Hyundai Switzerland Mutual Savings Bank, Inc.

Korea Standards Bank, Inc., and 2 others

June 26, 2009

1. The plaintiff's claims against the defendants are all dismissed.

2. The costs of lawsuit shall be borne by the Plaintiff.

Of the distribution schedule prepared on March 9, 2009 by the above court with respect to the auction case of real estate rent in Seoul Southern District Court 2007Taeng 17380, the dividend amount of KRW 180,000,000 to the defendant Korea Standards Bank for the defendant 2 and 3 shall be KRW 162,950,106, the dividend amount of KRW 36,619,054 to the defendant 2 and 3 shall be KRW 0,00, and the dividend amount of KRW 53,68,948 to the plaintiff shall be corrected.

1. Basic facts

A. On May 2, 2003, Nonparty 1 concluded a lease contract with Nonparty 2 to lease KRW 90,000 from May 23, 2003 to May 23, 2005, for the lease term of the Yangcheon-gu Seoul (Dong and its lot number omitted) 3 apartment complex 301, 102 (hereinafter “instant real estate”). Nonparty 1 concluded a lease contract with Nonparty 2 to lease the deposit amount of KRW 90,000,00. Nonparty 2 occupied on May 23, 2003, and obtained a fixed date on the lease agreement. After that, Nonparty 1 concluded a lease renewal contract with Nonparty 2 on April 11, 2005 to extend the lease term until May 23, 2007.

B. On June 14, 2004, the Plaintiff leased KRW 60,000,00 to Nonparty 1 on a due date on April 14, 2005, and received from Nonparty 1 the refund claim of KRW 90,000,000 under the above lease agreement on the instant real estate for the purpose of securing the above loan repayment claim, and Nonparty 2 consented to the assignment of claim on the same day.

C. Nonparty 3 (the husband of Nonparty 1) purchased the instant real estate from Nonparty 2 on October 24, 2006 and completed the registration of ownership transfer on October 24, 2006. In addition, on the date of the acquisition of ownership, concluded a mortgage agreement with the Defendant Korea Standards Bank, Inc., Ltd., and concluded the mortgage agreement with the said Defendant, which amounted to KRW 180,000,000 for the maximum debt amount. On November 23, 2006, Defendant 2 and 3 created a joint collateral security at KRW 75,00,000 for the maximum debt amount.

D. Upon the commencement of the auction of real estate on August 14, 2007 at the Seoul Southern District Court (Seoul Southern District Court) around 2007, around 17380 with respect to the instant real estate on August 14, 2007, the Defendant Co., Ltd. reported the right and demand for distribution as each mortgagee, and the Plaintiff also reported the right and demand for distribution to the said court as the lessee of the instant real estate on September 2007.

E. On February 11, 2009, the instant real estate was sold at KRW 219,90,000 on the date of the sale of the said auction procedure. On March 9, 2009, the said auction court: (a) distributed KRW 216,839,474 out of the amount to be actually distributed after adding interest to the above sale price and deducting the execution cost; (b) KRW 180,000,000 to Defendant Korea-based Bank, Inc., Ltd.; and (c) distributed KRW 36,619,054 to Defendant 2 and 3, and the Plaintiff was excluded from the said distribution.

F. On March 9, 2009, the date of distribution of the above auction procedure, the Plaintiff stated an objection against the total amount of dividends to the Defendants.

[Ground of recognition] Unsatisfy, Gap evidence 1, 2, 3, Gap evidence 4-1, 2, Gap evidence 5-1, 2, Gap evidence 6, Eul evidence 2 (the same as Eul evidence 1) and the purport of the whole pleadings

2. The plaintiff's assertion

As the cause of the instant claim, the Plaintiff asserted that, as Nonparty 1’s creditor who was transferred the right to return the lease deposit by Nonparty 1 to Nonparty 1, the debtor, was the debtor, the Plaintiff should be given priority over the Defendants, who was transferred the right to return the lease deposit from Nonparty 1, who had already met the requirements for setting up a right to lease prior to acquiring a mortgage, and thus, the Plaintiff should be given priority over the Defendants.

3. Determination

According to Article 3(2) of the Housing Lease Protection Act, when a lessee of a house equipped with a fixed date in a lease agreement entered into a housing lease agreement and completed resident registration with a lessor, he/she has the right to receive a deposit in preference to junior creditors or other creditors from the proceeds from the sale of a house leased pursuant to the Civil Execution Act. It is apparent from the language and text that the aforementioned provision recognizes the right to preferential payment of a lease deposit only to the “Lessee” of a residential building.

However, according to the facts acknowledged earlier, the Plaintiff is merely a person who has received a claim for the return of the lease deposit from Nonparty 1 as a general pecuniary claimant, and there is no reason to acknowledge that the Plaintiff is a lessee of the instant real estate or that the Plaintiff was transferred the right of lease of the instant real estate from Nonparty 1. It is evident that the Plaintiff’s assertion in this case is not acceptable (in the case of transfer of a pecuniary claim secured by a mortgage, it is the same as merely that the transferee of the claim can participate in the distribution in the position of a general creditor who has no preferential right of payment, in the auction procedure for the debtor’s property, if the Plaintiff merely received the claim without being separately transferred the right of lease from the transferor of the claim.

On the other hand, the plaintiff's assertion that he demanded a distribution as the exercise of creditor's subrogation right is examined. If the plaintiff exercised the right to demand a distribution in the auction procedure by subrogation against the non-party 1 as the creditor of the above claim against the non-party 1, the plaintiff's assertion is clear that the non-party 1 has not already transferred the right to return the lease deposit to the plaintiff and has no claim to return the lease deposit to be preferentially reimbursed any more, as seen earlier, so the plaintiff's assertion is not reasonable. If the plaintiff's assertion of subrogation by the plaintiff is the creditor under the contract for the transfer of the claim to return the lease deposit by the non-party 1, who is the creditor under the contract for the transfer of the claim to which the claim to return the lease deposit was transferred by the non-party 1, and the lessor has expressed his consent to the transfer of the claim, the non-party 1 has already transferred the lease deposit to the plaintiff as the performance of the obligation under the above contract for the transfer of the claim and payment, and there is no further benefit.

Thus, the plaintiff's claim of this case is dismissed as it does not appear to be a mother or have any ground.

Judges Lee Sung-hoon