Plaintiff (Attorney Park Jong-chul et al., Counsel for plaintiff-appellant)

Defendant 1 and three others (Law Firm Rodd, Attorneys Yellow-nam, Counsel for the defendant-appellant)

June 4, 2009

Suwon District Court Decision 2008Gahap2824 Decided December 11, 2008

1.The judgment of the first instance, including a claim for exchange change in the trial, shall be modified as follows:

The Defendants, on the ground of an agreement of transfer security made on May 13, 200, on the part of the Plaintiff:

A. Attached 2. Of the building permits listed in the List 2. Attached Form 1. Of the building permits listed in the List, the procedure for the change of the owner’s name is carried out;

B. Attached Form 1. Of each real estate listed in the list, the procedure for the registration of ownership transfer shall be implemented with respect to each corresponding share listed in the list.

2. The total costs of the lawsuit are borne by the Defendants.

1. Purport of claim

It is the same as the order (the plaintiff filed a request for the change of the original owner's name, and the part of it was changed in the trial to the claim for the transfer registration of ownership in accordance with the transfer security agreement).

2. Purport of appeal

The judgment of the first instance is revoked. The plaintiff's claim is dismissed.

1. Basic facts

The following facts can be acknowledged in light of the following facts: (a) there is no dispute between the parties; (b) evidence 1, evidence 7, evidence 8, evidence 1, evidence 20-1 through 9, evidence 1, evidence 9-16, evidence 26-7, and the purport of the whole pleadings.

A. On January 27, 1995, Nonparty 3 entered into a sales contract and received part of the down payment with the purport that one household among the multi-household housing in this case is transferred and is to be additionally paid KRW 270 million, on the land (number 1 omitted), (number 2 omitted), (number 3 omitted), and (number 4 omitted) to build multi-household housing for 31 households (hereinafter “multi-household housing in this case”) on the land.

B. Nonparty 2 and Nonparty 3 agreed to obtain each building permit in the name of Nonparty 1, and 15 households, respectively, in the name of Nonparty 3, as security for the above purchase price.

C. Accordingly, Nonparty 3 completed the registration of ownership transfer in the name of Nonparty 1 on August 21, 1996 and March 14, 1997 (number 2 omitted), (number 3 omitted), and (number 4 omitted) land. Nonparty 2 obtained each building permit in the name of Nonparty 1 for the 15 households on the ground of the land of Jung-ri (number 1 omitted) Jung-ri on September 23, 1996, (number 2 omitted), (number 3 omitted), (number 3 omitted), (number 4 omitted), and (number 4 omitted for the 16 households on the ground of the land (number 4 omitted) (the detailed details of the building permit in the name of Nonparty 1 is as shown in Annex 2, and hereinafter referred to as “instant building permit”).

D. After that, even though construction was completed on around 2002, the registration of preservation of ownership was not completed due to the lack of approval for use. As to each real estate listed in the table 1, 2, and 5 Nos. 4, 26, 203, and 3, 4, 6, 9, and 2, 301 in the name of Nonparty 1, the registration of preservation of ownership was completed in the name of the Defendants as to each real estate listed in the table 1, 2, and 5, 4, 2003, 3, 4, 6, and 9, 301, and 2, 301. The remaining six households did not have completed the registration of preservation of ownership until now.

E. On December 18, 2005, the Plaintiff purchased the land at issue (number 3 omitted), (number 4 omitted), (number 4 omitted) from Nonparty 4 who was awarded a bid in the auction procedure, and acquired the ownership thereof. With respect to the land at issue (number 1 omitted), (number 2 omitted), (number 5 omitted), (number 5 omitted), (number 6 omitted), the Suwon District Court 99Hu9843, 200 another and around 10617 (Joint) which was awarded a successful bid in the auction procedure, and did not acquire the ownership thereof.

F. On the other hand, the non-party 1 died on April 15, 2005 and jointly inherited the property of non-party 1 in the same proportion as indicated in the list of annexed Table 1, but filed a petition for a trial on approval of the fixed price which was inherited on July 29, 2005 with the Suwon District Court No. 2005-Ma1117, and the above judgment was accepted on July 29, 2005.

2. Determination on the defense prior to the merits

With respect to the Plaintiff’s seeking for the implementation of the procedure for change in the name of the owner of the instant multi-household housing due to the transfer security agreement against the Defendants, the Defendants asserted that the instant lawsuit claiming for change in the name of the owner against the Defendants, who are the heir of the deceased non-party 1, is unlawful, since the instant multi-household housing was newly constructed by Non-party 2 at his own effort and cost, even if the Plaintiff won in the instant lawsuit, it is impossible to obtain implementation of the procedure for change in the name of the owner of the building permit even if the Plaintiff won in the instant lawsuit, and that registration of ownership was completed against 1

Although Nonparty 2 acquired the instant multi-household house at once and the registration of preservation of ownership was completed for 10 households, the Plaintiff has a benefit to seek the implementation of the procedure in the name of the owner in order to achieve the remaining six generations’ purpose of transfer for security. Therefore, the Defendants’ defense is without merit.

3. Judgment on the merits

A. The assertion and judgment

(1) The argument

The Plaintiff asserted that, on May 13, 200, Nonparty 1 entered into a transfer security agreement with the Plaintiff to transfer the ownership of the instant multi-household house to the Plaintiff for the purpose of securing the Plaintiff’s obligation to repay the loan, the Defendants, the inheritor of Nonparty 1, were obligated to implement the procedure for change of the name of the owner of each building on the instant multi-household house listed in the attached Table 3, where the registration of preservation of ownership has not been completed among the instant multi-household houses, and to implement the procedure for transfer of ownership on each real estate listed in the attached Table 4, where the registration of preservation of ownership has been completed among the instant multi-household houses. The Defendants asserted that Nonparty 1 did not have made the above agreement.

(2) Facts of recognition

The following facts are either not disputed between the parties, or there is no dispute between Gap evidence 1, Gap evidence 2, Eul evidence 4-2, and Eul evidence 5 (each document document No. 4, No. 5-2, and No. 15-2, and each document No. 15-2, and the authenticity of the whole of each of the above documents is presumed to have been established. In this regard, the defendants asserted that each of the above documents was forged by the plaintiff, but it is not sufficient to acknowledge it solely with the records No. 12-1, No. 10, Eul evidence No. 9-2, and No. 15-2.

(A) On September 8, 1997, Nonparty 2, along with the deceased Nonparty 1, agreed to transfer three households (Ddong 401, 402, 403) out of 16 households of this case to the Plaintiff as payment in kind until December 5, 1997, if the Plaintiff borrowed KRW 50 million from the Plaintiff on December 4, 1997 due date and the repayment period is due, to the Plaintiff. (Evidence 1)

(B) On September 19, 198, Nonparty 2 borrowed an additional KRW 36 million from the Plaintiff as well as the deceased Nonparty 1 on the security, and prepared a monthly rent contract (Evidence A2) with a deposit of KRW 36 million for the Plaintiff as a security. Nonparty 2 and Nonparty 1 around that time borrowed KRW 12 million from the Plaintiff.

(C) Around January 20, 1999, Nonparty 2 agreed to pay the principal and interest of the loan by January 30, 1999 and issued a promissory note with a face value of KRW 100 million at the face value of Nonparty 3 for the payment of the loan.

(D) On February 14, 200, when the Plaintiff was unable to receive the above loan from Nonparty 2, etc., it received a written statement from the deceased Nonparty 1 that “the deceased Nonparty 1 transferred to the Plaintiff four households (BJ No. 101, Ddong 401, 402, and 403) from the above 16 households until March 15, 200, but if the deceased Nonparty 1 fails to perform this, 16 households and the instant building permit will be transferred.”

(E) On May 13, 200, the Plaintiff received a letter from the deceased Nonparty 1 that “the deceased Nonparty 1 transferred 16 households out of the instant multi-household housing constructed under the name of the deceased Nonparty 1 to the Plaintiff, the obligee, as the obligee, as payment in kind of KRW 300 million (including this fund)” (Evidence 5).

(F) On November 7, 200, the Plaintiff received a written statement from Nonparty 2 that “The Plaintiff transferred the 15 households newly built in the name of Nonparty 3 and the 16 households newly built in the name of the deceased Nonparty 1 to the payment for the loan amount of KRW 300 million against the Plaintiff, and issued to the Plaintiff by November 18, 2000 a written statement stating that “The Plaintiff shall deliver the documents for the change of the owner’s name to the Plaintiff by November 18, 200 (Evidence 10).

(G) The above agreement between the Plaintiff, Nonparty 1, and Nonparty 2 had an agreement between the Plaintiff and Nonparty 2 on the transfer of ownership on the premise of subsequent liquidation with the aim of securing the Plaintiff’s loan obligations.

(3) Determination

According to the above facts, in light of the relationship between the plaintiff, the non-party 3, the non-party 2, and the deceased non-party 1, the developments leading up to the construction of the multi-household house in this case, the details of the agreement dated February 14, 2000 and May 13, 200, the non-party 2, the actual owner of the multi-household house in this case, and the details of the agreement dated November 7, 2000 and the circumstances leading up to the conclusion of each of the above agreements, etc., the deceased non-party 1, under the agreement with the non-party 2 on May 13, 200, transferred the ownership of the owner of the multi-household house in this case under the name of the plaintiff to the non-party 1 and the non-party 2, and the list of the non-party 1, the owner of the multi-household house in this case, which was newly constructed under the trust from the non-party 2, to guarantee the obligations of the plaintiff.

B. Defendant’s assertion and judgment

(1) Claim for the extinction of secured obligation

The Defendants asserted that, since Nonparty 3 deposited KRW 100 million against Nonparty 2’s debt to the Plaintiff, and all of the secured debt of the instant security agreement was extinguished, the instant security agreement was invalidated.

According to the above facts and evidence Nos. 8, 9-15, 17-1 of evidence Nos. 17-1 of the above facts, it is recognized that Nonparty 3 delivered a notarial deed of KRW 100 million at par to the Plaintiff for the payment of the loan obligation to the Plaintiff by Nonparty 2, etc. through his agent, Nonparty 3 paid 10 million at face value to the Plaintiff on March 15, 2006, KRW 2,750,160 of the promissorysory note deposit amount with the Plaintiff as deposit money, and KRW 3.1 million of the auction cost on June 19, 208, and the Plaintiff received the above deposit money. However, as seen above, it is reasonable to view that the loan obligation to the Plaintiff was jointly borne by the deceased Nonparty 1 and Nonparty 2, and it is not reasonable to deem that the net Nonparty 1 and Nonparty 2 shared the Plaintiff with the agreement No. 1750,000, KRW 1750,000.

(2) The assertion that the title trust agreement is invalid and terminated

The Defendants asserted that the title trust agreement between the Plaintiff and Nonparty 1 on the premise of the title trust registration on real estate is null and void as it is in violation of the Act on the Registration of Real Estate under Actual Titleholder’s Name. Even if the title trust agreement is valid, it is merely an agreement to trust the name of the owner to the Plaintiff, and thus, it can be terminated at any time.

As seen earlier, the instant transfer agreement between the Plaintiff and Nonparty 1 cannot be deemed as a title trust agreement that can be terminated as an agreement to secure a loan obligation to the Plaintiff. Therefore, the said assertion by the Defendants is without merit.

(3) Claim on invalidity of an unfair juristic act

The Defendants asserted that: (a) the Plaintiff’s issuance of a promissory note of KRW 100 million for the payment of the instant loan obligation by Nonparty 3; (b) accordingly, the compulsory auction was carried out; and (c) the conclusion of the instant transfer security agreement with Nonparty 1 is an unfair legal act that uses Nonparty 1’s influence, rashness, and experience.

According to the statement 10 of the certificate No. 9-10, the fact that the plaintiff applied for a compulsory auction on the land of the middle interest rate (number 1 omitted), (number 5 omitted), and (number 6 omitted) owned by Nonparty 3 on July 30, 1999 is recognized as having been conducting an auction on July 30, 199. However, there is no clear evidence that the multi-household house of this case is 10 times the loan loan as alleged by the defendants at the time of the agreement on the transfer of a security for transfer, and there is no evidence that the multi-household house of this case was in the construction, as seen earlier or as recognized by the statement No. 9-11 of the certificate No. 9-11, the multi-household house of this case was in the process of auction on the land at the request of the Seoul Livestock Industry Cooperatives, etc., and the value was not high. Therefore, the agreement between the plaintiff and Nonparty 1 cannot be deemed unfair, the above assertion by the defendants is without merit.

(4) Invalidity of the agreement made by an unentitled person

The Defendants asserted that the agreement on the transfer of security between the deceased non-party 1 and the non-party 1 on the transfer of security concluded with the non-party 1, who is an owner of the instant multi-household house as a title trustee of the building permit, does not have any effect under the substantive law. However, as seen earlier, the Plaintiff, as the actual owner of the instant multi-household house, has agreed with the non-party 2, who is the original purchaser of the instant multi-household house, also with the deceased non-party 1, it is reasonable to deem that the agreement on the transfer of security between the Plaintiff and the deceased non-party 1 is valid due to

4. Conclusion

If so, the plaintiff's claim of this case should be accepted on the ground of its reason, and the judgment of the court of first instance is modified as the plaintiff's claim has been additionally accepted in exchange for exchange in the trial.

[Attachment 1, 2, 3, and 4]

Judges highest fever (Presiding Judge)