2013Da20496 Revocation, etc. of Fraudulent Act

1. A;

2. B

3. C.

Seoul High Court Decision 2012Na65852 Decided February 6, 2013

March 20, 2015

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

The grounds of appeal are examined.

1. As to the third ground for appeal

A. The "date when the obligee becomes aware of the cause for revocation" means the date when the obligee became aware of the requirement for the obligee's right of revocation, that is, the date when the obligee becomes aware of the fact that the obligor had committed a fraudulent act with the knowledge that the obligee would prejudice the obligee. However, it would be a fraudulent act unless there are special circumstances to change the obligor's intent to sell and consume real estate, which is the only property in excess of the obligation, into money, which is easy for the obligor to consume. Moreover, the obligor's intent of deception, which is the subjective requirement for the fraudulent act, is perceived that the shortage of joint security of the claim arises, and thus, it is unnecessary to avoid or avoid

In the event that a debtor sells real estate, which is the only property, and alters in money easily for consumption, the debtor’s intent to understand is presumed. Thus, if the debtor disposes of real estate, which is the only property, and the creditor knew that there is no particular property other than the real estate, the creditor was aware of the fact that the debtor knowingly committed a fraudulent act, i.e., the reason for revocation (see, e., Supreme Court Decisions 96Da2606, 2613, May 9, 1997; 2000Da3262, Sept. 29, 200).

Meanwhile, the principle of free evaluation of evidence declared by Article 202 of the Civil Procedure Act means that it does not need to be linked to formal and legal evidence rules, and does not allow a judge’s arbitrary judgment. Thus, the fact finding shall be in accordance with logical and empirical rules based on the principle of justice and equity, based on the admissible evidence that has gone through legitimate evidence examination procedures, and even if fact finding falls under the discretion of a fact-finding court, it shall not exceed the said limit (see, e.g., Supreme Court Decision 2009Da7198, 77204, Apr. 13, 2012).

B. The lower court acknowledged that (1) on October 13, 2009, the sales contract of this case against the Defendant and E Co., Ltd. (hereinafter “E”) was a fraudulent act and filed a lawsuit claiming revocation, etc. of the sales contract of this case on July 25, 2009 (hereinafter “the sales contract of this case”) against the Defendant and E, Inc. (hereinafter “E”), and that there was a false receipt that the Plaintiffs received payment of the subcontract price of this case from F was attached with documentary evidence; and (2) The sales contract of this case, which was the sole act of selling the real estate of this case where E had already been in excess of its obligation at the time of the conclusion of the sales contract of this case, was deemed to constitute a fraudulent act detrimental to creditors by reducing the debtor’s general execution property, and (2) it was difficult to readily conclude that the Plaintiffs were disposing of the real estate of this case due to the lack of evidence to deem that the Plaintiffs were directly involved in the above lawsuit, or that there was a lack of evidence to conclude that it was unlawful by the lower court’s determination that it was unlawful.

(1) Review of the reasoning of the lower judgment, the evidence duly admitted, and the record reveals the following facts.

(A) E was awarded a contract for the instant new construction from June 22, 2005, and F. Of the instant new construction works, Plaintiff A entered into a contract for the instant new construction works with F on August 22, 2005, Plaintiff B, Plaintiff B, and Plaintiff C entered into a subcontract for the instant new construction works with E, respectively. On July 15, 2005, the instant new construction works was suspended, and E enacted a contract for the instant new construction works between F and F on August 22, 2005.

On July 8, 2008, the Plaintiff filed a lawsuit for construction cost claim against E with the Suwon District Court Branch of 2007da43054, and the judgment was finalized on July 8, 2008 to pay KRW 82,500,000 and delay damages.

On June 16, 2008, Plaintiff B prepared a protocol of settlement that “E shall pay the said Plaintiff KRW 40 million and delay damages,” by filing a lawsuit for construction cost payment with Seoul Southern District Court Decision 2007Da81135, which read that “E shall pay the said Plaintiff 40 million won and delay damages.”

The plaintiff C reached an agreement between E and E on June 2005 that "E pays KRW 40,710,410,000 and transfers the same amount of the new construction cost claim of this case to E for the payment."

(B) In order to secure the claim for the construction cost of the new construction project of this case, E entered into a trade reservation with F as to the instant real estate on September 30, 2006 and paid KRW 70 million deposit with F without any separate declaration of intent after the date of completion of the reservation, and completed the provisional registration of ownership transfer claim (hereinafter referred to as the “provisional registration of this case”) on June 24, 2005 as to the instant real estate on June 27, 2005.

After all, E completed the principal registration on September 10, 2009 based on the provisional registration of this case, and completed the registration of ownership transfer (hereinafter referred to as the "registration of ownership transfer of this case") in the Defendant on July 25, 2009, based on the sales contract of this case as of July 25, 2009.

(C) However, on October 13, 2009, F filed a lawsuit against E and the Defendant claiming for the revocation of fraudulent act and the procedure for cancellation registration (hereinafter referred to as the “former lawsuit of this case”) with the Daejeon District Court Branch of Seosan Branch of 2009Kahap2360, on the premise that “F has a claim for the return of unjust enrichment by subrogation of KRW 966,461,959 of the subcontract price for E, including the Plaintiffs, and on July 25, 2009, sold the instant real estate only owned by E with debt excess.”

In the previous litigation of this case, F submitted a receipt attached to the complaint that he received reimbursement of KRW 61,50,000 on June 30, 2009, KRW 61,500,000, and KRW 40,700 on July 7, 2009, and KRW 40,000 to Plaintiff C. However, the contents stated in the above receipt are false, and despite the above receipt, there was no evidence to prove the above fact of subrogation in the previous lawsuit of this case, the claim for revocation of F’s fraudulent act was rejected. Meanwhile, F was present as witness in this case and was prepared by the above receipt as a false witness, on the grounds that the above receipt was prepared for the purpose that “F was entitled to recover the ownership of the real estate in excess of the purpose of securing payment in lieu of the subcontractor’s obligation to pay the subcontract price to the Plaintiff.” However, if the Plaintiff acquired the ownership of the land of this case, F would have received the payment from the Plaintiffs for the testimony of this case.

(D) On December 31, 2006, as of December 31, 2006, the asset total amount of KRW 296,214,202, the total amount of the debt total amount of KRW 542,776,618, the net loss in the year 2006 was KRW 402,368,656, and the total amount of the asset total amount of KRW 292,565,958 as of December 31, 2007, the total amount of the asset total amount of KRW 292,565,958, and the total amount of the debt total amount of KRW 603,672,912, the net loss in the year 2007 was 64,54,538, and the amount of loss in the year 207 was 913,762,954.

E is presumed to have aggravated the financial status of E around July 25, 2009, which was at the time of the conclusion of the instant sales contract, as the closure of business on March 2007 and did not own particular real estate except the instant real estate. As seen above, the amount of E’s subcontract payment obligation claimed by F in the previous lawsuit of this case reaches KRW 966,461,959, even based on the amount of F’s subcontract payment obligation claimed by subrogation.

(2) Examining the above facts in light of the legal principles as seen earlier, the following circumstances are revealed.

(A) The Plaintiffs’ claim for the construction price of each of the above subcontracting claims against E was due to a claim that occurred four years prior to the instant sales contract, and it was impossible to recover the claim even if there were sufficient time to exercise the claim, and further, E was already closed in 2007. As such, it appears that around October 2009, E, which prepared the above receipt, had been aware that the Plaintiffs and the subcontractors of subcontract price, including the Plaintiffs, committed a financial condition in which they were unable to properly repay the obligation for the construction price to the creditors.

In addition, in the case of Plaintiff A and B, even though enforcement against E’s property was possible due to its executive titles, there is no evidence that enforcement against E’s property was conducted, and it is also because the F cooperates in the instant lawsuit filed by preparing false receipts, other than the instant real estate, because the Plaintiff A and B knew that E does not have any asset having substantial asset value.

Ultimately, it is reasonable to view that the Plaintiffs were aware of the fact that E was in a de facto excess of liability as recognized by the lower court at the time of the instant sales contract, which was concluded immediately before the preparation of the above receipts.

(B) Meanwhile, even based on F’s testimony, the Plaintiffs prepared false receipts in order for F to recover the ownership of the instant real estate from E to recover the claim of the Plaintiffs from the disposal price. Thus, it is clear that the Plaintiffs also knew that E had already acquired the ownership of the instant real estate by the principal registration based on the provisional registration of this case at the time of the preparation of the above receipts.

In addition, in light of the fact that the ownership transfer registration of this case based on the sales contract of this case was made on the same day as the above principal registration, and the lawsuit filed by F against the defendant for the cancellation of fraudulent act and the cancellation of the ownership transfer registration of this case, it is in accordance with the empirical rule to deem that the plaintiffs who cooperate with F in the previous lawsuit of this case, were aware of the fact that the ownership transfer registration of this case was made in the future of the defendant, barring any other special circumstances. In particular, in the case of plaintiffs A and B, they had a title of execution that can be immediately enforced against E, and if they did not dispose of the real estate of this case, they were forced to enforce compulsory execution against E. In the absence of the circumstances where E did not proceed with the compulsory execution procedure, and prepared a false receipt and prepared a false receipt, and practically did not have to cooperate with F's previous lawsuit corresponding to the lawsuit of this case, the above judgment is supported by the fact that the above plaintiffs became more impossible in the future registration of this case was made with respect to the real estate of this case, and the compulsory execution procedure against E.

(C) In addition, as recognized by the court below, the act of selling the instant real estate, the only property of which E is the property under excess of its actual obligation, and changing the sale price into money, is presumed to have the intent to cause harm to E, which is a debtor, as a fraudulent act against the creditors. Thus, it is reasonable to view that the plaintiffs, who were aware of the said act at the time of the filing of the instant lawsuit on October 13, 2009, were aware of the facts of E at that time, i.e., the cause for cancellation of creditor’s revocation, unless there

D. Nevertheless, without sufficiently examining these circumstances, the lower court rejected the Defendant’s defense on the ground that the instant lawsuit was filed on September 2, 201, which was nine (1) years after the lapse of the exclusion period, and was unlawful, on October 13, 2009, by erroneous determination to the effect that it was insufficient to recognize that the Plaintiffs were aware of the grounds for revocation of the instant obligee’s right of revocation on the sole basis of the foregoing reasons.

Therefore, such judgment of the court below is erroneous in the misapprehension of legal principles as to the exclusion period of the obligee's right of revocation, the starting point of counting fraudulent act and intent of deception, or in the misapprehension of legal principles as to the judgment, or in violation of the principle of free evaluation of evidence against logical and empirical rules.

2. Conclusion

Therefore, without further proceeding to decide on the remaining grounds of appeal, the judgment below is reversed, and the case is remanded to the Seoul High Court. It is so decided as per Disposition by the assent of all participating Justices.

Justices Kim Jae-young

A person shall be appointed.