Whether expenses for inherited property, such as inheritance tax and litigation expenses for the management and preservation of inherited property, are included in the calculation of legal reserve of inheritance (negative)

Article 1113(1) of the Civil Act

Plaintiff 1 and one other (Attorney Lee Young-young, Counsel for the plaintiff-appellant)

Defendant (Law Firm, Attorneys Park So-young et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2011Na34479 decided January 27, 2012

The judgment below is reversed and the case is remanded to Seoul High Court.

The grounds of appeal are examined.

1. Regarding the plaintiffs' grounds of appeal

A. As to the ground of appeal on the land and the building on the Seocho-dong (Land Number 1 omitted) and its ground of appeal

The court below rejected the Defendant’s assertion that the share of the land and its ground buildings (hereinafter “Seo-dong real estate”) donated by the deceased was not 1/3 but 1/2, and that the evidence in its holding alone is insufficient to recognize it, and there is no other evidence to acknowledge it.

However, the above determination by the court below is difficult to accept for the following reasons.

On the records, the following circumstances, namely, the deceased, the plaintiff 1, and the defendant, on February 3, 1984, on the land among the Seocho-dong real estate, the ownership transfer registration or ownership preservation registration was completed on August 14, 1992, on each one-third share of the building among the Seocho-dong real estate, and the deceased and the plaintiff 1 completed the registration of ownership transfer under the name of the defendant on December 21, 2002. The certificate of the deceased submitted by the defendant (No. 52-1 of the evidence No. 52) entered that the deceased purchased the above real estate in the name of three for convenience while purchasing it, and later, it was stated that they transferred the shares of the deceased and the plaintiff 1 to the defendant by transferring the shares of the plaintiff and the plaintiff 1 to the defendant, and it is reasonable to view that the plaintiffs, on all the premise that the remaining portion of the real estate donated by the plaintiff 2 (No. 52-3-1 of the evidence No. 53-1 of the deceased's title No. 21 of the title 21 of the deceased's.21.

Nevertheless, the lower court recognized that the Defendant’s shares donated from the Deceased were only 1/3 shares. In so doing, the lower court erred by misapprehending the bounds of the principle of free evaluation of evidence in violation of logical and empirical rules, thereby adversely affecting the conclusion of the judgment. The allegation in the grounds of appeal assigning this error

B. As to the remaining grounds of appeal

For the reasons indicated in its reasoning, the lower court rejected each of the Plaintiffs’ assertion, namely, the assertion that the deceased donated the land and the above ground buildings (number 2 omitted) to the Defendant, and that the obligation to return the lease deposit against the land and the above ground buildings (hereinafter referred to as “unified real estate”) should be excluded from the deceased’s inheritance obligation. Examining the record, the lower court did not err in its judgment by misapprehending the facts contrary to logical and empirical rules, or by misapprehending the legal doctrine on the basic property in calculating legal reserve, contrary to what is alleged in the grounds of appeal.

2. As to the Defendant’s ground of appeal

A. As to the ground of appeal on the Seocho-dong real estate

In calculating the gift value of Seocho-dong real estate, the lower court acknowledged the Defendant’s assertion that the secured debt amount of the right to collateral, which is established on December 6, 2002, should be deducted from the said real estate, that the secured debt amount of the right to collateral should be deducted from the said real estate, and determined that the secured debt amount, which is established on December 6, 2002, was transferred to the Defendant by contract acceptance on December 21, 2002. Accordingly, the lower court determined that the secured debt of the said right to collateral was merely the Defendant’s debt, but cannot be deducted from the Defendant’s debt.

However, the above determination by the court below is difficult to accept for the following reasons.

According to the records, the defendant alleged that the above collateral obligation was actually used by the deceased under the name of the plaintiff 1 as the deceased's debt, and that the plaintiffs did not assert that the above collateral obligation was actually due to the plaintiff 1's debt, or that the plaintiff 1 used the above loan. ② The plaintiff 1 asserted that the contract was cancelled due to the conditional donation of the 1/3 share of the Seocho-dong real estate in 2008, although the conditions were not fulfilled, the above collateral obligation was not included in the 60 million won or the above collateral obligation, and ③ the above collateral obligation was actually the defendant's debt or the defendant did not appear to have actually used the above loan. In light of this, it is reasonable to deduct the above collateral amount when calculating the value of the donation of the Seocho-dong real estate if the deceased's debt was the above collateral obligation, and it cannot be viewed that the defendant ultimately acquired the above collateral obligation.

Nevertheless, the lower court determined that the Defendant cannot deduct the foregoing secured debt solely on the ground that the Defendant assumed the above secured debt without examining who actually performed the obligation. In so doing, the lower court erred by misapprehending the bounds of the principle of free evaluation of evidence in violation of logical and empirical rules, misunderstanding of facts beyond the bounds of the principle of free evaluation of evidence, or failing to exhaust all necessary deliberations, thereby adversely affecting the conclusion of the judgment. The allegation in the grounds of appeal assigning this error is with merit.

B. As to the grounds of appeal on deposit money

The lower court rejected the Defendant’s assertion that KRW 6,331,095, which the Defendant deposited with Nonparty 3 in accordance with the final judgment of the lawsuit claiming the return of the premium that Nonparty 3 brought against the Defendant, etc., should be deducted as an inheritance obligation, on the ground that, when determining the litigation costs and the deposit money together under the title of “judgment on litigation costs and inheritance tax”, they do not constitute an obligation that the decedent had borne at the time of the commencement of inheritance under Article 1113(1) of the Civil Act,

However, as above, the amount deposited according to the final judgment is completely different from the litigation cost, and the defendant alleged that he deposited the amount ordered to be paid in the judgment as a comprehensive donee of the deceased. Thus, the court below rejected the above assertion without examining the deposit and the litigation cost. The court below erred by misapprehending the legal principles on basic property for calculating the legal reserve of inheritance and by failing to exhaust all necessary deliberations, which affected the conclusion of the judgment. The grounds of appeal assigning this error are with merit.

C. As to the remaining grounds of appeal

1) Article 1113(1) of the Civil Act provides, “The legal reserve of inheritance shall be calculated by adding the value of donated property to the value of the property owned by the inheritee at the time of commencing the inheritance and deducting the total amount of the debt.” In this context, the obligation to be deducted refers to the obligation of the inheritee, i.e., the obligation of the inheritee, and does not include expenses for inherited property, such as inheritance tax and litigation costs for managing

The lower court rejected the Defendant’s assertion that: (a) inheritance tax and gift tax paid by the Defendant; (b) the expenses for responding to the lawsuit claiming the return of custody money brought by the Defendant against the Defendant after the death of the deceased; (c) the expenses for the transfer of real estate; and (d) the expenses incurred in the lawsuit claiming the confirmation of shareholder’s rights; and (c) the inheritance tax, etc. is different from the inheritance tax imposed individually on the inheritor due to inheritance; and (d) the inheritance tax, etc. is different from the inheritance tax imposed on the inheritor at the time of the death of the decedent;

The above determination by the court below is in accordance with the legal principles as seen earlier. In so doing, it did not err by misapprehending the legal principles as to the basic property in calculating legal reserve of inheritance.

On the other hand, the court below did not explicitly state the grounds for determination as to the defendant's argument that the executor of the deceased's will should deduct the expenses incurred in the lawsuit against the tax support corporation, but in light of the above legal principles, it is obvious that the above argument is a case of rejection of freeboard, so the omission of judgment by the court below does not affect the conclusion

2) On the grounds indicated in its reasoning, the lower court rejected the lower court’s assertion, on the grounds indicated in its reasoning, that the sum of the maximum debt amount of each right to collateral security established on the above real estate should be deducted in calculating the value of the non-owned real estate; ② the Defendant’s assertion that the U.S. transferred from the deceased merely received the lease deposit, etc. of the tension-dong Hyundai Apartment, which was owned by the Defendant, and did not have been donated; ③ the Deceased did not err by misapprehending the legal doctrine regarding the burden of free evaluation of evidence against logical and empirical rules, as otherwise alleged in the grounds of appeal, by misapprehending the legal doctrine regarding: (a) the deceased’s assertion that: (b) the 3rd party’s (number 4 omitted); (c) the 9/21 share among the land and the buildings on the Gu-dong (number 5 omitted); (d) the repair cost for the above apartment; and (b) the construction of the land and the building on the ground; and (c) the Plaintiff’s assertion that the deceased was donated to the Plaintiff 1;

3) The lower court rejected the Defendant’s assertion that the claim against Nonparty 5 should not be included in the inherited property, on the ground that: (a) Nonparty 5’s claim against the company bank, which the deceased trusted in the name of Nonparty 5, was withdrawn and consumed by Nonparty 5 after the deceased’s death; (b) Nonparty 5 did not have sufficient means to recover or recover the claim from Nonparty 5; and (c) the claim against Nonparty 5 should not be included in the inherited property; (d) Nonparty 5’s claim against the deceased’s claim against the Industrial Bank of Korea, which is the basis of calculating the legal reserve of inheritance; and (e) Nonparty 5’s claim against Nonparty 5 did not affect the calculation of the legal reserve of inheritance; and (e) Nonparty

In light of the relevant legal principles and records, although it is inappropriate for the court below to consider the deposit claimant of the Industrial Bank of Korea as the deceased, even if the deposit claimant of the Industrial Bank of Korea is Nonparty 5, the deceased has the right to seek the transfer of deposit claim or the return of withdrawal money against Nonparty 5, and there is no evidence to deem that Nonparty 5 was insolvent at the time of commencing the inheritance, and the conclusion to reject the defendant's argument is justified, and there is no error by misapprehending the

4) The court below is found to have not explicitly stated the grounds for judgment on the defendant's assertion that the non-party 4 received the share of real estate from the deceased due to loyalty, as alleged in the grounds of appeal, but examining the records, there is a lack of evidence to prove that the deceased held the title trust of real estate with loyalty to the non-party 6, and thus the above assertion has no choice but to be rejected. Thus, the omission of judgment by

3. Conclusion

Therefore, the judgment of the court below is reversed, and the case is remanded to the court below for a new trial and determination. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Min Il-young (Presiding Justice)