[1] After the grace period under the Act on the Registration of Real Estate under Actual Titleholder’s Name has expired, whether a title truster may file a claim for the registration of transfer of ownership based on the cancellation of title trust (negative)

[2] Requirements for a joint business operation agreement to be a partnership agreement under the Civil Act

[3] The elements for recognizing that real estate was purchased by several persons for the purpose of resale marginal profit in a partnership company with their partners

[4] The case holding that the legal relationship between the joint buyers is merely a co-ownership relationship, and it is not a partnership under the Civil Act, in case where the joint buyers of real estate did not cooperate with each other for the purpose of achieving the "joint purpose" in order to obtain the resale profit, and it is not recognized that there was "the purpose of joint business operation"

[1] According to the provisions of Articles 11, 12(1), and 4 of the Act on the Registration of Real Estate under Actual Titleholder’s Name, a title truster, who had any real right to real estate registered under a title trust agreement prior to the enforcement of the same Act, under the name of the title trustee, shall carry out the actual name registration, etc. within the grace period stipulated under Article 11 of the same Act, and since the title truster’s title trust agreement and any change in the real right to real estate made pursuant thereto becomes null and void after the expiration of the grace period, the title truster may not file a request for the

[2] The partnership agreement under the Civil Act is a contract under which two or more persons mutually invest to jointly operate a business, and it can be deemed that the agreement is limited to the agreement under which a specific business is jointly operated, and the degree of achievement of a common purpose cannot be deemed to meet the requirements for establishment of the partnership.

[3] In a case where several persons jointly purchase real estate, the legal relationship between the buyers is a co-ownership relationship, which can be merely a co-owner and purchased at the same company with their number of members. If the purpose of the joint purchase is to acquire the resale marginal profit, it is necessary at least to vest the purchased land in the company's property, not a co-ownership but a joint purchaser's property, and there is an express or implied agreement between the joint purchaser to distribute the profit after disposing of it for all accounts based on the intention of all the joint buyers. Thus, if the purpose of the joint purchase is to acquire the resale marginal profit, it shall not be deemed to have been purchased at the same company if the joint purchaser, at least, belongs to the company's property, not a co-ownership of the purchased land, and if it is possible to acquire the price by disposing of the

[4] The case holding that the legal relationship between the joint buyers is merely a co-ownership relationship, and it is not a partnership under the Civil Act, in case where the joint buyers of real estate did not cooperate with each other for the purpose of achieving a common purpose, and it is not recognized that there was an "the purpose of running a joint business" beyond this purpose

[1] Articles 4, 11, and 12(1) of the Act on the Registration of Real Estate under Actual Titleholder’s Name / [2] Article 703 of the Civil Act / [3] Articles 262 and 703 of the Civil Act / [4] Articles 262 and 703 of the Civil Act

[1] Supreme Court Decision 98Da1027 delivered on January 26, 1999 (Gong1999Sang, 347) / [2] Supreme Court Decision 2003Da60778 delivered on April 9, 2004 / [3] Supreme Court Decision 94Da54894 Delivered on September 15, 1995 (Gong1995Ha, 3378), Supreme Court Decision 2000Da30622 Delivered on June 14, 2002 (Gong2002Ha, 1627) (Gong202Ha, 1627), Supreme Court Decision 203Da25256 delivered on April 13, 2006 (Gong206Sang, 786)

Plaintiff 1 and one other (Attorney Park Young-soo, Counsel for the plaintiff-appellant)

Defendant 1 and three others (Law Firm Taedong et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2003Na74618 delivered on December 14, 2004

The part of the judgment of the court below concerning the first preliminary claim, the second preliminary claim, and the third preliminary claim is reversed, and that part of the case is remanded to the Seoul High Court. All appeals by the plaintiffs as to the main claim are dismissed.

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

1. The part concerning the primary claim in the grounds of appeal Nos. 1 and 4

A. According to the provisions of Articles 11, 12(1) and 4 of the Act on the Registration of Real Estate under Actual Titleholder’s Name, a title truster, who had any real right to real estate registered under a title trust agreement prior to the enforcement of the same Act, under the name of the title trustee, shall carry out the real name registration within the grace period stipulated under Article 11 of the same Act, and since the title truster’s title trust agreement and any change in the real right to real estate made pursuant thereto becomes invalid after the expiration of the grace period, the title truster may not file a claim for the registration of ownership transfer on the ground of termination of title trust (see Supreme Court Decision 98Da1027, Jan. 26, 199).

In the same purport, even if there was an agreement between the plaintiffs and defendant 1 on title trust as alleged by the plaintiffs, since the above agreement on title trust was null and void due to the lapse of the grace period under the above law, it is just to dismiss the plaintiffs' primary claim on the ground that the claim for transfer of ownership based on the termination of the later agreement on title trust cannot be allowed. In so doing, the court below did not err in the misapprehension of the rules of evidence, or in the misapprehension of the legal principles as

B. According to the records, the plaintiffs only claimed the amount of KRW 24,66,666,66 as each claim among the primary claims, and thus, the judgment of the court below that held on this premise does not contain any error of law as alleged in the ground of appeal No. 4, as alleged in the ground of appeal.

2. Regarding ground of appeal No. 2

A. The association agreement under the Civil Act is a contract under which two or more persons mutually invest to jointly operate a business (Article 703 of the Civil Act), and only the agreement under which a specific project is jointly operated, and the degree of achievement of common objectives cannot be deemed to meet the requirements for establishment of the association (see Supreme Court Decision 2003Da60778, Apr. 9, 2004).

Meanwhile, in a case where several persons jointly purchase real estate, the legal relationship between the buyers is a co-ownership relationship and can only be merely a co-purchase, and it may be purchased from a partner company (see Supreme Court Decision 2000Da30622, Jun. 14, 2002). If the purpose of a co-purchase is to acquire marginal profit from resale, it should be at least belong to the partner company's property, not the co-purchase, and if it is to acquire it from the partner company for a joint project, there must be an express or implied agreement between the joint buyers to distribute the profit after disposing of it for all accounts based on the intention of all the co-owners. Accordingly, if the purpose of the joint purchase is to acquire marginal profit from resale, it shall not be deemed to have been purchased from the partner company.

B. According to the reasoning of the judgment below, the court below rejected the above assertion on the ground that there was an agreement between the plaintiffs and the defendant 1 on Sep. 24, 1982 that the plaintiff should share one third share of each of the real estate of this case in the future when the plaintiff and the defendant 1 replaced the tenant with the non-party 1, as well as January 28, 1978 which entered into a sales contract for each of the real estate of this case. Rather, there is no evidence to acknowledge this, the plaintiffs and the defendant purchased the real estate of this case and jointly purchased other real estate of this case in order to acquire the profit by resale the price increase, and jointly acquired other real estate for the same purpose. Accordingly, the plaintiffs and the above defendant constitute a partnership with the aim of jointly running such speculative business, and acquire the ownership of each of the real estate of this case in the name of another person.

C. However, we cannot agree with the above judgment of the court below.

According to the records, there is no evidence to prove that the plaintiffs and the defendant 1 entered into an agreement to jointly operate the speculative business with the content that they will resell their profits in the future at the time of entering into the above sales contract and distribute such profits in accordance with the investment ratio. However, the plaintiffs and the above defendants asserted that there was no intention or agreement to jointly operate the joint business at the time of the above defendant (the assertion that the association is co-ownership should be added as the second preliminary claim in preparation for a case where the assertion that the union is co-ownership is not accepted). Further, the plaintiffs and the above defendant purchased several real estate jointly with the above three or other persons when they recommend the purchase of real estate in physical color, and then they disposed of their shares freely thereafter.

Examining the above circumstances in light of the above legal principles, the plaintiffs and the above defendant merely cooperate with each other for the purpose of achieving a common purpose by disposing of each of the real estate of this case in the future, and it is not recognized that there was "the purpose of running a joint business" above. Thus, the legal relationship between them is merely a joint purchaser as a co-ownership relationship, and therefore, there was an agreement between them to share 1/3 share of each of the real estate of this case in the future around January 28, 1978, which is the time of the above sales contract.

However, according to the reasoning of the judgment below, the plaintiffs and the above defendant had the non-party 2, a seller, continue to manage each of the real estate of this case after the conclusion of the above contract, and had the non-party 1, a father of the above defendant, entrusted the management thereof according to the above defendant's proposal. Accordingly, the above defendant was delivered the real estate of this case from the non-party 2 on August 20, 1982 to the non-party 1 on September 24, 1982, and was selected to replace the tenant from the Jeju city to the non-party 2 on the part of the non-party 1 on the part of the non-party 1 on April 11, 1986, the ownership transfer registration was completed in the name of the non-party 3, the defendants (the non-party 1's children are children), the non-party 2, and the non-party 4 and the non-party 1's ownership transfer registration was made in the name of the defendant 1 and his children.

In light of the above circumstances, at least between the plaintiffs and the defendant 1, at least around September 1982, when the replacement of the above tenant, the management of each real estate of this case was entrusted to the non-party 1 pursuant to the above defendant's proposal, and it is reasonable to deem that there was an agreement between the above defendant and the defendant to transfer the plaintiffs' shares, and that there was an agreement between the plaintiff's first preliminary claim based on the agreement dated January 28, 1978 and September 24, 1982 is included in the purport of claiming such agreement.

Therefore, the court below should have further deliberated on whether there was such an agreement after clearly grasping the purport of the above co-ownership agreement claimed by the plaintiffs, and if there was such an agreement, the above agreement has been made for a long period of time in the name of the above defendant, his family members and relatives, and what is the reason why the plaintiffs did not properly assert their rights in the process, according to the records, the plaintiff 1 agreed to exchange their co-ownership shares with other land owned by the above defendant, and that the plaintiff 2 agreed to transfer the shares to the above defendant in lieu of his debt repayment, and that the above defendant's assertion that the plaintiff 1 would be responsible for the management, etc. to the non-party 1 is considerably reliable. Thus, it is not based on the above payment and exchange contract as well as the agreement that the plaintiffs and the above defendant agreed to entrust the management to the non-party 1, but because the plaintiffs did not exercise their rights for a long time.

Nevertheless, without doing so, there is no evidence to acknowledge the sharing agreement between the plaintiffs and the above defendant, and rather, the court below dismissed the first preliminary claim by the plaintiffs on the ground that the legal relationship between the plaintiffs and the above defendant is a partnership, it is erroneous in the misapprehension of legal principles as to the legal relationship between the plaintiffs and the above defendant, and by failing to exhaust all necessary deliberations, which affected

3. Conclusion

Upon receiving the Plaintiffs’ final appeal as to the first preliminary claim, it is unnecessary to examine the Plaintiffs’ remaining grounds of final appeal on the second preliminary claim and the third preliminary claim. Thus, the lower court’s judgment did not err by misapprehending the part on the first preliminary claim, the second preliminary claim, and the third preliminary claim, and remanded this part of the case to the lower court. It is so decided as per Disposition by the assent of all participating Justices on the final appeal on the Plaintiffs’ primary claim.

Justices Kim Hwang-sik (Presiding Justice)