[Judgment of the court below]

Spocheon Market

October 28, 2011

Suwon District Court Decision 2010Guhap4617 Decided April 19, 2011

1.The judgment of the first instance shall be modified as follows:

A. On April 28, 2010, the part that exceeds KRW 100,771,851 out of the penalty surcharges of KRW 235,134,320 against the Plaintiff is revoked.

B. The plaintiff's remaining claims are dismissed.

2. 40% of the total litigation cost shall be borne by the Plaintiff, and the remainder by the Defendant, respectively.

The judgment of the first instance shall be revoked. The defendant shall revoke the disposition of imposition of the penalty surcharge of KRW 235,134,320 against the plaintiff on April 28, 2010.

1. Details of the disposition;

A. Nonparty 4 married to the Plaintiff and died on November 8, 2003, but the land listed in the separate sheet (hereinafter “instant land”) owned by Nonparty 1 and Nonparty 2 (hereinafter “the Plaintiff, etc.”) was succeeded to the inheritance shares (hereinafter “Plaintiff, etc.”) to the Plaintiff, Nonparty 1 and Nonparty 2 (hereinafter “Plaintiff, etc.”) who are minor children, and registered the ownership transfer registration under the name of the Plaintiff, etc. on November 21, 2003 and December 8, 2003, respectively.

B. On April 28, 2010, the Defendant imposed a penalty surcharge of KRW 235,134,320 (hereinafter “instant disposition”) on the Plaintiff on the ground that the Plaintiff violated Article 3 of the Act on the Registration of Real Estate under Actual Titleholder’s Name by title trust with Nonparty 3 (hereinafter “Real Estate Real Name Act”).

Plaintiff 13/7 10,771,851 won for Plaintiff 2/7 67,181,234 won for Plaintiff 2 non-party 12/7 , 67,181,234 won for the payment of penalty surcharges on the instant land located within the part of the title truster located within the main sentence, "3 non-party 22/7,181,234 won for the gross amount of penalty surcharges of KRW 235,134,320 for the purpose of

[Ground of recognition] Facts without dispute, Gap evidence 1, 5 evidence, Eul evidence 3, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The plaintiff asserts that the defendant's disposition of this case is unlawful for the following reasons.

(1) Although the Plaintiff et al. filed a lawsuit against Nonparty 3 seeking cancellation of ownership transfer registration and return of unjust enrichment on the instant land, the said lawsuit was paid 40 million won on the part of Nonparty 3, and it was concluded by mediation, and the Plaintiff et al. did not confirm that the instant land was title trusted to Nonparty 3.

(2) Without any basis, the Defendant imposed the penalty surcharge on Nonparty 1 and Nonparty 2, who is the Plaintiff’s child, by adding up the penalty surcharge to the Plaintiff.

(3) The Plaintiff trusted that there was no tax burden, etc. on the instant land, and responded to the conciliation of the court in the said lawsuit. Thus, the instant disposition is in violation of the principle of trust protection. Even if the Plaintiff et al. held title trust with Nonparty 3, it did not evade taxes or avoid restrictions under the laws and regulations. Therefore, the instant penalty surcharge should be mitigated pursuant to the proviso to Article 3-2 of the Enforcement Decree of the Real Estate Real Name Act

B. Relevant statutes

The entries in the attached Table-related statutes shall be as follows.

C. Determination

(1) As to the Plaintiff’s first argument

Comprehensively taking account of the overall purport of pleadings as to Gap evidence Nos. 1 through 3, 5, 7, and Eul evidence Nos. 1 and 3, ① The plaintiff's Magn's death on November 8, 2003 demanded the plaintiff to claim that he be the legitimate heir and to transfer the land of this case. On November 21, 2003, the plaintiff filed a lawsuit for the execution of the procedure for the registration of ownership transfer against the plaintiff et al.; ② the plaintiff (the plaintiff's children, and the inheritance shares of the non-party No. 1 and his legal representative as to the non-party No. 2) registered the land of this case for inheritance shares and the registration of ownership transfer from the appellate court on December 8, 2003 to the non-party No. 3's allegation that the non-party No. 3, who was the plaintiff's title trust and the non-party No. 2, who was the plaintiff's claim for the cancellation of the registration of ownership transfer from the plaintiff No. 3 et al. al.

According to the above facts, the plaintiff et al. knew the fact that the time when the plaintiff et al. transferred the registration to the non-party 3 and the time when the plaintiff et al. filed a lawsuit against the plaintiff et al. for the execution of the procedure for the registration of ownership transfer, and the plaintiff et al. also held that the non-party 3 was in title trust in the lawsuit with the non-party 3. In light of these facts, the plaintiff et al. held that the land of this case was in title trust with the non-party 3 for the purpose of preventing the plaintiff's temporary injunction, etc. against the non-party 3 for the purpose of preventing this from being likely to be executed

(2) As to the second argument of the Plaintiff

According to Article 2 Subparag. 1 of the Real Estate Real Name Act, a title trust agreement means that a person who holds, or actually acquires, the ownership or other real rights to real estate (hereinafter referred to as “actual right holder”) and another person agrees to hold or hold the real right to real estate internally and the registration thereof is to be made under the name of the other person. According to Article 2 Subparag. 2 of the Real Estate Real Name Act, a title truster refers to a person who has the actual right holder to have the real right to his/her real estate registered under another person’s name according to the title trust agreement. Meanwhile, Article 3(1) of the Real Estate Real Name Act provides that any person shall not register any real right to real estate in the name of the title trustee pursuant to the title trust agreement. Article 5(1)1 of the Real Estate Real Name Act provides that a penalty shall be imposed on a title truster who violates Article 3(1) of the aforesaid Act.

In full view of the above provisions, it is reasonable to view that a person subject to a penalty surcharge under Article 5 (1) 1 of the Real Estate Real Name Act refers to "the person having the actual right who has the real right to his own real estate registered under another person's name according to the title trust agreement" under Article 2 subparagraph 2 of the Real Estate Real Name Act. In other words, a person who has concluded a title trust agreement on another person's real right to real estate and had another person register it under another person's name after concluding the title trust agreement on behalf of the other

In this case, the plaintiff is deemed to have made a title trust agreement with the non-party 3 as his legal representative with respect to the share in the inheritance of the land of this case owned by the non-party 1 and the non-party 2, who is a minor child. If so, the plaintiff merely entered into a title trust agreement with respect to the real right to another person's real estate, and thus, the plaintiff cannot impose a penalty surcharge on the plaintiff as to the share in the inheritance of the land of this case owned by the non-party 1 and the non-party 2. Therefore, it is illegal for the defendant to impose a penalty surcharge of KRW 134,362,468 on the plaintiff for the share in the inheritance

(3) As to the third argument by the Plaintiff

In general, in administrative legal relations, in order to apply the principle of the protection of trust to an administrative agency's act, the administrative agency should name the public opinion that is the subject of trust to an individual. However, in this case, the judgment was concluded as a result of the mediation of a civil case between the plaintiff, etc. and the non-party 3, and there was no public opinion statement of the administrative agency on the imposition of a penalty surcharge. Thus, the defendant's disposition of this case

In addition, according to Articles 3(1) and 5(1) of the Real Estate Real Name Act and Article 3-2 of the Enforcement Decree of the same Act, a penalty surcharge shall be imposed within the extent of an amount equivalent to 30/100 of the value of the pertinent real estate held in title trust, and where it is not for the purpose of evading taxes or evading restrictions on statutes, 50/100 may be mitigated. Thus, it shall be proved by the claimant that the above provision constitutes a case where taxes are evaded or avoiding restrictions on laws and regulations (see Supreme Court Decision 2005Du3257, Sept. 15, 2005). Since the above provision is a discretionary mitigation provision, even if the above grounds for reduction exist, the issue of whether to reduce the penalty surcharge is subject to the discretion of the imposing authority (see Supreme Court Decision 2006Du4554, Jul. 12, 2007). However, the Plaintiff’s assertion that this case’s land was donated to Nonparty 3, and there is no reason to deem that it would be an abuse of the Plaintiff’s real title trust law.

3. Conclusion

Therefore, the part of the penalty surcharge on the Plaintiff’s share in excess of KRW 100,771,851 as to the Plaintiff’s share in the disposition of this case should be revoked. The Plaintiff’s claim of this case shall be accepted within the scope of the above recognition with the grounds, and the remainder of the claim shall be dismissed as it is without merit. Thus, the judgment of the court of first instance is unfair with different conclusions, and the judgment of the court of first instance shall be partially accepted the Plaintiff’s appeal and the judgment

[Attachment List omitted]

Judges Kim Chang-chul (Presiding Justice)