1. Real estate registration is presumed to have been completed based on legitimate grounds for registration from the fact that it exists in its form. A person who asserts that he/she had registered in trust with another person shall be liable to prove the title trust fact (see, e.g., Supreme Court Decisions 95Da39526, Sept. 30, 1997; 99Da36372, Mar. 28, 2000; 2012Da84479, Oct. 29, 2015).

In addition, where an actor who enters into a contract performs a legal act in another’s name, who is the contracting party between the actor and the nominal owner constitutes a matter of interpretation of the intent of the contracting party (see, e.g., Supreme Court Decisions 2012Da4471, Nov. 29, 2012; 2012Da4471, Nov. 29, 201). Where the intent of the actor and the other party coincide, the contracting party shall be determined according to the same intent; where the intent of the actor and the other party is not in accord, the other party shall be determined by determining who is the contracting party among the actor and the nominal owner as the contracting party, based on the specific circumstances before and after the conclusion of the contract, such as the nature, content, purpose, and circumstance surrounding the contract (see, e.g., Supreme Court Decisions 200Da3897, May 29, 2001; 201Da32120, Sept

Therefore, in a case where a certain person purchases real estate through another person, and the name of the buyer and the registration of transfer of ownership are made under the name of another person, the trust relationship between the buyer and the registration titleholder is merely an internal relationship between them. Barring special circumstances such as where the other party understood the title truster as the party to the sale, the contracting party should be deemed the party to the sale and purchase (see Supreme Court Decisions 92Da909, Apr. 23, 1993; 95Da29116, May 16, 1997). The same applies to the case where, even if the other party was aware of the title trust relationship, the other party entered into a contract with the intention of directly reverting the legal effect of the contract to the title truster, not the contracting party, even if the other party was aware of the title trust relationship (see Supreme Court Order 2013S133, Oct. 7, 2013).

2. Review of the reasoning of the lower judgment and the reasoning of the first instance judgment cited by the lower court reveals the following facts.

A. On April 2010, the Defendant purchased the land of KRW 1,279 square meters of forests and fields ( Address 1 omitted) and KRW 899 square meters of forests and fields ( Address 2 omitted) from Nonparty 1 in the middle of Ulsan-do (hereinafter referred to as “instant real estate”) from Nonparty 1 in the middle of April 2010, and entered the purchaser of the sales contract as “Defendant and one other”.

B. On May 10, 201, the Defendant drafted a sales contract with Nonparty 1 as KRW 17 million and with the purchaser as the Defendant and Nonparty 2 (hereinafter “instant sales contract”). On July 8, 2011, the Defendant and Nonparty 2 completed the registration of ownership transfer on the instant real estate under the joint names between the Defendant and Nonparty 2.

C. From the deposit account in the Defendant’s name, KRW 30 million was deposited on April 27, 201 with Nonparty 1’s deposit account, KRW 20 million on July 16, 201, and KRW 20 million on July 7, 201.

D. Meanwhile, on July 25, 2011, Nonparty 2 completed a provisional registration of the right to claim the transfer of shares (hereinafter “the provisional registration of this case”) in the Defendant’s future on the ground of a trade promise on July 22, 2011, with respect to one half of the shares in the instant real estate (hereinafter “instant shares”).

3. The court below held that, based on the above facts and the circumstances that Nonparty 2 did not peep into a trace of the purchase price of the instant real estate, the Defendant purchased the instant real estate from Nonparty 1 as a party to the sales contract for the instant real estate and decided to be Nonparty 2 only the registration name of the instant shares, and thus, Nonparty 2 was entrusted with only the registration name, on the ground that the legal effect under the above sales contract was recognized as having been the intention to directly belong to the Defendant, the title truster, and the registration of ownership transfer with respect to the instant shares completed under Nonparty 2’s name is null and void by the Act on the Registration of Real Estate under Actual Titleholder’s Name, and the ownership of the instant shares remains in Nonparty 1, and thus, it cannot be deemed that the ownership of the instant shares remains in Nonparty 2’s responsible property, and thus, Nonparty 2 completed the provisional registration of this case in the future of Defendant with respect to the instant shares.

4. A. However, considering the above facts acknowledged by the court below in light of the legal principles as seen earlier, as long as the sales contract of this case was prepared in the name of Nonparty 2 and the Defendant’s joint name and the registration was completed in the name of Nonparty 2, in principle, the parties to the sales contract of this case under the sales contract of this case shall be deemed to be Nonparty 2. On the other hand, in order to recognize the purchaser of this case’s share as the Defendant, the special circumstances should be acknowledged that Nonparty 1, the other party, entered into a contract with the Defendant, who is not Nonparty 2, with the intention of directly reverting the legal effect under the sales contract of this case, and (2) the fact that the sales contract and the registration of transfer for the share of this case’s share of this case made in the name of Nonparty 2 were made under the title trust between Nonparty 2

B. However, when the instant sales contract was revised, or the Defendant paid part of the purchase price of the instant real estate, and Nonparty 2 did not scam any trace of raising the purchase price, it is insufficient to recognize the special circumstances that Nonparty 1 concluded the instant sales contract with the intent to recognize the purchaser of the instant shares as the Defendant, not Nonparty 2, and to directly transfer the effect of the contract only to the Defendant. As such, the Defendant cannot be deemed a party to the instant sales contract, and it is difficult to recognize that Nonparty 1 was aware of the fact of title trust as to the instant shares, not the parties to the instant sales contract, but the Defendant and Nonparty 2. Furthermore, it is difficult to deem that Nonparty 1 was aware of the fact of title trust.

Rather, according to the evidence duly adopted, Nonparty 2 established a farming corporation that produces ice junck-do, and operated a business together with the Defendant using the agricultural corporation’s subsidy, and purchased the instant real estate to use it as the site, around April 2010, when the first sale and purchase contract was made, Nonparty 2 requested the Defendant to provide money necessary for building the factory site before purchasing the instant real estate, and Nonparty 2 provided a request to the Defendant for the money necessary for building the factory site. Nonparty 2 purchased the instant land in this case’s site. Nonparty 2 had some equity interest in the purchase price of the instant real estate or the disposal price of the instant land, which was the basis of the funds for purchasing the instant real estate, and Nonparty 2 had a substantial interest in the process of acquiring the instant share, such as: (a) Nonparty 2 and Nonparty 3, as the debtor, can be seen as having known that the said land was used as a security for obtaining a large amount of loans from the financial institution.

5. Nevertheless, the lower court determined that the registration of Nonparty 2 as to the instant share was null and void by means of a title trust, on the sole ground of the above circumstances in its holding, without properly examining whether Nonparty 1 acted in bad faith of the seller in the event that the title trust is recognized, and on the ground that it is insufficient to recognize it, solely on the grounds of the above circumstances, the parties to the sales contract as to the instant share belong to the Defendant who is not the contracting party, and on such erroneous premise, concluded that the registration of Nonparty 2 as to the instant share was null and void by means of a title trust and thus,

Therefore, the court below erred by misapprehending the legal principles on the confirmation of parties to a contract, title trust, and bad faith of the other party, thereby adversely affecting the conclusion of the judgment. The ground of appeal assigning this error is with merit.

6. Therefore, without examining the remaining grounds of appeal, we reverse the judgment below, and remand the case to the court below for a new trial and determination. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Lee Ki-taik (Presiding Justice)