If a title truster, who has held a title trust on his own real estate to another person, registered an obligor as a title trustee in the course of establishing a mortgage on such real estate in order to secure his/her obligation, the obligation secured by the right to collateral (= obligation of the title truster

In establishing a right to collateral security under the name of a third party to secure a loan obligation arising from a transactional relationship with a third party, if a title truster who has trusted his own real estate to another person, registered the title trustee as an obligor according to the convenience between the parties, the obligation secured by the right to collateral security should be deemed as the obligation owed to the third party of the title truster.

Articles 103 [title trust], 105, 356, and 357 of the Civil Act; Article 601 of the Civil Procedure Act

[Plaintiff-Appellant] Plaintiff 1 and 1 other (Law Firm Gyeong, Attorneys Park Jae-soo et al., Counsel for plaintiff-appellant)

Jeju Bank, Inc.

Seoul District Court Order 99Ra1 dated April 12, 1999

The reappeal is dismissed.

The grounds of reappeal are examined.

In establishing a right to collateral security under the name of a third party in order to secure a loan obligation arising from a transactional relationship with a third party where a title truster who has trusted one’s own real estate to another person, if the title truster registered the said real estate as an obligor according to the convenience between the parties, the obligation secured by the right to collateral security should be deemed as the obligation owed by the third party (see Supreme Court Decision 79Da1822, Apr. 22, 1980).

According to the records, the real estate of this case was originally purchased from the non-party 3 on December 26, 1989. On January 22, 1990, the ownership transfer registration was completed under the name of the non-party 1 and the non-party 2 on the ground of the cancellation of the title trust on June 26, 1996. Meanwhile, the non-party 5, the creditor requesting the sale of this case, was established on September 29, 195 and January 5, 1996 with a sum of KRW 50,000,000 and KRW 10,000,000 on the real estate of this case, and the non-party 5 and the non-party 1, the owner of the above real estate, on the ground that the non-party 4 had been registered under the name of the non-party 4, the debtor, who was registered under the above mortgage registration, could not be found to have been registered under the above legal principles.

Therefore, the decision of the court below to the same purport is just, and there is no error of law such as the theory of lawsuit. There is no ground for argument.

Therefore, the reappeal is dismissed. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Lee Jae-soo (Presiding Justice)