Open Decision Ledger · Rehabilitation & bankruptcy
Whether the Extinguishment of a Debt by Compulsory Execution Is Subject to Avoidance under the Bankruptcy Act
Translated from the Korean original. Read the Korean
Supreme Court, Dec. 22, 1998, 98Da23614 (judgment)
Case name: 손해배상(기)
Official text on the National Law Information Center
Question
Even where the bankrupt's debt is extinguished not by the bankrupt's own act but by compulsory execution, may it be avoided pursuant to Article 64, subparagraph 2 of the Bankruptcy Act?
Holding
Acts concerning the extinguishment of obligations under Article 64, subparagraph 2 of the Bankruptcy Act include those based on acts of execution under Article 67 of the same Act; accordingly, the extinguishment of a debt by compulsory execution also becomes an act capable of being avoided.
Summary of the holding, verbatim
채무소멸에 관한 행위가 파산자의 행위에 의한 경우뿐 아니라 강제집행에 의한 경우도 부인할 수 있는 행위가 된다.
Unofficial English translation
An act concerning the extinguishment of a debt constitutes an act that may be avoided not only where it results from an act of the bankrupt but also where it arises from compulsory execution.
Disposition
Dismissed Stated in the decision
상고를 기각한다.
Unofficial English translation
The appeal is dismissed.
Form of the test
Elements stated Stated in the decision
같은 법 제67조의 집행행위에 기한 경우도 포함되므로
Unofficial English translation
including where it is based on an act of execution under Article 67 of the same Act
Factors
- 파산법 제64조 제2호에서 말하는 채무소멸에 관한 행위
- 같은 법 제67조의 집행행위에 기한 경우도 포함되므로
- 파산자의 행위에 의한 경우뿐 아니라 강제집행에 의한 경우도
Unofficial English translation
• an act concerning the extinguishment of a debt as referred to in Article 64, subparagraph 2 of the Bankruptcy Act
• including where it is based on an act of execution under Article 67 of the same Act
• not only where it results from an act of the bankrupt but also where it arises from compulsory execution
Relation to precedent
Cannot be determined Not in the decision
Decisions referred to
None listed
Burden of proof
Not addressed Not in the decision
Open question and revisit condition
When the extinguishment of a debt by compulsory execution is avoided, are other requirements for avoidance, such as the time of the act or the creditor's knowledge, determined by the same standard as in the case of an act by the bankrupt?
If the Supreme Court reaches a different holding on the interpretation of the avoidance provisions of the Debtor Rehabilitation and Bankruptcy Act, which succeeded the Bankruptcy Act, this reading is re-examined.
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As compared with an independent reading by another AI model (GPT-6 Astra), which read only the original text without seeing the primary reading, all 8 axes matched.
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Lower-court contrast & scope of application
Lower-court reading vs. Supreme Court holding
Lower-court context: According to the reasoning, the court below held, in effect, that the extinguishment of a debt by compulsory execution is also subject to avoidance under Article 64, subparagraph 2 of the Bankruptcy Act. The facts found by the court below and the specific course of its determination cannot be confirmed from the reasoning.
Supreme Court standard: The Supreme Court, finding the determination of the court below to the same effect to be correct and finding no misapprehension of legal principles or failure to exhaust deliberations concerning the right of avoidance under the Bankruptcy Act, dismissed the final appeal.
Distinguishing conditions
- Where a different type of act, rather than an act concerning the extinguishment of an obligation, is disputed as the subject of avoidance
- Where other requirements for the exercise of the right of avoidance, such as the time of the act or the knowledge of the other party, are not satisfied
- Where the case is one to which the Debtor Rehabilitation and Bankruptcy Act applies, so that the wording and requirements of the current avoidance provisions need to be checked separately
Record verification notes
Before asserting the same conclusion, confirm the sequence between the point in time when the debt was extinguished by compulsory execution and the point in time of the bankrupt's suspension of payment or the filing of the bankruptcy petition.
From the official text
Points at issue
파산자의 채무소멸에 관한 행위가 강제집행에 의한 경우도 파산법 제64조 제2호에 의한 부인권의 행사대상인지 여부(적극)
Unofficial English translation
Whether an act concerning the extinguishment of the bankrupt's debt may also be subject to the exercise of the right of avoidance under Article 64, subparagraph 2 of the Bankruptcy Act where it arises from compulsory execution (affirmative)
Summary of the holding
파산법 제64조 제2호에서 말하는 채무소멸에 관한 행위에는 같은 법 제67조의 집행행위에 기한 경우도 포함되므로, 채무소멸에 관한 행위가 파산자의 행위에 의한 경우뿐 아니라 강제집행에 의한 경우도 부인할 수 있는 행위가 된다.
Order
상고를 기각한다. 상고비용은 피고의 부담으로 한다.
Unofficial English translation
The appeal is dismissed. The costs of the final appeal shall be borne by the defendant.
Provisions referred to
파산법 제64조 제2호, 제67조
Read 2026-10-16 · Cross-read 2026-10-16. All quotes matched against the official text. The Chinese-character placeholders the court used for anonymised parties are given in their Korean readings, and parenthetical Chinese-character glosses are omitted.
Every entry is published only after all quotes have been matched character by character against the official text, and audited by an independent second reading from a different model family across all eight axes. Both agreed axes and text-grounded interpretive divergences are recorded openly. The ledger is a research record, not an assessment of the court or advice on any matter.
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