the deposit money to the creditor of provisional seizure (Articles 160(1)2 and 161(1) of the Civil Execution Act). Therefore, barring any special circumstance, the claim of the creditor of provisional seizure who ordered payment at the final and conclusive judgment on the merits becomes extinct at the time of final and conclusive judgment on the merits to the extent that the claim is appropriated for the amount deposited as above. Such legal principles are equally applied even if the debtor was declared bankrupt after the judgment on the merits became final and conclusive, so the effect of extinguishment of claim

In such a case, even if the dividend deposited by the creditor of provisional attachment receives it after the debtor is declared bankrupt, it is nothing more than that the receipt of the deposit already appropriated for the extinction of the claim of provisional attachment at the time when the judgment on the merits became final and conclusive, only is made at a separate point after the judgment on the merits becomes final and conclusive. Therefore, the deposit received by the creditor of provisional attachment as above

Articles 348(1), 382(1), and 423 of the Debtor Rehabilitation and Bankruptcy Act; Articles 160(1)2 and 161(1) of the Civil Execution Act; Article 741 of the Civil Act

Supreme Court Decision 2012Da65874 Decided September 4, 2014 (Gong2014Ha, 1987)

The Nonparty’s bankruptcy trustee

Specialized Construction Financial Cooperative (Law Firm LLC, Attorneys Nam Young-soo et al., Counsel for the defendant-appellant)

Seoul Central District Court Decision 2016Na6926 decided May 18, 2016

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

The grounds of appeal are examined.

1. All property owned by the debtor at the time that the debtor is declared bankrupt shall belong to the bankrupt estate [Article 382(1) of the Debtor Rehabilitation and Bankruptcy Act (hereinafter “the Debtor Rehabilitation Act”). Compulsory execution, provisional seizure, or provisional disposition, which is effected against the debtor based on the bankruptcy claim, which is a property claim arising before the debtor is declared bankrupt, against the property belonging to the bankrupt estate, shall lose its effect against the bankrupt estate (Articles 423 and 348(1) of

Meanwhile, in the auction procedure against real estate, the distribution court shall deposit the amount of dividends to the creditor of provisional seizure for the claim of the creditor of provisional seizure at the time of distributing dividends, and in the event the cause of deposit has ceased to exist as the judgment in favor of the creditor becomes final and conclusive as to the claim in favor of the creditor of the principal claim, the provisional seizure creditor shall pay the deposit amount (Articles 160(1)2 and 161(1) of the Civil Execution Act). Therefore, barring any special circumstance, the claim of the creditor of provisional seizure who ordered a payment at the final and conclusive judgment on the merits shall be extinguished at the time the judgment on the merits became final and conclusive to the extent that the claim is appropriated for the amount deposited as above (see Supreme Court Decision 2012Da65874, Sept. 4, 2014). Such legal principle is equally applicable to the above legal principle, and thus, the effect of extinguishment of the claim already occurred at the time of the final and conclusive judgment on the merits shall be deemed to remain valid

In such a case, even if the dividend deposited by the creditor of provisional attachment receives it after the debtor is declared bankrupt, it is nothing more than that the receipt is made at a separate point after the judgment on the merits became final and conclusive. Therefore, the deposit received by the creditor of provisional attachment after the judgment on the merits becomes final and conclusive shall not constitute unjust enrichment under the Civil Act in relation to the trustee in bankruptcy.

2. A. According to the reasoning of the judgment below, the court below held that, in the event that there are special circumstances, such as the debtor's declaration of bankruptcy while the creditor of provisional attachment did not pay the deposit despite the judgment on the merits of the case became final and conclusive, the right to claim payment of the deposit becomes an asset belonging to the bankrupt estate and the compulsory execution, provisional seizure, or provisional disposition against it becomes null and void, the claim of the creditor of provisional attachment is not extinguished, and therefore, as long as the defendant who is the person holding the provisional attachment voluntarily

B. However, the above determination by the court below is difficult to accept in the following respect.

1) Review of the reasoning of the lower judgment and the record reveals the following facts.

A) On June 14, 201, after the registration of provisional seizure by the Defendant was completed on June 14, 201, the voluntary auction of real estate (hereinafter “instant voluntary auction”) was commenced upon the application of the new bank, Co., Ltd., Ltd., a collateral security right holder, on August 10, 2011.

B) In the instant voluntary auction on April 12, 2012, the said real estate was sold, and on May 25, 2012, the distribution was carried out, and KRW 24,272,517 was distributed to the Defendant, who is the person holding the right to a provisional attachment. On June 5, 2012, the executing court deposited the said amount of dividends against the Defendant pursuant to Article 160(1) of the Civil Execution Act (hereinafter “deposit money”).

C) On July 26, 2013, the Defendant filed a lawsuit against the Nonparty, etc., the bankrupt debtor, etc. seeking reimbursement of KRW 195,135,219 as Seoul Central District Court 2013Gahap298, and damages for delay thereof. On July 26, 2013, the said court rendered a judgment in favor of the Defendant (hereinafter “instant judgment”), and the instant judgment on the merits became final and conclusive on August 17, 2013.

D) Meanwhile, the Nonparty, on June 17, 2014, filed a petition for bankruptcy with the Seoul Central District Court No. 2014Hadan6176 on the grounds that the said bankruptcy debtor was declared bankrupt on August 27, 2014, and the said court appointed the Plaintiff as the bankruptcy trustee.

E) On October 22, 2014, the Defendant paid KRW 24,279,832, including the instant deposit and interest thereon.

2) Examining the foregoing facts in light of the legal principles as seen earlier, the Defendant’s claim against the Nonparty, etc., who is the right holder of provisional attachment, was extinguished within the scope of appropriation of the instant deposit, and the effect of the extinguishment of the claim that had already occurred after the bankruptcy was declared against the Nonparty shall be deemed as still maintained even if the Nonparty was declared bankrupt. Therefore, even if the Defendant received the instant deposit money after the declaration of bankruptcy against the Nonparty, it was merely the Defendant’s receipt of the instant deposit that was already appropriated for the extinction of the provisional attachment claim at the time of the final judgment on the merits became final and conclusive, and thus, it cannot be deemed that unjust enrichment is established under the Civil Act in relation to the Plaintiff, who is the trustee in bankruptcy.

C. Nevertheless, the court below erred by misapprehending the legal principles as to the time of extinction of the preserved claim and the subject of attribution of the dividends deposited for the creditor of provisional seizure, and thereby adversely affecting the conclusion of the judgment, on the ground that the provisional seizure creditor filed a claim against the defendant for return of unjust enrichment by deeming that the defendant had voluntarily withdrawn from the property belonging to the bankrupt estate even though the deposit was still a property belonging to the bankrupt estate. The ground of appeal pointing this out is with merit.

3. Therefore, 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 Kim Shin (Presiding Justice)