In a case where a title trust relationship is terminated between husband and wife’s title trust, whether a truster’s right to claim for ownership transfer registration against a trustee becomes a truster’s responsible property (affirmative)

Unless special circumstances exist, a title trust agreement between husband and wife is valid (see Article 8 of the Act on the Registration of Real Estate under Actual Titleholder’s Name). In this context, the title truster may terminate the trust to the title trustee and request the performance of the registration procedure under the name of ownership solely on the ground that the trust relationship is terminated, as well as may make such a claim for the registration procedure on the ground that the trust relationship is terminated and the ownership is based on the termination of the trust. In such a case, where the title trust relationship is terminated, the truster’s right to claim for the registration of ownership against the trustee is a property jointly

However, in cases where a truster directly disposes of the trusted real estate on the premise that a valid title trust agreement is terminated, and the intermediate registration is omitted under an agreement with the trustee and a third party and the trustee completes the registration of ownership transfer immediately in the name of the third party, the truster’s right to claim the registration of ownership transfer against the trustee, which is the trustee’s responsible property, becomes extinct. Thus, if the truster’s passive property exceeds the active property or becomes worse, and the truster was aware of such fact, such legal act constitutes a fraudulent act as detrimental to the general creditors of the truster.

Articles 103 [title trust] and 406(1) of the Civil Act; Articles 4(2) and 8 of the Act on the Registration of Real Estate under Actual Titleholder’s Name

[Plaintiff-Appellant] Plaintiff 1 and 1 other (Law Firm Han, Attorneys Park Jong-soo et al., Counsel for plaintiff-appellant)

Plaintiff (Attorney Yoon Young-young, Counsel for the plaintiff-appellant)

Defendant (Attorney Lee Sung-soo, Counsel for defendant-appellant)

Seoul High Court Decision 2014Na60707 decided August 20, 2015

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

The grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed).

1. Regarding ground of appeal No. 1

A. (1) The lower court acknowledged the facts as indicated in its reasoning based on the adopted evidence, and determined that it is reasonable to view that Nonparty 1, as the actual owner of the instant land and building, completed the registration of ownership transfer under the name of Nonparty 2 pursuant to an implied title trust agreement with Nonparty 2, the wife, and obtained a building permit for the instant building in the name of Nonparty 2, and completed the registration of ownership transfer in the name of Nonparty 2.

In light of the records, the above judgment of the court below is just, and contrary to what is alleged in the grounds of appeal, the court below did not err by misapprehending the legal principles on presumption of unique property and certification of title trust agreements, thereby failing to exhaust all necessary deliberations or exceeding the bounds of the principle of free evaluation of evidence in violation of logical and empirical rules.

(2) Of the grounds of appeal on this part, the argument that the title trust agreement between Nonparty 1 and Nonparty 2 with respect to whether it is for the purpose of evading taxes, evading compulsory execution, or evading statutory restrictions has to have been deliberated even on whether it was for the first time in the final appeal, and thus, it cannot be a legitimate ground of appeal.

B. (1) The title trust agreement between husband and wife is valid (see Article 8 of the Act on the Registration of Real Estate under Actual Titleholder’s Name), barring any special circumstance (see, e.g., Supreme Court Decision 2000Da55171, May 10, 2002). In such a case, the title truster, upon termination of the trust agreement with the title trustee, may request the performance of the registration procedure for the transfer of ownership in the name of ownership solely on the ground that the trust relationship is terminated, and may also make such a claim against the ownership (see, e.g., Supreme Court Decision 2000Da55171, May 10, 2002).

However, in cases where a truster directly disposes of the trusted real estate on the premise that such a valid title trust agreement is terminated to a third party while omitting interim registration under the agreement with the trustee and the third party and immediately completing the registration of ownership transfer in the third party, the truster’s right to claim the registration of ownership transfer against the trustee, which is the property held by the truster’s liability, is extinguished. Thus, if the truster’s passive property exceeds or exceeds the positive property or the truster was aware of such fact, such legal act by the truster constitutes a fraudulent act as detrimental to the general creditors of the truster.

(2) Examining the facts acknowledged by the court below in light of the legal principles as seen earlier, the title trust relationship between the two parties was terminated by directly selling the instant land and building, which Nonparty 1 trusted to Nonparty 2, his wife, to the Defendant under the consent of Nonparty 2. Accordingly, the right to claim for ownership transfer registration, which Nonparty 1 acquired, becomes a joint collateral for the general creditors of Nonparty 1, a trust administrator. Nonparty 1, under the agreement with Nonparty 2 and the Defendant, immediately extinguished the right to claim for ownership transfer registration, which is the responsible property, by completing the ownership transfer registration in the future, to Nonparty 2, and accordingly, Nonparty 1’s claim for ownership transfer registration, which is the responsible property, exceeds the active property or exceeds the obligation. Accordingly, the above real estate sale contract constitutes a fraudulent act that harms the general creditors of Nonparty 1.

Unlike this, although the judgment of the court below, it is not appropriate for the part of the court below which stated the land and buildings of this case as the joint collateral property provided to the general creditors of non-party 1 as the joint collateral, it is just in its conclusion that the court below cancelled the sales contract of this case as a fraudulent act and ordered compensation for its restitution.

2. Regarding ground of appeal No. 2

A. At any time, whether there was a legal act corresponding to a fraudulent act should be determined with due care, taking into account the significant impacts on the interests between the parties, and the date on which the legal act corresponding to a fraudulent act was actually committed shall be determined as the standard (see Supreme Court Decision 2001Da73138, 73145, Jul. 26, 2002). However, barring any special circumstance, it shall be determined whether such fraudulent act was actually committed, centering on the date on which the grounds for registration on the register, which appears based on a disposal document, was based (see Supreme Court Decision 2002Da41589, Nov. 8, 2002).

B. In light of the records, the lower court’s determination that the instant sales contract was concluded on July 6, 2012, which was the date on which the grounds for registration was based on the registry was justifiable, based on comprehensive consideration of the circumstances as indicated in its reasoning, and contrary to what is alleged in the grounds of appeal, did not err by exceeding the bounds of the principle of free evaluation of evidence in violation of logical

3. Conclusion

Therefore, the appeal is dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Kwon Soon-il (Presiding Justice)