Plaintiff (Law Firm Filiwon, Attorneys Choi Jung-su et al., Counsel for plaintiff-appellant)

Defendant (Law Firm Taedong, Attorneys Lee Dong-soo et al., Counsel for defendant-appellant)

April 6, 2006

1. The plaintiff's claim of this case is dismissed.

2. The costs of lawsuit shall be borne by the Plaintiff.

As to each real estate listed in the separate sheet to the Plaintiff, the Defendant shall implement the registration procedure for cancellation on September 7, 2005 with respect to each registration of ownership transfer completed on August 12, 2005 by the Daejeon District Court Branch No. 34858 and each registration of cancellation on September 7, 2005, which was completed on January 10, 2005 by the receipt No. 8666 of the same support.

1. Basic facts

The following facts are not disputed between the parties, or can be acknowledged in full view of the whole purport of the pleadings as a result of the market price appraisal of evidence Nos. 1, 2-1 through 18, evidence Nos. 3, evidence Nos. 6, evidence Nos. 8, 9-1, 2, evidence No. 10, evidence No. 11, evidence Nos. 18, evidence Nos. 9-1 through 3, evidence No. 20-1 through 4, evidence Nos. 1 and 20, evidence Nos. 1 and appraiser Nos. 1 and 3, and evidence Nos. 1 through 20.

A. On January 10, 2005, the Defendant: (a) established and managed various companies, such as Non-Party 3, Non-Party 4, and Non-Party 5, which are managed by Non-Party 1 and Non-Party 1 (the non-party 1, other than the above company, for the purpose of investing in real estate; (b) set interest of KRW 200,000,000 to the non-party 1 and its company in joint name (hereinafter “non-party 1”) at 3% per month (hereinafter “the instant loan”); and (c) the Plaintiff jointly and severally guaranteed each real estate listed in the separate sheet owned by the Plaintiff on the same day (hereinafter “each real estate of this case”); and (d) completed the provisional registration of the right to claim ownership transfer registration on the grounds of the pre-sale on the same day under the Defendant’s name (hereinafter “the provisional registration”).

B. At the time of completion of the provisional registration of this case, each of the real estate of this case was registered prior to the establishment registration of a mortgage of this case No. 784,00,000, the maximum debt amount of July 30, 200, the debtor non-party 5, the mortgagee non-party 6, the mortgagee non-party 6, and the maximum debt amount of 715,00,000,000, the debtor, the plaintiff, and the mortgagee non-party 2 on January 10, 2005 (the date the establishment registration of a mortgage of this case was completed is the same as the date the provisional registration of this case was completed, but it is prior to the receipt number of the provisional registration of this case).

C. On July 29, 2005, Nonparty 1 paid KRW 147,200,000 to the Defendant (the Defendant and Nonparty 7, as married couple, used mixedly the Defendant or Nonparty 7 in doing a series of legal acts between the Nonparty 1 and Nonparty 1. Thus, in the instant case, the Defendant or Nonparty 7 provided that both the Defendant and Nonparty 7 provided a legal act between the Nonparty 1 and the Nonparty 1 in their joint name for convenience) upon repayment of the obligation to the Defendant.

D. On August 12, 2005, the Defendant completed the registration of ownership transfer based on the above provisional registration (hereinafter “this case’s principal registration”) on each real estate of this case on the ground that Nonparty 1 did not repay the loan obligation of this case.

E. On September 7, 2005, when the lawsuit of this case is pending, the plaintiff deposited KRW 103,945,206 with the reason of deposit that the defendant did not refuse to accept the loan of this case, and the defendant reserved and received an objection by appropriating the deposit money to the repayment of other claims against the plaintiff on July 29, 2005.

F. Meanwhile, at the time of July 31, 2005, the market price of each real estate of this case is KRW 1,092,268,100 for each real estate of this case, and the secured obligation of the secured obligation of the secured obligation of the security right No. 1 as stated in the above sub-paragraph (b) was completed for each real estate of this case to the non-party 6 corporation of the non-party 5 corporation, which is managed by the non-party 1, and the secured obligation amount is the amount of the secured obligation of KRW 560,00,000 for overdue interest and KRW 18,498,781 for overdue interest and the secured obligation

2. Determination

A. Claim for reimbursement of secured debt

(1) The plaintiff's assertion

On July 29, 2005, Nonparty 1, the principal debtor of the instant loan obligation, repaid KRW 147,200,000 out of the above loan obligation, and subsequently, the Plaintiff, as a joint guarantor, deposited KRW 103,945,206, which is the remainder of the debt on September 7, 2005, as a joint guarantor, requested cancellation of the said provisional registration by asserting that the instant loan obligation had been extinguished in whole, which is the secured obligation for the instant security registration, was extinguished. In addition, since the Defendant did not go through legitimate liquidation procedures at the time of completing the principal registration, it cannot be deemed that the Defendant acquired the ownership of each of the instant real estate on the sole basis of the principal registration. Accordingly, since the Plaintiff fully repaid the instant loan obligation, the Plaintiff asserted that the registration of this case was completed without any cause and sought cancellation of the said provisional registration.

(2) Determination as to whether the instant loan obligations were repaid

Therefore, I would like to examine whether Nonparty 1 paid KRW 147,200,000 to the Defendant on July 29, 2005 as the repayment of the loan of this case.

(A) Facts of recognition

The following facts may be acknowledged in full view of the evidence Nos. 1, 3-1, 2, 3-1, 6-2, Eul evidence Nos. 7, 8, 9-1, 2, Eul evidence Nos. 15-3, 4, 16, 19-1 through 5, and 19-5 of Eul evidence Nos. 15-2, and the purport of the whole pleadings in the testimony of non-party 1.

1) On December 2, 2002, the Defendant lent 150,000,000 won to Nonparty 1 for interest rate of 3% per month and on July 2, 2003. On June 10, 2003, the Defendant decided 40,000 won to Nonparty 1 for interest rate of 4% per month and three months for payment period.

2) On September 10, 2003, the Defendant entered into a contract with Nonparty 3 Co., Ltd., in the form of purchasing KRW 450,000,00,000, which is the amount of ordinary down payment, from the amount of KRW 38,670,00 in Ycheon-si, Ycheon-si, Namcheon-si, which is substantially managed by Nonparty 1, for sale of the said land at KRW 210,000,00 per square day between Nonparty 1 and the third party, the Defendant sold KRW 40,000 per square day, and if the land was sold at least KRW 210,00,00 per square day, the Defendant received KRW 40,000 per square day, and upon completion of the sale of the said land, concluded an investment agreement with Nonparty 1 to refund KRW 450,00,000 from the said invested principal.

3) On June 9, 2004, Nonparty 1 sold to the Defendant a part of 65 forest 38,670 m3,00 m3,00 m35 m38,670 m3,00 m3,00 m3,00 m3,00 m32,00 m3,00 m2,000 m2,000 m2,000 m2,000 m2,000 m2,000 m2,000 m2,000 m2,000 m2,0

4) Meanwhile, on January 10, 2005, Nonparty 1 created a mortgage on each of the instant real estate as a security for the Defendant’s loan obligations as of December 2, 2002, as well as the loan obligations as of June 10, 2003 between the Defendant and the Defendant on December 10, 2005, and concluded the registration of establishment of a mortgage No. 2, such as the above 1-B, under the name of the Defendant.

5) On January 26, 2005, the non-party 1 entered into an investment agreement between the defendant and the non-party 1 to purchase approximately KRW 750,000,000 for approximately 20,00 in the Cheong-gu, Cheong-gu, Gyeonggi-do and approximately 7 parcels. If the defendant invests KRW 750,00,000, the part of the ownership shall be transferred to the defendant, and the remaining land shall be sold to the third party, and the profit accrued from the sale of the remaining land shall be paid to the third party.

6) On July 4, 2005, the defendant urged the non-party 1 to pay a total of KRW 50,000,000,000,000 and the above investment deposit repayment obligation of KRW 450,000,000,000, in total, as of December 2, 2002, and as of June 10, 2003, and notified the non-party 1 that the principal registration will be made on the basis of the provisional registration of this case if the loan of this case was not repaid until July 11, 2005, and the interest obligation of this case was not repaid.

7) On July 11, 2005, Nonparty 1: (i) imposed on the Defendant the aggregate of KRW 150,000,000,00, including global income tax for 2004, resident tax and additional tax incurred due to the delay in the payment thereof, etc.; (ii) to secure payment, to deliver a promissory note to the Defendant with a face value of KRW 15,00,000 issued by Nonparty 1 and 8, and to pay it to the Defendant by July 21, 2005; (iii) to establish a collateral security right on each of the instant real property; (iv) to ensure that the Defendant did not make a provisional registration for the transfer of ownership with respect to the instant real property in the name of 0,000 square meters and 19,721 square meters, 00,000 square meters and 15,000 square meters and 15,000,000 square meters and 37,000 square meters and 15,047,07-1,07.

(B) Determination

The above facts are as follows. The defendant has several claims for loans other than the loan of this case between the non-party 1 and the non-party 1, and has several investments made in real estate sale and investment projects on July 4, 2005. The defendant urged the non-party 1 to pay other loans and investment refund claims as well as the loan of this case on July 11, 2005. The non-party 1 is the defendant on July 21, 2005. It is difficult to find that the non-party 2 did not pay 70,000,000 won for total amount of 70,000,000 won, and it is hard to find that the non-party 1 paid 70,000 won for the loan of this case on the premise that the non-party 2 did not pay 9,000,000 won for the loan of this case on the condition that the non-party 1 did not pay 7,000,000 won for the loan of this case.

B. Non-performance of liquidation procedures

(1) The plaintiff's assertion

The plaintiff asserts that the principal registration of this case, which was made on the basis of the above provisional registration made for the purpose of security, was null and void without going through a liquidation procedure prescribed by the Provisional Registration Security Act (hereinafter referred to as the "Provisional Registration Security Act"). (Although a creditor had completed the principal registration on the basis of the provisional registration for security without going through a liquidation procedure prescribed by the Act on Participation, it can only be a ground for cancellation of the principal registration, and thus, it cannot be a ground for cancellation of provisional registration. Thus, the plaintiff's claim should be examined only in the part

(2) Determination on the validity of the principal registration of this case

(A) The provisional registration of this case is a provisional registration under the Act on Participation, which was made to secure the Defendant’s loan claims against the Plaintiff.

However, in order for a creditor to acquire ownership of real estate for the purpose of security by exercising a provisional registration security right under a security contract, the provisional registration shall be null and void if the special agreement is null and void because it is contrary to the debtor's obligation to pay liquidation money and obligation to transfer ownership of real estate for two months from the date of arrival of the notification. The obligation of a creditor to pay liquidation money and obligation to transfer ownership of real estate for security shall follow the procedure prescribed in Articles 3 and 4 of the Participation Act, and any special agreement contrary thereto shall be null and void (Article 4(4) of the Participation Act). In addition, in light of the provisions of Articles 3 and 4 of the Participation Act, if the principal registration based on the provisional registration was made based on a special agreement between the person having the right to the provisional registration and the debtor, it shall be null and void, and if the special agreement is null and void within the meaning of the so-called collateral security, it shall be deemed null and void, and if the debtor has received notification to the debtor in accordance with the above procedure, it shall be deemed null and void.

(B) With respect to the instant case, there is no evidence as to the fact that the Defendant notified the Plaintiff of the appraised value of liquidation money at the time of the instant principal registration. However, on November 23, 2005, the Defendant notified the Plaintiff of the real estate price of KRW 1,092,268,100 in each of the instant real estate, and on the contrary, the sum of KRW 1,271,98,781 in total of the secured debt amount of each of the instant real estate and KRW 242,00,000 in total of the Defendant’s claim amount of KRW 1,513,998,781 in excess of this, and the fact that the Defendant served on November 24, 2005 on the Plaintiff that there was no liquidation money to be paid in excess of this, it is evident in the record that the Defendant notified the Plaintiff of the execution value of liquidation money of Articles 3 and 4 of the Act, and thus, the Defendant could be deemed to have performed the procedure of the original omission.

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and it is so decided as per Disposition.

[Attachment List of Real Estate]

Judges Kim Jae-sik (Presiding Judge)