In Korea, remedy for violation of rights in civil disputes is implemented by civil execution procedures. In real estate auction procedure, one of civil execution procedures, often we can see "… Lien has been reported but its existence is uncertain" in the remarks of the list of matters to be sold. The present study began with the question of whether for the court, which exists for the final settlement of disputes, it is adequate to make an advance notice of disputes related to lien and execute real estate auction procedure for the temporary settlement of the disputes.
With this background and purpose, the present thesis is composed as follows, focused on civil lien on real estate in real estate auction procedure.
Chapter I Introduction suggested practical problems related to lien in real estate auction procedure for presenting the objectives of the research, pointed out that an appropriate system and legal interpretation are required in order to protect the rights and interests of lien holders in real estate auction procedure and to resolve the legal instability of auction procedure, and presented research methods within the scope of research.
Chapter II, which is on legal principles related to real estate auction and lien, reviewed and analyzed the legal structure of real estate auctions including the meaning and history of real estate auctions from the viewpoint of comparative law, and analyzed existing interpretation theories on lien on real estate by examining the formation of lien under the Korean Civil Code and legislative cases in several countries. Based on the results, Chapter III studied methods for claiming rights practically applicable in real estate auction procedure applied by a third party by analyzing the countervailing power and distribution of lien such as lien holders' countervailing power, the existence of persons interested and the possibility of distribution according to the time of constitution of lien, examined practical methods for interpreting these matters expected to increase in the future by attempting new interpretation centering on the nature and procedure of real estate auctions applied by lien holders based on the lien, and analyzed lawsuits for confirming or reconfirming the existence of lien related to real estate auction procedure. Through these studies, this chapter dealt with the interpretation of lien in real estate auction procedure from practical viewpoints. Based on the discussion above, Chapter IV divided the real estate auction procedure into the stage of preparing the sale of real estate, the stage of real estate sale, the stage of distribution, the stage of lawsuit, etc. centering on the practical interpretation of the lien system under the current law, and discussed interpretation and legislation for solving problems in the current lien system.
Lastly, Chapter V Conclusion summarized the discussions of this study, and drew conclusions on lien in real estate auction procedure.
Summing up the discussions of this study, in civil execution procedure, the court plays the role of satisfying obligees' right by settling disputes among the involved persons ideally and realizing the fulfillment of obligations by exercising legal force on those who do not fulfill their obligations arbitrarily. That is, the compulsory execution system is a procedure promoting the implementation of the right to demand performance specified in the title by the executive organ's exercise of legal force upon the obligors.
Auction must protect the obligees and the obligors first of all, and consider the court's economy of procedure. Particularly, as lien on real estate is not announced, buyers hesitate to bid and this is a major cause of failed bids.
Not only cases that lien is reported in real estate auction procedure applied by others, but also recently there are increasing cases of application for auction by lien holders such as construction contractors for unsold real estate due to the depression of real estate construction business. If an auction applied by a lien holder is treated simply as a realization-type perfunctory auction and the buyer is forced to take over unconditionally, it is obvious that the applicants are reluctant to buy in fear of the emergence of unexpected lien holders and this increases the possibility of failed bid. After all, this troubles lien holders' credit security and obligors lose their opportunity to pay debts at once. The court also has to hold another bid due to continuous failed bids. Therefore, it is desirable to clear lien not announced in the registry as soon as possible.
Thus, with regard to lien in real estate auction procedure, one of highly controversial issues these days, the present study examined practical solutions for subordinated liens through the analogical application of practices in cases that lien is reported in real estate auction procedure applied by others, for which it is urgent to prepare legal measures against problems arising from false reports of lien, and cases that under the old Civil Procedure Act, when the superior mortgage extinguishes, subordinated usufructuary rights are also considered extinct even if there is no applicable legal provision. That is, in response to the necessity for the interpretation that eligibility for dividend exists also in subordinated lien holders contrary to the common opinion, we formulated a theory from a practical viewpoint in given conditions.
In addition, we formulated the theory of interpretation that real estate auction procedure applied by lien holders should be settled not by formal logic but from the viewpoint of liquidation-type realization auction. It is because we viewed that the practical idea of "once-for-all settlement of disputes" in civil suits is also necessary in auction procedure and tried to find solutions under the given legal system.
Also, this study suggests a number of institutional improvement plans from the legislative aspect for promoting the legal stability of auction procedure and enhancing the reliability of compulsory execution by clarifying rights related to lien on real estate to be sold in real estate auction procedure.
First, we examined closely the characteristics of lien as a real right granted by way of security. That is, like the effect of subordinated mortgages established later than superior mortgages is not denied in real estate auction but their right to obtain preferential satisfaction can be exercised only for the amount left after the superior mortgagees exercise their right on the subject matter, we can interpret lien in the same way from the viewpoint of fairness if lien is not for pleading against the opponent but is a real right granted by way of security under the law of obligation.
Second, as to real estate auctions applied by lien holders, we should not treat them as purely realization-type perfunctory auctions on the assumption that then lien holders apply them in order to avoid the burden of unconditional retention of the subject matters. That is, based on the fact that the Civil Law does not provide lien as a credit-like right to refuse considerations as in Germany but as a legal real right granted by way of security, we believe that lien holders retain the right of realization in a real sense like mortgagees exercise their security right.
Third, as to process in the executive court, it is necessary for the court to change its attitude toward the process in terms of promptness while the court of the suit pursues fairness in its decisions. That is, recognizing that lien is a real right granted by way of security, the executive court should treat lien holders subordinate to superior mortgages as persons interested and allow them to enjoy various rights given under the Civil Execution Act. In addition, executors who investigate such cases should be given authorities and responsibilities for legal judgment so that their activities should not be limited to formal fact finding. That is, improvement can be made by including in the current form of investigation order "Legal judgment on the existence of lien in the occupation of real estate."
From these viewpoints, it is considered necessary to develop advanced legislative security measures by examining related legal systems in Japan, which is superior to us in this area. Furthermore, there should be legal provisions demanding lien holders' report of their rights. That is, the obligatory lien report system can be solved legislatively by revising "… creditors who seized provisionally …" in Clause 1 of Article 88 of the Civil Execution Act to "… creditors who seized provisionally or reported lien …". What is more, in order to resolve the instability of sales procedure, the period of lien report should be until the date of termination of claim for dividend like lessees under the Housing Lease Protection Act and the Commercial Building Lease Protection Act. If an executor investigates lien holders and submits a report and there is any loss resulting from defects in the report, the loss can be made up for using the money deposited in the competent district court when the executor was appointed.
Fourth, with improvement in the method of announcing lien on real estate before the sales of real estate, another method is converting lien into a legal mortgage for establishing the order of real rights granted by way of security. That is, a legislative improvement was suggested, which is adding "When the debtor's real estate occupied by a lien holder is seized, the lien has the same effect as a mortgage" as Clause 3 of Article 322 of the Civil Code. In addition, the registration and announcement of lien by the introduction of the mandatory lien registration system similar to the mandatory lease right registration under the current Housing Lease Protection Act can make it easy to protect lien holders' rights and the right to use the subject matters. That is, a legislative improvement was suggested, which is prompt registration by the request of the court of execution through the introduction of the lien registration system initiated by lien registration order.
Furthermore, the introduction of a system that determines the existence of lien reported to the executive court can solve problems such as false or excessive lien reports. For this, it is considered necessary to adopt the system that requires the deposit of 10% of proceeds from sale in immediate appeal against a decision granting sale. That is, a legislative improvement was suggested, which adds "One who appeals for a decision on lien should put as security deposit money or securities approved by the court amounting to a tens of the amount of credit secured by the lien" and "When an appeal for a decision on lien has been dismissed, the complainer cannot demand the return of money or securities provided as security deposit" as Article 2 of 91 (Appeal for a Decision on Lien) of the Civil Execution Act.
Fifth, in case of the distribution of the successful bid price in the executive court, lien holders have the right to apply for auction but not the right to obtain preferential satisfaction, so they are considered not eligible for dividend. However, the executive court should take an active measure or solve this problem within the limit allowed. That is, considering that lien is not a right to refuse considerations under the Law of Obligation as in Germany but is provided as a real right granted by way of security and subordinated mortgagees receive dividend according to their order even if their mortgage extinguishes, we advocate lien holders' eligibility for dividend. That is, to lien holders is applicable Clause 1 of Article 88 of the Civil Execution Act "… obligees with the right to demand preferential satisfaction by other laws …" According to Clause 5 of Article 91 of the Civil Execution Act and from the viewpoint of normative interpretation, the top-priority lien is transferred to the buyer and other lien holders are eligible to claim dividend.
Lastly, for the prompt proceeding of lawsuits for confirming the existence or inexistence of lien in real estate auctions, we need to adopt the performance recommendation system in the trials for small claims. In the performance recommendation system, if the court's decision is trusted and no objection is raised to it, the decision has an effect equal to a conclusive judgment. In the same way, we need to introduce a recommendation system on the existence or inexistence of lien in lawsuits on lien. That is, legislative improvement can be made by revising "The procedure of settlement before instituting a lawsuit" to "The procedure of settlement before instituting a lawsuit and application for lien on real estate" in Part IV of the Civil Procedure Act and adding "In case a lawsuit has been filed over the existence of lien in the process of real estate auction, the court can recommend the defendant to perform according to the purpose of the application by attaching a duplicate of the complaint or the transcript of the protocol in instituting the lawsuit" as Article 1 of 389 (Procedure of Application for Lien on Real Estate).
We cannot ignore the fact that 20%~30% of lawsuits over real estate auctions are related to lien and 80~90% of lien reports are false. Therefore, if the executive court does not have a system for deciding the existence of lien, it is necessary to introduce such a system for the practical need of prompt proceeding. That is, legislative improvement can be made by revising "… request for the purpose of payment …" to "… request for the purpose of payment and request for the existence of lien in the process of real estate auction…" in Article 462 (Requirements for Application) of Part V of the Civil Procedure Act.
Furthermore, as bidders participate after the conditions of sale have been fixed, the system can prevent the delay of execution procedure and future disputes resulting from the abuse of the system and satisfy obligees through the optimization of sale price, and ultimately attain the goals of execution procedure. If rights related to lien on real estate to be sold in real estate auction procedure are clarified and consequently the system for stable auction procedure is settled and the effectiveness of execution procedure is secured, our legal culture will be upgraded a level higher.
Among the suggested improvement plans from the viewpoint of legislation and interpretation are legislatively adopted, they may clarify the status of lien holders in real estate auction procedure and solve problems related to the status. Furthermore, we expect the settlement of an efficient real estate auction system by preventing the delay of real estate auction procedure or future disputes arising from the abuse of the lien system.