In a case where the so-called three-party registration title trust agreement and subsequent registration are invalidated after the grace period under the Act on the Registration of Real Estate under Actual Titleholder’s Name, whether the title truster can seek the registration of transfer of ownership based on unjust enrichment against the title trustee (negative)

In the case of a so-called three-party registered title trust, even if the title truster holds a right to claim ownership transfer registration based on a sales contract against a seller, and the title truster is unable to hold the title of the registration due to the lapse of the grace period. In addition, in the case of a three-party registered title trust, the title truster may not file a claim for the registration of transfer against the title trustee, the title truster, who is the invalid title truster, due to the completion of the grace period. Ultimately, in the case of a three-party registered title trust, the title truster cannot file a claim for the registration of transfer based on unjust enrichment against the title trustee.

Articles 4 and 12 of the Act on the Registration of Real Estate under Actual Titleholder's Name;

[Plaintiff-Appellant] Plaintiff 1 and 1 other (Law Firm Han-sung, Attorneys Lee Jong-soo et al., Counsel for plaintiff-appellant)

Plaintiff (Attorney Han-chul et al., Counsel for plaintiff-appellant)

Defendant (Attorney Lee Jae-soo et al., Counsel for the defendant-appellant)

Suwon District Court Decision 2007Na12620, 12637 decided June 25, 2008

Of the judgment below, the part of the claim for counterclaim as to the size of 165.3 square meters in Tae-dong (number omitted) Seo-gu, Sung-nam-si (Seoul-si) is reversed, and that part of the case is remanded to Suwon District Court Panel Division. The remaining appeal by the Plaintiff (Counterclaim Defendant) is dismissed. The costs of appeal regarding the dismissal of appeal are assessed against the Plaintiff (Counterclaim Defendant).

We examine the grounds of appeal.

1. On the first ground for appeal

The court below acknowledged the facts of the judgment by taking full account of the employment evidence, and judged that the deceased non-party 1 (hereinafter "the deceased") held that each of the plaintiff (the counter defendant; hereinafter referred to as "the plaintiff") and the real estate listed in paragraph 1 of the attached Table No. 2 of the judgment of the court below (hereinafter referred to as "the housing of this case") under title trust with the real estate listed in paragraph 2 of the attached Table No. 2 of the judgment of the court below (the same as the real estate stated in the order; hereinafter the same as the real estate of this case) and the real estate listed in paragraph 1 of the same list of the same

2. As to the second and fifth points

The court below rejected all of the plaintiff's assertion that "the plaintiff and the non-party 2 acquired the ownership of the site and housing of this case through donation, completion of prescription, division of inherited property, etc. from the deceased, or the defendant's counterclaim claim of this case by the plaintiff (the non-party 2, the plaintiff 1, the plaintiff 1, the plaintiff 2, the plaintiff 2, the plaintiff 2, the plaintiff 2, the non-party 2, the plaintiff's claim for the counterclaim of this case is unlawful because the exclusion period is over, as a lawsuit for recovery of inheritance." In light of the relevant legal principles and records, the judgment of the court below

3. On the sixth ground for appeal

A. The court below held that, although title trust on the site of this case is a party to a sales contract, and only the name of the deceased falls under the title trust registered in the name of the third party, if the defendant cancels the registration of title transfer under the name of the plaintiff on behalf of the seller, and then restores the shares in inheritance among them under the name of the defendant, the procedure is complicated, and since the sale of the site of this case was made around 1977 and the seller who does not have any interest in the site of this case was in fact brought in a lawsuit, the legal relationship between the defendant who is the heir of the title truster and the plaintiff who is the title trustee should be resolved clearly. Since the title trust agreement was completed pursuant to the title trust agreement and the title trust agreement was null and void pursuant to Article 4 of the Act on the Registration of Real Estate under the name of the actual right holder, the plaintiff is holding the title of the registration in the name of the plaintiff on the site of this case without any legal grounds, and the defendant is thereby suffering from losses not holding the name of the plaintiff.

B. According to the Act on the Registration of Real Estate under Actual Titleholder’s Name (hereinafter “Real Estate Real Name Act”), in the case of a so-called three-party registered title trust, the existing title trust agreement and registration pursuant thereto are invalidated due to the lapse of the grace period prescribed under the same Act, and as a result, the real estate trusted in title is returned to the seller’s ownership. As such, the seller may seek cancellation of the registration under his/her name, which is null and void, from the title trustee. Meanwhile, the sales contract between the seller and the title truster still remains valid even after the expiration of the grace period since the seller and the title truster did not have any provision denying the validity of the sales contract between the seller and the title truster. As such, the title truster may file a claim against the seller for the registration of ownership transfer based on the sales contract, on behalf of the title trustee to preserve the seller’s right to claim the registration of ownership transfer (see

In light of the above legal principles, even if the title trust agreement and the registration pursuant to the title trust agreement are invalidated due to the expiration of the grace period stipulated in the Real Estate Real Name Act, the title truster cannot be deemed to have suffered losses that could not hold the title of the registration due to the expiration of the grace period. Furthermore, in the case of the so-called three-party registered title trust, the title truster cannot file a claim for the registration of transfer against the title trustee, who is the invalidated title trustee, at the end of the period of grace period. Thus, in the case of the third party registered title trust, it is reasonable to deem that the title truster cannot file a claim for the registration of transfer due to unjust enrichment

Nevertheless, the lower court, based on its stated reasoning, accepted the Defendant’s counterclaim seeking the registration of ownership transfer concerning the instant site on the ground that the Defendant, one of the co-inheritors of the title truster, was a title trustee, seeking the registration of ownership transfer against the Plaintiff, who was the title trustee. In so doing, the lower court erred by misapprehending the legal doctrine regarding three parties’ registered title trust or unjust enrichment, thereby adversely affecting

4. On the seventh ground for appeal

A request for ownership transfer registration for the restoration of a real name is filed under his/her own name, or a true owner who acquired ownership under laws seeks the restoration of the real name based on ownership in lieu of seeking the cancellation of the registration against the present registered titleholder. Thus, if the true owner is not a real owner, a request for ownership transfer registration for the restoration of the real name may not be made, as alleged in the grounds of appeal (see Supreme Court Decision 2007Da14940, Jul. 12, 2007). However, according to the facts duly established by the court below, the deceased, the title truster of the house of this case, who had newly constructed the house of this case and acquired the ownership of the house of this case, was restored to his/her ownership after the grace period under the Real Estate Real Name Act, and the defendant inherited the ownership of the house of this case from the deceased, the defendant may seek the ownership transfer registration for the restoration of the real name due to the restoration of the real name.

In the same purport, the decision of the court below which cited the defendant's counterclaim as to the house of this case is just, and there is no error in the misapprehension of legal principles as to the claim for ownership transfer registration based on the restoration of real name,

5. Conclusion

Therefore, the part of the judgment of the court below regarding the counterclaim against the site of this case is reversed, and that part of the case is remanded to the court below for a new trial and determination. The remaining appeal by the plaintiff is dismissed, and the costs of appeal to the Supreme Court are assessed against the losing party. It is so decided as per Disposition by the assent

Justices Ahn Dai-hee (Presiding Justice)