Plaintiff (Attorney Lee Sung-sung, Counsel for the plaintiff-appellant)

Hanol Trust Co., Ltd. (Law Firm Sepon, Attorneys Park Han-pon et al., Counsel for the defendant-appellant)

July 12, 2012

1. The defendant shall pay to the plaintiff each money listed in the separate sheet.

2. The plaintiff's remaining claims are dismissed.

3. The costs of lawsuit shall be borne by the defendant.

4. Paragraph 1 can be provisionally executed.

The defendant shall pay to the plaintiff 32,362,40 won with 20% interest per annum from the day following the delivery of a copy of the complaint of this case to the day of complete payment.

1. Facts of recognition;

A. Esti Construction Co., Ltd. (hereinafter “Esti Construction”) entered into a real estate security trust agreement (the main contents are as follows) between the Defendant Company and the Seoul Mapo-gu Co., Ltd. and the 8 lots of “○○○○○○○” building (hereinafter “instant commercial building”) on December 2007 (hereinafter “instant real estate”). On December 26, 2007, the trust agreement was concluded between the Defendant Company and the Defendant Company, and the obligor and the beneficiary as well as the Nonparty Company, 9 financial institutions including Korea mutual savings banks, etc., and the trustee as the Defendant Company, and the trust period was December 2004 (this is due to the fact that the instant building site, etc. was already trusted to the Defendant Company on or around December 2004 in relation to the said new construction and sale of the buildings) to the date of termination of the trust agreement.

[hereinafter] The "A" refers to the non-party company that is the truster, and the "B" refers to the defendant company that is the trustee.

Article 1 (Purpose of Trust)

The purpose of this trust contract is to preserve and manage trust real estate and to realize and settle the trust real estate when the debtor fails to perform his/her obligations in order to guarantee the responsibility to be performed by the "A", and the obligation to be borne by the debtor.

Article 4 ( Original of Trust)

The original of a trust shall be the profits accrued from the management of money belonging to the trust property, such as the property acquired by the trust real estate or by subrogation thereof, the disposal price of the trusted real estate, and penalty generated in connection with the disposal procedure, and other corresponding

Article 5 (Revenue from Trust)

Profits of the trust shall be rents, etc. accruing from the trusted real estate and others corresponding thereto.

Article 13 (Methods of Managing Money Belonging to Trust Property)

(2) The management of a contract bond (including penalty when a contract is cancelled), part payments, balance payments, etc. related to the disposal of trusted real estate under Articles 20 and 21 (2) shall be deposited in a financial institution prescribed by "B".

Article 14 (Bearing of Expenses)

(1) Taxes and public charges on real estate and trust profits, maintenance expenses, financial expenses, etc., and all other expenses necessary for the performance of trust affairs, and damages arising from any cause not attributable to "B" in the performance of trust affairs shall be borne by "A".

Article 21 (Settlement of Proceeds from Disposal, etc.)

(1) The order of priority in cases where "B" liquidates and adjusts the trusted real estate shall be as follows:

1. Expenses and remuneration related to the trust deed;

(a) Expenses: Electricity, water supply, management expenses, insurance premiums, appraisal fees, newspaper publication fees, etc. (tax and public charges, such as property tax notified in the name of the trustee by the date the balance of disposition is received);

(b) Remuneration: Fees for disposal of property and unpaid property management fees to be paid to the trustee;

2. Small-sum lease deposit (Article 8 of the Housing Lease Protection Act and Article 14 of the Commercial Building Lease Protection Act) before the registration of a trust;

3. Security deposits for lease prior to registration of a trust (Article 3-2 of the Housing Lease Protection Act), mortgage (within the maximum amount of claims), right to lease on a deposit basis, registered right to lease on a deposit basis, and secured claims for registered right to lease: Provided, That the order

4. Cases not falling under subparagraphs 2 and 3, among the lease deposit that a trustee has obligation to return.

5. Claims of priority beneficiaries;

6. To pay the remainder to the beneficiary (the truster, if the beneficiary does not have the beneficiary), if any, after making a successive repayment.

(2) A contract bond (including penalty upon cancellation of a contract), intermediate payment, balance, etc. received by "B" in connection with the disposal of real estate held in trust shall be managed by "B" until the interested parties pay it to the interested parties, and the proceeds from the operation thereof shall be included

B. On March 31, 2008, in relation to the construction and sale of the commercial building of this case, the non-party company again entered into an agreement with the defendant company, lending financial institutions, etc. on the following terms and conditions (hereinafter referred to as the "agency agreement") (However, the order of the execution of the funds stipulated in Article 13 of the above agreement was partially changed in April and October 2009).

[hereinafter] Nonparty Company A, “B”, “A”, “A”, “A”, “A”, “A”, “A”, “A”, “A”, “A”, refers to a lending financial institution.

Article 1 (Purpose of Agreement)

The purpose of this Agreement is to clarify the roles, scope of duties and responsibilities of the relevant project undertakers and to prescribe the detailed matters necessary for the promotion of the project in order to facilitate the implementation of the project.

Article 3 (Service and Business Affairs)

1. The roles and duties of “A”;

(a)a collateral trust to “A” for the financing of funds (such as the conclusion of a loan agreement) related to the Project and for the project site and completed buildings;

(c)to delegate and assist in the work of managing funds borrowed under the name of "A" related to "A" and the receipt, management, operation, and enforcement of proceeds from sale, etc.;

(e) the conclusion of sales contracts and the management of buyers of the project;

3. Roles and duties of “sick”;

(b)to be entrusted with all the project sites and buildings of "the Project" by a collateral trust;

(d) Financial management services, such as receipt, management, and execution of proceeds from sale by the account for management of proceeds from sale;

(e) Execution of project expenses, including construction expenses, through sales in lots and revenue management;

Article 10 (Performance, etc. of Sale of Goods)

(1) All the sale affairs, including advertisement for sale, sale method, sale price, timing of sale, management of buyers, etc., shall be conducted by "A" and shall be conducted in consultation with "B" and "B" in advance.

(2) The receipt and management of proceeds from sale in lots shall be managed by "sicks" through agency affairs.

Article 12 (Management of Funds)

(1) All revenues related to the target project, such as the principal of a loan, proceeds from sale in lots or rent, overdue charges of purchasers, interest income of financial institutions, etc., and refund money on taxes and public charges, shall be deposited into the account for management of proceeds from sale opened in the name of "J".

(2) The disbursement of all project costs, excluding construction costs, from among revenues deposited in the account for the management of proceeds from sale after the commencement of sale, shall be executed upon the written request of the “B” and “A” obtained the confirmation of the “B” and “B”, and the time of execution shall be within seven days from the date the “A” receives a written request: Provided, That the payment of construction costs shall be governed by Article 13(2).

(3) Notwithstanding the provisions of paragraph (2), with respect to the following subparagraphs, the term "disease" shall be independently executed, and the term "A", "B" and "J" shall not raise any objection:

(a) Taxes and public imposts;

(b) Proxy remuneration;

(c) Costs of lawsuit and other costs of cancellation of restrictive rights;

(d) Principal and interest of “fixed”;

Article 13 (Order of Execution of Funds for Management Accounts of Proceeds from Sale)

(1) "A soldier" shall be the execution of funds in the following order:

(a) First priority: Interest on loans;

2. Second priority: Taxes and public charges of trust property, trust disposal expenses and trust remuneration, substitute remuneration, business promotion expenses (charges for parcelling-out, expenses for parcelling-out system, etc.), and 40 million won per month operating expenses of enforcement company (where the parcelling-out rate is low, the amount paid shall be withheld);

(c) Priority: Loan principal; and

(d) Priority 4: Unpaid construction cost; and

5) 5: Other project costs and revenues of “A”;

(5) In the case of project costs essential for contingency in the course of the implementation of this project, "A", "B" and "J" may be agreed upon and requested to execute the project, notwithstanding the order of funding execution under paragraph (1) of this Article.

Article 16 (Reversion of Rights and Obligations and Certification of Power of Representation)

1. The legal effect of the act done by “A” on behalf of “A” shall belong to “A”, and “A” shall not assert the right or claim performance against “A”.

(2) After the conclusion of this Agreement, the term “A” shall immediately notify all interested parties and buyers of the project of the fact that the term “A” performs the duties on behalf of “A”.

Article 20 (Exemption Clause)

(1) In relation to "the project", where a buyer becomes the subject of the lawsuit, such as filing a lawsuit against "A" or a person interested in "A" or "B" against "A" or becomes the subject of the lawsuit, the costs of the lawsuit (including the principal and interest of the judgment) shall be borne by "A" or "B", and where the same does not apply, "A" may be appropriated from the funds of the fund management account.

Article 25 (Termination or Rescission of Agreement)

1. The term "this Agreement" may be terminated or rescinded upon an agreement by all the parties to the Agreement.

(2) Notwithstanding the provisions of the preceding paragraph, the term “sick” may terminate this Agreement upon agreement with “B” and “J” in any of the following cases:

(3) When this Agreement is terminated pursuant to paragraph (2), the deposit balance remaining in the “Fund Management Account” of the “A” shall be settled in accordance with the results of the agreement between the parties, including the buyer, and the management authority of the remaining business funds remaining after the settlement shall be jointly managed by the “A” and “B” until the repayment of loans and the unpaid construction costs of “B” are repaid in the order of the parties.

C. On November 20, 2009, the Plaintiff concluded a sales contract with the non-party company for the sale price of the instant real estate at KRW 80,906,000 in total (hereinafter “instant sales contract”), and agreed on the payment method as follows.

[hereinafter] The “A” refers to the Plaintiff, who is the seller, and the “B”, and the “B” is the buyer, and the “B” trust is the trade name before the change of the Defendant Company”).

Article 1 (Methods for Sale Price and Payment)

1. “B” shall deposit the proceeds of sale in the account designated by “A”, and where “B” deposits the proceeds of sale in any other way, “B” shall not raise any objection thereto even if it becomes null and void. In addition, this trust which is a fund manager shall receive the proceeds of sale on behalf of the seller “A”.

2.The term "B" shall pay the down payment, intermediate payment and remainder to the following accounts:

Account Number of the Account Bank in the section of the Bank of Korea (Account Number omitted) shall be

D. Accordingly, the Plaintiff paid KRW 16,181,200 as down payment on November 20, 2009, and the intermediate payment of KRW 16,181,200 on February 25, 2010, respectively, to the said bank account of the Defendant Company, a designated account.

E. However, the non-party company failed to comply with the promise to sell the Plaintiff to the real estate of this case by March 2010, and the Plaintiff notified the non-party company that it would cancel the sales contract of this case on June 18, 2010, and around that time, the notification reached the non-party company.

F. On November 27, 2010, the Plaintiff filed a lawsuit against the non-party company seeking the return of the above payment and the payment of penalty, with Seoul Central District Court 201Da273747, the Plaintiff filed a lawsuit against the non-party company, and received a judgment ordering the Plaintiff to pay to the non-party company the amount calculated at an annual rate of 5% from February 26, 2010 to August 20, 2010, calculated as to the total amount of KRW 32,362,40, and KRW 16,181,200 from November 21, 2009; the remainder of KRW 16,181,200 from February 26, 2010 to August 20, 2010; and the next decision became final and conclusive on December 10, 2010.

G. On the other hand, the non-party company currently has no particular property other than the commercial building of this case and its site trusted to the defendant company and the trademark right of this case.

[Ground of recognition] A without dispute, Gap evidence 1, Gap evidence 2, Gap evidence 3-1, 2, Gap evidence 4-7, Gap evidence 9, Eul evidence 1-9, Eul evidence 1-9, the purport of the whole pleadings.

2. Summary of the parties' arguments;

A. The plaintiff's selective assertion

(1) The Defendant Company is a person who manages and operates the sales price from the buyers in accordance with the real estate security trust agreement and the agency agreement prior to the Defendant Company. Accordingly, the Plaintiff paid the sales price directly to the Defendant Company. The Defendant Company, the addressee of the sales price, upon the lawful rescission of the instant sales contract, shall be deemed to have acquired the above amount without legal grounds. The obligation to return the sales price is the obligation to be settled first in light of the above real estate security trust agreement and the provisions or purport of the relevant Acts and subordinate statutes, and thus, the Defendant Company is obligated to return the sales price directly to the Plaintiff, or the Plaintiff is obligated to return it

(2) As seen earlier, the Plaintiff has the right to claim the return of the sale price determined by the judgment against the non-party company, and the non-party company has the right to claim the return of the sale price paid by the Plaintiff to the Defendant company in accordance with the real estate security trust agreement and the agency agreement. Since the non-party company at the present insolvent did not exercise its right against the Defendant company, the Defendant company is obligated to pay it to the Plaintiff who seeks the return of the sale price equivalent to the above sale price

B. The defendant company's assertion

(1) The defendant company is only an agent entrusted with the management of funds pursuant to the above agency agreement and is not a party to the sales contract of this case. The plaintiff also is not a party to the above real estate security trust agreement, and there is no ground to seek the return of the above sales price paid by the plaintiff to the defendant company.

(2) The sale price deposited from the Plaintiff to the account of the Defendant Company shall be dealt with in accordance with the order of execution and settlement of the funds stipulated in the real estate security trust agreement and the agency agreement. It shall not be deemed that the returned obligation should be settled prior to the obligation of the priority beneficiary. In order for the Defendant Company to return it, the written request of the Nonparty Company, which obtained the confirmation of the contractor and the lending financial institution, who is the priority beneficiary, pursuant to Article 12 of the above agency agreement, must be made. However, no such request was received from the Nonparty Company, and there is no provision regarding the return of the price when the sales contract between the Defendant Company and the non-party Company was cancelled.

(3) In addition, the non-party company, as a beneficiary of the above real estate security trust agreement, has a right to benefit from the defendant company, such as a claim for return of earnings upon termination of the above trust agreement in the future or a claim for transfer of ownership to the real estate subject to transfer of ownership. However, compared to the fact that the value of the commercial building in this case exceeds KRW 94.8 billion, the amount of the claim of the lending financial institution, which is the priority beneficiary, is merely about KRW 4.7 billion, it cannot be deemed that the non-party company is currently insolvent, and therefore, it cannot be deemed that the plaintiff needs to exercise its rights on behalf

3. Judgment on the plaintiff's subrogation claim

(a)the existence of preserved claims;

The plaintiff filed a lawsuit against the non-party company seeking the return of the sale price, etc. paid by it to the non-party company as Seoul Central District Court 201Da273747, Nov. 27, 2010, which ordered the non-party company to pay the plaintiff the total amount of the above payment of KRW 32,362,40, and damages for delay thereof as restitution following the cancellation of the contract for sale in this case to the non-party company on November 27, 2010. Since the judgment became final and conclusive on December 10, 2010, the plaintiff is in the status of creditor against the non-party company.

B. Existence of subrogation right

According to the real estate security trust agreement entered into between the non-party company and the defendant company, the purpose of the above contract is "to preserve and manage the trust real estate in order to guarantee the liability to be performed by the non-party company, and the obligation to be borne by it, the defendant company shall preserve and manage the trust real estate, and liquidate and settle it when the non-party company fails to perform its obligation." The original of the trust is "the profits accrued from the management of trust property, such as the property acquired by the trust real estate or by subrogation, the proceeds from the disposal of the trust real estate, the proceeds from the disposal of the trust real estate, and penalties related to the disposal procedure, etc., and the proceeds from the trust shall be "the rents, etc. accruing from the trust real estate", and the proceeds from the trust shall be managed by the defendant company until the payment to the interested parties of the contract deposit (including penalty upon the cancellation of the contract) and the proceeds from the management of the trust real estate in the name of the beneficiary, the management of the proceeds from the sale, the management of the funds, etc., and the proceeds from the loan or the trust account of the non-party company.

In accordance with the relevant provisions of the above real estate security trust agreement and the agency agreement, so long as the sales contract of this case concluded between the non-party company and the plaintiff becomes retroactively null and void retroactively, the sales price paid by the plaintiff does not constitute the sales proceeds stipulated in the original of the trust or the agency agreement under the above real estate security trust agreement. Thus, the defendant company should lose the legal cause for receiving and managing the sales price. Thus, the non-party company can demand the return of the sales price paid by the plaintiff to the defendant company on the ground of the above circumstances (if we do not do so, the above sales price may also be added to the real estate of this case which was returned to the trust property in the form of the cancellation of the sales contract of this case, and the defendant company may own it as trust property and use it twice for performing the principal and interest of the beneficiary).

As seen earlier, the Defendant Company argued to the effect that it is necessary to confirm the contractor and the lending financial institution, the first beneficiary, for the return of the above parcelling-out price under the provisions of Article 12(2) of the Agency Work Arrangement, and as long as the sale price paid by the Plaintiff following the cancellation of the parcelling-out contract does not constitute the original trust or the proceeds from sale, the above sale price cannot be used in the repayment of the principal and interest of the trust or the project cost to the first beneficiary, and thus, it cannot be deemed necessary to confirm or consent to the contractor or the first beneficiary for the return of the sale price. Therefore, the

C. Necessity of conservation

As seen earlier, it is doubtful that the above "trademark right, the right to claim the transfer of real estate," and the above "right to claim the transfer of the trademark right and the right to claim the transfer of the real estate," which the non-party company reported at the request of the non-party company for the sale order of the real estate, is in the situation where the property of the non-party company is separated from the property of the non-party company as the property of the non-party company is entrusted to the defendant company, and the non-party company is in the situation where it is insufficient to satisfy the plaintiff's above preservation right (the non-party company is the beneficiary of the above real estate trust contract, and it is hard to accept the above claim of the non-party company for the return of proceeds from the termination of the future trust contract or the right to claim the transfer of ownership of the real estate as the property of the non-party company, and it is hard to say that the non-party company's value of the above commercial building is merely 4.7 billion won as the amount of claims of the non-party company's preferential beneficiary.

D. Sub-committee

Thus, the defendant company is obligated to pay the plaintiff the amount equivalent to the sale price paid by the plaintiff to the account of the defendant company in accordance with the sales contract of this case with the non-party company and the delay damages.

4. Determination on Defendant Company’s defense

In regard to this, Defendant Company, a trustee, has asserted that it is responsible for the performance of the above obligation to the Plaintiff who subrogated the non-party Company, a truster only within the extent of its trust property. As such, Article 32 of the former Trust Act (wholly amended by Act No. 10924, Jul. 25, 201) provides that "the trustee shall be liable for performance within the extent of trust property with respect to the obligation to be borne by the beneficiary due to the deed of trust." In accordance with the cancellation of the contract of sale in this case, returning the price to the non-party company to the non-party company, the trustee company, bears the obligation to the non-party company, which is the beneficiary due to the deed of trust. However, the delayed repayment damages are arising from the inherent cause of the contract to the non-party company, rather than due to the deed of trust, and Article 14(1) of the above Act provides that "the above obligation of the non-party company, which is the subject of the contract to sell real estate and the non-party company, shall be exempted from liability for damages arising from the above part of the contract."

5. Conclusion

Therefore, the defendant company is obligated to pay to the plaintiff who subrogated the non-party company the amount of 32,362,40 won equivalent to the sale price (Provided, That this is within the limit of the property trusted by the non-party company to the defendant company) and to pay damages for delay calculated at the rate of 5% per annum under the Civil Act until September 6, 2012, and 20% per annum under the Act on Special Cases Concerning the Promotion, etc. of Legal Proceedings, etc. from the next day to the day of full payment, as requested by the plaintiff, if it is reasonable to dispute about the existence or scope of the performance obligation of the defendant company from September 3, 201 after the delivery of the copy of the complaint of this case from September 3, 2011 to the day of full payment.

[Attachment List omitted]

Judges No. Dan Chang