Civil act provides for the right of retention as follows : If the possessor of a thing or valuable instruments belonging to another person has any claim arising, in respect of such property or instruments and if payment of the claim is due, he may ret...
Civil act provides for the right of retention as follows : If the possessor of a thing or valuable instruments belonging to another person has any claim arising, in respect of such property or instruments and if payment of the claim is due, he may retain possession of the thing or instruments until the claim is satisfied. On the other hand, commercial act provides for the right of retention between merchants. Right of Retention is statutory real right granted by way of security regardless of the purpose of parties concerned when the necessary conditions fulfilled. Despite their differences in terminology and application, there are a number of similarities between liens Korea and other countries. This lien granted by law is only based upon the principle of equity or fairness. Though the right of detention based upon equity is introduced in many countries since Roman law, the details are somewhat different in each countries. This right of detention is known to be originated in exceptio doli of the Roman law. The lien between merchants granted by commercial law is different in its purpose and function from the civil lien which is based upon equity originated in Roman law. The merchant lien is introduced in purpose of the speediness of commercial transactions and avoidance of the annoying of a particular securities originated in commercial practice of medieval Italian cities. Commercial law provides merchant lien in purpose of speediness and convenience of securities in commercial transactions, because the civil lien is not fit for the commercial securities due to the condition of the relevance between liabilities and the objectives. Consequently, this merchant lien is quite related to the banking transactions. Type of charge that gives a bank automatic claim over a borrower`s property or assets that come in bank`s possession in the normal course of its business. The bank has the right to seize and sell the defaulting borrower`s property in its possession, after giving a reasonable notice but without going through the foreclosure procedure. Enforcement of a banker`s lien, however, may depend on the type of the property and the reason it was handed over to (or came in possession of) the bank. Movable estate, negotiable securities and promissory notes may be claimed under this lien. But it is not applicable where the borrower`s property was handed over to the bank for a specific purpose, such as for safe custody (as in the bank`s safe deposit boxes) or for sale through a department of the bank. In this article, I tried to show the relation between the merchant lien and banking transactions, to comment to the some judicial precedents related.