Plaintiff (Attorney Kim Yong-hoon, Counsel for plaintiff-appellant)

Defendant 1 and 2 others (Law Firm Hyhyeong et al., Counsel for the defendant-appellant)

October 17, 2012

1. As to real estate listed in the separate sheet:

A. Revocation of a sales contract concluded on June 20, 201 between Defendant 1 and Nonparty 2; and

B. Defendant 1 shall implement the procedure for registration of cancellation of ownership transfer registration, which was completed on June 22, 201 by the receipt No. 16491, to Nonparty 2 of Daejeon District Court’s official jurisdiction branch office, to Nonparty 2.

2. All claims filed against Defendant 2 (Defendant 1) and Defendant 3 (Defendant 2) are dismissed.

3. Of the costs of lawsuit, the part arising between the Plaintiff and Defendant 1 is assessed against the Plaintiff, and the part arising between the Plaintiff, Defendant 2 and Defendant 3 are assessed against the Plaintiff, respectively.

As to the real estate stated in the order of Paragraph 1 and the annexed list, each contract to establish a mortgage between Defendant 2, 3 and Nonparty 2 on June 22, 2011 shall be revoked, and Defendant 2 shall implement the procedure for registration of cancellation of each registration of establishment of a neighboring mortgage completed as of June 22, 201 with the Daejeon District Court No. 16489, Jun. 22, 2011, Defendant 3 shall implement the procedure for registration of cancellation of each registration of establishment of a neighboring mortgage completed as of June 16490, which was completed as of June 22, 2011 by the same court.

1. Facts of recognition;

A. The plaintiff filed a lawsuit against the non-party 2 on the claim for the takeover amount of the Cheongju District Court No. 98Gahap1006, 99Gahap406 (combined) and decided on November 2, 1994 for KRW 92,00,000 and KRW 23,000 among them, from November 2, 1994 for KRW 69,000,000, and from January 17, 1999 to September 17, 199, the amount of KRW 5% per annum from the next day to September 17, 199; and the amount of KRW 25% per annum from the next day to the date of full payment. The above decision was finalized on October 16, 199.

B. The disposition by Nonparty 2

1) On June 16, 201, Nonparty 2: (a) borrowed KRW 400 million from Defendant 2; (b) KRW 100 million from Defendant 3 on September 16, 201; and (c) agreed to provide real estate listed in the separate sheet (hereinafter “instant building”) and (iv) forest and 23 square meters of forest and 23 square meters of forest and 23 square meters of forest and 23 square meters of forest and 23 square meters of forest as joint security at the time of public housing, which is the site for the instant building.

2) Accordingly, on June 20, 201, Nonparty 2 completed the registration of creation of a neighboring mortgage with the maximum debt amount of KRW 130 million, each of which was KRW 16085 with respect to each of the above lands owned by Nonparty 3, as the receipt of a public support by the Daejeon District Court on June 16, 201, based on each of the collective security agreements rendered on the grounds of the collective security agreements rendered on June 16, 201.

3) In addition to the joint collateral of the instant building after Nonparty 2 completed the registration of transfer of ownership on June 22, 201 with respect to the instant building as the receipt of the same court No. 16488, Nonparty 2 completed the registration of transfer of ownership in the name of Nonparty 2 as the joint collateral of the instant building. Nonparty 2 completed the registration of establishment of a mortgage (hereinafter referred to as the “registration of establishment of a mortgage of this case”) with the maximum debt amount of KRW 16490,000,000, based on each additional contract concluded on June 22, 2011 (hereinafter “instant contract”) as of June 22, 201 by the court receipt of the same court as of June 22, 2011, which was KRW 520,000,000,000 for Defendant 3 and the maximum debt amount of KRW 130,000,000,000.

4) Next, Nonparty 2 completed the registration of ownership transfer (hereinafter “the registration of ownership transfer”) on June 22, 201 with respect to the instant building on the ground of sale as of June 20, 201 (hereinafter “the instant sale”) instead of paying his/her debt to Defendant 1, under the receipt of the same court on June 22, 2011.

C. The financial status of Nonparty 2

At the time of June 22, 201, 201, Nonparty 2, as of the date of the instant contract to collateral security or the date of the instant contract, did not possess any specific property other than the instant building, which was 748,071,060, and on the other hand, as of the above date, Nonparty 2’s liability for the said judgment against the Plaintiff was 370,432,328 won [=the principal amount of KRW 92,00,000 + the interest of KRW 23,000 + the amount of KRW 5,608,219 [the amount of KRW 23,00,000 until September 17, 1999 + (the amount of KRW 23,00,000 + KRW 23,000 + 0.5 + (4 + 320/365)]; 60,00,000 + 309/6.197.

[Ground of recognition] The fact that there is no dispute, each entry of Gap's 1 through 3 (including virtual numbers), the market price appraisal result of appraiser's 5, the fact inquiry result of the non-party 5, the purport of the whole pleadings, and the purport of the whole pleadings.

2. Determination

(a) Occurrence of the right to revoke the fraudulent act;

1) "Act detrimental to creditor", which is the object of creditor's right of revocation, means an act for the purpose of property right, that led to the act that the debtor's passive property exceeds active property or the debtor's excessive debts are added (see, e.g., Supreme Court Decision 2009Da90047, Jan. 28, 2010). Where the debtor's property is insufficient to fully repay his/her obligation, barring special circumstances, if the debtor offered it as payment in kind or as a security to a certain creditor, then it constitutes a fraudulent act in relation to other creditors, as it damages the interest of other creditors, and the same applies to cases where the debtor's property provided as payment in kind or as security is not the only property of the debtor, or is less than the amount of claim (see, e.g., Supreme Court Decision 2008Da85161, Sept. 10, 200

2) However, as seen earlier, Nonparty 2 did not own any property other than the instant building, the market price of which is equivalent to KRW 748,071,060 at the time of June 22, 201. On the other hand, Nonparty 2 bears the Plaintiff’s obligation to pay KRW 370,432,438, and Defendant 1 bears approximately KRW 53,000,000 (based on principal) from Defendant 2 and 3, while borrowing KRW 52,000,00 from Defendant 2 and Defendant 3 bears the obligation to pay KRW 50,000 (based on principal). In light of the above legal principles, Nonparty 2’s disposal act by Nonparty 2 is a joint mortgagee of KRW 70,000 and KRW 130,000 to Defendant 3,00,000,000, and immediately offered the instant building to Defendant 1 as payment in kind, barring any special circumstance, it constitutes a joint mortgagee of KRW 4081,2,2,084.

In addition, in this case, it is reasonable to deem that Nonparty 2, the debtor, was aware that he would thereby prejudice the general creditor such as the plaintiff, etc., and the defendants' bad faith is presumed also presumed as the beneficiary.

Therefore, barring special circumstances, the Plaintiff may exercise the right of revocation against the Defendants, a beneficiary, and seek restitution.

B. Determination as to Defendant 1’s assertion

1) Defendant 1’s assertion

Defendant 1 received ownership of the building of this case from Nonparty 2 in lieu of satisfaction of its obligation, which constitutes a normal transaction. At the time of transfer of ownership of the real estate of this case, Nonparty 2 did not know that the act of Nonparty 2 was harmful to the Plaintiff, the obligee.

2) Determination

A) Since the beneficiary's bad faith is presumed in a lawsuit seeking revocation of fraudulent act, the beneficiary is responsible for proving his/her good faith in order to be exempted from his/her liability. In this case, the issue of good faith shall be determined reasonably in light of the logical and empirical rules, comprehensively taking into account the relationship between the debtor and the beneficiary, the circumstances or motive leading up to the act of disposal between the debtor and the beneficiary, the circumstances leading up to the act of disposal, whether there are no special circumstances to suspect the act of disposal, and whether there are objective materials to support the act of disposal as a normal transaction, and circumstances after the act of disposal, etc. (see Supreme Court Decision 2007Da74621, Jul. 10, 200

B) In full view of the purport of the argument in the testimony of Nonparty 1 through 4 and the witness Nonparty 2, Defendant 1 loaned KRW 7,600,000 to Nonparty 2 on October 31, 1985, interest rate of KRW 4% on maturity, June 30, 1986, and the amount of KRW 50 billion on June 30, 1986, upon Nonparty 2’s failure to repay the above loan, Defendant 2 filed a lawsuit claiming the above loan against Nonparty 2 on December 14, 2007 with the Special Self-Governing District Court Decision 2007Da6539, the amount of KRW 30,500 and KRW 18,200,000 among them, and KRW 18,50,000,000,000 from Nonparty 1 to August 15, 207; and Defendant 200,000,000 won from each of the above buildings as security; and

① However, when calculating the principal of and interest on Nonparty 2’s debt to Nonparty 1 as at the time of the instant sale on June 20, 201, Nonparty 2’s assertion that: (a) the principal was 53,59,040 won + (the principal was 30,50,000 won + the interest rate of 9,097,500 won from August 17, 1997 to August 15, 2007 until the amount of 9,097,506 won (= 18,200,00 x 05 x (9+ 364/365)) was insufficient to recognize that Nonparty 2 had been aware of the fact that it was 14,01,534 [the 18,200,000 won x 200,000 won x 360,000 won x 205,00 won x 36365] of this case’s market price.

3) Accordingly, the instant sales contract concluded between Nonparty 2 and Defendant 1 on the instant building should be revoked as a fraudulent act, and Defendant 1 is obligated to implement the registration procedure for cancellation of the instant transfer of ownership to Nonparty 2 as a restoration to its original state.

C. Determination on Defendant 2 and 3’s assertion

1) Defendant 2 and 3’s assertion

Defendant 2 and 3 did not know that the mortgage contract of this case with Nonparty 2 was a fraudulent act detrimental to the Plaintiff, a creditor.

2) Determination

In full view of the purport of evidence Nos. 2, 2, and 6 and each testimony of Nonparty 2, Defendant 2 and 3 were between Nonparty 2 and Nonparty 2, and they first known at the time of lending the aggregate of KRW 500 million to Nonparty 2. Nonparty 2 needed funds to complete the construction of the building of this case, and Defendant 2 and 3 borrowed money from the bank after the construction of the building. Defendant 2 and 3 provided consultation to Nonparty 2, who was aware of the above money to Nonparty 6, and requested Nonparty 2 to cancel the above money under the name of Nonparty 1’s provisional disposition No. 60, which was issued to Nonparty 2, under the name of Nonparty 1 and Nonparty 2; Defendant 2 and 3 transferred the above money to Nonparty 2, who was in the name of Nonparty 7, a certified judicial scrivener at the office of Nonparty 6; Defendant 30,000 won and deposited the above money in the name of Nonparty 2, who was in the name of Nonparty 2, and Defendant 2 and 306.

According to the above facts, Defendant 2 and 3 anticipated that Defendant 2 and 3 would be able to obtain loans from the bank as collateral after the completion of construction of the building of this case from Nonparty 2 and repay the loan, if they were to lend funds necessary for the completion of construction of the building of this case to Nonparty 2, and it appears that Defendant 2 and 3 did not know that the mortgage contract of this case was prejudicial to the Plaintiff, which is the creditor of Nonparty 2.

Ultimately, the above arguments by the defendant 2 and 3 are with merit.

3. Conclusion

Therefore, the plaintiff's claim against the defendant 1 is justified, and all claims against the defendant 2 and 3 are dismissed as it is without merit. It is so decided as per Disposition.

[Attachment]

Judges Yang Sung-tae (Presiding Judge)