[1] The standard point of time to determine whether the act constitutes a fraudulent act in a case where the right of revocation is exercised on the ground of a fraudulent act as to the provisional registration of collateral which was transferred to real estate which became a sole ownership as a co-owned property partition.

[2] In a case where a new provisional registration for collateral security was established to replace the former provisional registration for the real estate owned by a co-owner, which was reverted to the original co-owned share after the partition of co-owned property, and the provisional registration for collateral security transferred to another co-owner for real estate divided as owned by another co-owner was cancelled

[1] Co-owned property partition, formally, is merely a change in the form of ownership by concentrating the shares acquired as a result of division, which are distributed to co-owners in common or substantially, in common. Therefore, in a case where the right of revocation was exercised on the ground of fraudulent act as to the provisional registration of security for co-owned shares, but the provisional registration of security for co-owned shares was established, barring any special circumstance, whether it constitutes a fraudulent act as at the time of establishment of provisional registration of security for co-owned shares

[2] In a case where the provisional registration of collateral security was established to replace the previous provisional registration of the real estate owned by the co-owner, which was reverted to the original co-owned share after the partition of co-owned property, and the provisional registration of collateral security transferred to another co-owner's real estate divided as owned by another co-owner was cancelled, barring special circumstances, such as the fact that the partition of co-owned property itself constitutes a fraudulent act, if the creditor against the mortgagee exercises his right of revocation, the partition of co-owned property constitutes a partition of co-owned property, and

[1] Articles 269 and 406(1) of the Civil Act; Article 2 subparag. 3 of the Provisional Registration Security Act / [2] Articles 269 and 406(1) of the Civil Act; Article 2 subparag. 3 of the Provisional Registration Security Act

[1] Supreme Court en banc Decision 98Da58443 delivered on June 17, 1999 (Gong199Ha, 1406)

Korea Credit Guarantee Fund (Law Firm Postal, Attorneys Lee Jong-young et al., Counsel for the plaintiff-appellant)

Defendant (Law Firm Open, Attorneys Yang Jae-ro et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2014Na2018924 decided October 24, 2014

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

The grounds of appeal are examined.

1. Review of the reasoning of the first instance judgment cited by the lower judgment and the record reveals the following facts.

(1) On June 24, 1998, when the Plaintiff entered into a credit guarantee agreement with Nonparty 2 with the credit guarantee principal of KRW 420 million and until June 23, 200, Nonparty 2 guaranteed the above credit guarantee agreement. Nonparty 2 obtained a loan of KRW 420 million from the Industrial Bank of Korea on the same day, and the Plaintiff guaranteed the loan obligations to Nonparty 2 to the Industrial Bank of Korea pursuant to the above credit guarantee agreement. Nonparty 2 lost the benefit of time due to delinquency in payment of interest on the above loan obligations on October 13, 1999, and the Plaintiff subrogated for the Industrial Bank of Korea on December 30, 199 upon the Industrial Bank of Korea’s request for the performance of guaranteed obligations.

(2) The Plaintiff filed a claim for reimbursement against Nonparty 2 and Nonparty 1, a joint guarantor, etc., with respect to KRW 405,212,203 as well as KRW 185,398,59, jointly and severally, and with respect to KRW 185,39,59. On November 11, 201, the said court rendered a favorable judgment in full favor of the Plaintiff on November 11, 201, and the said judgment became final and conclusive around that time.

(3) On February 10, 2010, Nonparty 1 purchased from Nonparty 3 for KRW 2.863/50,000 among 1,959 square meters of woodland 1,959 square meters ( Address 1 omitted) in Yongsan-gu, Yongsan-gu (hereinafter “instant land before the instant partition”), and completed the registration of ownership transfer on April 8, 2010.

(4) From November 26, 201 to July 27, 2011, Nonparty 1 borrowed a total of KRW 650 million from the Defendant on three occasions, and on April 18, 2012, in order to secure the payment of the above loan, Nonparty 1 and the Defendant entered into a promise for the return of substitute shares as to the share of KRW 2.863 out of the land before the instant partition, which was owned by the Defendant (hereinafter “the first promise for the return of substitute shares”), and completed the provisional registration for the transfer of ownership (hereinafter “the provisional registration for security”) on April 20, 2012.

(5) On September 16, 2012, in the instant land before the instant partition, the land was divided into co-owned land in Yongsan-gu ( Address 2 omitted) forest and 860 square meters (hereinafter “instant land”). On October 12, 2012, Nonparty 1, the co-owner of the instant land before the instant partition, obtained the registration of ownership transfer as to their respective shares from Nonparty 4, Nonparty 5, and Nonparty 6, the co-owner of the instant land before the instant partition, and became the sole owner of the instant land.

(6) On April 1, 2013, after the partition of co-owned property, Nonparty 1 and the Defendant entered into a promise to return substitute land (hereinafter “second substitute land return promise”) with the same content as the first substitute land return promise, and on April 3, 2013, the first collateral registration with respect to each of the divided lands, including the instant land, for which 2.863/53 shares was completed, was cancelled on the ground of the cancellation. On the same day, Nonparty 1 and the Defendant again completed the provisional registration for the instant land (hereinafter “second substitute registration”) on the ground of the second substitute return promise.

2. The lower court determined that, in order to establish a fraudulent act, the obligor’s joint security, namely, the obligor’s active property, should be less than the transfer of the juristic act by doing any legal act. However, the promise to return the second substitute security is merely a contract for transferring the first collateral security on the land prior to the instant partition to the provisional registration for the partition of co-owned property by the registration of the property as collateral No. 2.863 out of the land prior to the instant partition based on the promise to return the first substitute security, the first substitute security on the land prior to the instant partition cannot be deemed to have been more deficient than the obligor’s joint security due to the promise to return the second substitute security, on the grounds that the promise to return the second substitute security did not constitute a fraudulent act.

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

(1) The partition of co-owned property is formally an exchange or sale of shares among co-owners. However, it is merely a change in the form of ownership by concentrating the shares acquired due to the division (see, e.g., Supreme Court en banc Decision 98Da58443, Jun. 17, 199). Therefore, in a case where the right of revocation was exercised on the ground of fraudulent act as to the provisional registration of security for co-owned property, which was partially owned as a result of the partition of co-owned property, barring any special circumstance, whether it constitutes a fraudulent act at the time of establishment of provisional registration of security for co-owned property, barring any special circumstance. In addition, where a new registration of security for co-owned property was established after the partition of co-owned property was established as a substitute for the former registration of security for co-owned property, and the registration of security transferred as to the real property owned by another co-owner was cancelled, if the creditor against the person establishing the security right exercises the right of revocation, it constitutes a partition of co-owned property itself and constitutes a fraudulent act.

(2) According to the records, if the share of 2.863/63 of the land before the instant partition is converted into the area of 859.89m2 (i.e., 1,959m2 x 2.863/6.53m2). Since the size of the instant land divided from the land before the instant partition is almost 860m2, the said partition of co-owned property is deemed to be merely a change in the form of ownership by concentrating the share of Nonparty 1 on the instant land.

Meanwhile, notwithstanding the partition of co-owned property, the first collateral provisional registration established with respect to the portion of 2.863/63 of the land before the instant partition is not naturally concentrated on the part of the instant land divided in the future of Nonparty 1, but still remains on each divided land according to the previous shares ratio. In light of the facts and records as seen earlier, the issue of restricting the private ownership of Nonparty 4, Nonparty 5, and Nonparty 6, who were co-owners of the land before the instant partition due to the first collateral provisional registration, shall be resolved, and the Defendant concluded a second collateral return with the same content as the first collateral return of the land before the instant partition for the purpose of maintaining the same value as 2.863/53 of the secured value as to the portion of the land before the instant partition, and then the first collateral registration was cancelled and the second collateral registration was established instead of the second collateral registration.

(3) Considering the relevant legal principles such as the legal nature of partition of co-owned property, and the developments leading up to the conclusion of the promise to return the second substitute property, the promise to return the second substitute property is merely a formal substitution of the promise to return the first substitute property, and its substance is the same. In such a case, whether the elements of the fraudulent act are met should be determined at the time of the first promise to return the first substitute property. Furthermore, the Plaintiff seeking revocation of the fraudulent act and restitution of the original substitute property should be determined at the time of the first promise to return the second substitute property. Furthermore, the Plaintiff’s promise to return the second substitute property was already rescinded and replaced by the second substitute return promise to return the second substitute property, and the direct cause for the registration of the second collateral security registration is the second substitute return, and thus, can seek the revocation of the second substitute return promise that remains effective.

(4) Nevertheless, on the grounds indicated in its reasoning, the lower court rejected the Plaintiff’s claim seeking the revocation of the second substitute return reservation, which determined that the conclusion of the second substitute return reservation did not constitute a fraudulent act. In so doing, it erred by misapprehending the legal doctrine on the revocation of a fraudulent act, thereby failing to exhaust all necessary deliberations, thereby adversely affecting the conclusion of the judgment. The allegation contained in the grounds of appeal assigning this

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

Justices Kim Shin (Presiding Justice)