In a case where a so-called three-party registered title trust agreement and its registration becomes null and void due to the expiration of the grace period prescribed by the Act on the Registration of Real Estate under Actual Titleholder’s Name, whether a title truster may seek cancellation of registration under the name of the title trustee, in subrogation of a seller, in order to preserve the seller’s claim

Articles 4, 8, and 11 of the Act on the Registration of Real Estate under Actual Titleholder’s Name;

[Plaintiff-Appellant] Plaintiff 1 and 1 other (Law Firm Han-sung, Attorneys Lee Jong-soo et al., Counsel for plaintiff-appellant)

Plaintiff (Attorney Choi Han-chul, Counsel for the plaintiff-appellant)

Defendant 1 and four others (Attorneys Seo Sung-sung et al., Counsel for the plaintiff-appellant)

Seoul High Court Decision 2011Na27655 decided April 20, 2012

The part of the judgment of the court below against Defendant 1, Defendant 2, Defendant 3, and Defendant 4, the deceased non-party 1’s taking over the lawsuit, is reversed, and that part of the case is remanded to the Seoul High Court. The appeal against Defendant C-Accavialy Liberian on the limited-liability company specializing in the securitization is dismissed. The costs of appeal between the Plaintiff and Defendant C-Civiavia, the next Specialized Asset-backed Securitization Company are assessed against the Plaintiff.

The grounds of appeal are examined.

1. The part as to Defendant 1, Defendant 2, Defendant 3, and Defendant 4, Defendant 1’s taking over the lawsuit by Defendant deceased Nonparty 1

A. As to the grounds of appeal on the taking over of the lawsuit

According to the records, the death date of Defendant 1 (hereinafter “the deceased”) of the lower court is July 23, 201, and the legal representative was appointed on April 29, 201, which was the previous date, and Defendant 1, Defendant 2, Defendant 3, and Defendant 4, the heir of the deceased, filed an application for lawsuit against the deceased on July 25, 2012, which was following the sentence of the lower judgment.

On the other hand, if there is an attorney, even if the party dies, the proceedings shall not be interrupted (Articles 238 and 233(1) of the Civil Procedure Act).

Therefore, the ground of appeal on the purport that the judgment of the court below is unlawful as a party who died without going through the taking-over procedure despite the suspension of the proceedings due to the death of the deceased is without merit.

B. As to other grounds of appeal

According to the Act on the Registration of Real Estate under Actual Titleholder’s Name, in the case of so-called three-party registered title trust, the existing title trust agreement and the registration thereof are invalidated after the lapse of the grace period stipulated under the same Act, and as a result, the real estate held in title is returned to the seller’s ownership. As such, a seller may seek cancellation of the registration under his/her name, which is null and void. Meanwhile, as the same Act does not deny the validity of a sales contract between a seller and a title truster, the sales contract between a seller and a title truster still remains valid after the lapse of the grace period. As such, a title truster may file a claim for the registration of ownership transfer against a seller based on a sales contract. For the purpose of preserving the seller’s right to claim the registration of ownership transfer, a title truster may seek cancellation of the registration under his/her name

According to the reasoning of the judgment below, the court below held that the plaintiff's assertion that the plaintiff purchased the land of this case from the deceased on August 5, 200 and completed the registration of ownership transfer under the above non-party 2's name by agreement that the plaintiff would be the wife to the non-party 2. As the deceased sold the land of this case to the plaintiff as above, the plaintiff is liable to implement the registration of ownership transfer due to sale and purchase. The plaintiff's assertion that the transfer of ownership was completed as of September 10, 201 with respect to the land of this case as of September 10, 200, and even according to the plaintiff's assertion, the deceased completed the registration of ownership transfer under the name of the non-party 2 who entered into a title trust agreement with the plaintiff as the plaintiff's wife on September 10, 201 at the request of the plaintiff who was the buyer on September 10, 2001. Thus, the plaintiff's assertion based on the premise that the deceased failed to perform the

However, such determination by the court below is difficult to accept in light of the aforementioned legal principles and the following circumstances.

According to the records, the plaintiff mentioned the related case in which the registration of ownership transfer in the name of the non-party 2 is not null and void as a result of the three-party title trust agreement, and if the above registration of ownership transfer is null and void, the plaintiff's claim for the registration of ownership transfer in the name of the non-party 2 is justified. The court below should have faithfully examined whether the registration of ownership transfer in the name of the non-party 2 was made based on the three-party title trust in the name of his spouse, and whether the registration of ownership transfer in the name of the non-party 2 was not made for the purpose of avoiding legal restrictions, and should have judged whether the title trust agreement and the ownership transfer in the name of the non-party 2 were null and void, and therefore, the plaintiff is entitled to file a claim for the registration of ownership transfer based on the title trust agreement with the seller. However, the court below rejected the plaintiff's claim on the ground that the registration of ownership transfer in the name of the non-party 2 was completed. The ground of appeal assigning this error has merit

2. The part on Defendant CABAD Specialized Co., Ltd. (hereinafter “Defendant limited liability company”)

According to the reasoning of the judgment below, the court below rejected the plaintiff's assertion that the plaintiff's provisional disposition registration in the name of the plaintiff was cancelled due to the cancellation of provisional disposition registration, because the defendant limited liability company did not take measures such as entering the plaintiff's address and occupation in the office, and the plaintiff's provisional disposition registration in the name of the plaintiff was not possible due to the above unfair measures taken by the defendant limited liability company, and the plaintiff could not own the land of this case. Thus, the defendant limited liability company should pay the plaintiff the damages equivalent to the market price of the land of this case, and the damages for delay. The plaintiff's assertion that the provisional disposition registration in the name of the plaintiff limited liability company should be cancelled by the provisional disposition in the name of the non-party 2, even though it was well known of the plaintiff's address and occupation. Thus, even according to the plaintiff's argument, since the registration of provisional disposition in this case was completed due to the cancellation of the above provisional disposition registration, the plaintiff can already take effect by the right to preserve the above provisional disposition registration, and therefore, the plaintiff cannot own the land of this case.

As seen earlier, the court below should have determined whether the plaintiff can file a claim for the ownership transfer registration with the deceased, the seller, by faithfully examining what circumstances the ownership transfer registration in this case was made. Thus, it is erroneous that the court below held that the plaintiff can be filed with the right to claim the ownership transfer registration, which is the right to be preserved for the provisional disposition registration in this case, solely on the ground that the ownership transfer registration in the non-party 2 was completed. However, in light of the records, it cannot be readily concluded that the defendant limited liability company committed an unlawful act as alleged by the plaintiff or caused damage to the plaintiff as alleged by the plaintiff. Thus, the court below's rejection of this part of the plaintiff's assertion is acceptable, and there is no error of law that affected the conclusion of the judgment

3. Conclusion

Therefore, among the judgment of the court below, the part against Defendant 1, Defendant 2, Defendant 3, and Defendant 4, which are the taking-off of the lawsuit by Defendant 1, is reversed, and that part of the case is remanded to the court below for further proceedings consistent with this Opinion. The appeal against the Defendant limited liability company is dismissed. The costs of appeal regarding the dismissal of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices

Justices Kim Yong-deok (Presiding Justice)