[1] In a case where a subsequent purchaser completed a provisional registration on the basis of a pre-sale agreement, which is a fraudulent act, and completed the provisional registration in the future of the beneficiary, and the principal registration on the basis of the provisional registration is completed, whether the creditor may claim against the beneficiary revocation of the pre-sale agreement, which is a fraudulent act (affirmative), and whether the same holds true in a case where the beneficiary’s performance of the obligation to cancel the provisional registration, which is the original obligation of the beneficiary, is impossible as a result of the additional registration (affirmative)

[2] Where an illegal registration of correction was completed which does not recognize the identity of the registered titleholder, but where the registration was entered as a result of expressing the legal relationship of the registered titleholder after the correction and also conforms to the substantive relationship, the validity of the registration of correction (effective)

[3] Where a fraudulent act is rescinded or terminated while a lawsuit seeking revocation of a fraudulent act and restitution is pending, and a property seeking restitution is returned to a debtor, whether there is a benefit in the protection of rights (negative in principle), and whether the same applies where a property seeking restitution by revocation of a fraudulent act is returned to a debtor before a lawsuit seeking revocation of a fraudulent act is filed (affirmative)

[1] Even if an additional registration prior to the provisional registration was completed after the provisional registration was completed in the future of the beneficiary on the basis of the pre-sale agreement, and the principal registration based on the provisional registration was completed in the future of the subsequent purchaser, the above additional registration is indicating the transfer of the beneficiary’s rights based on the pre-sale agreement, which is a fraudulent act, and the status as a beneficiary is not extinguished pursuant to the additional registration, and the creditor is entitled to file a claim against the beneficiary for revocation of the pre-sale agreement, which is a fraudulent act. Furthermore, even if it is impossible for the beneficiary to perform the duty of cancellation of provisional registration, which is a beneficiary’s obligation to return the original property of the beneficiary, due to the reason that the beneficiary’s eligibility is denied in the lawsuit for provisional registration and the cancellation of the principal registration, it cannot be viewed as different even if the beneficiary

[2] The registration of correction of a registered titleholder is not allowed beyond the scope recognized as identical to the registered titleholder. However, even if the registration of correction was completed in violation of the registration of correction that is not recognized as identical to the registered titleholder as a result of acceptance of an application for correction because it is unclear whether the identity of the registered titleholder exists, if it has been completed, and such registration is completed as a result of indicating the relationship of rights of the registered titleholder after correction, and if it conforms to the substantive relationship, it shall be valid. In such a case, the validity of registration of correction shall not be retroactive and shall be disclosed to the public, and as long as the registration before correction is not a registration of invalidation, it shall be valid as a registration indicating the relationship of rights of the registered titleholder at the time of the correction, and as long as the registration before correction is not a registration of invalidation, it shall not

[3] In a case where a creditor filed a lawsuit seeking revocation of a fraudulent act against a beneficiary on the ground of a fraudulent act on the ground of a debtor's real estate, and then the creditor has been released or terminated during the lawsuit, and the creditor has returned to the debtor by punishing the property for which the revocation of a fraudulent act was sought, barring any special circumstance, the purpose of the lawsuit seeking revocation of a fraudulent act is already realized, and the benefit of protecting the right to be secured by the lawsuit is no longer effective, barring any special circumstance. Such legal principle likewise applies to the case where the property for which return was sought by

[1] Article 406 (1) of the Civil Act / [2] Article 186 of the Civil Act, Article 23 (6) of the Registration of Real Estate Act / [3] Article 406 (1) of the Civil Act, Article 248 of the Civil Procedure Act / [3]

[1] Supreme Court Decision 2004Da70079 decided Mar. 24, 2005 (amended) / [2] Supreme Court Decision 95Da2135 decided Apr. 12, 1996 (Gong1996Sang, 1494) / [3] Supreme Court Decision 2007Da85157 decided Mar. 27, 2008 (Gong2008Sang, 615)

(Attorney Cho Jae-soo, Counsel for the plaintiff-appellant)

Defendant 1 and four others (Law Firm Losch Rexroth, Attorneys Han-hwan et al., Counsel for the defendant-appellant)

Seoul Western District Court Decision 2011Na7929 decided November 24, 2011

Of the judgment of the court below, the part of the claim for revocation of purchase and sale reservation and restitution of real estate listed in the annexed list of the court below is reversed, and that part of the case is remanded to the Panel Division of the Seoul Western District Court. All remaining appeals are dismissed. The costs of appeal between the plaintiff, defendant 2, defendant 3, and defendant 5 are assessed against the plaintiff.

The grounds of appeal are examined.

1. As to the grounds of appeal relating to the cancellation of the reservation and the claim for restitution of real estate in the attached list of the lower judgment (hereinafter “attached list”) as to the real estate Nos. 2 through 5, 7, 9, 11, and 16

A. If a creditor’s revocation of fraudulent act and a claim for restitution are acknowledged, the beneficiary or subsequent purchaser is obligated to return the subject matter of the fraudulent act to the debtor as restitution. If it is impossible or considerably difficult to return the subject matter of the fraudulent act, the beneficiary or subsequent purchaser is liable to compensate for the equivalent amount of the value of the subject matter of the fraudulent act as performance of the duty to restore, and the case where the return of the subject matter is impossible or considerably difficult here refers to the case where the creditor cannot expect the realization of the performance from the beneficiary or subsequent purchaser, not simply absolute or physical impossibility, but rather in light of social experience rules or transaction norms (see Supreme Court Decision 97Da58316, May 15, 1998, etc.)

In a case where a provisional registration is completed to preserve the right to claim ownership transfer of a real estate owned by an obligor, the provisional registration itself does not have the effect of ownership transfer; however, when the principal registration is completed, the ownership transfer becomes effective retroactively from the time of the provisional registration, and as a result, creditors are unable to obtain full repayment from the obligor’s property, thereby undermining creditors (see Supreme Court en banc Decision 74Da334, Feb. 10, 1975, etc.). Therefore, a juristic act that is the cause of provisional registration undermining creditors is subject to revocation as a fraudulent act, and if the juristic act is revoked by fraudulent act, the provisional registration holder is obliged to cancel the provisional registration, which is the obligation to return the original property, as the restoration following such revocation, unless there are any special circumstances. Meanwhile, the right to claim change in real right subject to priority preservation by the provisional registration is not only the property right that can be transferred by its nature, but also the right is publicly announced and the method of public announcement is prepared by the provisional registration. In a case where the right is transferred, the registration of ownership transfer in the provisional registration can be made in the form of additional registration (see Supreme Court en banc Decision 10.

In full view of the above legal principles, even if a provisional registration was completed on the basis of a pre-sale agreement, and the subsequent purchaser completed the provisional registration, and further completed the principal registration on the basis of such provisional registration, the above additional registration indicates the transfer of the rights of the beneficiary based on the pre-sale agreement, which is a fraudulent act, and the status as a beneficiary is not extinguished pursuant to the above additional registration, and the creditor is entitled to file a claim against the beneficiary for revocation of the pre-sale agreement, which is a fraudulent act. Furthermore, even if the performance of the obligation to cancel the provisional registration, which is the obligation of the beneficiary to return the original obligation of the beneficiary, becomes impossible due to the above provisional registration and the cancellation claim as a result of the provisional registration, the eligibility of the beneficiary is denied, barring any special circumstance, the beneficiary shall be liable to compensate for the amount of the beneficiary’s shortage in common security arising from the above provisional registration and the principal

Supreme Court Decision 2004Da70079 Decided March 24, 2005, etc., which held that the transferor of a right based on the provisional registration cannot become the other party to a lawsuit claiming cancellation of the provisional registration and is not a nominal holder of the principal registration, shall be modified to the extent that it is inconsistent with this Opinion.

B. According to the reasoning of the judgment below and the evidence duly admitted, the provisional registration of the right to claim transfer of ownership was completed on September 18, 2006 by the registrar ex officio on the ground of error finding, and the provisional registration of the provisional registration was completed on September 18, 2006 by the following facts:

C. Examining the above facts in light of the legal principles as seen earlier, in the instant case seeking the revocation of the instant promise on the ground that the instant promise was a fraudulent act, the Plaintiff, the creditor, may claim for the revocation of the instant promise against Defendant 1 and the general timber service provider, the beneficiary with respect to the instant promise, and even if the said beneficiary’s obligation to cancel provisional registration is impossible, the Plaintiff may claim for compensation for value against the said beneficiary as the duty to restore the said provisional registration and the lack of joint security arising from the said registration.

D. Nevertheless, the lower court dismissed Defendant 1’s fraudulent act cancellation and claim for compensation for equivalent value with regard to the above provisional registration, on the contrary, on the ground that Defendant 1 and Boman’s general timber did not assume the obligation to compensate for the equivalent value to the creditor who revoked the fraudulent act, on the ground that the lower court erred by misapprehending that Defendant 1 and Boman’s general timber did not assume the obligation to compensate for the equivalent value.

Therefore, the judgment of the court below is erroneous in the misapprehension of legal principles as to the revocation of fraudulent act and compensation for value when provisional registration completed by fraudulent act was transferred, which affected the conclusion of the judgment.

2. As to the grounds of appeal on the cancellation of reservation for sale of real estate and the claim for restitution as to the attached list Nos. 1, 8, and 10

A. The registration of correction of a registered titleholder is not allowed beyond the scope recognized as identical to the registered titleholder. However, even if the registration of correction was completed in violation of the registration of correction which is not recognized as identical to the registered titleholder as a result of acceptance of an application for registration of correction because the identity of the registered titleholder is unclear, if it has been completed, and such registration has been completed as a result of indicating the relationship of rights of the registered titleholder after correction, and if it conforms to the substantive relationship, such registration is valid (see Supreme Court Decision 95Da2135, Apr. 12, 1996, etc.). In such a case, the validity of the registration of correction is not retroactive, and it is merely a publication of the acquisition of rights of the registered titleholder after correction, so insofar as the registration before correction is not a registration of invalidity of cause, it is valid as a registration indicating the relationship of rights of the registered titleholder at the time of the correction, and it is not deemed that the relationship of rights of the registered titleholder before

B. According to the reasoning of the judgment below and the evidence duly admitted, ① With respect to real estate owned by Nonparty 1, the provisional registration of Nonparty 2, based on the above provisional registration, was completed on September 13, 2006, and the provisional registration of the right to claim ownership transfer under the title of general timber was completed on September 18, 2006. On September 21, 2006, there was an additional registration ex officio changing the holder of the provisional registration into Defendant 1, the creditor of the right to claim ownership transfer on the ground of mistake, and on September 21, 2006, the additional registration of correcting Nonparty 2, the purchaser of the provisional registration, based on the provisional registration, was completed on February 7, 2007; ② The provisional registration of Nonparty 2, based on the list of Nonparty 1, the ownership transfer right holder, and the provisional registration of Nonparty 2, based on the separate registration, was entered in the list of Nonparty 1, the ownership transfer right holder and the additional registration of Nonparty 2, based on the additional registration No.26.

C. Examining the above facts in light of the legal principles as seen earlier, the registration of correction to correct the person holding the provisional registration in each unit on the basis of the registration of the right to claim transfer of ownership in each of the above real estate, and the principal registration in each unit buyer’s name based thereon, which is based on the registration of the registration, shall be valid as a registration consistent with the actual relation of each unit buyer, who is a registered titleholder, after correction. On the other hand, each of the registrations of correction shall not be retrospectively effective, but shall not affect the existence and validity of the sales reservation of this case and the right to claim transfer of ownership arising therefrom.

Therefore, the Defendant 1 and the Defendant 1, who entered into the instant promise with Nonparty 1, the debtor as to each of the above real estate, and completed the registration of the right to claim ownership transfer, are still in the status of beneficiary against the Plaintiff, the creditor of the revocation of the fraudulent act regarding the instant promise to sell and purchase notwithstanding the registration of illegal correction as above. Thus, barring any other circumstance, the Plaintiff may claim against the Defendant 1 and the Plaintiff for the revocation of the fraudulent act and the restoration of the original state to the original state on each of the above real estate

D. Nevertheless, the lower court erred by misapprehending that the instant sales promise concerning each of the above real estate, which was made prior to the completion of a valid corrective registration, consistent with the substantive relationship that revises the person having the right to a provisional registration as to each of the above real estate as a buyer, did not exist, and determined otherwise, that Defendant 1 and Defendant 4, who was the bankruptcy trustee of the general timber lawsuit filed by the bankrupt, had no standing to file a lawsuit for revocation of a fraudulent act on the ground of

Therefore, the court below erred by misapprehending the legal principles on the registration of correction of the registered titleholder, which affected the conclusion of the judgment.

3. As to the grounds of appeal on the cancellation of sales reservation and restoration of real estate No. 6 as stated in the separate sheet, and the cancellation of the contract to establish a mortgage and the claim for restitution of the original status

In a case where a creditor filed a lawsuit against a beneficiary for the revocation of a fraudulent act and restitution of the said fraudulent act on the ground of a debtor's real estate, and the creditor has already rescinded or terminated such fraudulent act while the lawsuit is pending, and the creditor has returned to the debtor by punishing the property for which the revocation of such fraudulent act was sought, barring any special circumstances, the purpose of the lawsuit for revocation is already realized, and no longer the benefit of the protection of rights by the lawsuit is available (see Supreme Court Decision 2007Da85157, Mar. 27, 2008, etc.). Such legal principle also applies where the property for which return was sought by the revocation of such fraudulent act was returned to the debtor before the lawsuit for revocation of the fraudulent act was filed.

The lower court determined that, inasmuch as both the instant purchase and sale reservation and the instant mortgage agreement concluded on August 31, 2006 and the collective timber contract concluded on August 31, 2006 between Nonparty 1 and Defendant 1, Defendant 2, Defendant 3, Defendant 5, and Boan on August 31, 2006 entered into on August 31, 2006 with respect to each of the real estate listed in the separate sheet No. 6, all of which were rescinded, renounced, or terminated before the instant lawsuit was brought, and the provisional registration of the right to claim share transfer and the registration of the establishment of each collateral respectively, the Plaintiff did not have a benefit in filing a lawsuit to seek the cancellation of the said sale reservation and each of the said

Examining the reasoning of the judgment below in light of the records, the above judgment of the court below is deemed to have been based on the above legal principles, and contrary to the allegations in the grounds of appeal, there were no errors in the misapprehension of legal principles

4. Conclusion

Therefore, of the judgment of the court below, the part of the claim for revocation of purchase and sale reservation and restitution of real estate listed in the separate sheet Nos. 1 through 5, 7 or 16 shall be reversed, and this part of the case shall be remanded to the court below for further proceedings consistent with this Opinion. All of the remaining appeals shall be dismissed, and the costs of appeal incurred between the plaintiff, defendant 2, defendant 3, and defendant 5 shall be borne by the losing party

Justices Yang Sung-tae (Presiding Justice)