Plaintiff 1 and two others (Attorney Hah-ho, Counsel for the plaintiff-appellant)

Head of the Office of Government

March 29, 2012

District Court Decision 2011Guhap810 Decided September 6, 2011

1. All appeals filed by the plaintiffs are dismissed.

2. The costs of appeal are assessed against the Plaintiffs.

The judgment of the first instance shall be revoked. The defendant shall revoke each disposition imposing capital gains tax of KRW 54,764,970 against the plaintiff 1 on February 10, 2010, KRW 36,422,50 against the plaintiff 2, and KRW 36,030,820 against the plaintiff 3.

1. Quotation of judgment of the first instance;

The reasoning of the judgment of this court is as follows: (a) the second 9 of the judgment of the court of first instance “each 2/3 equity” is the same as the reasoning of the judgment of the court of first instance (each 2/7 equity) except that the second 9 equity is “each 2/7 equity”; and (b) the relevant part is cited pursuant to Article 8(2) of the Administrative Litigation Act and the main sentence of Article 420 of the Civil Procedure Act.

2. Determination

A. Although the title of title trust property is owned by the trustee, the actual ownership is owned by the truster. Thus, if the truster transfers the trust property at his/her own will, he/she shall be liable to pay the transfer income tax in a position to de facto control, manage, and dispose of the transfer income. However, if the trustee transferred the title trust property at his/her own discretion without the delegation or consent of the truster, the transferor is not the trustee, but the truster is not in a position to de facto control, manage, and dispose of the transfer income, unless the transfer income is returned to the truster, and therefore the truster is not in a position to de facto control, manage, and dispose of the transfer income (see, e.g., Supreme Court Decisions 8Nu10329, Mar. 27, 1991; 95Nu4551, Nov. 10, 195; 95Nu9068, Feb. 9, 1996; 9Du278, Aug. 6, 1998).

B. The following facts may be acknowledged in light of the overall purport of the arguments in Gap evidence Nos. 2 and 3, Gap evidence Nos. 8-1 to 19, and Eul evidence Nos. 7.

1) On November 8, 2003, Nonparty 1’s mother, Nonparty 2, the mother of Nonparty 1, filed a lawsuit against the Plaintiffs on November 21, 2003, claiming that part of the instant land was owned by Nonparty 2, and that they were to file a claim against the Plaintiffs for the registration of transfer of each of the Plaintiffs’ shares in the said land (Jan Government District Court 2003Gahap6887; hereinafter “instant lawsuit”).

2) As a result of seeking measures to maintain the ownership of the land of this case with Nonparty 3, the husband of Nonparty 3 and Nonparty 4, etc., the Plaintiff agreed to entrust the ownership of the land of this case to Nonparty 4 with the affairs of litigation, etc. Accordingly, with respect to the land listed in Nos. 1 through 5, 11, 13, and 15 among the land of this case, the registration of ownership transfer was completed on December 8, 2003, and the registration of ownership transfer was completed on the ground of donation under Nonparty 3’s name on the same day. As to the land listed in Nos. 6 through 10, 12, 16, and 17 of the attached list of real estate was completed on November 21, 2003, and the registration of ownership transfer was completed on November 27, 2003 for the first and second shares, and on the remaining 1/2, the registration of ownership transfer was completed on the grounds of donation under Nonparty 3’s name.

3) Meanwhile, on March 3, 2004, Nonparty 5 and 6, etc., who are Nonparty 1’s small father, filed a lawsuit against the Plaintiffs and Nonparty 3 seeking the cancellation of registration in the names of the Plaintiffs and Nonparty 3 (Gu Government District Court Decision 2004Ga7781; hereinafter “Class 2 lawsuit”) by asserting that the ownership of the land listed in the [Attachment 1 omitted] No. 1,489 square meters of forest land and 4,715 square meters prior to ( Address 1 omitted) among the instant land and the Macheon-si (hereinafter “No. 2 lawsuit”).

4) On July 29, 2004, the first lawsuit was final and conclusive against Nonparty 2. On May 26, 2005, the second lawsuit was concluded with conciliation of the content that Nonparty 3 transferred the ownership of the land to Nonparty 5 and 6.

When the plaintiffs and the non-party 3 have completed the registration of transfer on behalf of the plaintiffs, or when the non-party 4 incurred expenses in the process corresponding to the first and second lawsuits on behalf of the plaintiffs, the non-party 3 and the non-party 4 sold the land of this case to cover the above expenses. On July 21, 2004, the non-party 7 entered the list 1,20,000 won of the land of this case and the non-party 3 or 13 on February 20, 205 in the list 40,000 won of the land of this case to the non-party 2, 60,000 won of the price of the land of this case and the non-party 50,000 won of the land of this case to the non-party 2, 60,000 won of the price of the land of this case to the non-party 2, 705,000 won of the sale of the land of this case to the non-party 16.

5) On May 18, 2006, with respect to Nonparty 3, the Plaintiffs filed a lawsuit claiming the cancellation of the registration of transfer of ownership in Nonparty 3’s name and the return of the land amounting to the value of the instant land preliminaryly on the ground that the Plaintiffs first held title trust with Nonparty 3. (Ji Government District Court 2006Gahap3582).

On January 26, 2007, the above court acknowledged that the plaintiffs trusted the land of this case to the non-party 3. The court ordered the cancellation of the registration in the non-party 3's name on the ground that the title trust is null and void pursuant to Article 4 (1) of the Act on the Registration of Real Estate under Actual Titleholder's Name (hereinafter "Real Estate Real Name Act"), and ordered the compensation of the total amount of KRW 281,610,000, which is equivalent to the market price at the time of the disposal of the land of this case, among the land of this case, as to the land of this case, the title trust of which is already completed in the non-party 10 and the non-party 11.

With respect to this, Nonparty 3 appealed (Seoul High Court Decision 2007Na32889). During the appellate trial, the buyer filed for registration of ownership transfer on the land listed in the attached list 3 through 15 of real estate. Accordingly, with respect to the land listed in the attached list 1 and the attached list 2, the Plaintiffs filed for cancellation of registration in the name of Nonparty 3 for the invalidation of title trust. As to the land listed in the attached list 3 through 17, the Plaintiffs filed for return of unjust enrichment or claim for damages arising from the disposal of real estate held in title trust, and filed for a total of KRW 1,039,30,000 for the return of unjust enrichment or claim for damages arising from the disposal of real estate held in title trust. In addition, the delegation contract was terminated if the Plaintiffs were deemed to have delegated the sale and purchase of the land of this case to Nonparty 3, and the purport and reasons for the transfer registration was modified to Nonparty 1,70,000,000 won.

On October 8, 2009, the appellate court established conciliation between Nonparty 3 and Nonparty 4, with the exception of the amount appropriated as the aforementioned various registration and litigation costs, etc., out of the sale price of the instant land, and Nonparty 3 and Nonparty 4 jointly pays to the Plaintiffs.

C. As such, the plaintiffs filed a lawsuit against the non-party 3 claiming cancellation of the ownership transfer registration of the land of this case by asserting that the above title trust was null and void by the Real Estate Real Name Act. While the lawsuit is pending, the plaintiffs filed a lawsuit against the non-party 3 to claim for cancellation of the ownership transfer registration of the land of this case. In light of the fact that, in lieu of the registration of cancellation following the invalidation of the title trust, the plaintiffs would receive the registration of cancellation from the non-party 3 and the non-party 4 in lieu of the purchase price of the land of this case from the non-party 3 and the non-party 4 to receive the registration of cancellation due to the invalidity of the title trust, the mediation was made to return the remaining amount after deducting all expenses related to the land of this case from the sale price of this case during that period. In light of the fact that the transfer price of the land of this case by the non-party 3, the title trustee, was fully returned to the plaintiffs who

Therefore, the disposition of this case is legitimate, and the prior plaintiffs' assertion on different premise is without merit.

3. Conclusion

Therefore, the judgment of the court of first instance is justified, and all appeals by the plaintiffs are dismissed. It is so decided as per Disposition.

[Attachment List of Real Estate]

Judges Lee Tae-tae (Presiding Judge)