Plaintiff 1 and one other (Law Firm Gyeyangyang, Attorneys Lee Dong-soo, Counsel for the plaintiff-appellant)

[Judgment of the court below]

March 18, 2016

1. All of the plaintiffs' claims are dismissed.

2. The costs of lawsuit are assessed against the plaintiffs.

The Defendant’s imposition of a penalty surcharge of KRW 33,406,80 each against the Plaintiffs on May 1, 2014 shall be revoked.

1. Details of the disposition;

A. On April 19, 2002, Plaintiff 1 purchased 1/2 shares of each of the 1,722 square meters (hereinafter “instant land”) around 202, with Nonparty 1 and Nonparty 1, and completed the registration of ownership transfer with respect to the instant land in the name of Nonparty 1.

B. On January 2, 2004, Plaintiff 1 purchased 1/2 of the instant land from Nonparty 1 for KRW 200 million, and paid KRW 130 million to Nonparty 1 in cash, and the remainder of KRW 70 million to Nonparty 1 for the remainder of KRW 182 million with the maximum debt amount set forth in the said land, the debtor 1, and the debtor 1, the agricultural cooperative of the mortgagee 1, the mortgagee 1, and the mortgagee 5, the mortgagee 1 acquired the secured debt of the right to collateral security, in lieu of the payment, and Plaintiff 2 bears part of the above purchase amount at that time.

C. The Plaintiffs completed the registration of ownership transfer under Nonparty 1’s name due to the issue subject to a land transaction permit, etc., and completed the registration of ownership transfer under Plaintiff 1’s name with respect to the portion of 1/2 out of the instant land and the remaining 1/2 under Plaintiff 2, respectively.

D. On May 1, 2015, the Defendant imposed a penalty surcharge of KRW 33,406,80, each of the following, on the basis of the officially assessed individual land price of 2010, on the following grounds, on May 1, 2015, on the ground that Article 3 of the Act on the Registration of Real Estate under Actual Titleholder’s Name (hereinafter “Real Estate Real Name Act”) was prohibited from registering the real right to real estate in the name of a trustee under the title trust agreement, notwithstanding that the real right to real estate was not registered under the title trust agreement. However, the Plaintiffs violated the provisions of Article 3 of the Real Estate Real Name Act by registering the instant land in the name of Nonparty 1 on April 19, 202.”

Standard market price of the land stated in the main sentence (based on January 1, 2010) the amount of penalty surcharges for the standard market price of the land stated in the main sentence (area 】 194,000 won x shares x 167,034,00 won 33,406,80 won x 20% x 20% of the standard market price of the land stated in the main sentence x 5% of the real estate assessed (in excess of 2 years) x 15% of the expiration date of the obligation period (in excess of 2

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1 through 6, Eul evidence Nos. 1 through 4 (including branch numbers), the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiffs' assertion

1) The Plaintiffs did not have held title trust with Nonparty 1 on the instant land.

A) Nonparty 1 unilaterally completed the registration of ownership transfer with respect to the entire land of this case on April 19, 2002, and there was no title trust agreement between Plaintiff 1 and Nonparty 1.

B) The Plaintiffs purchased shares owned by Nonparty 1 on or around January 2, 2004, and did not obtain land transaction permission, and only made registration under Nonparty 1.

C) Since Plaintiff 2 paid part of the purchase price around January 2, 2004, Plaintiff 2 completed the registration of ownership transfer with respect to 1/2 shares out of the instant land, and there is no relationship with Nonparty 1.

2) As at the time when Plaintiff 1 purchased shares owned by Nonparty 1, Plaintiff 2 imposed a part of the purchase price, Plaintiff 2’s registration of title trust cannot be deemed as the registration of title trust.

3) 50/100 of the penalty surcharge should be mitigated in accordance with Article 3-2 of the Enforcement Decree of the Real Estate Real Name Act, since there was no purpose to evade taxes or avoid the restrictions under the law.

B. Relevant statutes

The entries in the attached Table-related statutes are as follows.

C. Determination

1) Whether a title trust agreement exists

A) Relevant legal principles

In general, in a lawsuit seeking revocation of a penalty surcharge, the burden of proving the existence of the requirements for the imposition of a penalty surcharge shall be deemed to be against the disposition authority, which is the subject of the imposition of a penalty surcharge, unless the other party proves the existence of the requirements in light of the empirical rule in the specific litigation, unless the other party proves that the facts in question are not eligible for the application of the empirical rule (see Supreme Court Decision 2002Du3645, Jun. 11, 2004, etc.).

The main sentence of Article 2 subparagraph 1 of the Act on the Registration of Real Estate under Actual Name (hereinafter referred to as "title trust agreement") provides that "a person who holds, or actually acquires, the ownership or other real rights to real estate (hereinafter referred to as "real rights to real estate") (hereinafter referred to as "real rights to real estate") shall be a person who has the ownership or other real rights to the real estate and another person shall possess or have the real rights to the real estate internally between him/her and another person, and the registration thereof (including provisional registration) shall be made in the name of another person (including a case by means of a consignment or consignment sale or ratification)." One of the core signs showing whether a person who has the real rights to the real estate is a person who has the real rights to the real estate is liable for the acquisition of the real right to the real estate (see Supreme Court Decision 2008Do7546, Jul. 8, 2010, etc.).

B) In the instant case:

(1) Whether a title trust agreement exists around 2002

Comprehensively taking account of the following circumstances acknowledged by comprehensively taking account of the overall purport of arguments in the statements in Gap evidence Nos. 2, 7 through 9, and Eul evidence Nos. 5 through 8, it is reasonable to view that Plaintiff 1 acquired 1/2 shares out of the land of this case and Plaintiff 1 would hold the ownership of the above shares, but Plaintiff 1 would hold the ownership of the above shares, and the registration thereof was made under the name of Nonparty 1, and the registration of ownership transfer for the above shares was made in the name of Nonparty 1.

① Around 2002, Plaintiff 1 and Nonparty 1 agreed to purchase 1/2 shares of the instant land jointly with Nonparty 1, and around that time, Nonparty 1 paid KRW 178 million as the purchase price for the said 1/2 shares.

② The instant land was located within the land transaction permission zone, and Plaintiff 1 did not meet the requirements for acquiring the said land. Therefore, Plaintiff 1 was unable to complete the registration of ownership transfer for one-half portion of the said land under the name of Plaintiff 1.

③ In light of the fact that Plaintiff 1 appears to have not participated in the preparation of the sales contract (Evidence A8) dated January 20, 2002, and that Nonparty 1 paid the purchase price for his share with the money loaned as security by Nonparty 1, while the Plaintiff did not take measures to guarantee Nonparty 1’s right to claim for ownership transfer registration, Nonparty 1 appears to have unilaterally completed the registration of ownership transfer on April 19, 2002.

However, Plaintiff 1 did not take measures to refund money in the name of the purchase price, even though Nonparty 1 explained that “The instant land could not complete the registration of ownership transfer in the name of Plaintiff 1 residing in another land within the land transaction permission zone, and thus, the registration of ownership transfer with respect to the entire land was completed in its own name.”

④ Rather, on May 23, 2002, Plaintiff 1 recognized that the ownership transfer registration has been made in the name of Nonparty 1 with respect to his share, and completed the registration of establishment of a neighboring mortgage with respect to the instant real estate as the maximum debt amount of KRW 80 million, the debtor 1, and the mortgagee 1.

⑤ In addition, from 2002 to 2004, Plaintiff 1 bears the property tax on the one-half share of the instant land, and the half of the national health insurance premiums imposed on Nonparty 1.

(6) According to the above circumstances, around May 23, 2002, when the registration of the establishment of the above collateral was completed, the title trust agreement was concluded between Plaintiff 1 and Nonparty 1. As to the real estate owned by the title trustee, the registration title trust relationship can be established pursuant to the ex post facto title trust agreement between the title truster and the title truster (see Supreme Court Decision 2009Da14968, Dec. 10, 2009). As such, the imposition of penalty on the ground that the registration of the title trust was made between Plaintiff 1 and Nonparty 1 on the ground that the registration of the title trust was made on the one-half share of the above land around 2002.

7) Meanwhile, the plaintiffs asserted that the plaintiff 1 and the non-party 1 entered into a partnership business agreement for a joint business and completed the registration of ownership transfer under the name of non-party 1 who is the manager after acquiring the land in this case. However, in light of the fact that the plaintiff 1 stated that the plaintiff 1 purchased 1/2 of the above land in order to establish a house after being employed in the relevant lawsuit and the complaint of this case, the above assertion is without merit.

(2) Whether a title trust agreement exists in 2004

In full view of the following circumstances, it is reasonable to view that a title trust agreement existed between the plaintiffs and the non-party 1 around January 2, 2004, taking into account the following circumstances acknowledged by comprehensively considering the evidence Nos. 7 and Nos. 5 through 8 of the evidence Nos. 7 and the purport

① On January 2, 2004, Plaintiff 1 purchased shares of KRW 1/200,000 from Nonparty 1 in the instant land. At the time of the conclusion of the said sale contract, the Plaintiffs knew that the said land cannot be transferred to the Plaintiffs under the name of the Plaintiffs, whose domicile is located in another land within the land transaction permission zone.

② Plaintiff 1 asserted that “Plaintiff 1 purchased shares from Nonparty 1 on January 2, 2004, and entered into a two-party registration title trust agreement between Nonparty 1 and Nonparty 1 to hold ownership only externally until meeting the requirements for acquiring land within the land within the land transaction permission zone.”

③ Plaintiff 1 paid the property tax on the instant land from around 2004 to January 201 and Nonparty 1’s national health insurance premium.

④ Plaintiff 2, as Plaintiff 1’s wife, paid part of the purchase price at the time of purchasing Nonparty 1’s shares on January 2, 2004. Moreover, Plaintiff 2, on January 5, 2011, obtained a land transaction permit and completed the registration of transfer of ownership with respect to the one-half shares of the instant land (the Plaintiff asserts that the registration of transfer of Plaintiff 2’s ownership is not a title trust from Plaintiff 1, and Plaintiff 2 recognized that Plaintiff 2 is the actual right holder of the instant land).

⑤ Since Nonparty 1 and Nonparty 1 cooperates with the Plaintiffs to obtain a land transaction permit and a registration of transfer of ownership, it can be deemed that there was an implied or marina trust agreement with Plaintiff 2 (the Plaintiffs asserted that, after entering into a sales contract around 2004, Nonparty 1 had the Plaintiffs transferred the transaction to Nonparty 1’s address.)

C) Sub-decision

Therefore, since the registration of title trust was made under the title trust agreement between the plaintiffs and the non-party 1 pursuant to the title trust agreement, this part of the plaintiffs' assertion is without merit (this disposition was made under the premise that the plaintiffs held the title trust of the land of this case with the non-party 1. Therefore, it is not determined as to the assertion that the plaintiffs 1 did not constitute the title trust of plaintiff

2) Summary of reduction of penalty surcharge

A) The proviso to Article 3-2 of the Enforcement Decree of the Real Estate Real Name Act provides that “where taxes are not evaded or taxes are not evaded, a penalty surcharge may be mitigated by 50/100.” This provision is a discretionary mitigation provision that constitutes a case where a title truster is not for the purpose of evading taxes or avoiding restrictions under the law and regulations (see, e.g., Supreme Court Decision 2011Du1662, Jan. 26, 2012).

B) Determination

The evidence submitted by the plaintiffs alone is insufficient to recognize that there was no purpose to evade taxes or avoid restrictions pursuant to the laws and regulations with respect to the title trust of the above land, and there is no other evidence to acknowledge this otherwise.

Rather, on April 19, 2002 and January 2, 2004, the Plaintiffs were not able to obtain land transaction permission for the instant land, and the registration of Nonparty 1 was made, and the registration was made in the name of the Plaintiffs in 2011 after seven to nine years since the date of purchase of the instant land. As seen earlier, according to the above facts of recognition, it can be deemed that the Plaintiffs, by title trust with Nonparty 1, lost their right to the said land, thereby undermining the relevant Acts and subordinate statutes, such as the National Land Planning and Utilization Act.

C) Sub-decision

Therefore, this part of the plaintiffs' assertion is without merit.

3. Conclusion

Therefore, the plaintiffs' claim of this case is dismissed in entirety as it is without merit. It is so decided as per Disposition.

[Attachment]

Judges Lee Jong-hee (Presiding Judge)