Summary
This chapter distinguishes eligibility to make a demand for distribution from the statutory scope of creditors who actually receive distribution.
1.1The Standard by Which the Path Opens
Mere assertion of a prior right does not place one's name on the distribution table. Only when statements acknowledging the claim, deposit (payment into court), and actual receipt by the creditor are separately recorded will the endpoint of enforcement not be overstated. Now, Creditor A claims to have a right to preferential payment, but no record remains as to whether a demand for distribution was made. Since the fact of holding the priority right and the status of being a target of the distribution of the sale proceeds are matters of separate determination, the question now is whether participation in the procedure also follows automatically once the priority right exists. Participation in distribution means becoming a target of the distribution of the sale proceeds in the statutory manner, and the determination of this section stays only at the standard for the entrance to that channel.
Article 88 of the Civil Execution Act provides: "A creditor who has an enforceable authenticated copy, a creditor who has made a provisional attachment after the registration of an auction commencement decision, and a creditor who has a right to claim preferential payment under the Civil Act, the Commercial Act, or other statutes may make a demand for distribution." The subjects of this text are the creditors enumerated in the respective subparagraphs, the act is the demand for distribution, and the condition is the existence of the corresponding qualification. What this provision confers, however, is merely the qualification to make a demand.
The reason why Article 148 of the Civil Execution Act separately limits the creditors who are to receive distribution lies here. This Article lists side by side "creditors who have made a demand for distribution by the deadline for demands for distribution" and "creditors who hold a mortgage, jeonse right, or other right to claim preferential payment that was registered before the first registration of the auction commencement decision and is extinguished by the sale," distinguishing whether a demand has been submitted from the status of automatic participation fixed by registration. This is why the determination that one holds the qualification to make a demand and the determination that one actually enters the target of distribution are separate stages, and here a fixed conclusion is attached that the channel opens only where the required demand for distribution has been made and the action and documents corresponding to the objection have been submitted within the period.
Losing a substantive priority right because one did not know the procedure is harsh. If a small-claim creditor, having received no guidance, misses the deadline and is pushed back in the distribution table, recovery is difficult, and that loss is not wiped away even by registration. Yet holding a right to preferential payment cannot be converted in every case into automatic participation in distribution. If automatic status were granted on the strength of qualification alone, the range of claims marked by demands for distribution would become unstable, and the share of creditors who kept the deadline within the same table would become unpredictable. This is why, while acknowledging the disadvantage pointed out by the counterargument, the formal requirements at the entrance are not stripped away.
In the synthetic scene, all that is confirmed is the circumstance that Creditor A claims a right to preferential payment while no record of a demand for distribution remains. Because the time of the demand and of the submission cannot be confirmed, it cannot be determined whether the status of automatic participation has arisen or whether the deadline for demands for distribution was missed. However, if it is confirmed as an automatic-participation right registered before the statutory point in time, exclusion is not fixed merely by the separate omission of a demand for distribution. Statements acknowledging the claim, deposit (payment into court), and actual receipt by the creditor, which cannot be fixed by the scene, remain unverified, and this does not immediately mean that relief is impossible.
Accordingly, the entrance to this relief does not open on the strength of an assertion of priority alone. Conversely, where the statutory status of participation, the required demand for distribution, and the submission within the period of the action and documents corresponding to the objection are all in place, it cannot be said that the entrance is closed.
1.2The Conditions That Block Relief
When examining the difference between the qualification to demand distribution and actual participation in distribution, Creditor A claims to have a right to preferential payment, but no record remains as to whether a demand for distribution was made. After it was confirmed earlier that statements acknowledging the claim, deposit (payment into court), and actual receipt by the creditor must be separately recorded lest the endpoint of enforcement be overstated, the question now arises whether the existence of the right and the procedural status of participation are distinct matters.
The first basis for answering this question is Article 88 (1) of the Civil Execution Act. Its text provides: "①A creditor who has an enforceable authenticated copy, a creditor who has made a provisional attachment after the registration of an auction commencement decision, and a creditor who has a right to claim preferential payment under the Civil Act, the Commercial Act, or other statutes may make a demand for distribution" (Article 88 of the Civil Execution Act). What is determined here is the subject qualified to make a demand for distribution and the conditions of the act constituting that qualification. The text merely permits the enumerated creditors to take the form of a demand for distribution; it does not say that their names are placed on the distribution table automatically on the strength of that qualification alone.
This section separates the qualification to make a demand for distribution from the statutory range of creditors who actually receive distribution. Article 148 of the Civil Execution Act provides: "The creditors who are to receive distribution of the amount prescribed in Article 147 (1) shall be the persons prescribed in the following subparagraphs: 1. An attaching creditor who has applied for auction by the deadline for demands for distribution; 2. A creditor who has made a demand for distribution by the deadline for demands for distribution; 3. A provisional attachment creditor registered before the first registration of the auction commencement decision; 4. A creditor who holds a mortgage, jeonse right, or other right to claim preferential payment that was registered before the first registration of the auction commencement decision and is extinguished by the sale" (Article 148 of the Civil Execution Act), binding the persons subject to distribution to the requirements of each subparagraph. The reason this distinction matters is that the qualification in the preceding paragraph opens the entrance to the procedure, whereas the range in this paragraph determines whether that entrance has actually been passed. Even if one holds the qualification under Article 88 (1), if the requirements of Article 148 are not met, one does not reach participation in distribution, meaning becoming a target of the distribution of the sale proceeds in the statutory manner; and if even one requirement is missing, the channel of relief is closed.
Divided this way, losing a substantive priority right because one did not know the procedure may appear harsh. The criticism that it is unjust for a claim deserving of protection to be pushed aside by a formal omission of a demand for distribution is aimed at a clear loss. At the core of that criticism lie the facts that a creditor who has already secured a right to preferential payment loses the substance on account of the formality of the record, and that this disadvantage may operate regardless of the nature of the claim. The author, without denying this disadvantage, answers that holding a right to preferential payment cannot be converted in every case into automatic participation in distribution. The qualification required by Article 88 (1) and the range set by Article 148 are distinct requirements, so substituting the former for the latter would make the meaning of the statutory range prescribed in each subparagraph disappear.
The fact confirmed in this scene is only that Creditor A asserts a right to preferential payment while no record of a demand for distribution is visible. Contrasting this with the subparagraphs of Article 148, the requirement of subparagraph 2, namely that a demand for distribution was made by the deadline for demands for distribution, has not been established by the record. By contrast, the registration requirement of subparagraph 4 cannot be confirmed either, since the scene contains no time of registration. Accordingly, on the strength of this scene alone, it cannot be determined whether Creditor A falls within the statutory range, or could have fallen within it. Whether a demand for distribution could have been made, whether it was actually made, and whether there was a status of automatic participation without a demand each remain items to be confirmed separately.
The conclusion this section permits is narrow. Participation in distribution does not arise automatically on the strength of holding a right to preferential payment alone, and where a creditor required to make a demand for distribution missed the deadline, or failed after the objection to submit proof of the filing of a statutory action, etc., so that the objection is deemed withdrawn, the channel of relief is closed if even one of the statutory requirements is unmet. However, where the status of automatic participation or the time of the demand and submission cannot be confirmed, the matter remains undetermined; and if it is confirmed as an automatic-participation right registered before the statutory point in time, exclusion is not fixed merely by the separate omission of a demand for distribution. Statements acknowledging the claim, deposit (payment into court), and actual receipt by the creditor must be kept separately as records concerning the substance of the right.
1.3The Boundary That Remains When There Is No Data
In this scene, the issue is whether holding the priority right does not necessarily mean participation in distribution, that is, the qualification to become a target of the distribution of the sale proceeds in the statutory manner. The substance of the priority right and inclusion among the targets of distribution must be examined separately.
Article 88 (1) of the Civil Execution Act provides: "①A creditor who has an enforceable authenticated copy, a creditor who has made a provisional attachment after the registration of an auction commencement decision, and a creditor who has a right to claim preferential payment under the Civil Act, the Commercial Act, or other statutes may make a demand for distribution." This text enumerates the subjects qualified to 'make' a demand for distribution. It means that a creditor holding a right to claim preferential payment under the Civil Act, the Commercial Act, and the like also has that qualification; it does not mean that the mere holding of that right causes automatic inclusion in the distribution table.
It provides: "The creditors who are to receive distribution of the amount prescribed in Article 147 (1) shall be the persons prescribed in the following subparagraphs: 1. An attaching creditor who has applied for auction by the deadline for demands for distribution; 2. A creditor who has made a demand for distribution by the deadline for demands for distribution; 3. A provisional attachment creditor registered before the first registration of the auction commencement decision; 4. A creditor who holds a mortgage, jeonse right, or other right to claim preferential payment that was registered before the first registration of the auction commencement decision and is extinguished by the sale." If Article 88 is the entrance to qualification, Article 148 sets the statutory range of the actual targets of distribution. These two stages are separated because the right to make a demand and the status of receiving distribution are constructed as separate requirements. Where the status of automatic participation or the time of the demand and submission cannot be confirmed, matters as to which the materials of determination are not specified remain undetermined, distinguished from impossibility.
The counterargument that losing a substantive priority right because one did not know the procedure is harsh is aimed at the loss whereby the burden of formal procedure pushes out the holder of the substantive right. No one wants the result that a priority right holder, visible through registration, loses its place in the distribution because of the formality of the demand. Even so, holding a right to preferential payment cannot be converted in every case into automatic participation in distribution. If a substantive priority right were to stand in for inclusion among the targets of distribution by itself, the distinction between the deadline and the registration requirements separately prescribed by Article 148 would collapse. While not erasing the disadvantage the counterargument points out, the mere fact of holding the right cannot fix automatic participation.
What is confirmed in the synthetic scene is only the fact that Creditor A asserted a right to preferential payment and that no record remains as to whether a demand for distribution was made. None of rights registration, the deadline for demands for distribution and the application, distribution table, objection, filing of an action, and stay documents can specify the time of the demand and the fact of submission. Whether it is a right recognized as carrying the status of automatic participation, or a claim requiring a demand, likewise cannot be settled on this scene alone. Accordingly, the existence and the time of the demand remain undetermined rather than impossible. If it is confirmed as an automatic-participation right registered before the statutory point in time, exclusion is not fixed merely by the separate omission of a demand for distribution.
The conclusion this section permits is narrow. It cannot be said that participation in distribution arises automatically on the strength of the mere fact of holding a right to preferential payment, and the present state, in which neither the demand nor its time can be confirmed, is mere undeterminedness for want of materials and cannot be pronounced an impossibility of relief. The channel for participating in the auction distribution and maintaining an objection opens where the statutory status of participation and the required demand for distribution are in place and the action and documents corresponding to the objection are submitted within the period. Conversely, where a creditor required to make a demand misses the deadline, that channel is blocked. The circumstance that there are no materials cannot be read as converting into the non-existence of the demand or the extinction of the right.
1.4The Records Needed for Determination
The expression 'right to preferential payment' does not always place one's name on the distribution table. On the premise that statements acknowledging the claim, deposit (payment into court), and actual receipt by the creditor must be separately recorded lest the endpoint of enforcement be overstated, the question now shifts from the size of the right to the record of whether one's name was entered in the procedure. To answer this question, one comes to ask what must remain.
This text enumerates the qualifications to make a demand for distribution. The subjects of which the text speaks are the enumerated creditors, the act is the demand for distribution, and holding a right to claim preferential payment is only one ground for the qualification. Other issues under this provision are not addressed at present.
The reason the qualification to make a demand must be separated from the range that actually constitutes the target of distribution is that the qualification in the preceding paragraph does not immediately fix participation in distribution. Here, participation in distribution means becoming a target of the distribution of the sale proceeds in the statutory manner. Accordingly, stage determinations are made only on the basis of materials recorded in the documents concerning rights registration, the deadline for demands for distribution, the application, the distribution table, the objection, the filing of an action, and the stay, and absent records are not filled in by presumption.
Nor is it erased that it is unjust for a claim deserving of protection to be pushed aside by a formal omission of a demand for distribution. Yet the path to remedy this disadvantage cannot be found in converting holding a right to preferential payment in every case into automatic participation in distribution. That change would erase the structure of the statutory provisions that separates the enumerated qualifications from the range of the targets of distribution. The author instead places the answer in narrowing the records by which the stages are determined. Insofar as judgment is made only on the materials remaining in the record, no situation arises that must be filled in by presumption.
The fact confirmed in the synthetic scene is that Creditor A claims to have a right to preferential payment, but no record remains as to whether a demand for distribution was made. Contrasting this fact with the foregoing conditions, the assertion of holding a right to claim preferential payment concerns one of the grounds for qualification under Article 88, while the requirements of each subparagraph demanded by Article 148 must be confirmed by other records. The scene does not settle whether or when an application for a demand for distribution was made, nor the time of registration. Hence the stage cannot be fixed on this scene alone, and the status of automatic participation or the time of the demand and submission remain undetermined. If only one condition is changed, however, and it is confirmed as an automatic-participation right registered before the statutory point in time, exclusion is not fixed merely by the separate omission of a demand for distribution.
The conclusion this section permits is narrow. A judgment that participation in distribution arises automatically on the strength of a single assertion of holding the priority right cannot be made on this record; conversely, a judgment that exclusion is fixed immediately merely because the record is silent cannot be made either. Whether it is the side asserting the right or the side seeking exclusion, anyone who would speak to the stage must make clear which of the enumerated documents remains.
1.5Circumstances That Change the Decision
The preceding step confirmed that the statement acknowledging the claim, the deposit (payment into court), and the creditor's actual receipt must each be left on the record separately, so that the reach of enforcement is not exaggerated. The scene now set out differs from that. That something is not on the record does not mean the act did not occur; it means that the materials for judgment are empty. In this state, the issues are whether, on the basis of the mere fact of holding a right to preferential payment, the claim becomes subject to distribution of the sale proceeds, and whether the participation in distribution spoken of here arises automatically.
The provision setting the qualifications to file a demand for distribution and the provision designating the creditors entitled to receive distribution do different work. Article 88 of the Civil Execution Act declares: "(1) A creditor holding an authenticated copy with enforceability, a creditor who has made a provisional attachment after the registration of the auction commencement decision, and a creditor having a right to preferential payment under the Civil Act, the Commercial Act, or other Acts may file a demand for distribution." (Article 88 of the Civil Execution Act) This provision fixes only the qualifications of the persons who may apply for the demand; it does not carry the meaning that one becomes subject to distribution even without making the demand. Article 148 of the Civil Execution Act limits the creditors entitled to receive distribution to four classes. Among them, subparagraph 3 designates "a provisional attaching creditor registered before the registration of the first auction commencement decision," and subparagraph 4 designates "a creditor holding a mortgage, a jeonse right, or other right to preferential payment that was registered before the registration of the first auction commencement decision and is extinguished by the sale" (Article 148 of the Civil Execution Act). Only by reading these two apart can the prior right be distinguished from participation in distribution.
This distinction creates the stage of determination. Holding a right to preferential payment is a determination that asks whether a right to preferential payment registered before the registration of the first auction commencement decision is extinguished by the sale; participation in distribution is a determination that asks whether one becomes subject to distribution of the sale proceeds by the statutory method. The fact that the former is established does not bring the latter into being as well, and whether the requirements of the latter are met is confirmed separately by the closing date for demands for distribution and the application, the distribution schedule, objections, and the filing of an action and stay documents. At this point, the omission of a demand for distribution cannot serve as a sole ground for fixing the exclusion of a creditor whose automatic participation status has been confirmed.
It is unjust that a claim deserving protection be pushed aside through a formal omission of a demand for distribution. The loss this counterargument aims at is clear. A creditor who transacted in reliance on the security value disclosed by registration, if bound to a fixed exclusion on the sole ground that the procedural schedule of the closing date for demands was missed, sees the expectation of recovery collapse. It is difficult to justify a result in which even the circumstance of not knowing the procedure leads to a retreat in substantive rank. Yet this conclusion cannot go beyond the answer that holding a right to preferential payment cannot in all cases be converted into automatic participation in distribution. So long as the qualification to make a demand under Article 88 (1) and the scope of distribution under Article 148 are kept apart, confirmation of the fact of holding the right does not expand into automatic participation status. The hardship of the counterargument remains as it is, but no expansion is permitted.
Contrasting only the facts placed in this scene makes the boundary clear. Creditor A merely asserts a right to preferential payment, and whether and when a demand for distribution was applied for cannot be confirmed from the record. Accordingly, the holding of the right to preferential payment itself, whether registration occurred before the registration of the first auction commencement decision, the closing date for demands and the time of application, and whether objections and the filing of an action and stay documents were submitted are all unverified. If, among these, neither the automatic participation status nor the time of demand or submission can be confirmed, the question of participation in distribution remains undetermined. Unless one invents and fills in matters that cannot be determined from the scene, neither the fixing of exclusion nor the impossibility of relief is declared.
Accordingly, the conclusion this section permits is narrow. It cannot be asserted that participation in distribution arises automatically on the sole basis that the holding of a right to preferential payment has been confirmed; conversely, exclusion cannot be fixed on the sole basis of the absence of any record of a demand. If it is confirmed to be an automatic participation right registered before the statutory point in time, exclusion is not fixed merely by a separate omission of a demand for distribution; and if a specified change is confirmed, the existing judgment of blocking or effectiveness is discarded and the determination is redone from that stage. This determination takes as its standard the channels for participating in auction distribution and maintaining objections, but they open only where the statutory participation status and the necessary demand for distribution are in place and the corresponding action and documents after the objection are submitted within the time limit. The reason the distinction drawn thus far leaves a place it cannot fill lies in the following question.
1.6The Strongest Counterargument and the Answer
The present situation is one in which Creditor A asserts a right to preferential payment while no record remains as to whether a demand for distribution was made, and it asks whether the result that a substantive priority right collapses merely because the procedure was not known is truly just. This question marks precisely the point where the substance of the right meets the form of participation in distribution.
Article 88 of the Civil Execution Act provides: "A creditor holding an authenticated copy with enforceability, a creditor who has made a provisional attachment after the registration of the auction commencement decision, and a creditor having a right to preferential payment under the Civil Act, the Commercial Act, or other Acts may file a demand for distribution." What this provision fixes is only the persons who hold the qualification to "make" a demand for distribution and the basis therefor. It is a clause that clarifies which creditors hold a right to preferential payment and in what manner they may make a demand; it is not a provision declaring that they are placed on the distribution schedule automatically even without making a demand.
That qualification provision and the scope of the actual recipients of distribution are determinations at different stages. Article 148 of the Civil Execution Act, while enumerating the creditors entitled to receive distribution, lists "a creditor who has filed a demand for distribution by the closing date for demands for distribution" as a separate item, and places "creditors holding a right to preferential payment registered before the registration of the first auction commencement decision and extinguished by the sale" in yet another item. That is, the authority to make a demand and the status of becoming subject to distribution by completing the demand are separate, and the author regards this distinction itself as the answer to the present question.
The greatest disadvantage this distinction leaves is that a creditor lacking procedural information loses substantive rank and is pushed back. Such loss is not erased by words. Even so, the author's conclusion does not waver. Holding a right to preferential payment cannot in all cases be converted into automatic participation in distribution, and even where a formal demand for distribution has been omitted, the priority right itself cannot be seen as immediately converted into automatic participation. The premise that the statement acknowledging the claim, the deposit, and the creditor's actual receipt must be separately recorded lest the reach of enforcement be exaggerated makes one wary of an attitude that binds the substance of the right and the form of enforcement into a single mass.
In the synthetic scene, Creditor A asserts a right to preferential payment, but there is no record of whether a demand for distribution was made. This fact alone confirms neither automatic participation status nor the time of demand; hence it cannot be determined that the claim was excluded from the objects of distribution, nor can it be asserted that it survived. If, however, the condition is established that where it is confirmed to be an automatic participation right registered before the statutory point in time, exclusion is not fixed merely by a separate omission of a demand for distribution, the determination changes. The remaining objects of confirmation are the registration of the right, the closing date for demands for distribution and the application, the distribution schedule, objections, and the filing of an action and stay documents; and even where materials are absent, that absence remains undetermined.
In the end, the permissible conclusion is narrow: it preserves the distinction that participation in distribution does not arise from the assertion of a substantive priority right alone, and that one becomes subject to distribution only where the statutory method of a demand for distribution has been completed. An interpretation that goes beyond this distinction and elevates the holding of a right to preferential payment into automatic participation in all cases is not permitted.
1.7The Link to the Application and the Dispositive Part
Earlier, the conclusion was confirmed that holding a right to preferential payment cannot in all cases be converted into automatic participation in distribution; proceeding from that premise, the analysis now turns, instead of examining claims deserving protection, to distinguishing the character of the right from the procedural status. That is, it is the work of confirming that the mere assertion that one has a prior right does not automatically place one in any item of the distribution schedule.
The source text corresponding to this question consists of two pieces. Article 88 (1) of the Civil Execution Act provides: "A creditor holding an authenticated copy with enforceability, a creditor who has made a provisional attachment after the registration of the auction commencement decision, and a creditor having a right to preferential payment under the Civil Act, the Commercial Act, or other Acts may file a demand for distribution." This provision declares that specified persons are qualified to perform a specified act. That act is the demand for distribution, and the persons are limited to holders of an authenticated copy with enforceability, provisional attaching creditors after the registration of the auction commencement decision, and holders of a statutory right to preferential payment. What this paragraph fixes is the qualification to make a demand, not a status of being deemed to have made a demand automatically.
Article 148 of the Civil Execution Act presents the substance of participation in distribution in another way. It provides: "The creditors who are to receive the amount set forth in Article 147 (1) shall be the persons prescribed in the following subparagraphs," and divides their scope into four classes: a seizing creditor who applied for the auction by the closing date for demands for distribution; a creditor who filed a demand for distribution by the closing date for demands for distribution; a provisional attaching creditor registered before the registration of the first auction commencement decision; and a holder of a mortgage, a jeonse right, or other right to preferential payment registered before the registration of the first auction commencement decision and extinguished by the sale. The distinction between the two provisions is decisive here. One fixes the qualification to act; the other fixes the statutory scope of those actually subject to distribution. Since participation in distribution means becoming subject to distribution of the sale proceeds by the statutory method, the qualification to make a demand does not lead directly to automatic participation in distribution. If this distinction is missed, the holding of a qualification is mistaken for the acquisition of a status.
The strongest counterargument aimed at this distinction is that losing a substantive priority right because one did not know the procedure is harsh. The sense of injustice that a claim deserving protection is pushed aside through a formal omission of a demand for distribution belongs to the same context. A right to preferential payment is a right recognized in substantive law such as the Civil Act or the Commercial Act; to lose its substance because one procedural document was neglected appears contrary to equity in outcome. This dissatisfaction must be taken seriously. Yet holding a right to preferential payment cannot in all cases be converted into automatic participation in distribution. The reason the law separates the recognition of qualification from the acquisition of status is that the timing and manner of the demand constitute the order of distribution, and this section addresses only that distinction. The loss the counterargument points to is therefore real, but it is not a ground for destroying the scope the law has fixed.
In the synthetic scene, Creditor A claims to hold a right to preferential payment, but no record remains as to whether a demand for distribution was made. This fact alone permits no assertion in either direction. The qualification fixed by Article 88 (1) may be recognized, but whether the creditor was actually included in the scope fixed by Article 148 must be shown by the record. Only if the registration of the right, the closing date for demands for distribution and the application, the distribution schedule, objections, and the filing of an action and stay documents are confirmed can that status be determined. Yet if one condition here is altered, the determination changes. That is, if it is confirmed to be an automatic participation right provided in Article 148, subparagraph 3 or 4, exclusion is not fixed merely by an omission of the demand. However, since the scene in this section is one where the presence or absence of a demand is unconfirmed, neither the automatic participation status nor the time of demand or submission can be confirmed, and automatic participation itself also remains undetermined.
Accordingly, what can be determined with regard to this question is narrow. Even where the qualification to file a demand for distribution is recognized on the basis of the assertion of a right to preferential payment, one does not thereby automatically acquire the status of participation in distribution—that is, of becoming subject to distribution of the sale proceeds by the statutory method. What this section permits is a determination distinguishing the recognition of qualification from the acquisition of status; what it does not permit is a determination asserting that one enters the scope of creditors actually receiving distribution on the basis of holding the qualification alone. Even if undetermined items remain, the conclusion of this distinction stands.
1.8The Scope This Section Undertakes
Accepting that the mere assertion of a right to preferential payment cannot make one subject to distribution, Creditor A claims to hold a right to preferential payment while no record remains as to whether a demand for distribution was made. In this scene, to confirm the gap between the holding of the priority right and actual participation in distribution, the question is posed: if one has a priority right, is participation in the procedure automatic as well? To answer that question, the qualification to file a demand for distribution is separated from the statutory scope of creditors actually receiving distribution. The two scopes appear to overlap on the surface, but they require determinations at different stages.
The first provision corresponding to this question is Article 88 (1) of the Civil Execution Act. That clause provides: "(1) A creditor holding an authenticated copy with enforceability, a creditor who has made a provisional attachment after the registration of the auction commencement decision, and a creditor having a right to preferential payment under the Civil Act, the Commercial Act, or other Acts may file a demand for distribution." (Article 88 of the Civil Execution Act) What this provision fixes is the qualification for a demand for distribution. It means that a creditor having a right to preferential payment falls among the persons who may apply for a demand for distribution; it does not provide that distribution is received on that fact alone. The grant of qualification and the determination of the objects of distribution are treated in the provision by distinct wording.
The second provision to examine is Article 148 of the Civil Execution Act. That clause provides: "Article 148 (Scope of Creditors Entitled to Receive Distribution) The creditors who are to receive the amount set forth in Article 147 (1) shall be the persons prescribed in the following subparagraphs. 1. A seizing creditor who applied for the auction by the closing date for demands for distribution 2. A creditor who filed a demand for distribution by the closing date for demands for distribution 3. A provisional attaching creditor registered before the registration of the first auction commencement decision 4. A creditor holding a mortgage, a jeonse right, or other right to preferential payment registered before the registration of the first auction commencement decision and extinguished by the sale" (Article 148 of the Civil Execution Act), and so limits the scope. The qualification to apply given by the preceding clause and the objects of distribution fixed by this clause are distinct. Since participation in distribution means becoming subject to distribution of the sale proceeds by the statutory method, that state cannot be regarded as reached on the basis of qualification alone.
The loss this counterargument aims at is the disadvantage suffered by a creditor who, apart from the substantive right disclosed by registration, merely missed the form of procedure, together with the impairment of trust that disadvantage entails. Even so, the author holds that the holding of a right to preferential payment cannot in all cases be converted into automatic participation in distribution. If it were converted into automatic participation, the distinction between the place Article 88 of the Civil Execution Act has limited to the qualification for a demand for distribution and the scope Article 148 of the Civil Execution Act has fixed as the objects of distribution would collapse. The harshness the counterargument points out remains; but one cannot answer it by raising qualification into participation.
All that can be confirmed in this scene is the contrast between the asserted right and the missing record. Article 148, subparagraph 2 of the Civil Execution Act places a creditor who filed a demand for distribution by the closing date for demands for distribution among the objects of distribution, and subparagraph 4 limits the right to preferential payment registered before the registration of the first auction commencement decision to a right extinguished by the sale. Yet the scene contains no materials to check the presence of the application for a demand for distribution, its closing date, or registration before the registration of the first auction commencement decision. Accordingly, participation in distribution cannot be determined, and to the extent that neither the automatic participation status nor the time of filing the demand can be confirmed, the matter remains undetermined. The facts, service, and performance results of an actual case, and years, amounts, accrual dates, and judgment outcomes not posited, lie outside this scene.
The conclusion this section permits is narrow. Since the right to preferential payment under Article 88 (1) of the Civil Execution Act confers the qualification to file a demand for distribution, and one must fall within the scope fixed by the subparagraphs of Article 148 of the Civil Execution Act to receive actual distribution, the holding of a priority right and participation in distribution cannot be treated as the same. The impermissible conclusions are those asserting that a name is placed on the distribution schedule merely because a right to preferential payment exists, or that exclusion is fixed immediately merely because no record of a demand for distribution exists. Places where materials are lacking must be left undetermined.
1.9Application of the Text of the Provisions and the Holdings of Precedents
Under that judgment, which holds that statements acknowledging the claim, deposits in court, and the creditor's actual receipt must each be recorded separately if the endpoint of enforcement is not to be overstated, the question now is whether a creditor asserting a right to preferential payment may place its name on the channel for participating in auction distribution and maintaining an objection. The substance of the priority right and participation in the procedure are separate questions, and only the wording of the latter is addressed here. Within the limits the relevant source text permits, this section examines whether possession of a priority right also makes participation in the procedure automatic.
The relevant source texts for this question are Article 88 and Article 148 of the Civil Execution Act. Article 88 provides: "A creditor who holds an authenticated copy with executory force, a creditor who effected a provisional attachment after the registration of an auction commencement decision, or a creditor who has a right to preferential payment under the Civil Act, the Commercial Act, or other Acts may file a demand for distribution." The subjects prescribed by this wording are creditors possessing the qualifications listed, the act is a demand for distribution, and the conditions are the source Act of that qualification and the time of registration. Without extending other paragraphs of the same Article or other grounds, it addresses only the qualification to file a demand for distribution.
Article 148 of the Civil Execution Act fixes the "scope of creditors entitled to distribution" in four types. Placed together here are "a creditor who filed a demand for distribution by the deadline for demands for distribution" and a creditor holding a right to preferential payment that was "registered before the registration of the first auction commencement decision and extinguished by the sale." The reason these two wordings must be distinguished is that the qualification to file a demand for distribution and the status of actually becoming an object of distribution are determined by different wordings. Here, participation in distribution means becoming an object of distribution of the sale proceeds by statutory means, and only the wording of the relevant source text is used as the ground for judging the channel for participating in auction distribution and maintaining an objection.
The strongest counterargument aims at the point that losing a substantive priority right because one did not know the procedure is harsh. The result that a claim deserving protection is pushed back because of the omission of a formal demand for distribution can only be disadvantageous to the creditor. Even without denying this disadvantage, possession of a right to preferential payment cannot be converted into automatic participation in distribution in all cases. Since Article 148 places side by side the type whose participation status is recognized by registration and the type for which a demand for distribution is a requirement, the participation requirements set by the wording cannot be omitted merely by reason of the existence of the priority right. The loss pointed out by the counterargument remains, but that loss alone cannot break down the distinction drawn by the wording.
The facts confirmed in the synthetic scene are only that Creditor A asserted a right to preferential payment but that no record remains as to whether a demand for distribution was made. Which of the types in the subparagraphs of Article 148 it falls under, and whether the demand was made before the deadline for demands for distribution, cannot be determined from the record alone. Judgment requires confirmation of the registration of the right, the deadline for demands for distribution, and the application, distribution schedule, objection, and the filing of the action and stay documents; if the automatic participation status or the time of filing of the demand is not confirmed, the determination remains undetermined.
What can be confirmed in this section is that the qualifications and scope set by the wording of the relevant source text serve as the standard for the channel for participating in auction distribution and maintaining an objection, and that they are not extended by other grounds outside the wording or by the reasons for a judgment. Whether participation in distribution becomes automatic upon the mere possession of a right to preferential payment, and whether other creditors may contest that distribution, are not determined here. A name cannot be regarded as placed on the distribution schedule merely by an assertion that a prior right exists, and unverified matters are left as unverified.
1.10Fine Distinctions Within the Stage
Before distinguishing participation in distribution from the qualification to file a demand, it is confirmed only that Creditor A asserts that she has a right to preferential payment but that no record remains as to whether she filed a demand for distribution. The preceding section sets out the task of separating the qualification to file a demand for distribution from the statutory scope of creditors actually entitled to distribution. In this scene Creditor A merely asserts the right, and that assertion does not substitute for a record of the demand for distribution; accordingly, whether possession of a priority right immediately means participation in distribution is the question to be solved now. This question is addressed only within the meaning of participation in distribution defined in this section and the two scopes that follow from it.
Article 88 (1) of the Civil Execution Act sets out the qualification to file a demand. This wording enumerates that the persons who may file a demand for distribution are holders of an authenticated copy with executory force, attaching creditors after the registration of the auction commencement decision, and creditors with a right to preferential payment by law. On the author's application, this provision determines only the qualification that opens the door to the demand, and the mere fact of possessing that qualification does not mean that the sale proceeds are already distributed to that person. Being able to file a demand and receiving distribution are, from the position of the provision itself, different thresholds.
Why this difference must be distinguished is made clear by the wording of Article 148 of the Civil Execution Act. That provision states: "The creditors entitled to receive distribution of the amount provided for in Article 147 (1) shall be the persons provided for in the following subparagraphs: 1. An attaching creditor who filed an application for auction by the deadline for demands for distribution; 2. A creditor who filed a demand for distribution by the deadline for demands for distribution; 3. A provisional attachment creditor registered before the registration of the first auction commencement decision; 4. A creditor who holds a mortgage, a leasehold deposit right, or other right to preferential payment that was registered before the registration of the first auction commencement decision and is extinguished by the sale." The author's conclusion follows from connecting these two wordings. Article 88 opens the qualification to file a demand, while Article 148 sets out side by side the case in which that qualification was actually exercised and the case in which the status is fixed by registration, thereby closing the scope of those entitled to distribution. Participation in distribution means that a person who has crossed both of these thresholds becomes an object of distribution of the sale proceeds. Unless qualification and scope are separated here, the wording that one may file a demand is mistaken for the wording that one receives distribution.
The counterargument that losing a substantive priority right because one did not know the procedure is harsh is the sharpest grievance that can be raised at this point. The loss aimed at by this counterargument is clear. If, although holding a right to preferential payment by law, one yields one's place to later ordinary creditors because one failed to transfer that status into a demand, the substantive ranking and the distribution outcome diverge. Yet the answer the author has set does not change. This answer does not erase the disadvantage of the counterargument. It remains that the omission of a formal demand may lead to the loss of a substantive priority right. However, so long as Article 148 records side by side, as two separate scopes, the creditor who filed a demand by the deadline and the person whose status is fixed by registration before the deadline, possession itself cannot be read as participation in all cases. The weight of the counterargument is acknowledged, but this section has no authority to widen the scope set by the wording.
Matching the facts set in the synthetic scene with the foregoing conditions reveals the boundary. Creditor A merely asserts a right to preferential payment, and no record remains as to whether a demand for distribution was filed. So long as Article 148 makes the deadline for demands for distribution a condition in order to place a creditor who filed a demand within the scope of distribution, this scene alone, in which no record of the application for the demand can be confirmed, does not permit the definitive conclusion that A falls within that scope. The state of insufficient material remains undetermined. Undetermined does not immediately mean irremediable; it means withholding judgment beyond the range of what can be confirmed.
The conclusion this section permits is narrow and clear. Participation in distribution means becoming an object of distribution of the sale proceeds by statutory means, and possessing the qualification to file a demand for distribution is distinguished from falling within the statutory scope of creditors actually entitled to distribution. So long as Article 88 opens the qualification for the demand and Article 148 prescribes the scope of those entitled to distribution, this section does not permit the conclusion that possession of a right to preferential payment is automatic participation in all cases. Conversely, it does not erase the aspect of the counterargument that the omission of a formal demand may be disadvantageous to a substantive priority creditor. What this section does not address is whether one who fails to file a demand is automatically excluded, whether even a first-priority wage claim requires a demand, and the requirements for maintaining an objection. Within the frame of this judgment, which has distinguished the qualification and scope of the foregoing wording, the next question asks how that distinction operates in actual procedure. How are the operation, the blocking, and the undetermined state of the channel for participating in auction distribution and maintaining an objection distinguished?
1.11Synthesis of Effectiveness, Blockage, and Undetermination
The question addressed in this section is whether, if there is a priority right, participation in the procedure is also automatic; specifically, how the effect, the blocking, and the undetermined state of the channel for participating in auction distribution and maintaining an objection are distinguished. In this scene, the assertion of the existence of a priority right and the legal status of participation in distribution must be examined as two separate stages.
Article 88 (1) of the Civil Execution Act enumerates the persons who may file a demand for distribution. Its wording provides: "A creditor who holds an enforceable copy of the judgment, a creditor who effected a provisional attachment after the registration of an auction commencement decision, or a creditor who has a right to preferential payment under the Civil Act, the Commercial Act, or other Acts may file a demand for distribution." What is spoken of here is the qualification to file a demand for distribution, and a creditor holding a right to preferential payment merely enters as one type of that qualification. This provision grants the qualification while at the same time placing the demand as a separate act.
Article 148 of the Civil Execution Act specifies the scope of creditors entitled to distribution in each subparagraph. Among them, "a creditor who filed a demand for distribution by the deadline for demands for distribution" and "a creditor who holds a right registered before the registration of the first auction commencement decision and extinguished by the sale" are placed side by side. The reason these two must be distinguished is that the former participates by virtue of the act of application known as the demand, while the latter comes in as an automatic participation status according to the time of registration. This distinction between qualification and scope serves as the criterion that separates the conditions under which the channel opens and the conditions under which it is blocked.
The fact that the substance of the right to preferential payment is narrowed by the formal requirements of the auction procedure is an irretrievable loss. If a creditor for whom a demand is required misses the deadline, the channel of participation is blocked; and where, because a proof of the filing of the statutory action and other documents is not submitted after the objection, the objection is deemed withdrawn, the channel of maintenance is blocked as well.
Whether a demand was applied for in this scene, and its timing, cannot be confirmed and therefore remain undetermined. Facts beyond these confirmation conditions are not adjudged, since the scene does not fix them.
What opens in this section is the case where a person holds the statutory participation status and the required demand for distribution and, after the objection, submits the matching action and documents within the time limit; what is blocked is the case where a creditor for whom a demand is required missed the deadline or failed to submit proofs and the like. If the automatic participation status or the timing of the demand or submission cannot be confirmed, the matter remains undetermined, and it does not revert to irremediable merely because there is no material.
1.12Conclusion Carried Over to the Next Section
A name is not placed on the distribution schedule merely by the words that a priority right exists. In this very scene it is at issue whether holding the prior right and participation in distribution—that is, becoming an object of distribution of the sale proceeds by statutory means—are the same thing. Furthermore, the question whether participation in the procedure is also automatic if there is a priority right ultimately touches upon what must be handed over to the next section.
Article 88 (1) of the Civil Execution Act sets out the persons qualified to file a demand for distribution as follows. "①A creditor who holds an enforceable copy of the judgment, a creditor who effected a provisional attachment after the registration of an auction commencement decision, or a creditor who has a right to preferential payment under the Civil Act, the Commercial Act, or other Acts may file a demand for distribution." (Civil Execution Act, Article 88) The subjects prescribed by this wording are creditors holding an enforceable copy of the judgment, attaching creditors after the registration of the auction commencement decision, and creditors with a right to preferential payment by law; the act is a demand for distribution, and the condition is the establishment of that qualification. Up to this point it is a declaration of the qualification to file a demand for distribution. Taking this paragraph alone, whether one has reached actual distribution remains a separate question.
Alongside this, Article 148 of the Civil Execution Act limits the scope of creditors entitled to distribution to four types. "The creditors entitled to receive distribution of the amount provided for in Article 147 (1) shall be the persons provided for in the following subparagraphs: 1. An attaching creditor who filed an application for auction by the deadline for demands for distribution; 2. A creditor who filed a demand for distribution by the deadline for demands for distribution; 3. A provisional attachment creditor registered before the registration of the first auction commencement decision; 4. A creditor who holds a mortgage, a leasehold deposit right, or other right to preferential payment that was registered before the registration of the first auction commencement decision and is extinguished by the sale" (Civil Execution Act, Article 148). Thus the reason why possession of the qualification must be separated from inclusion among the objects of distribution becomes apparent. Whereas Article 88 (1) provides what one may do, Article 148 separately determines who, having obtained what by a certain point in time, shall be regarded as a person entitled to distribution. This distinction adds no new requirement; it explains that the two wordings preside over different stages.
This loss is weighty in that the substance of the right to preferential payment is pushed out of the objects of distribution because of a defect in procedural documents, at the very place where it is left as it is. Such an alteration itself destroys the place at which Article 88 (1) and Article 148, examined above, separated qualification and scope. While not erasing the disadvantage aimed at by the counterargument, the reason one cannot conclude that possession of the priority right immediately leads to participation lies precisely in this distinction.
In this scene Creditor A asserts a right to preferential payment, and no record of a demand for distribution remains. What can be confirmed here is only that assertion and the absence of the record. This scene, in which the automatic participation status or the timing of the demand or submission cannot be confirmed, remains undetermined. One can set out only the contrast that the channel operates where a person holds the statutory participation status and the required demand for distribution and submits the matching action and documents within the time limit after the objection, and that it is blocked where a creditor for whom a demand for distribution is required missed the deadline or where the objection is deemed withdrawn.
The conclusion this section permits is that participation in distribution is not established automatically by the mere possession of a right to preferential payment. What this section does not permit is either of the two categorical assertions: placing every priority right without exception under the obligation to file a demand for distribution, or, conversely, exempting every priority right from that demand. Within the framework set out—that statements acknowledging the claim, deposits in court, and the creditor's actual receipt must each be recorded separately if the endpoint of enforcement is not to be overstated—this section passes the distinction between qualification and participation to what follows. Does even a first-priority wage claim require a demand for distribution?