In cases where the main sentence of Article 4(2) of the Act on the Registration of Real Estate under Actual Titleholder’s Name is applied to real estate and the registration of transfer of ownership in the name of the debtor who is a title trustee is null and void, whether the general creditor of the debtor against whom the decision to commence compulsory sale of real estate was rendered may seek the revocation of the fraudulent act against the act of creation of mortgage after the debtor entered into a mortgage contract with the third party

Where the main text of Article 4(2) of the Act on the Registration of Real Estate under Actual Titleholder’s Name applies to real estate, and the registration of transfer of ownership in the name of the debtor who is a title trustee is null and void, such real estate is not owned by the debtor, and it cannot be deemed that the debtor’s property is liable for joint security offered to the general creditors. Even if the debtor concluded a mortgage contract with a third party on real estate and completed a mortgage establishment registration, it cannot be said that the debtor caused a decrease in the debtor’s responsible property, and thus, it cannot be deemed a fraudulent act detrimental to the debtor’s general creditors. Meanwhile, even if the debtor, who is a title trustee, concluded a mortgage contract with a third party and concluded a mortgage contract with a third party, and the compulsory auction procedure for the above real estate was commenced after the completion of the mortgage establishment registration, it cannot be said that the debtor’s act of establishing a mortgage is a fraudulent act.

Article 406 of the Civil Act, Article 4(2) and (3) of the Act on the Registration of Real Estate under Actual Titleholder’s Name

Supreme Court Decision 99Da55069 Decided March 10, 2000 (Gong2000, 932) Supreme Court Decision 2008Da41635 Decided September 25, 2008

Plaintiff (Law Firm Jeong, Attorneys Go Jae-hwan et al., Counsel for plaintiff-appellant)

Defendant (Law Firm Heavy, Attorneys Lee Sung-soo et al., Counsel for the defendant-appellant)

Suwon District Court Decision 201Na40028 decided April 12, 2012

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

The grounds of appeal are examined.

Where the main sentence of Article 4(2) of the Act on the Registration of Real Estate under Actual Titleholder’s Name applies to real estate, and the registration of transfer of ownership in the name of the debtor who is a title trustee is null and void, such real estate is not owned by the debtor, and it cannot be deemed that it is the debtor’s property held as joint collateral. Even if the debtor concluded a mortgage contract with a third party on the above real estate and completed a mortgage establishment registration, it cannot be deemed that the debtor caused a decrease in the debtor’s responsible property, and thus, it cannot be deemed a fraudulent act that causes damage to the debtor’s general creditors, and it cannot be deemed that the debtor has the intention of deception (see, e.g., Supreme Court Decisions 9Da55069, Mar. 10, 200; 2008Da41635, Sept. 25, 2008). Meanwhile, even if the debtor, who is a title trustee, concluded a mortgage contract with a third party and the debtor concluded the mortgage establishment registration after the establishment registration, it cannot be deemed null and void.

In the same purport, the court below affirmed the first instance court's order that dismissed the plaintiff's claim for revocation of a fraudulent act against the entrusted real estate under the name of the general creditor of the debtor, on the ground that the act of setting collateral to the title trustee in the form of a return obligation based on the act of trust does not constitute a fraudulent act with respect to the real estate in this case, to which the main sentence of Article 4 (2) of the Act on the Registration of Real Estate under Actual Titleholder's Name applies, and there is no error in the misapprehension of legal principles as to the "third party" under Article 4 (3) of

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.

Justices Min Il-young (Presiding Justice)