[1] The extinctive prescription period of the right to claim ownership transfer registration, which the title truster has against the title trustee under the legal doctrine of unjust enrichment, without taking measures such as real name conversion even after the grace period under Article 11 of the Act on the Registration of Real Estate under Actual Titleholder’s Name

[2] Where a title truster has continuously occupied and used real estate held in title trust, whether extinctive prescription of a claim for registration based on a claim for return of unjust enrichment against the title trustee is not in progress (negative)

[1] Where a title trustee acquires the title of real estate pursuant to the title trust agreement before the enforcement of the Act on the Registration of Real Estate under Actual Titleholder's Name, the title truster could have terminated the title trust agreement and acquired the ownership of the pertinent real estate at any time before the grace period under Article 11 of the said Act expires after the enforcement of the said Act. The title truster's title trust agreement becomes null and void under Articles 12 (1) and 4 of the said Act after the lapse of the grace period without taking measures such as real name, while the title trustee shall acquire the pertinent real estate. Since Articles 3 and 4 of the said Act prevent the title truster from owning the pertinent real estate, the title trustee is obliged to return the real estate he/she acquired to the title truster as unjust enrichment. Accordingly, the title truster's right to claim the transfer of ownership against the title trustee for the restoration of the pertinent real estate is a right to claim the return of unjust enrichment under the provisions of the relevant Act, and the prescription expires after the lapse of ten years under Article 162 (1) of the Civil Act.

[2] In a case where a title truster, prior to the enforcement of the Act on the Registration of Real Estate under Actual Titleholder’s Name, who lost his/her right due to the enforcement of the Act on the Registration of Real Estate under Actual Titleholder’s Name, which provides for criminal punishment against the violation, claims for the return of unjust enrichment against the real estate under title trust, the title truster exercises his/her right to possession, use, etc. of the real estate from the beginning under the invalidated title trust agreement, and thus, cannot be deemed as having actually exercised the right to claim the return of unjust enrichment. In addition, if the title truster occupied and used the real estate, the extinctive prescription of the right to claim the return of unjust enrichment against the title truster does not run after the lapse of the grace period and the prescription period of the Act on the Registration of Real Estate under Actual Titleholder’s Name, even if the title truster still violated the said Act, and thus, is the result of protecting his/her right.

[1] Articles 3, 4, 11, and 12(1) of the Act on the Registration of Real Estate under Actual Titleholder’s Name; Articles 162(1) and 741 of the Civil Act / [2] Articles 3, 4, 7, 11, and 12(1) of the Act on the Registration of Real Estate under Actual Titleholder’s Name; Articles 162(1) and 741 of the Civil Act

[1] Supreme Court Decision 2000Da21123 decided Dec. 26, 2002 (Gong2003Sang, 452) Supreme Court Decision 2008Da62687 decided Nov. 27, 2008 (Gong2008Ha, 1793)

Plaintiff (Law Firm Southern, Attorneys Lee Ho-ho et al., Counsel for the plaintiff-appellant)

Defendant (Attorney Choi Im-soo et al., Counsel for defendant-appellant)

Seoul Central District Court Decision 2008Na20293 Decided February 5, 2009

The appeal is dismissed. The costs of appeal are assessed against the plaintiff.

We examine the grounds of appeal.

Where a title trustee acquires the title of real estate in accordance with the title trust agreement before the enforcement of the Act on the Registration of Real Estate under Actual Titleholder’s Name (hereinafter “Real Estate Real Name Act”), the title truster is entitled to terminate the title trust agreement at any time before the grace period under Article 11 of the same Act expires after the enforcement of the Real Estate Real Name Act, and the title truster is entitled to acquire the ownership of the relevant real estate after the grace period under Articles 12(1) and 4 of the same Act expires without taking any measures such as real name, and the title trustee becomes null and void under Articles 12(1) and 4 of the same Act, while the title trustee acquires the relevant real estate in full. Since Articles 3 and 4 of the same Act prevent ownership from being attributed to the title truster, the title trustee is not obligated to return the relevant real estate acquired by him/her as unjust enrichment (see Supreme Court Decisions 200Da21123, Dec. 26, 2002; 2008Da62616, Nov. 27, 2008).

According to the reasoning of the judgment below, the court below rejected the plaintiff's claim for unjust enrichment on July 1, 1996 against the defendant on the same day, since the plaintiff purchased the land of this case from the seller and entered into a sale contract under the title trust agreement between the parties, and completed the whole registration of the plaintiff's purchase shares (50/130), and the seller did not know that the plaintiff's purchase shares registered in the name of the defendant are the seller's bona fide title trust, and the grace period under Article 11 of the Real Estate Real Name Act has expired. The plaintiff acquired the complete ownership of the above share as of July 1, 1996. The plaintiff was entitled to claim for unjust enrichment on the same day against the defendant, and since the expiration of the 10-year statute of limitations from July 1, 1996, the above claim was extinguished, and even if the plaintiff purchased the land of this case, it did not interfere with the law of real estate under title trust and its unlawful act.

In light of the aforementioned nature of the right to claim restitution of unjust enrichment of this case and the legislative intent of the Real Estate Real Name Act, the above judgment of the court below is justified.

The Supreme Court Decision pointing out in the ground of appeal is that where a purchaser of real estate takes delivery of the object, the right to claim for registration of the purchaser does not take place differently from other claims, and its purport is that in light of the reason for existence of the prescription system, the purchaser cannot be seen as a locked person on his/her right. Moreover, when comparing the remaining state of registration in the name of the seller and the state where the purchaser takes over and takes advantage of the real estate transaction, the situation should be protected and it is more reasonable to realize the real estate transaction (see, e.g., Supreme Court en banc Decision 76Da148, Nov. 6, 1976; Supreme Court Decision 98Da32175, Mar. 18, 199; Supreme Court Decision 98Da32175, Mar. 18, 1999; thus, the title truster’s right to claim for return of real estate under the Real Estate Real Name Act, which was invalidated by the enforcement of the Real Estate Real Name Act; instead, the title truster’s right to claim for return cannot be accepted.

The court below did not err in the misapprehension of legal principles as to extinctive prescription, relevant precedents, and pleadings, as otherwise alleged in the ground of appeal.

Therefore, the appeal is dismissed. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Yang Chang-soo (Presiding Justice)