Method of determining whether a beneficiary is bona fide in a lawsuit seeking revocation of a fraudulent act

Article 406(1) of the Civil Act

Supreme Court Decision 2007Da74621 Decided July 10, 2008

Specialized Construction Financial Cooperative (Law Firm Cump, Attorneys Doh-soo et al., Counsel for the defendant-appellant)

Defendant (Attorney Cho Jae-soo, Counsel for the defendant-appellant)

Seoul High Court Decision 2013Na30297 decided June 5, 2015

The judgment below is reversed and the case is remanded to Seoul High Court.

The grounds of appeal are examined.

1. As to the ground of appeal on the claim to be preserved against the revocation of fraudulent act

Examining the reasoning of the judgment below in light of the relevant legal principles and records, it is just that the court below determined that there was a high probability that the Plaintiff’s claim for the advance reimbursement based on the credit transaction agreement between the Defendant and Nonparty 1 was established in the near future at the time when the instant sales contract was concluded, on March 24, 2010. In so doing, the court below did not err in the misapprehension of legal principles as to the preserved claim for the revocation of fraudulent act, or incomplete deliberation, contrary

2. As to the ground of appeal on the good faith of the beneficiary

A. Since the beneficiary's bad faith is presumed in a lawsuit seeking revocation of a fraudulent act, the beneficiary is responsible for proving his/her good faith in order for the beneficiary to be exempted from his/her liability. In such cases, the issue of good faith shall be determined reasonably in light of logical and empirical rules, comprehensively taking into account various circumstances, such as the relationship between the debtor and the beneficiary, the details of and the background and motive for the act of disposal between the debtor and the beneficiary, the circumstances leading up to the act of disposal, whether there are no special circumstances to suspect that the terms and conditions of the act of disposal, and whether there are objective materials to support the act of disposal as normal transaction, and circumstances after the act of disposal, etc. (see, e.g

B. Review of the reasoning of the lower judgment and the record reveals the following circumstances.

(1) The Defendant had resided in Italian for a long time, and entered November 7, 201 and was scheduled to depart on December 6, 201.

(2) On November 21, 2011, the Defendant entered into the instant sales contract with Nonparty 1 as a broker Nonparty 2, a broker affiliated with the office of licensed real estate agents, to purchase the instant real estate at KRW 1.08 billion near the market price. At that time, there is no evidence to prove that the Defendant was aware of Nonparty 1’s financial situation or transactional situation, including the relationship of relatives with Nonparty 1.

(3) According to the instant sales contract, on November 21, 201, the Defendant transferred the down payment of KRW 100 million from the account in the name of Nonparty 1 to the account opened in the name of Nonparty 4. On November 22, 2011, the intermediate payment payment date, issued three copies of a check equivalent to KRW 250 million, and paid the intermediate payment of KRW 250 million to Nonparty 1 as the check. On November 25, 201, the remainder payment date, the Defendant transferred the instant real estate from Nonparty 3, the Defendant’s wife, as security, and KRW 220 million, and KRW 350 million,000,000,000,000, which was leased the instant real estate to Nonparty 4 and paid the remainder to Nonparty 1,700,000,000 won to Nonparty 1 as a check.

(4) Meanwhile, Nonparty 4, who first leased the instant real estate by Nonparty 2’s brokerage, renounced the occupancy, and returned the lease deposit amount of KRW 350 million from the Defendant, but immediately, leased the instant real estate by Nonparty 2’s brokerage, and immediately paid KRW 350 million to the Defendant for the lease deposit. From that time, the period during which the lease deposit was due was due was due.

C. Examining these facts in light of the legal principles as seen earlier, inasmuch as the Defendant, the beneficiary, was unaware of Nonparty 1’s financial status or transaction circumstance, and purchased the instant real estate at a price close to the market price through the broker, and paid the sales price in full, and caused the lessee to possess the instant real estate, there is sufficient ground to deem the Defendant to constitute a bona fide beneficiary who purchased the instant real estate without knowing that the instant sales contract constituted a fraudulent act. Furthermore, even if the period from the conclusion of the instant sales contract to the completion of the contract was not extended on the five days before November 30, 201, and even if the period was the five days before the completion of the contract, the Defendant was trying to promptly complete the purchase of the instant real estate by leaving the Republic of Korea, and even if Nonparty 4, who first leased the instant real estate from the Defendant, borrowed the lease deposit from Nonparty 1, it cannot be deemed that the Defendant was aware of the fact that the Defendant was unaware of the circumstances surrounding Nonparty 1’s transaction. Therefore, the presumption is not reversed.

Nevertheless, the lower court rejected the Defendant’s assertion that the instant sales contract constitutes a bona fide beneficiary who was unaware of the fact that the instant sales contract was a fraudulent act. In so doing, the lower court erred by misapprehending the legal doctrine on the good faith of a beneficiary in revocation of a fraudulent act and the burden of proof thereof, which led to the failure to exhaust all necessary deliberations, which affected the conclusion of the judgment. The allegation contained in the grounds

3. Conclusion

Therefore, the lower judgment is reversed, and the case is remanded to the lower court for further proceedings consistent with this Opinion. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Jo Hee-de (Presiding Justice)