The legal nature of the waiver of co-ownership under Article 267 of the Civil Act (i.e., the other party’s sole act)

Article 267 of the Civil Act provides, “If a co-owner renounces his/her share or dies without an inheritor, his/her share reverts to the other co-owners in proportion to their shares.” Here, the waiver of co-ownership falls under a separate act committed by the other co-owners as a juristic act, and thus, even if the declaration of intent to waive co-ownership of real estate reaches the other co-owners, it does not immediately take effect as a result of the change in real rights following the waiver of co-ownership, and the other co-owners shall acquire the right to claim ownership transfer registration as to the co-ownership to be reverted to themselves, and the change in real rights following the waiver of co-ownership to be registered pursuant to Article 186 of the Civil Act takes effect.

Articles 186 and 267 of the Civil Act

Supreme Court Decision 65Da301 Delivered on June 15, 1965

Plaintiff (Attorney Cho Il-young et al., Counsel for the plaintiff-appellant)

Defendant (Law Firm LLC, Attorneys Kim Nung-hwan et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2014Na55859 decided August 13, 2015

The appeal is dismissed. The costs of appeal are assessed against the defendant.

The grounds of appeal are examined.

1. Article 267 of the Civil Act provides, “If a co-owner renounces his/her share or dies without an inheritor, his/her share reverts to the other co-owners in proportion to their respective shares.” Here, the waiver of co-ownership falls under a legal act by the other co-owners, and thus constitutes a sole act committed by the other co-owners, and thus, even if the declaration of intent to waive his/her co-ownership reaches other co-owners, it does not immediately lead to the effect of any change in real rights arising from the waiver of his/her share. The other co-owners shall acquire the right to claim ownership transfer registration as to his/her share, and thereafter the change in real rights arising from the waiver of his/her share to be registered pursuant to Article 186 of the Civil Act takes effect (see Supreme Court Decision 65Da301, Jun. 15, 1965).

2. The reasoning of the lower judgment reveals the following facts.

A. The Plaintiff owned 289.45/990 shares (hereinafter “the Plaintiff’s previous shares”) among 2,472.4m2 (hereinafter “the instant real estate”) in Nam-gu, Incheon, and Nonparty 1 owned 199.29/990 shares among the instant real estate (hereinafter “non-party 1 shares”).

B. On September 11, 2002, Nonparty 1, including the Plaintiff, filed a lawsuit against 28 co-owners of the instant real estate at the time of filing a lawsuit for the transfer registration procedure against the Plaintiff, and submitted a complaint containing a declaration of intent that “the waiver of the share of Nonparty 1” is “the waiver of the share of Nonparty 1.” On April 11, 2003, the court rendered a judgment that “the 28 co-owners shall take over the transfer registration procedure for the share of Nonparty 1 with respect to the share of 28 co-owners among the shares of Nonparty 1, on January 13, 2003.” The above judgment became final and conclusive around that time.

C. On November 13, 2005, the non-party 1 et al. inherited the non-party 1's property according to the statutory share of inheritance, as the non-party 1 died without completing the registration of ownership transfer according to the above judgment.

D. The Defendant acquired the Plaintiff’s previous shares through a compulsory auction procedure. After that, the Defendant filed a lawsuit against Nonparty 2, etc. against other co-owners of the instant real estate, “Nonindicted 1 renounced his/her own shares, and Nonparty 2, etc., etc. shall perform the procedure for the registration of ownership transfer with respect to Nonparty 1’s shares according to their statutory shares in inheritance.” In the said lawsuit, the decision of recommending reconciliation was finalized with the purport that “Nonindicted 2, etc., shall implement the procedure for the registration of ownership transfer with respect to Nonparty 1’

E. Accordingly, on April 29, 2010, the Defendant completed the registration of ownership transfer based on the renunciation of equity on January 13, 2003 with respect to Nonparty 1’s equity (hereinafter “instant equity”) out of Nonparty 1’s equity (hereinafter “instant equity”). Thereafter, the Defendant sold the Plaintiff’s previous equity and the instant equity to Nonparty 3, etc., and completed the registration of ownership transfer, thereby disposing of the entire equity.

3. Examining these facts in light of the legal principles as seen earlier, even if Nonparty 1, a co-owner of the instant real estate, expressed his/her intent to renounce his/her co-ownership to other co-owners, the Plaintiff cannot be deemed to have acquired ownership of the instant share immediately unless the registration following such declaration has been completed. However, upon Nonparty 1’s declaration of waiver of share, the Plaintiff became entitled to the right to claim ownership transfer registration of the instant share against Nonparty 1 and Nonparty 2, a successor. On the other hand, the Defendant merely acquired only the Plaintiff’s previous share through a compulsory auction procedure, and cannot be said to have acquired any title, such as the right to claim ownership transfer registration as to the instant share.

The court below also held that the defendant has a duty to return unjust enrichment on such premise. In light of the records, the conclusion of the court below is acceptable, and contrary to what is alleged in the grounds of appeal, the court below did not err by misapprehending the legal principles as to the renunciation of co-ownership or unjust enrichment, inconsistent reasoning, and lack of reasoning

4. Therefore, the appeal is dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Park Poe-dae (Presiding Justice)