[1] Where a trustee bears a debt in the course of performing trust affairs, whether the scope of liability is limited within the limit of the trust property (negative)

[2] Where a trustee goes bankrupt, whether a creditor who has a claim arising from the performance of trust affairs can exercise his/her right as a bankruptcy creditor against the bankrupt estate (affirmative)

[1] Unlike the general creditor of the trustee, a creditor who has a claim arising from the performance of trust affairs may enforce compulsory execution against the trust property (Article 21(1) of the Trust Act). Meanwhile, limiting the trustee’s performance liability to the extent of the trust property is limited to the obligation to be borne by the beneficiary due to the deed of trust (Article 32 of the Trust Act). Thus, the trustee’s performance liability to the creditor (Article 21(1) of the Trust Act) who is able to enforce compulsory execution against the trust property among the third parties other than the trustee (Article 21(1) of the Trust Act), shall not be limited within the limit of the trust property, but shall be

[2] Where a trustee goes bankrupt, the trust property does not constitute a bankrupt estate except for the trust property of the trustee (Article 22 of the Trust Act), but a creditor who holds a claim arising from the performance of trust affairs may exercise the right as a bankruptcy creditor against the bankrupt estate as to the total amount of the claim at the time the bankruptcy is declared.

[1] Articles 21(1) and 32 of the Trust Act / [2] Article 22 of the Trust Act

[1] [2] Supreme Court Decision 2004Da31906 Decided October 15, 2004

Plaintiff 1 and 18 others (Attorney Cho Jong-chul, Counsel for the plaintiff-appellant)

Bankruptcy Trustee of Korea Real Estate Trust Corporation and one other

Busan High Court Decision 2003Na6170, 6187 decided April 29, 2004

All appeals are dismissed. The costs of appeal are assessed against the Defendants.

1. The court below acknowledged the facts based on the evidence of employment, and held that the bankrupt Korean Real Estate Trust Co., Ltd. (hereinafter referred to as the "Korean Real Estate Trust") has the obligation to pay compensation for delay for delay of sales, as stated in the judgment of the plaintiffs, and rejected the defendants' assertion that the chairperson of the Emergency Countermeasure Committee composed of the buyers of the building in the judgment (hereinafter referred to as "the building in this case") agreed not to claim compensation for delay of sales, or agreed not to claim compensation for delay of sales, in consideration of the difficult circumstances at the time of sale of the building in this case. In light of the records, the court below's fact-finding and determination are justified, and there is no error in the misapprehension of the rules of evidence or the misapprehension of the legal principles as to the interpretation of expression of intent, as alleged in

2. The creditor holding a claim arising from the performance of trust affairs may enforce compulsory execution against the trust property, contrary to the general creditor of the trustee (Article 21(1) of the Trust Act). Meanwhile, limiting the trustee’s performance liability to the extent of the trust property is limited to the obligation to be borne by the beneficiary due to the deed of trust (Article 32 of the Trust Act). Thus, the responsibility to perform the obligation to the creditor (Article 21(1) of the Trust Act), among the third parties other than the trustee, who is able to enforce compulsory execution against the trust property (Article 21(1) of the Trust Act), shall not be limited within the limit of the trust property, but shall also affect the trustee’s inherent property. In addition, where the trustee goes bankrupt, the trust property does not constitute the bankruptcy estate except for the trust property (Article 22 of the Trust Act). Any creditor holding a claim arising from the performance of trust affairs may exercise his right as a bankruptcy creditor against the bankrupt at the time of

The court below held that the claim such as liquidated damages for delay, etc. of this case, which the plaintiffs held at the time of declaration of bankruptcy of the Korean Real Estate Trust, is a bankruptcy claim on the ground that it is not possible to enforce compulsory execution against the land and buildings of this case, which are the trust property, but on the ground that it is not possible to exercise the right as bankruptcy creditor against the bankruptcy estate. The judgment of the court below is just in accordance with the above legal principles, and there is no error of law by misapprehending the legal principles as to Article 22 of the Trust Act

3. Therefore, the appeal is dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition.

Justices Byun Jae-chul (Presiding Justice)