Plaintiff

Defendant (Attorney Kim Jong-young, Counsel for the defendant-appellant)

November 21, 2008

Seoul Central District Court Decision 2007Da37729 Decided May 1, 2008

1. The defendant's appeal is dismissed.

2. The costs of appeal shall be borne by the Defendant.

1. Purport of claim

The defendant will implement the procedure for cancellation registration of transfer of ownership, which was completed as No. 34215 on July 8, 2005, with respect to each real estate listed in the attached list to the plaintiff by the Daejeon District Court of Daejeon District Court's Busan District Court's Branch Office.

2. Purport of appeal

The judgment of the first instance is revoked. The plaintiff's claim is dismissed.

1. Basic facts

The following facts shall not be disputed between the parties, or may be acknowledged by comprehensively considering the purport of the entire pleadings in each entry in Gap evidence Nos. 1, 2, and 6:

A. The ○○ Scholarship Foundation, a non-party incorporated foundation (hereinafter “non-party incorporated foundation”), is a public interest corporation established for the purpose of awarding scholarships and subsidizing academic research expenses pursuant to the Act on the Establishment and Operation of Public Interest Corporations.

B. On April 8, 2004, the Plaintiff: (a) received a proposal from Nonparty 2, a standing director of the non-party foundation, to the effect that “the non-party foundation shall take over ○ University and establish a school foundation; (b) if the business is a sex, the Plaintiff would appoint the Plaintiff to the standing director and the non-party 1 (the non-party in the judgment of the Supreme Court) who is the Plaintiff’s birth to the school principal; and (c) concluded a contract to donate each real estate listed in the attached list owned by the Plaintiff (hereinafter “the instant real estate”) to the non-party foundation on the following terms (hereinafter “the instant gift contract”).

① A newly established school foundation shall take over all rights of the ○ University; Nonparty 1 shall operate the ○ University as the principal and a director; and the Plaintiff shall be appointed as a standing director.

② If the above conditions are not met, the contract of donation shall be null and void from the beginning, and the non-party foundation shall bear all the expenses and restore the pertinent real estate to its original state.

C. However, the non-party foundation did not have a business plan, such as accepting ○ University and establishing a school juristic person.

D. On December 3, 2004, the registration of ownership transfer was completed in the name of the non-party foundation under the title of the Daejeon District Court No. 63597 for receipt of the ASEAN Branch Office of the Daejeon District Court pursuant to the gift contract of this case.

E. On July 8, 2005, the registration of transfer of ownership in the name of the defendant was completed on July 7, 2005, as stated in the purport of the claim regarding the instant real estate.

F. At the first preparatory date for pleading of the first instance court of the instant case, which was held on June 13, 2007, Nonparty Foundation re-convened with the Plaintiff by enforcing the procedure for cancellation registration of ownership transfer registration as indicated in the said paragraph (d).

2. Determination

A. Claim for revocation of a gift contract by fraud

The plaintiff concluded the gift contract of this case by deception of the non-party 2 or the non-party foundation, and the document stating that the plaintiff revoked it reaches the non-party foundation on February 16, 2007, and thus the gift contract of this case was revoked. Thus, the plaintiff asserts that the registration of transfer of ownership in the name of the defendant who purchased the real estate of this case from the non-party foundation

On the other hand, a third party who has acquired a right to real estate from a donee due to a fraudulent declaration of intent can be presumed in good faith unless there are special circumstances. Thus, in order for a donor of real estate who has expressed his/her intent due to fraud to claim revocation of a declaration of intent by fraud to a third party, it is necessary to prove the third party's bad faith (see Supreme Court Decision 70Da2155, Nov. 24, 1970), and each statement of No. 4, 17, 19, 34, 36, and 38 as well as testimony of Non-Party 2, and 3 as witness of the first instance trial alone, it is insufficient to establish the fact that the defendant purchased the real estate of this case even if he/she knows that the gift contract of this case was concluded by deception, and there is no other evidence to prove otherwise, the plaintiff's assertion in this part cannot be asserted against the defendant due to the revocation of the gift contract

B. Invalidity of a gift contract upon fulfillment of the condition of rescission

At the time of the donation contract of this case, the Plaintiff agreed to invalidate the non-party foundation’s failure to take over the ○ University. Since the non-party foundation failed to take over the ○ University, the contract of this case is null and void. The Plaintiff asserts that the registration of transfer of ownership in the name of the Defendant, which purchased the real estate from the non-party foundation, is invalid

However, as seen earlier, the fact that the Plaintiff agreed as above at the time of entering into the instant donation contract is as follows. The fact that the non-party foundation did not take over the ○ University does not conflict between the parties, and thus, the instant donation was null and void. However, unless the above terms and conditions of the donation contract are registered, the Plaintiff cannot oppose the Defendant who purchased the instant real estate from the non-party foundation as invalid (see Supreme Court Decision 92Da5584, May 22, 1992), and the Plaintiff’s assertion on this part is without merit.

(c) Invalidity of a gift contract due to false conspiracy and indication;

The Plaintiff asserts that the sales contract between the non-party foundation and the Defendant (hereinafter “instant sales contract”) was concluded in a false manner without the intention to transfer the ownership, and thus, is null and void. The Plaintiff seeks to cancel the registration of transfer of ownership in the name of the Defendant in subrogation of the

However, it is not sufficient to recognize the fact that the sales contract of this case was made by means of false conspiracy with the statements in Gap's evidence Nos. 4, 17, 19, 34, 36, and 38 and each testimony of non-party Nos. 2 and 3 of the first instance trial witness, and there is no other evidence to acknowledge it. Thus, the plaintiff's assertion on

D. Invalidity of a sales contract due to violation of statutes

As the Plaintiff did not obtain permission from the competent authority at the time of selling the instant real estate, which is an endowment, to the Defendant, the instant sales contract is null and void, and the registration of transfer of ownership in the name of the Defendant is also null and void, and the Plaintiff seeks to cancel the registration of transfer of ownership in the name of the Defendant

First, Article 11(1) of the Act on the Establishment and Operation of Public Interest Corporations (hereinafter “Public Interest Corporation Act”) provides that the property of public-service corporations shall be divided into fundamental property and common property as prescribed by the Presidential Decree. Article 16(1)2 of the Enforcement Decree of the Public Interest Corporation Act provides that the property donated or acquired without compensation by a public-service corporation shall be the basic property of a public-service corporation as a matter of course. It cannot be deemed that the property is a basic property of a public-service corporation, and that there was no resolution of the board of directors to incorporate the property into the basic property of a public-service corporation, or there was no permission of the competent authority for the acquisition of the property (see Supreme Court Decision 94Da12005 delivered on December 22, 194). Thus, the pertinent property donated free of charge by the non-public-service corporation to the Plaintiff shall be deemed the basic property of the non-party foundation (it shall not be accepted in the case of a public-service corporation as incorporated foundation).

Furthermore, Article 11(3) of the Public Interest Corporation Act on the Disposal of Fundamental Property of Public Interest Corporations is a mandatory provision, and it is null and void to dispose of fundamental property without obtaining permission from the competent authority in violation of this provision (see Supreme Court Decision 2004Da50044, Sept. 28, 2005). According to the evidence No. 39, the non-party foundation can recognize the fact that the non-party foundation sold the real property of this case, which is the basic property, and did not obtain permission from the competent authority of the office of education of Gangnam-gu, Seoul. Thus, the sales contract of this case is null and void in violation of the mandatory provision, and the registration of ownership transfer in the name of the defendant is also null and void. Thus, the defendant is obligated to implement the procedure for

3. Conclusion

Therefore, the plaintiff's claim of this case is justified, and the judgment of the court of first instance is just, and the defendant's appeal is dismissed as it is without merit. It is so decided as per Disposition.

[Attachment List omitted]

Judges Choi Pung (Presiding Judge)