In a case where Party A entered into a sales contract with Party B with respect to real estate, which is the only property of Party B, in excess of debt, the case holding that the lower court erred by misapprehending the legal doctrine on the presumption of bad faith of the beneficiary, on the ground that it is reasonable to view that Party B knew that it was a fraudulent act, and that Party B did not know that it would prejudice the obligee A at the time of entering into the sales contract, and that it is reasonable to deem that Party B did not know that the presumption of bad faith as to the beneficiary B was reversed

Article 406 of the Civil Act

Dongyang Capital Co., Ltd.

Tyman loan Co., Ltd.

Defendant (Attorney Hong Sung-sung et al., Counsel for defendant-appellant)

Ulsan District Court Decision 2010Na4271 decided January 6, 2011

The judgment of the court below is reversed, and the case is remanded to the Ulsan District Court Panel Division.

The grounds of appeal are examined.

1. The lower court determined that Nonparty 1’s act of entering into the instant sales contract with the Defendant regarding the instant real estate, the sole property of which is the debtor in excess of the debt, constitutes a fraudulent act with the knowledge that it would reduce the joint security of ordinary creditors, barring any special circumstance, and as long as Nonparty 1’s intention of injury is recognized, the Defendant’s bad faith as the beneficiary is presumed.

Furthermore, based on the evidence adopted, the lower court rejected the Defendant’s transfer of resident registration to another address on June 14, 2007, on the ground that: (a) Nonparty 1 entered into the instant lease agreement with Nonparty 2 on a lease deposit of KRW 60 million between the Defendant’s father and Nonparty 2; (b) Nonparty 2 appears to have entered into the instant lease agreement on July 2, 2007, “the date of July 2, 2009” in the judgment of the first instance, which was accepted by the first instance court, after obtaining a fixed date on the instant lease agreement and completing a move-in report on the instant real estate; and (c) Nonparty 1 was aware of the fact that the instant lease agreement was concluded with Nonparty 1 on August 24, 2007, which was concluded on the same date as the Defendant’s non-party 1’s non-party 60,000 won and the Defendant’s request for sale of the instant real estate, which was concluded on August 24, 2007.

2. However, it is difficult to accept the lower court’s determination that the Defendant was a malicious beneficiary.

According to the reasoning of the judgment below and the records, the following facts are revealed. In other words, Nonparty 1 was first aware of the lease relationship with Defendant or Nonparty 2, and it does not seem that there was a special relationship with Defendant or Nonparty 2. The purchase price of this case was 76 million won equivalent to the market price of the real estate in this case. The Defendant set off the lease deposit claim of this case and paid the remainder of KRW 16 million to Defendant 20 million at the time of the sale contract of this case. The lease contract of this case was set up in the name of Nonparty 1 and the provisional registration of Nonparty 3 was completed in the name of Nonparty 60, but it was not possible to conclude the sale contract of this case 70,000 won after deducting the lease deposit of this case from Nonparty 2’s market price of this case from the date of the sale contract of this case. Nonparty 2 was aware that the sale and purchase contract of this case was completed by Nonparty 1, 70,000,000 won prior to the date of the sale contract of this case.

In light of the above facts, it is difficult to find any motive or reason for the Defendant to purchase the instant real estate with knowledge of the fraudulent act, and it is reasonable to deem that the Defendant was unaware of the fact that Nonparty 1’s obligee was harmed at the time of entering into the instant sales contract. Therefore, it is sufficient to deem that the presumption of bad faith against the Defendant, a beneficiary, was reversed.

Nevertheless, the court below determined that the presumption of bad faith cannot be reversed solely on the basis of the facts and circumstances stated in its holding that it is difficult to recognize a hot rationality. The court below erred by misapprehending the legal principles regarding the presumption of bad faith of the beneficiary in a fraudulent act, or by erroneously recognizing facts beyond the bounds of the principle of free evaluation of evidence and logical and empirical rules. The ground of appeal assigning this error has merit.

3. Therefore, the lower judgment is reversed, and the case is remanded to the lower court for further proceedings consistent with this Opinion. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Jeon Soo-ahn (Presiding Justice)