In a case where the title trust agreement and its registration are invalidated after the grace period under the Act on the Registration of Real Estate under Actual Titleholder’s Name has expired, whether the title truster may seek a cancellation of the registration under the name of the title trustee on behalf of the seller (affirmative)

If an existing title trust agreement and its registration are invalidated due to the lapse of the grace period prescribed in the Act on the Registration of Real Estate under Actual Titleholder’s Name, the real estate held in title trust is returned to the seller, and thus, the seller can seek cancellation of the registration under the name of the title trustee, which is null and void. Meanwhile, the same Act does not stipulate any provision denying the validity of the sales contract between the seller and the title truster, and even after the expiration of the grace period, the sales contract between the seller and the title truster still remains valid. As such, the title truster may seek cancellation of the registration under the name of the title trustee,

Articles 4 and 12(1) of the Act on the Registration of Real Estate under Actual Titleholder’s Name

[Judgment of the court below]

Defendant (Attorney Choi Young-chul et al., Counsel for the defendant-appellant)

Seoul High Court Decision 98Na59073 delivered on March 18, 1999

The appeal is dismissed. The costs of appeal are assessed against the defendant.

We examine the Defendant’s grounds of appeal.

According to the reasoning of the judgment of the court of first instance cited by the judgment below, it is evident that the court of first instance orders the Defendant to implement the procedure for registration of cancellation on the ground that the title trust agreement in this case and the registration of ownership transfer in the name of the Defendant as to each of the above real estate becomes null and void pursuant to the Act on the Registration of Real Estate under Actual Titleholder’s Name (hereinafter “Real Estate Real Name Act”), rather than ordering the Defendant to implement the procedure for registration of cancellation on the ground that the period of grace stipulated in the Act on the Registration of Real Estate under Actual Titleholder’

In addition, if the existing title trust agreement and its registration are invalidated due to the lapse of the grace period under the Real Estate Real Name Act, the real estate held in title trust is returned to the seller, and the seller can seek cancellation of the registration under the name of the title trustee, which is null and void. Meanwhile, the Real Estate Real Name Act still remains valid after the expiration of the said grace period since the seller and the title truster did not have any provision denying the validity of the sales contract between the seller and the title truster. Therefore, the title truster may seek cancellation of the registration under the name of the title trustee, which is null and void, by subrogation of the seller, in order to preserve the seller's right to claim ownership transfer registration based on the said sales contract. The judgment of the court below to this purport is justifiable, and there is no error of law by interpretation of the Real

Therefore, the appeal is dismissed and all costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Lee Jae-hee (Presiding Justice)