In a case where a title truster, who had contracted title trust prior to the enforcement of the Act on the Registration of Real Estate under Actual Titleholder’s Name, was legally hindered in transferring the relevant real estate under his/her name within the grace period prescribed in Article 11 of the same Act, the title trustee is subject to unjust enrichment to be returned (=purchase

Before the enforcement of the Act on the Registration of Real Estate under Actual Titleholder’s Name, the title truster and the title trustee entered into a contract for the title trust agreement with the owner who was the party concerned and was unaware of the fact that the title trustee was a title trust agreement, and completed the registration of ownership transfer of the pertinent real estate in the name of the trustee pursuant to the said contract. However, even after the grace period stipulated under Article 11 of the said Act expires, if the title truster had a legal obstacle in transferring the pertinent real estate under his name, the title truster could not acquire the ownership of the pertinent real estate. Therefore, the damage suffered by the title truster due to the invalidity of the said title trust agreement is the purchase fund provided to the title trustee rather

Articles 4, 11, and 12(1) of the Act on the Registration of Real Estate under Actual Titleholder’s Name; Article 741 of the Civil Act

Supreme Court Decision 2007Da69148, 2007Da69155 Decided February 14, 2008 (Gong2005Sang, 393)

KS Construction Co., Ltd. (Attorneys Choi Jong-soo et al., Counsel for the plaintiff-appellant)

Defendant 1 and one other (Attorney Gyeong-hee et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2007Na10513 decided September 13, 2007

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

We examine the grounds of appeal.

Before the enforcement of the Act on the Registration of Real Estate under Actual Titleholder’s Name, if the title truster and the title trustee entered into a contract of title trust with the owner who was the party concerned and was unaware of the fact that the title trustee was a title trust agreement, and completed the registration of ownership transfer of the pertinent real estate in the name of the trustee pursuant to the said contract, but there was a legal obstacle for the title truster to transfer the pertinent real estate under his name until the grace period prescribed in Article 11 of the said Act expires, the title truster could not acquire the ownership of the pertinent real estate. Therefore, the damage suffered by the title truster due to the invalidity of the said title trust agreement is not the relevant real estate itself but the purchase fund provided to the title trustee

In the same purport, the court below is just in holding that the non-party, a title truster, could not acquire ownership prior to the expiration of the grace period prescribed by the farmland transaction certification or the farmland acquisition certificate prescribed by the former Farmland Act on the ground that the non-party, the title truster, failed to meet the requirements for the issuance of the farmland sale certification or the farmland acquisition certificate prescribed by the former Farmland Act, among the real estate in this case, the unjust enrichment to be returned by the Defendants due to the invalidity of the title trust agreement on each of the above real estate was the amount equivalent to the purchase fund of each of the above real estate that was received by the non-party, and there is no error in the misapprehension of legal principles as to the objects and scope of return of unjust enrichment due to

Therefore, all appeals are dismissed, and the 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 Shin Hyun-chul (Presiding Justice)