In a case where a contractor entered into a trust agreement with a trust company on a newly constructed commercial building with a financial institution and a newly constructed commercial building as a priority beneficiary of a loan and a construction project in order to guarantee the performance of a debt to a financial institution and a construction project, the case holding that, under the trust agreement, the contractor may terminate part of the trust on the part, on the ground that the sales contract is effective for the commercial building and the trust company, which is the truster, the trustee, the trust company, the preferential beneficiary, and the construction corporation, and the preferential beneficiary, and on the condition that the priority beneficiary is paid the debt or the repayment is secured for the sale price, and the first beneficiary agreed to express his/her

In a case where a contractor entered into a trust agreement with a trust company on a newly constructed commercial building with a financial institution and a newly constructed commercial building with a priority beneficiary in order to secure the repayment of a loan to a financial institution and the obligation for the construction cost, the case held that, in light of the purpose and structure of the trust agreement, the management and operation of the sale price, the status and role of the parties to the trust agreement, such as a truster, a trust company, a trustee, a trust company, a preferential beneficiary, a financial institution and the market corporation, a preferential beneficiary, a sales contract valid for the commercial building is made, and the sales price is fully deposited with a separate designated account for the payment of the sale price so that the first beneficiary can receive the claim to the executor or at least receive the sale price from the executor, and the executor can terminate part of the trust in order to register the ownership of the real estate sold to the buyer, and the first beneficiary agreed to give implied consent to the declaration of partial termination of the trust agreement.

Article 105 of the Civil Act, Article 58 of the Trust Act

Plaintiff 1 and one other (Attorney Noh Jae-in, Counsel for the plaintiff-appellant)

KF Real Estate Trust Co., Ltd. (Law Firm Apex, Attorneys Park Gi-ro et al., Counsel for the plaintiff-appellant)

Barun Co., Ltd.

Law Firm Construction Co., Ltd. (Law Firm Apex, Attorneys Park Gi-ju et al., Counsel for the plaintiff-appellant)

Seoul Northern District Court Decision 2009Na2284 Decided September 9, 2009

All appeals are dismissed. The costs of appeal are assessed against the plaintiffs.

We examine the grounds of appeal.

1. As to the assertion that the first beneficiary is obliged to consent to partial termination of the trust pursuant to the Act on the Sale of Buildings in Units

A. According to Article 4(1)1 of the former Act on Sale of Buildings in Lots (amended by Act No. 8635 of Aug. 3, 2007; hereinafter “former Act”), a seller of buildings in lots shall enter into a trust contract and an agency contract with a trust company under the Trust Business Act in order to sell a building in lots after the commencement report, and according to Article 3(1)3 of the former Enforcement Decree of the Act on Sale of Buildings in Lots (amended by Presidential Decree No. 20947 of Jul. 29, 2008; hereinafter “former Enforcement Decree of the Act on Sale of Buildings in Lots, a trust contract under Article 4(1)1 of the former Act shall include “the fact that the seller of buildings in lots shall settle the sales price paid by the seller in preference to other bonds and rights of beneficiaries when settling the trust.”

B. According to the reasoning of the first instance judgment cited by the lower judgment, the lower court rejected the Plaintiffs’ assertion that the Defendant (i.e., the first beneficiary of the instant trust (hereinafter “Defendant Corporation”) is liable to express his/her consent on the partial termination of the instant trust, on the ground that Article 3(1)3 of the former Enforcement Decree of the Act on the Construction of Buildings (which merely indicates “the Act on the Sale of Buildings,” but is understood as meaning the former Act that was applied at the time of entering into each sales contract by the Plaintiffs, in its context, at the time of entering into each sales contract, is nothing more than an effective provision in light of the circumstances indicated in its reasoning.

However, Article 1 of the Addenda of the former Subdivision Act (amended by Act No. 786, Oct. 22, 2004) provides that "this Act shall apply from the building where the first purchaser of the commercial building (including the case where the purchaser of the commercial building is recruited without public offering) is offered to the purchaser of the commercial building after the enforcement of this Act," and Article 2 of the Addenda provides that "This Act shall apply from the building where the first purchaser of the commercial building was offered to the purchaser of the commercial building (including the case where the purchaser of the commercial building is offered to the purchaser of the commercial building without public offering)." Thus, even according to the record, there is no evidence to acknowledge that the first purchaser of the commercial building was offered to the purchaser of the commercial building after the enforcement date of the former Subdivision Act (amended by Act No. 790, Apr. 23, 2005). Accordingly, according to the reasoning of the first instance judgment cited by the lower court, it appears that the first purchaser of the commercial building was made within 3 months prior to the enforcement date of the agreement.

Therefore, there is no room to apply the old law to the sale of the commercial building of this case. Thus, regardless of whether Article 3 (1) 3 of the former Enforcement Decree of the Subdivision Act is the effective provision, the plaintiffs' assertion under the premise that the old law is applied to the sale of the commercial building of this case, and the court below did not err in the misapprehension of legal principles which affected the conclusion of the judgment, although the reasoning of the court below differs, it did not err in the misapprehension of legal principles that affected the conclusion of the

2. As to the assertion that the first beneficiary is obliged to consent to partial termination of the trust in accordance with the instant trust contract, etc.

A. According to the reasoning of the judgment of the court of first instance cited by the court below and the records, in order to secure the performance of its obligation to the first beneficiary on March 7, 2007, the executor of this case entered into a trust contract (hereinafter “the trust contract of this case”) with Defendant KB real estate trust company (hereinafter “Defendant trust company”) as to the commercial building of this case. The contract of this case was entered into between the Si of this case and the defendant Corporation on October 23, 2003; the execution company of this case on March 23, 2007; and the loan agreement entered into between the defendant Corporation and the defendant Corporation on March 23, 2007; the sale contract of the commercial of this case was entered into under the name and the responsibility of the above executor; the trust company was established at the expiration of the sale contract in the name of the executor; and the trust company, which is the first beneficiary of this case, shall be deposited in the trust account of the beneficiary of this case; and the trust company shall be deposited in the trust account of this case.

In full view of the purpose and structure of the instant trust agreement, the management and operation of the sale price, the status and role of the parties to the instant trust agreement, such as trusters, the trusters, the trustees, and the first beneficiary, etc. under the instant trust agreement, when the sales contract is effective for the instant commercial building and the Defendant trust company, the trustee, and the Defendant Corporation, the first beneficiary, and the Defendant Corporation, have made an implied agreement to express their consent to partial termination of the trust agreement. Accordingly, if the first beneficiary is in the status of securing the repayment of the first beneficiary’s claim based on the sale price, due to the fact that the first beneficiary is repaid the claim against the instant contractor or at least deposited in the account for receiving the sale price so that the said executor can not withdraw at will, then the trust can be partially terminated in order to complete the registration of ownership transfer for the real estate sold to the beneficiary, and the first beneficiary agreed to express his/her consent to partial termination of the trust.

B. However, according to the reasoning of the judgment of the court of first instance cited by the court below, since the execution company of this case, lot Capital company, and defendant corporation did not deposit the sale price in its designated account in the conclusion of a loan agreement on March 23, 2007, the plaintiffs did not deposit the sale price in its designated account. Thus, the defendant corporation, who is the first beneficiary, cannot be deemed to have secured the payment of the claim in its priority, barring any special circumstance. Thus, the execution company of this case cannot be deemed to have satisfied the requirements for partial termination of the trust, and there is no obligation to express consent to the defendant corporation as to the expression of intent to partially terminate the trust.

C. Although the reasoning of the judgment of the court below is somewhat inappropriate, the court below's rejection of the plaintiffs' assertion that the defendant trust company has an obligation to implement the procedure for the registration of ownership transfer of each real estate of this case with respect to the executor of this case on the ground of the partial termination of the trust of this case and the defendant corporation has an obligation to express its consent to the partial termination of the trust of this case on each real estate of this case on the grounds as stated in its reasoning is justified, and there is no error in the rules of evidence or the incomplete hearing

3. As to the assertion on the burden of proof as to whether the account holder knew of the deposit of the sale price to other accounts than the designated account for receipt of the sale price

citing the reasoning of the judgment of the court of first instance, the court below determined that it is difficult to view that the defendant Si was aware of the fact that the sales price of the buyers, including the plaintiffs, was deposited into an account other than the above designated sales price receipt account, and there is no other evidence to acknowledge it. The judgment of the court below is just, and it is not erroneous in the misapprehension of the legal principle as to the burden of proof, contrary to

4. Conclusion

Therefore, all appeals are 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 on the bench.

Justices Jeon Soo-ahn (Presiding Justice)