채권자대위권의 행사에 의한 처분제한과 피대위채권에 대한 전부명령의 효력

The effect of the assignment order against the claim of obligor in relation to the restricted disposal of obligor after obligee’s exercise of the right of subrogation

In August 29th 2016, The Supreme Court of Korea rendered a meaningful judgement with regard to the concurrence of the obligee’s right of subrogation and the assignment order. The judgement states that the assignment order against the claim of obligor is void if it is arrived to the garnishee after the effectuation of restriction on disposal of obligor according to another obligee’s exercise of the right of subrogation legislated by Korean Civil Law article 405 paragraph 2. The judgement uses analogical application of Korean Civil Execution Law article 229 paragraph 5 based on the similarity in structure between the collection lawsuit and the subrogation action by obligee on monetary claim. Also, obligee’s right of subrogation will be unprofitable if another obligee with assignment order can have its claim exclusively satisfied. Ultimately, the judgement treats the restriction on disposal of obligor effectuated by the subrogation action as the case where attachment or demand for dividend distribution has been made for monetary claim by another obligee. However, the judgement of The Supreme Court of Korea is not appropriate for following reasons - First, obligee’s right of subrogation has low protective value since Korean Civil Law article 405 paragraph 2 does not prohibits the payment from the third party debtor to the obligor and therefore obligee’s right of subrogation can easily become unprofitable. Second, exclusive satisfaction of claim, the effect of obligee’s right of subrogation on monetary claim, has a little need of protection since it is a mere factual effect (phenomenon) which is grounded on the obligee’s right of set-off and can be enjoyed only while another obligee does not intervene only until the obligee receives the payment. The expectation of obligee for the exclusive satisfaction of claim can be easily dissatisfied by the payment made to obligor or the compulsory execution(order of collection) made for another obligee. Third, there is a domestic criticism on exclusive satisfaction of claim as an effect of obligee’s right of subrogation on monetary claim suggesting that it does not accord with the original purpose of obligee’s right of subrogation and that it should be restrained by the interpretation. Fourth, there was an actual attempt of legislation to restrain it in Japan. Fifth, using analogical application of Korean Civil Execution Law article 229 paragraph 5 regarding the obligee’s right of subrogation can make the compulsory execution proceedings for monetary claim unstable. Also, it is doubtful whether the legal principle about the concurrence of the obligee’s right of subrogation on monetary claim and the assignment order which the judgement suggested can have a binding force as it was not applied to the case for actual problem solving.