The meaning of a person subject to penalty surcharge pursuant to Article 5(1)1 of the former Act on the Registration of Real Estate under Actual Titleholder’s Name / Whether an agent is subject to penalty surcharge in cases where a title trust agreement is concluded by an agent (negative), and whether such legal doctrine likewise applies to cases where a title trust agreement is concluded by a legal representative on behalf of a minor (affirmative)

In full view of the language, structure, and purport of Article 2 subparag. 1 and subparag. 2, Articles 3(1), and 5(1)1 of the former Act on the Registration of Real Estate under Actual Titleholder’s Name (amended by Act No. 10682, May 19, 201; hereinafter “former Real Estate Real Name Act”), a person subject to a penalty surcharge pursuant to Article 5(1)1 of the former Real Estate Real Name Act is “title truster” in violation of Article 3(1). In other words, “the person subject to a penalty surcharge pursuant to a title trust agreement to register his/her own real estate under another person’s name,” and even if a title trust agreement was concluded by an agent, the agent cannot be deemed subject to a penalty surcharge, unless there is any special provision that can impose a penalty on his/her legal representative, and such legal doctrine likewise applies where a title trust agreement was concluded by a legal representative on behalf of a minor.

Articles 2 subparag. 1 and 2, 3(1), and 5(1)1 of the former Act on the Registration of Real Estate under Actual Titleholder’s Name (Amended by Act No. 10682, May 19, 201);

Plaintiff

Spocheon Market

Seoul High Court Decision 2011Nu17501 decided December 16, 2011

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

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

1. Article 3(1) of the former Act on the Registration of Real Estate under Actual Titleholder’s Name (amended by Act No. 10682, May 19, 201; hereinafter “former Act on the Registration of Real Estate under Actual Titleholder’s Name”) provides that “No person shall register any real right to real estate in the name of the title trustee according to the title trust agreement.” Article 5(1) of the same Act provides that “a person who falls under any of the following subparagraphs shall be punished by a penalty surcharge within the limit of an amount equivalent to 30/100 of the value of the relevant real estate” and Article 3(1)1 provides that “a title truster who violates the provisions of Article 3(1).”

In addition, Article 2 of the same Act provides, “title trust agreement” as “a person who holds, or actually acquires or intends to acquire, the ownership or other real rights to real estate (hereinafter “real rights to real estate”) (hereinafter “real right holder”) and another person, shall be construed as “an agreement between the actual right holder and another person that the actual right holder should hold or hold the real right to real estate and the registration thereof shall be made in his/her name” (Article 1); and “title truster” as “the actual right holder that has the real right to his/her real estate registered in another person’s name pursuant to the title trust agreement” (Article 2(2)).

In full view of the language, structure, purport, etc. of the foregoing relevant provisions, a person subject to penalty pursuant to Article 5(1)1 of the former Real Estate Real Name Act is “title truster” in violation of the provisions of Article 3(1), namely, “the person having the actual right to have a real right to his/her own real estate registered under a title trust agreement under another person’s name,” and even if a title trust agreement was concluded by an agent, the agent cannot be deemed subject to penalty, unless there is any special provision that allows a legal agent to impose a penalty on the agent. This legal doctrine likewise applies to cases where a legal agent

2. According to the reasoning of the judgment below, the court below acknowledged the fact that the plaintiff was the legal representative of the non-party 1 and the non-party 2 who is a minor child and completed a title trust agreement with the non-party 3 on behalf of the legal representative of the non-party 1 and the non-party 2 on behalf of the plaintiff, and completed the registration in the name of the non-party 3, on behalf of the non-party 2. The court below determined that the plaintiff was merely a person acting in the title trust,

In light of the above legal principles and records, the above fact-finding and judgment of the court below are just, and there is no error in the misapprehension of legal principles as to the person subject to penalty surcharges under the former Real Estate Real Name Act.

In addition, the argument that the Plaintiff is a de facto holder of the ownership of the instant land, since the Plaintiff voluntarily acquired the ownership of Nonparty 1 and Nonparty 2 and received profits therefrom after acquiring the ownership of the instant land, is not a legitimate ground for appeal due to a new argument in the final appeal. Moreover, even if examining the record, the Plaintiff did not err by misapprehending the legal principles that affected the conclusion of the judgment.

3. Therefore, the appeal is 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 Lee In-bok (Presiding Justice)