[1] Whether Article 44 of the Trust Act stipulating the requirements for the trustee to exercise the right to claim compensation and the right to claim compensation applies even where the trust is terminated (negative)

[2] Whether a trust company's transaction of trust property and proprietary property conducted in violation of Article 31 (1) of the Trust Act can be deemed a valid transaction just because it is beneficial to the beneficiary (negative)

[3] In a case where a trust company lends its own funds to a trust account with its own funds while keeping them in combination with its own funds and its external loans in its own funds, the case holding that it is difficult to view that the loan costs equivalent to the interest accrued from the external loan on the ground that the trust company's transactions that it lent its own funds to the trust account are null and void in violation of Article 31 (1) of the Trust Act

[4] The extent of recognition of expenses incurred in performing trust affairs which can be recovered by the trustee by exercising the right to self-help sale stipulated in the trust contract

[5] The case holding that the court below erred in the misapprehension of legal principle, in case where the trust company paid interest on the loan from the trust account to the money borrowed from the trust account after the trust company did not include the principal in the principal, and then calculated the loan expense with respect to the interest, the trust company should calculate the loan expense without examining whether the trust company actually borrowed external loan to pay the interest that was not included in the principal, and whether the loan expense should be properly borne for the performance or termination of the remaining trust affairs after the trust was completed

[6] In a case where a trust company, which is a trustee, claims unjust enrichment without any legal ground, equivalent to the difference in interest where a beneficiary directly borrowed funds by minimizing expenses incurred in borrowing funds under favorable terms based on its high credit, the case holding that the beneficiary cannot be deemed to have made unjust enrichment without any legal grounds, since the profit gained by the beneficiary by raising funds under favorable conditions is included in the scope of profit to be enjoyed by the beneficiary under the trust contract, since the profit gained by the beneficiary is included in the scope of profit to be enjoyed by the beneficiary under favorable conditions

[7] The case affirming the judgment below which held that, in case where the trustee asserted that the trustee may claim compensation equivalent to the above additional interest pursuant to the provisions of Article 739 (1) of the Civil Code because it constitutes necessary or beneficial expenses incurred in borrowing funds under more favorable terms than those for the trust business, on the ground that the trustee, without any duty, is not a manager of the trust business for another person, but is a manager of the trust business for the beneficiary pursuant to the trust business, and accordingly borrowing funds under the most favorable terms within the extent of the trustee's ability is included in the trustee's duty, and thus, the trustee's right to claim compensation for expenses under Article 739 (1) of the Civil Code is not recognized, and even if the trustee borrowed funds in the above manner and borrowed funds, other than the interest on the loan, the trustee cannot be deemed as being beneficial for the necessary expenses or expenses incurred in borrowing funds under the conditions favorable to the whole amount and interest on the loan.

[1] Articles 42, 43, 44, 55, and 56 of the Trust Act / [2] Article 31(1) of the Trust Act, Article 103 of the Civil Act / [3] Article 31(1) of the Trust Act, Article 105 of the Civil Act / [4] Article 42(1) of the Trust Act / [5] Article 42(1) of the Trust Act / [6] Article 741 of the Civil Act / [7] Article 739(1) of the Civil Act

[1] Supreme Court Decision 2005Da9685 Decided September 7, 2007 (Gong2007Ha, 1548) / [2/4] Supreme Court Decision 2006Da62461 Decided January 30, 2009 (Gong2009Sang, 224) / [4] Supreme Court Decision 2003Da47621 Decided April 15, 2005 (Gong2005Sang, 729)

Nonelectric Industry Co., Ltd. (Law Firm Han-gu, Attorneys Long-si et al., Counsel for the plaintiff-appellant)

Korea Land Trust Co., Ltd. (Law Firm Sejong, Attorneys Kang Shin-op et al., Counsel for the plaintiff-appellant)

Supreme Court Decision 2006Da62461 Decided January 30, 2009

Seoul High Court Decision 2009Na15215 decided December 30, 2010

The part of the lower judgment against the Plaintiff is reversed, and that part of the case is remanded to the Seoul High Court. The Defendant’s appeal is dismissed.

The grounds of appeal are examined.

1. Plaintiff’s ground of appeal

A. As to the first ground for appeal

According to the reasoning of the judgment below, the court below interpreted that Article 19 of the trust contract of this case provides that where a beneficiary fails to pay expenses, etc. concerning trust property even though the defendant, who is the trustee, claimed expenses, etc. concerning the trust property during or after the continuation of the trust contract of this case, the defendant may exercise the right to self-help sale in accordance with Article 19 of the trust contract of this case even after the termination of the trust contract, if the defendant, the trustee, has the right to claim compensation for expenses, etc. concerning the trust property, the defendant can exercise the right to self-help sale in accordance with Article 19 of the trust contract of this case.

In light of the records, the above judgment of the court below is just, and there is no error of law as to the interpretation of trust contract.

B. Regarding ground of appeal No. 2

The provisions of Article 44 of the Trust Act, while the trust deed is maintained without termination or termination, does not apply to the case where the trust deed is terminated (see Supreme Court Decision 2005Da9685, Sept. 7, 2007).

The court below's rejection of the plaintiff's assertion that the defendant, the trustee, cannot exercise the right to claim compensation for expenses or the right to sell self-help under Article 44 of the Trust Act in the case where the trust is terminated in the same purport is justified, and there is no error of law such as misunderstanding of legal principles

C. Regarding ground of appeal No. 3

According to the reasoning of the lower judgment, the lower court determined that the Plaintiff’s obligation to compensate for expenses following the termination of the instant trust agreement ought to be performed in preference to the Defendant’s obligation to register ownership transfer under Article 19 of the instant trust agreement.

In light of the records, the above judgment of the court below is just, and there is no error in the misapprehension of legal principles as to the relationship between the beneficiary's duty of compensation for expenses and the trustee's duty of transfer of trust property

D. Regarding ground of appeal No. 4

A trust company’s transaction between a trust company and its proprietary property in violation of Article 31(1) of the Trust Act shall be null and void. The mere fact that such transaction is beneficial to the beneficiary cannot be viewed as valid (see Supreme Court Decision 2006Da62461, Jan. 30, 2009).

According to the reasoning of the judgment below, the court below determined that, where the defendant, a trust company, lends his own funds to the trust account of this case with his own funds in combination with his own funds and outside loans to the trust account of this case, the defendant should not perform other trust affairs or use the defendant's own business affairs, and eventually, the defendant should borrow funds from outside in the trust account due to the reason that the defendant's lending funds from the trust account to the trust account should be regarded as the expenses for the trust property even in cases

However, in light of the legal principles as seen earlier, since the transaction that the Defendant lent to the trust account of this case with its own funds is null and void as a transaction violating Article 31(1) of the Trust Act, it is difficult to view that the Defendant incurred loan equivalent to the interest accrued from the loan loan based on invalid loan claims, even though the Defendant can claim compensation by asserting and proving that the Defendant actually paid or incurred certain expenses incurred in performing the trust affairs of this case due to lending its own funds to the trust account.

Nevertheless, the court below erred by misapprehending the legal principles on the interpretation and application of Article 31(1) of the Trust Act, which affected the conclusion of the judgment, in determining that the Defendant’s lending of funds to the trust account of this case to its own funds would occur. The Plaintiff’s ground of appeal assigning this error is with merit.

E. Ground of appeal No. 5

As seen earlier, Article 19 of the Trust Contract of this case aims to promote convenience in collecting expenses, etc. by disposing of the trust property and allowing the trustee to appropriate the expenses, etc. for the payment of the trust property if the beneficiary fails to pay the expenses, etc., even though the trustee claimed expenses, etc. concerning the trust property during or after the continuation of the trust of this case (see Supreme Court Decision 2003Da47621, Apr. 15, 2005). The Defendant, who is the trustee, may recover the loan and all other expenses incurred in performing the trust affairs in accordance with the method prescribed in Article 19 of the Trust Contract of this case. Although the Defendant may not necessarily claim the expenses to be incurred after the completion of the trust affairs or the trust affairs, it is recognized that the Defendant properly bears the expenses with the care of a good manager to perform or terminate the remaining trust affairs after the completion of the trust affairs or the trust affairs (see Supreme Court Decision 2006Da62461, Jan. 30, 2009).

According to the reasoning of the judgment below, the court below held that since March 30, 2005, even if the interest on the loan was not included in the principal due to the change of the defendant's accounting standards, the interest on the loan continues to occur, and since the plaintiff did not repay the interest on the loan to the defendant and the trust revenue of this case was insufficient to cover the expenses incurred in relation to the payment of the interest, the defendant should have borrowed the loan again in order to repay the interest, and accordingly, the interest on the new loan should be calculated on the ground that the interest was incurred again.

However, according to the legal principles as seen earlier, the lower court should have deliberated on whether the Defendant actually borrowed an external loan to pay interest that was not included in the principal after March 30, 2005, to bear the necessary expenses for the financing of the loan, and whether the burden was properly borne for the performance or completion of the remaining trust affairs after the completion of the trust. Nevertheless, the lower court’s determination that the amount of the loan should be calculated with respect to interest solely on the grounds stated in its reasoning, without examining whether to actually borrow the loan for the payment of interest. In so doing, the lower court erred by misapprehending the legal principles on the scope of the obligation to compensate expenses after the termination of the trust, thereby failing to exhaust all necessary deliberations, which affected the conclusion

F. Regarding ground of appeal No. 6

According to the reasoning of the judgment below, the court below rejected the Plaintiff’s assertion that the Defendant should deduct the instant parking lot from the trust expenses to the company established by the person who was the manager of the company, caused the Plaintiff to incur approximately KRW 7.8 billion on a monthly basis.

In light of the records, the above measures of the court below are just, and there is no violation of law by failing to exhaust all necessary deliberations as to illegality or duty of loyalty in violation of logical and empirical rules and beyond the limit of the free evaluation of evidence.

2. As to the Defendant’s ground of appeal

A. As to the first ground for appeal

According to the reasoning of the judgment below, the court below determined that even if the plaintiff, a trustee, obtained the profit of the plaintiff due to the defendant's offering of funds under favorable conditions based on high foreign credit, it cannot be deemed that the difference between the interest that the plaintiff directly borrowed and the interest that the defendant borrowed cannot be deemed as unjust enrichment without any legal ground, since it is included in the scope of the profit that the plaintiff should enjoy in accordance with the trust contract of this case, since the plaintiff's offering of funds under favorable conditions that the trustee can raise funds under favorable conditions and minimize the expenses necessary for the borrowing of funds.

In light of the relevant legal principles and records, the above judgment of the court below is just and there is no error in the misapprehension of legal principles as to unjust enrichment.

B. Regarding ground of appeal No. 2

According to the reasoning of the judgment below, the defendant is not a manager of affairs on behalf of others, but a manager of affairs on behalf of the plaintiff pursuant to the trust contract of this case, and accordingly borrowing of funds on the most favorable condition within the defendant's capacity for the trust business of this case under the trust contract of this case is also included in the defendant's obligation. Thus, the defendant's right to claim compensation for expenses under Article 739 (1) of the Civil Act is not acknowledged, and even if the defendant borrowed funds in the above manner and paid additional expenses in addition to the loan interest, the defendant's specific assertion and proof of the expenses are not sufficient to claim compensation for expenses under Article 19 of the trust contract of this case.

In light of the relevant legal principles and records, the above judgment of the court below is just and acceptable, and there is no violation of the misapprehension of legal principles as to office management.

3. Conclusion

Therefore, the part of the lower judgment against the Plaintiff is reversed, and that part of the case is remanded to the lower court for further proceedings consistent with this Opinion. The Defendant’s appeal is dismissed. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Park Si-hwan (Presiding Justice)