Korea Credit Guarantee Fund (Law Firm Southern, Attorneys Cho Young-young, Counsel for the defendant-appellant)

Defendant 1 and one other (Law Firm Wond, Attorneys White-gu et al., Counsel for the defendant-appellant)

Seoul Central District Court Decision 201Gahap7050 Decided December 29, 2011

September 21, 2012

1. The part of the judgment of the court of first instance against the plaintiff, which cited below, shall be revoked.

A. Defendant 2 shall pay to the Plaintiff 131,00,000 won with 5% interest per annum from February 2, 2011 to October 12, 2012, and 20% interest per annum from the next day to the day of full payment.

B. As to the real estate listed in paragraph (2) of the attached Table No. 2 on June 26, 2008, Defendant 1 performed the registration procedure for cancellation of the registration of the establishment of a neighboring mortgage completed under No. 78042 on the receipt of the Namyang District Court's receipt of the Namyang District Court.

C. On June 26, 2008, the agreement to establish a mortgage concluded on June 26, 2008 between Defendant 1 and Defendant 2 as to the real estate listed in paragraph (1) of the attached Table.

2. On June 26, 2008, the lawsuit seeking confirmation of the establishment registration of a neighboring establishment under Defendant 1 as of the land listed in paragraph (1) of the attached Table No. 1 of the Plaintiff’s attached Table of Real Estate as changed in the trial shall be dismissed.

3. The plaintiff's remaining appeal is dismissed.

4. 5 minutes of the total costs of the lawsuit shall be borne by the Plaintiff, and the remainder shall be borne by the Defendants, respectively.

5. Paragraph 1(a) of this Article may be provisionally executed.

The judgment of the court of first instance shall be revoked. 1. Defendant 2 paid 5% per annum to the Plaintiff from August 9, 2007 to the delivery date of a copy of the complaint of this case, and 20% per annum from the next day to the date of complete payment. 2. A. Defendant 1 executes the procedure for cancellation of registration of establishment of a collateral security on the real estate stated in paragraph (2) of the attached Table No. 2 to Defendant 2 on June 26, 2008 as to the real estate listed in paragraph (1) of the attached Table No. 78042. The plaintiff and the Defendants confirmed that the registration of establishment of a collateral security on the real estate stated in paragraph (1) of the attached Table No. 2 of this case was null and void from the registration office of the court of second instance as to the registration of establishment of a collateral security on the real estate stated in the attached Table No. 2 of this case to the court of second instance on June 26, 2008.

1. Basic facts

The following facts do not conflict between the parties, or may be acknowledged by taking into account the whole purport of the pleadings in each entry in Gap evidence 1-1 to 5, Gap evidence 2, 3, Gap evidence 4-1, 2, Gap evidence 5, Eul evidence 1-1, 2, Eul evidence 1-2, and Eul evidence 19-1, 19-2.

A. The Plaintiff’s claim for reimbursement against Nonparty 1 (Supreme Court Decision)

(1) The Plaintiff entered into a credit guarantee agreement with H&C Co., Ltd. (hereinafter “G&C”). At the time, H&C agreed to reimburse the Plaintiff for the exercise or preservation of the Plaintiff’s subrogated payment and other rights, and Nonparty 1 and 2 jointly and severally guaranteed the Plaintiff’s obligation to compensate for the reimbursement of the principal and interest of loan, in order to guarantee the payment of the principal and interest of the loan. The amount guaranteed by the Credit Guarantee Fund Act on April 12, 2007 is KRW 212,50,000, and the term of guarantee was April 11, 2008 (hereinafter this change to April 8, 2011).

(2) H&C obtained a loan of KRW 250,00,000 from the bank of Nonparty on the security of a guarantee under the said credit guarantee agreement.

(3) On September 6, 2010, G&C suffered a credit guarantee accident as a result of delinquency in paying interest on the above loan. On January 14, 2011, the Plaintiff subrogated the bank of 217,922,768 won.

(4) The Plaintiff spent KRW 1,627,410 for the preservation of the claim for reimbursement due to the said subrogation, and recovered KRW 733,560 among them.

B. On May 26, 2006, Defendant 2 concluded a sales contract with Nonparty 3 on the following terms: (a) the real estate listed in Paragraph 1 (hereinafter “instant land”; (b) the real estate listed in Paragraph 2 “instant building”; and (c) the sales price of KRW 210,00,000 for each of the instant real estate; and (b) the down payment of KRW 21,000,000 for the contract date; and (c) the intermediate payment of KRW 79,00,000 for the remainder payment of KRW 110,00,000 on August 10, 2006 (hereinafter “instant sales contract”).

C. After the purchase price under the instant sales contract was fully paid to Nonparty 3, each of the instant real estate was registered on August 9, 2007 with respect to each of the instant real estate on the grounds of sale and purchase as of August 7, 2007 under Defendant 2’s receipt of the Namyang District Court’s receipt office, and each of the registration of ownership was completed on August 7, 2007 with respect to each of the instant real estate. As of June 26, 2008, the maximum debt amount was KRW 350,000,000, and each of the registration of mortgage establishment (hereinafter “mortgage establishment”) based on each of the instant mortgage agreements with the mortgagee as of June 26, 2008 (hereinafter “mortgage establishment registration”).

D. As to the instant land, on January 24, 2006, prior to the instant sales contract, the registration of creation of a mortgage was completed with the debtor Nonparty 4, the maximum debt amount of Non-party 2,80,000 won, and the mortgagee as the U.S. agricultural cooperative. After that, upon the application of the U.S. agricultural cooperative, the voluntary auction procedure was initiated regarding the surrounding real estate including the instant land. On January 10, 2012, AD Co., Ltd was awarded a successful bid for the instant land, and accordingly, on June 26, 2008, the registration of establishment of a mortgage on the instant land under the name of Defendant 1 (hereinafter referred to as “registration of establishment of a mortgage on the instant land”).

E. Defendant 2 is the friendship of Nonparty 1, and Nonparty 1 used each of the instant real estate as a warehouse for his own business after the instant sales contract was concluded by Nonparty 1.

F. Nonparty 1 bears the obligation of the above joint and several liability obligations against the Plaintiff, while Nonparty 1 does not have any special property owned in his/her own name, and is in excess of the obligation.

2. The parties' assertion

A. Summary of the plaintiff's assertion

(1) When Nonparty 1 purchased each of the instant real estate at his own money, he entered into a title trust agreement with Defendant 2, and entered into a sales contract with a bona fide seller under Defendant 2, and Defendant 2 subsequently completed the registration of ownership transfer on each of the instant real estate.

(2) The above title trust agreement between Nonparty 1 and Defendant 2 is null and void in accordance with the Act on the Registration of Real Estate under Actual Titleholder’s Name. As such, Defendant 2, the title trustee, is obligated to return KRW 210,000,000 of the purchase fund received from Nonparty 1, the title truster, as unjust enrichment.

(3) Claim for money against Defendant 2

The Plaintiff has a claim for reimbursement of KRW 218,816,618 [217,922,768 won + 893,850 won (1,627,410 won - 73,560 won)] against Nonparty 1, and Nonparty 1 is in insolvent. Thus, Defendant 2 is obligated to pay the Plaintiff the above unjust enrichment amounting to 210,000,000 won and damages for delay.

(4) Claim for the cancellation, etc. of the registration of the establishment of the neighboring mortgage of this case

(A) The primary claim

The mortgage contract of this case is null and void since it is a contract based on a false agreement concluded between Defendant 2 and Defendant 1 without a secured obligation, and the registration of establishment of mortgage of this case based on this is invalid. Accordingly, upon the Plaintiff’s request by subrogationing Nonparty 1 and Defendant 2 in sequence, Defendant 1 is obligated to implement the procedure for registration of cancellation of establishment of mortgage of the above neighboring real estate under Defendant 1’s name on June 26, 2008 concerning the real estate listed in paragraph (2) of the attached Table No. 2 of the real estate list (hereinafter “the building of this case”). In addition, the Plaintiff seeks confirmation of establishment of mortgage of this case as to the land of this case that was already cancelled against the Defendants.

(B) Preliminary Claim

The instant mortgage contract is a fraudulent act detrimental to Defendant 2, including Nonparty 1. Therefore, upon the Plaintiff’s request by subrogation of Nonparty 1, Defendant 2 and Defendant 1, the instant mortgage contract is revoked, and Defendant 1 is obligated to implement the registration procedure for cancellation of the establishment of a neighboring mortgage on the instant building due to restitution to the original state.

B. Summary of the defendants' assertion

Defendant 1 purchased each of the instant real estate upon Nonparty 1’s request by Nonparty 1, a fraud, and held title trust with Defendant 2. Defendant 1 transferred the purchase price of each of the instant real estate to Nonparty 1 from his own account, and Nonparty 1 paid it to the seller.

3. Determination

A. First, we examine whether Nonparty 1 trusted each of the instant real estate to Defendant 2.

(1) The following facts are not disputed between the parties, or can be acknowledged by comprehensively taking into account the following facts: Gap evidence 8-1 to 3, Gap evidence 9, 10, Eul evidence 6, Eul evidence 8, 9, Eul evidence 15-1 to 15-3, Eul evidence 1, 2, Eul evidence 17-1 to 17-3, the court of first instance, the Korean Standards Bank of the court of first instance, the National Bank of Korea, and the results of the order to submit each financial transaction information to the Korean National Bank of the court of first instance, and the purport of all pleadings as a result of the order to submit tax information to the Korean National Bank of the first instance court

(A) If a bill or check was deposited in the Korea Standards Bank Depository Account (Account No. 1 omitted), a non-party 1, the head of the non-party 1, was transferred to the same bank account (Account No. 2 omitted; hereinafter “instant account”). At that time, the said collection amount was transferred to the same account with the defendant 1. The most of the collection amount transferred to the instant account was again transferred to the National Bank Account under the non-party 1 (Account No. 3 omitted; hereinafter “Non-party 1 Account”). From January 1, 2003 to April 20, 2006, the sum of the money transferred to the non-party 1 account from the instant account to the non-party 3,788,95,95,000, while the non-party 1 did not have returned to the instant account from the non-party 1 to the non-party 1, and the money deposited to the non-party 1’s account.

(B) Of the bills and checks entrusted for collection to the above custody notes account held by Defendant 1, there are considerable number of bills and checks issued or endorsed by Nonparty 1, the transaction partner of Nonparty 1, and the bills and checks issued or endorsed by loan companies.

(2) The above facts and the defendants alleged that the non-party 1 paid the purchase price of each real estate of this case with the money remitted from the account of this case to the non-party 1 account. However, even according to the defendants' assertion, the amount and date of the money transferred from the account of this case to the non-party 1 account does not coincide with the payment date and amount of the down payment, intermediate payment and balance stipulated in the sale and purchase contract of this case. ② The account of this case is the account where the collection of the bill and check deposited into the above account of the defendant 1, and it appears that the account of this case was specialized in the business of discounting the bill and check according to the transaction details of the above custody bill, and there is no evidence to prove that the defendant 1 paid the discount of the bill and check, and the non-party 1 paid the bill to the non-party 1 to the account of this case to the non-party 1 at the time of testimony at the court of first instance, and it cannot be viewed that the account of this case was made directly by the defendant 14 et al.

(3) Recognizing that Nonparty 1 paid the purchase price of each of the instant real estate with the money withdrawn from Nonparty 1’s account, the Defendants asserted that the said money was remitted from the instant account owned by Defendant 1, but it is recognized that the money deposited in the instant account was not actually owned by Defendant 1, and Nonparty 1 used the money deposited in the instant account for himself/herself, Defendant 2 was the relative of Nonparty 1, and Nonparty 1 used the instant real estate as a warehouse for his/her own business, in light of the fact that Nonparty 1 purchased each of the instant real estate at his/her own money, and Nonparty 1 used the instant real estate as a warehouse, it is inevitable to deem that Nonparty 2 purchased each of the instant real estate at his/her own money, based on a title trust agreement between Defendant 2 and Defendant 2.

B. The part claiming money against Defendant 2

(1) As seen earlier, each of the instant real estate was held in title by Nonparty 1 pursuant to the title trust agreement with Defendant 2, and the said title trust agreement is null and void pursuant to Article 4(1) of the Act on the Registration of Real Estate under Actual Titleholder’s Name. As such, Defendant 2, the title trustee, is obligated to return the amount equivalent to the purchase fund of each of the instant real estate received from Nonparty 1, the title truster, to the unjust enrichment

(2) Furthermore, the facts that Nonparty 1 set the sales amount of KRW 210,00,00 in the sales contract of the instant case, which was provided by Nonparty 1 to Defendant 2, are acknowledged as above. However, the Defendants asserted that Nonparty 1, instead of paying the above sales amount of KRW 210,000,000, an intermediate payment of KRW 79,000,000, an intermediate payment of KRW 210,000, was to take over the secured obligation of the right to collateral security (i.e., the secured obligation of the right to collateral security, which was established on the instant land, against the said U.S. agricultural cooperative, and there is no evidence to prove otherwise that Nonparty 1 became the debtor of the said obligation or was paid directly. Thus, the amount of each of the real estate purchase funds provided by Nonparty 1 to Defendant 2 shall be KRW 131,00,000 (= KRW 210,000,000).

The part of the plaintiff's assertion in excess of this part is without merit.

(3) Sub-determination

Therefore, Defendant 2 is obligated to pay damages for delay at the rate of 5% per annum under the Civil Act from February 2, 2011 to October 12, 2012, which is the date of delivery of a copy of the complaint of this case, to the Plaintiff seeking reimbursement of Nonparty 1’s insolvency, on behalf of Nonparty 1 as the creditor of Nonparty 1, who is insolvent. As such, Defendant 2, from February 2, 2011, who is the day following the day of delivery of a copy of the complaint of this case, is liable to pay damages for delay at each rate of 20% per annum under the Act on Special Cases Concerning Expedition, etc. of Legal Proceedings from the next day to the day of full payment [the Plaintiff is liable for damages for delay from August 9, 207, which was received by the title trustee from the title trust of this case, to the day of delivery of a copy of the complaint of this case, unless the title trust agreement proves that the purchase funds received from the title trust agreement was based on the title trust agreement, the Plaintiff’s claim 2020.

C. The part concerning the claim for cancellation, etc. of the registration of the establishment of the neighboring mortgage of this case

(1) The primary claim

(A) Determination ex officio as to the legitimacy of the lawsuit seeking nullification of the establishment registration of a mortgage on the instant land

The Plaintiff asserts that the aforementioned mortgage contract on the instant land between Defendant 2 and Defendant 1 is a contract based on a false conspiracy, and thus is null and void, and that the establishment registration of a neighboring mortgage on the instant land was also null and void, and that there was a benefit from such confirmation, and that the establishment registration of a neighboring mortgage was null and void against the Defendants.

On the other hand, in a lawsuit for confirmation, there is a dispute between the parties as to the legal relationship subject to confirmation, and thereby, it is recognized that it is the most effective and appropriate means to determine the legal status of the plaintiff as a confirmation judgment to eliminate the apprehension and danger when the plaintiff's legal status is unstable and dangerous. Thus, in a lawsuit for confirmation, filing a lawsuit for performance or formation of confirmation is not a final solution of the dispute, and therefore there is no benefit of confirmation (see, e.g., Supreme Court Decisions 2005Da60239, Mar. 9, 2006; 2009Da93299, Feb. 25, 2010).

According to the health account and evidence No. 18-1 as to the instant case, the Plaintiff had already filed a lawsuit of demurrer against the Defendant 1 on the premise that the said establishment registration was null and void. As such, insofar as the objective of the claim for nullification of the said establishment registration can be directly achieved, the Plaintiff’s lawsuit for invalidity of the establishment registration of the said establishment registration is not the interest of confirmation, and there is no other evidence to acknowledge it as unlawful.

(B) Claim for the cancellation of registration of the establishment of a mortgage on the instant building

1) As seen earlier, each of the instant real estate was trusted in title by Nonparty 1 to Defendant 2, and even based on the Defendants’ assertion, Defendant 1 completed the establishment registration of the instant collateral without the secured debt in preparation for the case where Defendant 2 denies the title trust with Defendant 2, under the premise that Defendant 1 was the title trust of each of the instant real estate, and thus, the agreement on the establishment of the instant collateral security agreement is null and void since the agreement on the establishment of the instant mortgage was based on the false representation, and the registration of the establishment registration of the instant collateral security based on

2) In full view of the results of the order issued by the court of first instance to submit financial transaction information to the Korea Federation of Banks, Defendant 2 may be deemed to have a status exceeding obligations.

3) Accordingly, upon the Plaintiff’s request by subrogation of Nonparty 1 and Defendant 2 in succession, Defendant 1 is obligated to implement the procedure for registration of cancellation of the establishment registration of a neighboring mortgage on the instant building to Defendant 2.

(2) Preliminary claim (the part on the instant land)

(A) On June 26, 2008 regarding the instant land between Defendant 2 and Defendant 1, at the time of the conclusion of the aforementioned mortgage contract, Defendant 2 was liable to return unjust enrichment of KRW 131,00,000 against Nonparty 1. As seen earlier, Defendant 2 had no specific property other than each of the instant real property, and was in a state of exceeding the obligation. In such a situation, Defendant 2’s act of entering into the pertinent mortgage contract with Defendant 1 to offer the instant land as security constitutes a fraudulent act detrimental to general creditors including Nonparty 1, and is presumed to constitute Defendant 1’s bad faith as a beneficiary.

(B) Accordingly, upon the Plaintiff’s request by subrogation of Nonparty 1, the above mortgage contract concluded on June 26, 2008 between Defendant 1 and Defendant 2 regarding the instant land should be revoked.

4. Conclusion

Therefore, the plaintiff's claim against the defendants is accepted within the scope of the above recognition, and the part of the claim for nullification of establishment registration of the neighboring land of this case is dismissed as it is unlawful, and the remaining claim is dismissed as there is no ground. Since the part of the plaintiff's loss which corresponds to the part cited in the judgment of the court of first instance is different from this conclusion, each cancellation is ordered against the defendant 2, and the payment of the above quoted amount is ordered against the defendant 1, and the execution of the procedure for registration of cancellation of establishment registration of the neighboring mortgage related to the building of this case is ordered against the defendant 1 and the defendant 2. The above mortgage contract of this case is revoked between the defendant 1 and the defendant 2 as of June 26, 2008. The plaintiff's lawsuit for nullification of establishment registration of the neighboring mortgage concerning the land of this case as to the land of this case as modified at the court of first instance is

[Attachment]

Judges Cho Jae-hae (Presiding Judge)