[1] In a case where a person who followed the title of real estate held in title by the title trustee does not fall under a third party under Article 4(3) of the Act on the Registration of Real Estate under Actual Titleholder’s Name and such registration is null and void, the validity of registration under the name of the person who entered into a new legal ground for the registration, and whether the person who entered into the said interest constitutes a third party under the said provision (negative)

[2] Whether the presumption under Article 218(2) of the Civil Procedure Act is broken if one of the parties who wants to exclude res judicata of the previous final and conclusive judgment proves the fact that the status of the party was succeeded before the closing of pleadings (affirmative)

[3] The point of time to determine succession under Article 218(2) of the Civil Procedure Act in a case where a person who filed a lawsuit seeking cancellation of ownership transfer registration transfers ownership of the pertinent real estate to another person during the lawsuit pending

[1] In Article 4 (3) of the Act on the Registration of Real Estate under Actual Titleholder’s Name (hereinafter “Real Estate Real Name Act”), “third party” refers to a person, other than the parties to a title trust agreement and a general successor, who directly has a new interest with him/her on the basis of a real right holder. Thus, if a person following a title trust held by a title trustee does not constitute a third party under the above provision, such person cannot assert the validity of his/her registration based on an invalid title trust registration under Article 4 (3) of the Real Estate Real Name Act, unless there are special circumstances, such as that the registration is valid in accordance with a substantive relationship. Thus, insofar as the registration of a person following the title transfer registration made by a title trustee is null and void, if a person who has a new interest in the real estate registration based on the invalid registration was again registered, the registration of the title cannot be exempt from a direct interest relationship between the third party and the title trustee and the third party under Article 4 (3) of the Real Estate Real Name Act, barring any special circumstances.

[2] In determining the subjective scope of res judicata, the purport of Article 218(2) of the Civil Procedure Act that stipulates that if a party fails to make a statement of succession by the time when the pleading is closed, it shall be presumed that the successor has the burden of proof, and thus, if it is proved that the successor has the burden of proof before the closing of pleading, the res judicata does not extend to his successor. Thus, if a party who wants to exclude res judicata of the previous final and conclusive judgment proves that the succession to the status was made before the closing of argument, then the presumption of Article 218(2) of the Civil Procedure Act that the successor is a successor after the closing of argument, regardless of whether the party has made a statement of succession to the status before the closing of argument, should be deemed to be broken.

[3] In a case where a person against whom a lawsuit seeking cancellation of ownership transfer registration was filed transfers ownership of the pertinent real estate to another person during the proceeding, whether the succession was made before the closing of argument or after the closing of argument should be determined as of the time when the change in ownership registration takes effect.

[1] Article 4(3) of the Act on the Registration of Real Estate under Actual Titleholder’s Name / [2] Article 218(2) of the Civil Procedure Act / [3] Article 218(2) of the Civil Procedure Act

[1] Supreme Court Decision 2003Da11714 Decided May 16, 2003, Supreme Court Decision 2002Da48771 Decided August 30, 2004 (Gong2004Ha, 1589)// [2] Supreme Court Decision 77Da92 Decided July 26, 197 (Gong1977, 10241)

Seoul Central Institute of Education (Law Firm, Kim & Lee, Attorneys Oh Jeong-hon et al., Counsel for the defendant-appellant)

Lee Chang-ro (Law Firm Sejong, Attorneys Seo Sung-sung et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2004Na59500, 59517 decided May 26, 2005

The appeal is dismissed. The costs of appeal are assessed against the plaintiff (Counterclaim defendant).

We examine the grounds of appeal.

1. Regarding ground of appeal No. 1

The term "third party" in Article 4 (3) of the Act on the Registration of Real Estate under Actual Titleholder's Name (hereinafter "Real Estate Real Name Act") means a person, other than the parties to a title trust agreement and a general successor, who has entered into a new interest directly with him/her on the basis that the title trustee is a real right holder. Thus, if a person who followed the title holder of the real estate under title trust by the title trustee is not a third party as provided in the above provision, such person cannot assert the validity of his/her registration based on the invalid title trust registration under Article 4 (3) of the Real Estate Real Name Act, unless there are special circumstances such as that the registration of the title holder is valid in accordance with the substantive relations (see, e.g., Supreme Court Decisions 2003Da11714, May 16, 2003; 2002Da4871, Aug. 30, 2004).

In addition, as long as the registration of a person who received the registration of ownership transfer from a title trustee under the registry is null and void, if a person who entered into a new legal cause with respect to the registration of real estate has followed the registration again on the basis of the invalid registration, the registration of the title shall not be exempted unless there are any special circumstances. In addition, the person who entered into a new interest based on the invalid registration with a person other than a third party under Article 4(3) of the Real Estate Real Name Act shall not be deemed to be a third party under the above provision.

In the same purport, the court below held that the land of this case was originally purchased and registered by the defendant (the plaintiff Lessee; hereinafter "the defendant"), and was held in title with the non-party 1, and that the non-party 2 filed a transfer registration lawsuit against the non-party 1 by asserting that he was the actual owner. Since the non-party 2 acquired the ownership by obtaining the recognition of the non-party 1, the non-party 2 did not lead to the ownership of the land of this case, but did not lead to a new legal cause between the non-party 1 and the non-party 1, and the non-party 2's acquisition of ownership constitutes an anti-social legal act committed by actively participating in the non-party 1's act in breach of trust, which constitutes a third party as stipulated in Article 4 (3) of the Real Estate Real Name Act, and thus, the registration of the non-party 2's name is null and void, and it does not constitute a new legal principle as to the non-party 2's registration under the name of the non-party 3 and the title trustee.

2. Regarding ground of appeal No. 2

In determining the subjective scope of res judicata, Article 218(2) of the Civil Procedure Act, which provides that where a party fails to state his/her succession until the closure of pleadings, it shall be presumed that he/she succeeded subsequent to the closure of pleadings, the purport of Article 218(2) of the Civil Procedure Act is that the person who asserts his/her succession prior to the closure of pleadings bears the burden of proving the existence of such burden of proof, and that res judicata of the final and conclusive judgment does not extend to his/her successor if it is proved that the succession

Therefore, if one of the parties wishing to exclude res judicata of the previous final and conclusive judgment proves the fact that the status of the party was succeeded before the closing of argument, the presumption of Article 218(2) of the Civil Procedure Act, which is the successor after the closing of argument that the res judicata of the previous final and conclusive judgment has effect, shall be deemed to be broken, regardless of whether the party in the previous lawsuit made a statement about such succession. In this case, in a case where the person who filed a lawsuit seeking cancellation of ownership transfer transfer transfers the ownership of the pertinent real estate to another person during the proceeding, the determination of whether the succession was made before the closing of argument or after the closing of argument should be made at the time of the transfer registration

According to the reasoning of the judgment below, the court below determined that the lawsuit filed by the defendant against the non-party 2 for the cancellation of the ownership transfer registration of the land of this case was finalized and finalized after the pleadings were closed on June 11, 1998, and that the plaintiff received the donation of the land of this case from the non-party 2 during the proceeding of the lawsuit and completed the registration of ownership transfer on December 11, 1997, which is the day before the closing of argument, the presumption under Article 218 (2) of the Civil Procedure Act was broken and thus the res judicata effect of the above final judgment does not affect the plaintiff. In light of the records in light of the above legal principles, the above judgment of the court below is just and acceptable, and it does not err by misapprehending the legal principles on the subjective scope of res judicata effect or the reversal of presumption.

3. Conclusion

Therefore, the appeal is dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices.

Justices Lee Hong-hoon (Presiding Justice)