In cases where the registration of transfer of ownership and the registration of trust in the name of a third party was made in accordance with the trust contract under the former Trust Act at the time of the completion of the acquisition by prescription for possession, and where the registration of transfer of ownership and the registration of trust in the name of the same trustee has been completed in the name of the same trustee under a separate trust contract, whether the possessor may claim the completion of the acquisition by prescription against the trustee (negative)

In light of the ownership relationship of trust property, independence of trust property, opposing power of trust registration, and purport of Articles 3(1), 20, 24, and 30 of the former Trust Act (wholly amended by Act No. 10924, Jul. 25, 201; hereinafter the same), insofar as a trustee has ownership in the name of a trustee under a trust agreement under the former Trust Act at the time the prescription for acquisition of real estate is completed, the possessor of the real estate can claim the completion of the prescription period against the trustee and exercise the right to claim the transfer of ownership. However, if the possessor of the real estate was unable to claim the completion of the prescription period against the third party by disposing of it to the third party and completing the registration for transfer of ownership in the name of the same trustee, it cannot be viewed that the third party has the right to claim the transfer of ownership in the name of the same trustee under a separate trust agreement, which is the owner of the real estate at the time of the completion of the prescription period, even if the ownership of the real estate was restored to the trustee.

Article 245(1) of the Civil Act, Article 1 subparag. 2 (see current Article 2), Article 3(1) (see current Article 4(1)), Article 20 (see current Article 25(1)), Article 24 (see current Article 28), and Article 30 (see current Article 37) of the former Trust Act (Amended by Act No. 10924, Jul. 25, 201);

KF Real Estate Trust Co., Ltd. (Law Firm Cheong, Attorneys Park hwan-ki et al., Counsel for the plaintiff-appellant)

Defendant 1 and one other (Law Firm Beneficiary, Attorneys Lee Jae-min et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2013Na59298 decided August 21, 2014

All appeals are dismissed. The costs of appeal are assessed against the Defendants.

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

1. The possessor for whom the period of prescription for acquisition of ownership by possession has expired has the right to claim for the transfer of ownership against the owner at the time of the completion of the period of prescription, and thus, the third party who acquired the ownership of the real estate after completing the registration of ownership transfer cannot be asserted for the completion of the period of prescription (see, e.g., Supreme Court Decision 89Meu1305, Apr. 9, 191). However, the possessor does not lose his right to claim for the transfer of ownership against the owner at the time of the completion of the period of prescription, but only does not lose his right to claim for the transfer of ownership against the owner at the time of the completion of the period of prescription, and if ownership is restored to the owner at the time of the completion of the period of acquisition for any reason, the possessor can, in principle, claim for the completion of the period of prescription to the owner (see, e

Meanwhile, when the registration of ownership transfer of real estate has been completed in the future in accordance with the trust contract under the Trust Act, the ownership of real estate is entirely transferred to the trustee, and the ownership of real estate is not reserved against the truster in the internal relationship with the truster (see Supreme Court Decision 2000Da70460, Apr. 12, 2002, etc.).

However, given that the trust property under the Trust Act is separate from the trustee’s own property or other trust property and independent management thereof, even if any trust property falls under the ownership of the trustee, the relationship of rights cannot be treated equally with the trustee’s own property or other trust property (see, e.g., Supreme Court Order 2002Ma2754, Dec. 6, 2002). To ensure such independence principle of trust property, the former Trust Act (amended by Act No. 10924, Jul. 25, 201; hereinafter the same) manages the trust property separately from the trustee’s own property or other trust property (see, e.g., Article 30); the trust property and the trust property may not be offset against any obligation not belonging to the trust property (Article 20); and Article 24(1) of the former Trust Act and Article 24(3) of the Trust Act shall apply mutatis mutandis to the trust property, separately from the former trust property and the owner thereof (see, e.g., Article 34 of the Trust Act).

In light of the ownership relationship of such trust property, independence of trust property, opposing power of trust registration, and purport of the provisions of the relevant former Trust Act, etc., even if the ownership transfer registration and trust registration are made in the name of the trustee in accordance with the trust contract under the former Trust Act at the time the acquisition by prescription of real estate is completed, the possessor may exercise the right to claim ownership transfer registration by asserting the completion of the acquisition by prescription against the trustee as long as the trustee holds an internal and external ownership of the trust property. However, if the possessor cannot assert the completion of the acquisition by prescription against a third party because the real estate is disposed of to the third party and the ownership transfer registration is completed in the name of the third party, the possessor cannot claim ownership transfer registration and trust registration again in the same name of the same trustee under a separate trust contract, and even if the ownership of the real estate was restored to the trustee, the possessor constitutes a new interested party after the completion of the acquisition by prescription, barring any special circumstance, and thus, the possessor cannot claim the completion of the acquisition by prescription against another trustee, who has the right to claim ownership transfer registration or trust property.

2. Review of the reasoning of the lower judgment and the record reveals the following circumstances.

A. Defendant 1, as the owner of the instant house, occupied the instant part of the instant land with the intention of ownership for twenty (20) years, including possession by the former occupant, and the prescriptive acquisition for it was completed on October 11, 2009. Defendant 1, including the possession by Defendant 2-do occupant, occupied the instant block structure with the intention of ownership for twenty (20) years, and completed the prescriptive acquisition for the said land on October 11, 2009.

B. On June 29, 2009, the Nonparty, including each part of the Defendants’ possession, was the original owner of the instant land, entered into a trust agreement with the Plaintiff, a trust company, and completed the registration of ownership transfer and trust registration of the instant land in the future of the Plaintiff. At the time the Defendants’ prescriptive acquisition completed, the Plaintiff owned and managed the instant land as the trustee.

C. After that, on August 31, 201, the savings bank of this case purchased the instant land jointly from the Plaintiff, and completed the registration of transfer of ownership based on a trade on the same day under its joint ownership name.

D. The savings bank of this case concluded a trust agreement with the Plaintiff on the same day, and completed the registration of ownership transfer and trust in the future of the Plaintiff.

3. Examining these circumstances in light of the legal principles as seen earlier, insofar as the land of this case was entrusted to the Plaintiff from the Nonparty at the time of the completion of the prescription period for possession of each of the respective possession areas by the Defendants, the Defendants could have claimed for the prescriptive acquisition against the Plaintiff, who was the owner at the time of the completion of the prescription period. However, since the land of this case was disposed of to the savings bank, which was the third party, and the ownership transfer registration was completed in their names, the Defendants could not assert the prescriptive acquisition against the savings bank of this case. Accordingly, insofar as the savings bank of this case again registered the ownership transfer and trust registration to the Plaintiff under a separate trust agreement, so long as the land of this case became subject to the original trust property and the ownership of the Plaintiff, who was the owner at the time of the completion of the prescription period, was restored from the original trust property, the Defendants cannot assert the effect of prescriptive acquisition against the Plaintiff as to the land of this case

Although the reasoning of the judgment below is inappropriate, the judgment of the court below that the Defendants cannot assert the effect of prescriptive acquisition on the part in possession of the land in this case against the Plaintiff on the ground that the Plaintiff constitutes a new interested person after the completion of prescriptive acquisition, is justified in its conclusion and it is not erroneous in the misapprehension of legal principles as to the prescriptive acquisition of possession by the Defendants, which affected the conclusion of the judgment.

4. Therefore, all appeals are 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 Jo Hee-de (Presiding Justice)