2011Da107375 Revocation, etc. of Fraudulent Act

Plaintiff:

Completion of Law Firm

Park Jong-soo et al., Counsel for the plaintiff-appellant

Defendant

Law Firm Doz., Counsel for the plaintiff-appellant

[Defendant-Appellant] Plaintiff 1 and 2 others

Seoul Central District Court Decision 2011424554 Decided November 10, 2011

October 25, 2012

The judgment of the court below is reversed, and the case is remanded to the Seoul Central District Court Panel Division.

The grounds of appeal are examined.

1. The creditor's right of revocation is a right to revoke the debtor's disposal of the debtor's property by fraudulent act and to return the debtor's property that is deviating from the fraudulent act to the whole creditor for the purpose of returning to the debtor's responsible property. Thus, the "act detrimental to the creditor who is the object of the creditor's right of revocation" is "a juristic act for the purpose of the debtor's property right" and it means an act for which the debtor's passive property exceeds the debtor's active property or lacks the state of excess of his/her obligation, and it is required

On the other hand, in cases of bilateral title trust between the owners of real estate after the enforcement of the Act on the Registration of Real Estate under Actual Titleholder's Name, the registration of transfer of ownership in the name of the trustee under the title trust agreement shall be cancelled as the invalidation of the cause. The real estate is still owned by the truster, and is still a responsible property provided to the joint security of the general creditors of the truster.

Therefore, in cases where a truster, who is a debtor, directly executes a contract with a third party in his/her name or in the name of the trustee, with respect to a trust real estate, which is a responsible property provided by the general creditors of the truster, becomes a de facto party to a legal act, such a truster’s legal act may constitute a fraudulent act as an act detrimental to the general creditors of the truster, if the truster exceeds active property or exceeds his/her obligation, and the truster was aware of such fact. In such cases, the subject of revocation of a fraudulent act shall be a legal act between the truster and the third party, and restitution to the original state shall be made by the third party to implement the registration procedure for cancellation.

2. In this case, the Plaintiff is a creditor against Nonparty 1, and Nonparty 1, the debtor, in accordance with the bilateral title trust agreement with Nonparty 2, sold to the Defendant each of the instant real estate in excess of the registered title under the name of Nonparty 2, constitutes a fraudulent act that causes damage to the joint security of ordinary creditors, including the Plaintiff. Thus, Nonparty 2 and the Defendant’s cancellation of a sales contract on each of the instant real estate and restitution thereof, demanding the Defendant to implement the procedure for registration cancellation of ownership transfer registration.

The lower court dismissed the Plaintiff’s claim for revocation of fraudulent act among the instant lawsuits on the ground that the sales contract that the Plaintiff seeks revocation is a juristic act between Nonparty 2 and the Defendant, the trustee of each of the instant real estate, and that the Plaintiff, the obligee of Nonparty 1, could not seek revocation thereof, and dismissed the Plaintiff’s claim for restitution on the premise of revocation of fraudulent act.

3. According to the records, the plaintiff alleged that the non-party 1, who trusted the name of registration in the name of non-party 2, sought revocation of the fraudulent act against the defendant's disposal of each of the real estate of this case, and the defendant also did not dispute the fact that the non-party 1 sold each of the real estate of this case to the defendant as the seller. Therefore, according to the above legal principles, the plaintiff can seek revocation of the fraudulent act against the defendant as the actual party.

If so, the court below should have tried to examine whether the plaintiff's act of seeking revocation of a fraudulent act was confirmed (see, e.g., Supreme Court Decision 2009Da83599, Feb. 11, 2010). However, without taking such measures, the part of the claim for revocation of a fraudulent act in the lawsuit in this case is unlawful, and the part of the claim for restitution that is sought on the premise of revocation of a fraudulent act is dismissed for the above reasons. In so doing, the court below erred by misapprehending the legal principles on "a juristic act by which the debtor becomes subject to revocation of a fraudulent act" and failing to perform its duty to explain, which affected the conclusion of the judgment.

4. 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 Kim Chang-suk

Justices Yang Chang-soo

Chief Justice Park Poe-dae

Justices Go Young-young