[1] The purport of Article 108(2) of the Civil Act that prevents a bona fide third party from setting up a false declaration of intent that has conspired with the other party, and the standard for determining whether a person constitutes “third party”

[2] The case holding that the court below erred in the misapprehension of legal principle that, in case where Gap's husband Eul completed the transfer registration of share ownership on the ground of a final judgment with delivery certificate and confirmation certificate, Eul completed the transfer registration of share ownership on the ground of a final judgment with Gap's delivery certificate and Eul completed the transfer registration of share ownership on the ground of a final judgment, and Eul completed the transfer registration of share ownership on the ground of property division, Eul's husband Byung completed the transfer registration of share ownership on the ground of property division, and Eul et al. completed the transfer registration of share ownership transfer registration on the above real estate by sale, and Eul et al. completed the transfer registration based on the provisional registration under Eul's name, in case where Eul's lawsuit seeking the performance of principal registration based on the provisional registration that Eul filed for the provisional registration was conducted by service by publication, and Gap's favorable judgment was finalized, but Eul's promise to sell and purchase, which is the ground for provisional registration, was null and void by a false declaration of intention with Eul, which is the ground for provisional registration under Eul's name

[1] In principle, a false declaration of intent made in collusion with the other party is null and void, and any person may assert the invalidity thereof. However, with respect to a third party in good faith who has established a new legal interest based on the legal relationship formed externally by a false declaration as a person other than the party of a false declaration and the general successor, not only the party of the false declaration but also any person who has established a new legal interest can not oppose the invalidation of the false declaration. The purport that the invalidation of the false declaration cannot be asserted against a third party in good faith is to protect a person who enters a legal relationship with a legal interest with a separate legal cause on the basis of it. Thus, the third party's scope is not to be determined only formally based on the legal relationship, but also on

[2] Where Gap terminated Eul's provisional registration of ownership transfer based on Eul's provisional registration for the purpose of real estate management; Eul's husband's right to claim ownership transfer registration based on provisional registration based on Eul's provisional registration was followed by service by public notice; Gap's decision in favor of Eul became final and conclusive but Gap's promise to purchase and sell provisional registration, which is the ground for registration, was invalidated by a false declaration of intention with Eul's provisional registration; Eul's judgment cancelled Eul's claim; Eul's transfer registration of ownership based on the final and conclusive judgment with delivery evidence and confirmation evidence which had been issued before Eul's appeal was completed; Eul's husband's husband's right to claim transfer registration of ownership based on division of property was not registered under Eul's name; Eul's title's provisional registration was not a false declaration of intention that provisional registration is established based on Byung's provisional registration; Eul's title was not a false declaration of intention that it constitutes a provisional registration based on Byung's provisional registration; thus, the court below's judgment's decision that the registration of ownership was void by public trust and other than a false declaration of intention that was cancelled after Eul's provisional registration.

[1] Article 108 of the Civil Act / [2] Article 108 of the Civil Act

[1] Supreme Court Decision 9Da51258 delivered on July 6, 2000 (Gong2000Ha, 1861)

Plaintiff (Attorney Lee Sung-sung, Counsel for the plaintiff-appellant)

Defendant (Attorney Jeon Chang-soo, Counsel for the defendant-appellant)

Seoul Eastern District Court Decision 2019Na20421 decided September 18, 2019

The judgment of the court below is reversed, and the case is remanded to the Seoul Eastern District Court Panel Division.

The grounds of appeal are examined.

1. The Plaintiff, who duly completed the registration of share ownership transfer of the instant real estate, sought the transfer of the right to claim the payment of the instant deposit and its notification to the Defendant on the premise that he was in a position to invoke the completion of prescription on his secured obligation of the instant right to collateral security. Accordingly, the Defendant asserted to the effect that the registration of share ownership transfer in the name of the Plaintiff was based on the provisional registration in the name of Nonparty 1, which was completed with respect to the instant real estate, and the principal registration based on the registration based thereon, and that the said provisional registration is null and void due to a false declaration of intent made in collusion between Nonparty 1 and Nonparty 2. As such, the Plaintiff cannot be viewed as a position to lawfully acquire

In light of the facts stated in its holding, the lower court determined that the Plaintiff constitutes a person who has a new legal interest based on the legal relationship formed by a provisional registration based on a false declaration of intent made in collusion between Nonparty 1 and Nonparty 2, and thus, constitutes a bona fide third party, and thus, the Defendant cannot assert that the declaration of intent, which caused the above provisional registration, is null and void. The lower court rejected the Defendant’

2. However, the lower court’s determination is difficult to accept for the following reasons.

A. In principle, a false declaration of intent made in collusion with the other party is null and void and any person may assert the invalidity thereof. However, with respect to a third party in good faith who has established a de facto new legal interest based on the legal relationship formed by a false declaration as a person other than the party of the false declaration and the general successor, not only the party of the false declaration but also any person who has entered a legal relationship with a third party in good faith with a third party. The purport that the false declaration cannot be asserted against the third party in good faith is to protect the person who enters a legal relationship with a legal interest with a separate legal cause on the basis of the false declaration. As such, the third party's scope is not to grasp only formally based on the legal relationship, but also should be grasped practically by whether a new legal interest was made based on the false indication (see, e.g., Supreme Court Decision 9Da

B. Review of the reasoning of the lower judgment and the record reveals the following facts.

1) On December 24, 1986, Nonparty 2 completed the registration of ownership transfer due to the sale of the instant real estate, and subsequently completed the registration of ownership transfer to the Defendant on July 22, 1998 with the maximum debt amount of KRW 30 million.

2) Around July 1998, Nonparty 2 (around July 1998, Nonparty 2 (hereinafter “Nonindicted Party 2”) filed a provisional registration of the right to claim ownership transfer registration with the purchase and sale reservation made on February 22, 1999 as the cause of registration for the management of the real estate of this case to Nonparty 1, who had a usual friendship with the United States.

3) However, with the knowledge that Nonparty 2 does not return to the Republic of Korea, Nonparty 1 filed a lawsuit against Nonparty 2 on May 14, 2007 against the Seoul Eastern District Court 2007Kadan27411, seeking implementation of the principal registration based on the provisional registration on the instant real estate. The said lawsuit was initiated by service by public notice, and the judgment was handed down on July 25, 2007 with the winning of Nonparty 1 on August 15, 2007 and became final and conclusive on August 15, 2007. Nonparty 1 was issued a delivery certificate and confirmation certificate of the above judgment on August 20, 207, respectively.

4) Afterwards, Nonparty 2 knew of the fact that he was sentenced to the above judgment and filed an appeal for subsequent completion with Seoul Eastern District Court 2008Na2571 on March 5, 2008, the above court revoked the first instance judgment and rendered a judgment dismissing Nonparty 1’s claim on March 18, 2009 on the ground that the promise to sell and purchase, which is the cause of the above provisional registration, was null and void by means of a false declaration of intent made between Nonparty 1 and Nonparty 2. The above judgment became final and conclusive on April 9, 2009.

5) However, Nonparty 1, who had been issued prior to the filing of the said subsequent appeal, had a delivery certificate and a confirmation certificate source, and completed the registration of ownership transfer on the ground of a final and conclusive judgment on January 8, 2015 under his/her own name on August 15, 2007. Nonparty 3, as the husband of Nonparty 1, was aware of all the above facts by treating most of the acts of Nonparty 1 on behalf of Nonparty 1, but completed the registration of ownership transfer on the instant real estate under his/her own name on January 8, 2015.

6) After that, Nonparty 3 sold the instant real estate to Nonparty 4, and Nonparty 4 sold each of the instant real estate to the Plaintiff. On February 13, 2018, the Plaintiff completed the registration of ownership transfer on the ground of sale on February 5, 2018.

C. According to the above facts, it is reasonable to view that the main registration of the real estate in the name of Nonparty 1 was not based on the false declaration of intent itself, which is a provisional registration established with respect to the establishment of a false provisional registration between Nonparty 2 and Nonparty 1, but it was a registration of invalidity of cause unilaterally completed based on the judgment of the first instance court, which became retroactively null and void as it was revoked and finalized by the appellate court judgment after the declaration of false intent was withdrawn. Accordingly, the registration of title transfer, including the principal registration in the name of Nonparty 1, and each registration of ownership transfer successively completed to the plaintiff to the next time, is null and void under our legal system, unless there are special circumstances to the contrary.

Furthermore, as seen earlier, the provisional registration completed by Nonparty 2 and Nonparty 1 based on a false declaration of intention, and the registration of ownership transfer in Nonparty 3’s name, which was unilaterally completed by Nonparty 1, are included in the middle of the principal registration. Accordingly, the registration of ownership transfer in Nonparty 3, which was based on the provisional registration, is considered to have been separated from the provisional registration in Nonparty 1. Moreover, the act of establishment of provisional registration and the establishment of principal registration is considerably distinguishable from that of Nonparty 3 and the person who completed the registration of ownership transfer after Nonparty 3 and the establishment of principal registration, which can be the object of trust, is not the provisional registration in Nonparty 1’s name, but the principal registration in Nonparty 1’s name is not the provisional registration in the name of Nonparty 1. This cannot be deemed to have established a new legal interest in the provisional registration in the name of Nonparty 2 based on the provisional registration in the name of Nonparty 1. This can not be deemed to have been the status of the third party without removal of the remaining appearance of Nonparty 1’s name.

D. Nevertheless, solely on the grounds stated in its reasoning, the lower court rejected the Defendant’s assertion that the Plaintiff is not in a position to lawfully acquire equity ownership or to invoke the completion of the prescription on the instant real estate, deeming that the Plaintiff constitutes a third party of a false declaration of intent conspired. In so determining, the lower court erred by misapprehending the legal doctrine on a third party in a false declaration of intent conspired, thereby failing to exhaust all necessary deliberations, thereby adversely affecting the conclusion of the judgment. The

3. Therefore, without further proceeding to decide on the remaining grounds of appeal, the lower judgment is reversed, and the case is remanded to the lower court for further proceedings consistent with this Opinion. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Kim Jae-hyung (Presiding Justice)