Seoul Eastern District Court 2015Kadan131544 (03 March 03, 2016)

Revocation of Fraudulent Act

A title trust agreement that acquires real estate owned by a delinquent under the name of the defendant upon the agreement on payment in kind was concluded.

An act of transferring ownership in the name of the defendant constitutes a fraudulent act.

Article 406, etc. of the Civil Act

2016Na2020709 Revocation of Fraudulent Act

Korea

AA

Seoul Eastern District Court Decision 2015Kadan131544 Decided 03, 2016

June 17, 2016

July 15, 2016

1. The plaintiff's appeal is dismissed.

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

1. Purport of claim

The title trust agreement concluded on October 00, 00 with respect to each real estate listed in the separate sheet between the defendant and BB shall be revoked within the range of KRW**,***,********. The defendant shall pay to the plaintiff ************ and its amount at the rate of 5% per annum from the day following the date of the final judgment of this case to the day of full payment.

2. Purport of appeal

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

1. Basic facts

A. Tax claims against the Plaintiff BB

The plaintiff decided and notified BB each of 6 global income tax and 1 capital gains tax, but BB failed to pay it, and as of October 00, 00, ****,**** in default of national tax.

(b) a real estate sales contract between BB and J;

BB concluded a real estate sales contract with J on October 00, 000 to sell 00,000 00 -00 -00 -00 -00 000 -00 -000 -000 - (hereinafter “the instant 000 -”) to KRW 00,000,000. At the time of the above payment, B agreed that each of the above real estates listed in the separate list (hereinafter “each of the instant real estates”) shall be transferred by payment in kind.

C. Title agreement between the defendant and BB

BB, at the time of the accord and satisfaction agreement with respect to each of the instant real estate on October 00, 00, entered into a title trust agreement with the Defendant, who is not in the name of J and BB, to complete the registration of ownership transfer with respect to each of the instant real estate (hereinafter “instant title trust agreement”). Accordingly, theJ completed the registration of ownership transfer with respect to each of the instant real estate 00 court 00 registry offices received on October 0, 000, based on the sale as of October 00, 000.

D. Real estate sales contract between the defendant and GG

On October 00, 000, the Defendant sold each of the instant real estate to GG, and completed the registration of ownership transfer on the ground of the instant sale No. 000 registry office of 00,000,000.

E. Property status of BB at the time of the instant title trust agreement

BB, at the time of the instant title trust agreement on October 00, 000, owned the instant title trust agreement with active property No. 000,000 as active property, and had been bearing tax liabilities, security deposit, and bank loans with passive property.

[Reasons for Recognition] Unsatisfy, Gap evidence Nos. 1 through 6 (including branch numbers, hereinafter the same shall apply), the purport of the whole pleadings

2. Determination on this safety defense

A. The defendant's assertion

The obligee’s right of revocation shall be brought within one year from the date on which the obligee becomes aware of the cause for revocation. The Plaintiff ought to be deemed to have known of the existence of the cause for revocation in the title trust agreement with respect to each real estate of this case at the latest on October 0, 000. However, since the Plaintiff filed the instant lawsuit on October 0, 000 after at least one year thereafter, the instant lawsuit is unlawful as it exceeds the exclusion period.

B. Determination

1) The "date when the obligee becomes aware of the cause for revocation" in the exercise of the right of revocation refers to the date when the obligee becomes aware of the fact that the obligor had committed a fraudulent act while knowing that it would prejudice the obligee. This is not sufficient to simply recognize the fact that the obligor performed a disposal act of the property. It is necessary to know the existence of a specific fraudulent act and to know the fact that the obligor had an intent to injure the obligor. In this case, the burden of proof regarding the lapse of the limitation period lies in the other party to the suit for revocation (see, e.g., Supreme Court Decisions 2007Da63102, Mar. 26, 2009; 2013Da206542, Oct. 11, 2013). However, if the obligee had known that the obligor had declared that the obligee had an intent to sell real property only to the obligee, barring any special circumstance, 200, 2000, the obligee had been aware of the obligor's intent to sell the property (see, 2000.

2) The facts stated in the evidence Nos. 1, 2, and 1 and the facts alleged by the Defendant are insufficient to deem that the Plaintiff was aware of the existence of specific fraudulent act and its intention to harm the property of each of the instant real estate from the completion of the registration of ownership transfer to October 0, 000, and there is no other evidence to acknowledge otherwise. Rather, in full view of the purport of the argument in the evidence Nos. 7, a public official of the National Tax Service affiliated with the Plaintiff conducted an investigation into the property status of BB, including the output and verification of the list of property status of BB for the collection of national taxes, including capital gains tax, around October 00, 00, and only after examining the financial status of BB, he was the only property owned by BBB, and the fact that the Defendant and BB entered into the instant title trust agreement. Accordingly, the Plaintiff did not have any clear reasons to deem that the Defendant’s fraudulent act had been committed within 00 years of objection and its intention to harm the existence.

3. Judgment on the merits

(a)the existence of preserved claims;

1) Legal principles

A) In principle, a claim that can be protected by the obligee’s right of revocation should have arisen before the obligor performs a juristic act for the purpose of property right with the knowledge that it would prejudice the obligee. However, if, at the time of the juristic act, there has already been established a legal relationship that serves as the basis for the establishment of the claim, and it is highly probable that the claim would have been created in the near future, and where a claim is created in the near future because its probability has been realized in the near future, the claim may also become a preserved claim (see, e.g., Supreme Court Decision 2000Da17346, Jun. 27, 2000). Such legal principle applies to a claim (see, e.g., Supreme Court Decision 200Da17346, Jun. 27, 2000). Therefore, even if no specific disposition has yet been taken at the time of the fraudulent act, there was a high probability that the claim would have been established in the near future, and the possibility thereof has been realized in the near future (see, etc.).

B) A tax liability is naturally established without the need to recognize the fact that a taxpayer satisfies the requirements for taxation (see, e.g., Supreme Court Decision 2008Da84458, May 14, 2009).

2) Determination

Under the below, the defendant's argument is about the global income tax claim of October 000 and the transfer income tax claim of October 00, 000.

A) Global income tax claim of October 000

According to Article 21 (1) 1 of the Framework Act on National Taxes, liability for tax payment is established when a taxable period is terminated; pursuant to Article 5 (1) of the Income Tax Act, the taxable period of income tax is from January 1 to December 31; and pursuant to Article 65 (1) of the same Act, the period from January 1 to June 30 shall be the interim prepayment period; and pursuant to Article 65 (1) of the same Act, the amount equivalent to 1/2 of the amount of tax paid or to be paid as income tax on global income for the immediately preceding taxable period shall be determined as the amount of tax to be

According to this, the global income tax on the BB on October 00, 000 (hereinafter "the global income tax of this case") was established on the global income tax on October 00, 000. However, the global income tax of this case is the global income tax on the global income in the immediately preceding taxable period of 000, and the basic legal relationship on the occurrence of the claim was already generated prior to October 00, 000, which is the date of the instant trust agreement, and there was a high probability as to the fact that the claim of this case was established in the near future, and the possibility was realized on October 00, 00, and thus, it is highly probable, so the creditor's global income tax of this case is subject to the revocation of fraudulent act.

B) Transfer income tax bonds of October 000

As seen earlier, BB made the instant title trust agreement on October 00, 00 by disposing of No. 000Ra, which was 000,000, and the Plaintiff’s transfer income tax (hereinafter “the transfer income tax of this case”) was created. At the same time, BB transferred No. 000, the Plaintiff’s transfer of this case to J., and the Plaintiff completed the registration of ownership transfer of each of the instant real estate in accordance with the payment agreement for part of the purchase price and the instant title trust agreement, but BB did not perform the report and payment procedure of the transfer income tax of this case. Accordingly, it is highly probable that BB was liable for specific tax on the transfer income tax of which transfer income tax was omitted in the near future, and that there was a high probability for BBB to establish a claim corresponding to the Plaintiff’s transfer income tax of this case by imposing the transfer income tax of this case on BB around 000, and thus, the Plaintiff’s assertion that the transfer income tax of this case was groundless from the Defendant’s revocation of the transfer income tax claim of this case is reasonable.

(b) The intention to commit fraudulent acts and to injure himself;

1) Legal principles

A) Unless there are special circumstances, changing the sale of real estate, which is the sole property of the debtor, into money that can be consumed, is a fraudulent act. The debtor’s intent of deception, which is a subjective element of a fraudulent act, refers to recognizing that there is a shortage of joint security for claims, and thus, it does not require or intent to harm creditors. If the debtor sells real estate, which is the only property, and alters the proceeds with money that can be consumed easily, the debtor’s intent is presumed, and the burden of proving that the purchaser or the transferee did not have acted in bad faith is the beneficiary (see, e.g., Supreme Court Decision 2008Da84458, May 14, 2009).

B) If a debtor does not include the real estate purchased under excess of his/her obligation as his/her common property, and completed the registration of ownership transfer under the name of a title trustee pursuant to a title trust agreement between the title trustee, barring any special circumstance, a title trust agreement would constitute a fraudulent act detrimental to the creditors of the title truster, barring any special circumstance. Furthermore, it is presumed that a title truster, who is the debtor, has an intention to harm the creditors at the time of completing the registration of ownership transfer under the name of the title trustee, and that the said fraudulent act has been malicious to the title trustee (see, e.g., Supreme Court Decision 2002Da69358, Mar.

2) Determination

In light of the above legal principles, as seen from the basic facts, BB owned the instant No. 000 as the sole property at the time of the conclusion of the instant title trust agreement, and the J and the Defendant sold the said real estate to J, and completed the registration of ownership transfer on each of the instant real estate in lieu of payment for part of the purchase price of the said real estate in accordance with the instant title trust agreement between J and the Defendant. Therefore, the instant title trust agreement should be deemed as a fraudulent act detrimental to the Plaintiff, the creditor of BB, the title truster, barring any special circumstance. In addition, BB, the title truster, is reasonable to deem that there was an intention to harm the Plaintiff, the creditor, at the time of completion of the registration of ownership transfer on each of the instant real estate under the name of the Defendant, the title truster, and is presumed to have had a bad faith as to the said fraudulent act even the Defendant,

C. Judgment on the defendant's defense

1) The defendant's assertion

The Defendant did not know that the content of the real estate sales agreement between BB and J on No. 000 of the instant case, and did not know that the instant title trust agreement was a fraudulent act detrimental to the creditors of BB. Therefore, even if the Defendant did not know the fact in detail, the Defendant constitutes a bona fide beneficiary.

2) Determination

A) Since the beneficiary's bad faith in a lawsuit seeking revocation of a fraudulent act is presumed to have been presumed to be the beneficiary's bad faith, the issue of whether the beneficiary is bona fide is determined reasonably in light of logical and empirical rules, comprehensively taking into account the relationship between the debtor and the beneficiary, the details of and the background or motive for the act of disposal between the debtor and the beneficiary, the circumstances leading up to the act of disposal, whether there are no special circumstances to doubt that the terms and conditions of the act of disposal are normal transaction, and circumstances after the act of disposal, etc. Meanwhile, the issue is whether only the beneficiary's good faith is involved in the lawsuit seeking revocation of the fraudulent act and whether the beneficiary was negligent in the beneficiary's good faith is not determined (see, e.g., Supreme Court Decision 2007Da74621, Jul. 10, 2008). To recognize that the beneficiary was bona fide at the time of the fraudulent act, such as the beneficiary's unilateral statement of the debtor, and the statement that was merely a third party's statement, etc. (see, 2016.).

B) The facts acknowledged earlier are the following: (a) the Defendant is the son of BB; (b) the instant title trust agreement was concluded at the same time between BB and J; and (c) the J completed the registration of ownership transfer of each of the instant real estate in the Defendant’s future; (b) the Defendant, the beneficiary at the time of the instant title trust agreement, is insufficient to be recognized as having acted in good faith; and (c) there is no other evidence to prove otherwise. Accordingly, this part of the Defendant’s assertion is without merit.

(d) Method and scope of revocation of fraudulent act and restitution to original state;

(1) Revocation of fraudulent act and compensation for value;

A) If a creditor’s revocation of fraudulent act and a claim for restitution are acknowledged, the beneficiary is obligated to return the subject matter of the fraudulent act to the debtor as restitution, and if it is impossible or considerably difficult to return the subject matter of the fraudulent act, the beneficiary is obligated to compensate for the equivalent amount of the value of the subject matter of the fraudulent act as a performance of the duty to restore if it is impossible or considerably difficult to return the subject matter. Here, “the return of the subject matter is impossible or considerably difficult” refers to cases where the return of the subject matter is not simply absolute or physically impossible, but it is impossible to expect the realization of the performance (see, e.g., Supreme Court Decision 96Da14616, Jul. 26, 1996). On the other hand, if the subject matter of the fraudulent act is transferred from the beneficiary to the subsequent purchaser and its registration is completed, regardless of whether the creditor is entitled to remedy through a lawsuit against the subsequent purchaser, and it is reasonable to view that the beneficiary’s obligation to restore the subject matter is legally impossible to the creditor, barring any special circumstances that may re-transfer it (see, etc.

B) Following the completion of the registration of transfer of ownership with respect to each of the instant real estate by J in accordance with the instant title trust agreement, the Defendant disposed of the instant real estate to GG on October 00, 00 and completed the registration of transfer of ownership with respect to each of the instant real estate in the future of GGG on October 00, 000. In light of the above legal principles, barring any special circumstance, it is reasonable to deem that the Defendant’s obligation to return originals of the instant real estate to the Plaintiff is in a state of legal impossibility, and therefore, the Plaintiff may claim cancellation of the instant title trust agreement and compensation for value.

2) Scope of compensation for value

A) For value compensation, an order for compensation for damages within the scope of the establishment of a fraudulent act is given to the general obligees’ joint collateral (see, e.g., Supreme Court Decision 2003Da40286, Dec. 12, 2003). When an obligee exercises his/her right of revocation, in principle, he/she cannot exercise his/her right of revocation in excess of his/her own claim amount. In this case, the obligee’s claim amount includes interest or delay damages arising from the time of the conclusion of arguments in fact-finding proceedings (see, e.g., Supreme Court Decision 2000Da66416, Sept. 4, 2001). Accordingly, value compensation should be limited to the lesser amount between the amount of joint collateral held by the object of a fraudulent act

B) As seen earlier, since the purchase price for each real estate of this case which is the object of the instant title trust agreement is KRW 00,00,000,000, the amount of co-security should be considered to be KRW 000,000.On the other hand, the amount of the Plaintiff’s preserved claim is the aggregate of tax claims against BB ***,***,******(the aggregate of the tax claims against BB). As the amount of each real estate of this case exceeds KRW 00,000,000, which is the joint security value of each real estate of this case ********,****,******* because the amount of the Plaintiff’s preserved claim amount *****,*******, the amount of compensation should be limited to the

Accordingly, the defendant asserts that the scope of compensation for value should be limited merely because the plaintiff's claim against BB around October 00, 000 is a total of KRW 00,000,000,000. However, the defendant's claim against BB should also be included in the scope of the plaintiff's preserved claim on October 00, 00 and the transfer income tax claim on October 00, 000 as mentioned above. Thus, this part of the defendant's assertion is without merit.

3) Sub-determination

Therefore, the title trust agreement of this case is revoked within the range of****,**,***, and the defendant has a duty to pay the plaintiff compensation for delay compensation at value**********,**** and its payment for delay at the rate of 5% per annum under the Civil Act from the day following the day this judgment became final and conclusive to the day of complete payment.

4. Conclusion

The plaintiff's claim shall be accepted on the grounds of its reasoning. The judgment of the court of first instance is just with this conclusion, and the defendant's appeal against this is dismissed as it is without merit.