담보물권의 목적인 채권의 상계

A Study on the Setoff over pledged claims

The Supreme Court has traditionally ruled that the pledgee has preferential right to payment, and thus the holder of opposite-demand (the third debtor) cannot contest pledge using setoff. This shows that the court recognizes the fact that setoff functions as a means of private enforcement and thus considers holders of setoff rights as a competing creditor. This is a reasonable standpoint. As setoff functions in reality as a means of private execution, this reality should be considered when granting or denying setoff rights. However, the ruling in question(2013da91672) states that provided that the expectation of setoff is reasonable, it can be used to contest pledge granted by way of security to pledged claim. Pledge has priority over credit, regardless of the timing of their formation. Therefore, it is natural to concluded that even if the expectation of setoff was established before the pledge, setoff cannot be given priority over pledge. The ruling in question states that as long as a creditor’s expectation of setoff is reasonable, it cannot be damaged by ex post facto grounds such as the establishment of pledge granted by way of security. However, it is disputable that “reasonable expectation of setoff is a concept with any factual substance that cannot be damaged once established. Until now, this issue has been discussed in relation to the interpretation of Article 498 of the Civil Act where said interested parties are (provisional) seizure obligees. The ruling in question appears to be based on such existing discussions of Article 498 of the Civil Act. However, interested parties shoud be distinguished between (provisional) seizure obligees and real right holders. If the enforcement function of setoff is not disregarded, the priority of real right to credit should also be considered as ground to limit setoff rights. Thus, the correct ruling in the case in question should be that the loan creditor cannot contest the lease right(chonsegwon)-mortgagee with setoff.