Plaintiff (Law Firm Hanl, Attorneys Jeong Young-won et al., Counsel for the plaintiff-appellant)

Korea Land Trust Co., Ltd. (Law Firm Sejong, Attorneys Kang Shin-op et al., Counsel for the plaintiff-appellant)

March 8, 2006

Suwon District Court Decision 2004Gahap3594 Decided June 22, 2005

1.The judgment of the first instance shall be modified as follows:

A. The defendant received 18,210,874,838 won from the plaintiff and 5% interest rate per annum from January 1, 2001 to the date of full payment, and then the plaintiff received 18,210,874,838 won per annum from the plaintiff.

(1) Procedures for cancellation of each trust registration completed on May 4, 200 with respect to each real estate listed in the separate sheet 1, 2, 3, 5, 6, 7, 8, 9, and 10 in the separate sheet 1, 2, 3, 5, 6, 7, 8, 9, and 10, which was completed on May 4, 200 by the Sungwon District Court Branch of Sung-nam Branch of the Sungwon Branch of the District Court, and completed on August 2, 200,

(2) On December 31, 200, the procedure for the registration of ownership transfer due to the termination of the trust on each real estate listed in the separate sheet 1 to 10

D. Each performance shall be made.

B. The plaintiff's remaining claims are dismissed.

2. The total cost of a lawsuit shall be divided into two parts, one part, and the other part shall be borne by the plaintiff, respectively.

1. Purport of claim

The Defendant, as the Plaintiff

(a) the procedure for cancellation of each trust registration completed on May 4, 200 with respect to each real estate listed in the separate sheet No. 1, 2, 3, 5, 6, 7, 8, 9, and 10 in the Suwon District Court, Sung-nam Branch of the Sung-nam Branch of the Sungwon District Court, which was completed on May 4, 200 in the separate sheet No. 44931, and completed on August 2, 200 in the separate sheet No. 78660;

B. On December 31, 2000, the procedure for the registration of ownership transfer on the ground of termination of the trust on December 31, 200 with respect to each real estate listed in the separate sheet 1 through 10 (hereinafter “each real estate of this case”).

D. Each performance shall be made.

2. Purport of appeal

The part against the defendant in the judgment of the first instance shall be revoked, and the plaintiff's claim corresponding to the revoked part shall be dismissed.

1. Basic facts

The following facts are not disputed between the parties, or may be recognized by taking into account the respective descriptions of Gap evidence 1 through 4 (including each number), Eul evidence 8, and the whole purport of pleadings:

A. On August 31, 1996, the Plaintiff and the Defendant entrusted the Defendant with the Seo-dong (number omitted) 5,311.6 square meters (hereinafter “instant land”). On the ground of the instant land, the Defendant constructed a three-story and a eight-story automobile specialized building on the ground level, and sold it to the Defendant as trust property. The Defendant, as trust proceeds, acquired an amount equivalent to a certain ratio, and concluded a sale-type land trust agreement (hereinafter “instant trust agreement”) with the purport that the Defendant would return trust property and profits to the Plaintiff upon the termination of the contract.

B. The Defendant completed the registration of ownership transfer of the instant land under the name of the Defendant pursuant to the instant trust contract, and completed the instant building, which is a parking lot, business facility, or sales facility of the third and third underground floors, the 8th underground floors, the 8th floor above the ground, and completed the registration of trust and the registration of ownership transfer under the name of the Defendant as to the instant building on May 4, 200 (Provided, That the real estate recorded in the attached list 4 was completed as the co-owned property portion as the trust registration under the name of the Defendant and the registration of ownership transfer on August 2, 200).

C. The trust contract of this case terminated on December 31, 200 after the expiration of the period, and the building of this case was sold in lots except each real estate at the time of the filing of the lawsuit of this case.

D. The relevant provisions of the Trust Act and the instant trust agreement relating to the instant case are as follows.

(1) Trust Act

Article 31 (Restriction on Acquisition of Right by Trustee)

(1) No trustee shall make the trust property as his/her proprietary property or acquire any right thereto, regardless of in whose name the trustee is entitled: Provided, That where it is apparent that he/she would benefit the beneficiary, or there is any justifiable reason, he/she may make

Article 42 (Expenses, Claims for Compensation by Trustee)

(1) Where a trustee receives compensation for any taxes, public charges and other expenses and interest borne with respect to trust property, or any loss incurred in performing trust affairs without any negligence, he/she may sell the trust property and exercise the right in preference to other persons having the right.

Article 43 (Right to Demand Remuneration) The provisions of the preceding Article shall apply mutatis mutandis to remuneration if the beneficiary receives any remuneration from the trust property. The same shall apply where the trustee receives the remuneration from the beneficiary.

Article 49 (Right of Former Trustee to Compulsory Execution)

(1) The former trustee may perform a compulsory execution or auction against the trust property on the basis of the right to receive the expenses or damages prescribed in Article 42 (1) or the right to receive the remuneration prescribed in Article 43.

(2) The former trustee may retain the trust property in order to exercise the right referred to in the preceding paragraph.

Article 60 (Reversion of Trust Property after Termination of Trust) Where a trust is terminated, if the person entitled to Reversion of the trust property fails to specify in the act of trust, the trust property shall revert to the truster or his heir.

Where a trust is terminated, the trust shall be deemed to exist until the trust property is transferred to the person having the right to whom it reverts. In such cases, the person having the right to whom it reverts shall be deemed the beneficiary.

Article 62 (Idem) The provisions of Articles 27 and 49 shall apply mutatis mutandis when the trust property reverts to the beneficiary or any other person upon completion of the trust.

(2) The instant trust agreement

Article 4 (Borrowing of Funds)

(1) A defendant may appropriate funds necessary for building construction and performance of trust affairs from trust property, or borrow funds at the expense of the plaintiff or beneficiary.

Article 13 (Initial Beneficiary) The first beneficiary of this Trust shall be the plaintiff: Provided, That the third person may be the beneficiary.

Article 18 (Payment of Expenses)

(1) The following expenses shall be borne by beneficiaries:

1. Taxes, public imposts, and registration expenses for the trust property;

2. Design and supervision expenses and construction cost;

3. Repayment of loans, rental deposit, etc. and interest thereon;

4. Repair, preservation, and improvement expenses of real estate in trust, and fire insurance premiums;

5. Expenses incurred in dealing with sale in lots;

6. Other expenses equivalent to the following subparagraphs:

Article 19 (Appropriation of Expenses Incurred in Realization of Trust Property) Where money belonging to a trust property is not sufficient to appropriate funds for the repayment of borrowings and interest thereon, losses incurred without the defendant's negligence in the course of performing trust affairs, other expenses incurred in performing trust affairs, and the payment of the money by the defendant, the beneficiary shall be claimed, and where the money falls short of the money, the method and value that the defendant considers reasonable, which are part of

Article 20 (Accounting of Trust and Delivery of Profits)

(1) The calculation date for trust property shall be June 30, December 31 and the termination date of the trust, and the defendant shall prepare a statement of receipt for the relevant calculation period and submit it to the beneficiary.

Article 21 (Trust Remuneration)

(1) The remuneration for trust during the construction period until the completion of development, such as the completion of a building, shall be the amount equivalent to 5/100 based on the aggregate of the value of entrusted property and construction expenses. In such cases, the defendant shall calculate the remuneration for trust in accordance with the formula in each calculation machine to receive it from the trust property, and if it is impossible to receive it from the trust property

(2) The amount of trust fees during the period of sale in lots after completion of development, such as the completion of buildings, shall be the amount equivalent to 5/100 (3/100 of the amount of sale in lots after March 1, 200) of the price of sale in lots. In such cases, where trust fees are to be received from trust property and cannot be received from trust property, the defendant shall claim the beneficiary thereof.

Where the trust contract is terminated under Article 25 (Delivery of Trust Property upon Termination of Trust), the defendant shall obtain approval from the beneficiary for final settlement, and deliver the trust property to the beneficiary in accordance with the following methods in return for the certificate of beneficial interest and redemption:

1. As to the trusted real estate, the defendant shall cancel the trust registration and transfer the registration to the beneficiary, and then transfer the trusted real estate to the beneficiary in the existing condition;

2. Omission;

3. The repayment liabilities for borrowings, rental deposit, etc., and other obligations shall be treated as follows:

(a) Omission;

B. The defendant may withhold the delivery of money belonging to trust property in order to secure funds for the repayment of borrowed money and other debts, and when this reservation falls short of the amount of money, the defendant shall have the beneficiary deposit the shortage with the beneficiary: Provided, That with the consent of the creditor, the defendant may, by succession of the borrowed money and other debts to the beneficiary, be exempted from

2. Judgment on the assertion of conflict with res judicata

A. The defendant's assertion

On April 2002, the Plaintiff filed a lawsuit against the Defendant regarding a building unsold in lots until the time, including each of the instant real estate, for the registration of ownership transfer due to the termination of trust as Seoul District Court 2001Kahap21798. On January 9, 2004, the decision in lieu of the conciliation made in the above court became final and conclusive on January 9, 2004, and the Plaintiff decided to waive the right to claim for the registration of ownership transfer that was sought at the time of the above decision. The instant claim for the registration of ownership transfer pertaining to each of the instant real estate due to the same cause conflicts with the res

B. Determination

In full view of the purport of the argument in the evidence No. 4, the above Seoul District Court 2001Kahap21798 (hereinafter “instant conciliation decision”)’s main contents: ① sell the part unsold in lots among the buildings of this case to the conciliation intervenor (non-party corporation corporation) at the amount equivalent to 22 billion won and value added tax; ② the above sales contract is established at the time when the conciliation intervenor pays the down payment at the fixed date; ② the first intermediate payment, second intermediate payment, or balance is not paid at the agreed date, the above sales contract becomes null and void; ③ in the case where the conciliation intervenor did not pay the down payment or the first intermediate payment and the first intermediate payment are paid, the Plaintiff filed an application for cancellation of provisional disposal order with the Seoul District Court 2001Kahap20202 as to the above real estate, and ④ in the case where the Plaintiff and the Defendant did not waive the Plaintiff’s claim for ownership transfer registration on the ground of termination of trust relation between the Plaintiff and the Defendant, and the remaining part of the sales contract was not paid after the settlement agreement was changed.

According to the above facts, the part concerning the waiver of the plaintiff's claim for ownership transfer registration among the conciliation decision of this case is valid only when the above sales contract is duly formed and the balance is performed, and where the contract is not established or its validity is lost, the provision concerning the waiver of the plaintiff's claim for ownership transfer registration based on the termination of the plaintiff's trust contract shall not affect the trust contract of this case between the plaintiff and the defendant, and as long as the above conciliation intervenor did not establish the above sales contract because he did not pay the down payment, the plaintiff's claim of this case based on the termination of the trust contract of this case shall not conflict with the res judicata.

3. Whether the right to self-help sale is recognized at the time the trust deed is terminated;

A. The parties' assertion

The Plaintiff asserts that the Defendant is obligated to implement the cancellation of the trust registration and the transfer registration of ownership (hereinafter “ownership transfer registration”) with respect to each real estate of this case as the trust contract of this case expires with the expiration of the termination of the termination of the trust contract of this case. As such, the Defendant shall revert each real estate of this case to the Plaintiff pursuant to Article 60 of the Trust

In regard to this, the defendant, as a trustee, has the right to claim compensation for expenses and the right to claim compensation for expenses (hereinafter referred to as "right to claim compensation for expenses"), and since the defendant has the right to dispose of the trust property to satisfy the right to claim compensation for expenses even after the termination of the trust contract of this case pursuant to Article 42 (1) of the Trust Act or Article 19 of the trust contract of this case, as long as the defendant intends to exercise his/her right to self-help sale, he/she shall not be obliged to perform the registration of transfer to the plaintiff. Accordingly, the plaintiff shall not exercise his/her right to sell self-help after the termination of the trust contract, and therefore, the plaintiff shall not

B. Determination

(1) The right to sell self-help under Article 42(1) of the Trust Act

First of all, Article 42 (1) of the Trust Act recognizes the trustee's right to sell self-help after the termination of the trust contract, and Article 42 (1) of the Trust Act provides for the trustee's right to sell self-help and priority under Article 42 (1) of the Trust Act, and compulsory execution right, auction right and lien under Article 49 of the Trust Act. Article 49 of the Trust Act is a provision for the enforcement of the former trustee's right to claim compensation when the trustee is changed. ② Meanwhile, Article 62 of the Trust Act on legal relations after the termination of the trust applies mutatis mutandis only Article 49 of the former trustee's right to enforce compulsory execution, and Article 42 of the former trustee's right to sell self-help is not applicable mutatis mutandis. ③ On the termination of the trust relationship, trust relationship between the truster and the trustee terminates, and the trustee bears the duty to return trust property to the beneficiary. Under this circumstance, it is not reasonable to recognize the trustee's right to claim compensation for expenses, such as the right to sell self-help and the trust agreement.

Therefore, in this case where the trust contract expires due to the expiration of the period, the defendant cannot exercise the right to sell self-help under Article 42 (1) of the Trust Act.

(2) Right to sell self-help under Article 19 of the Trust Contract

Next, as to whether the defendant can exercise the right to self-help after the termination of the trust contract in this case under Article 19 of the trust contract, Article 62 of the Trust Act on the method of exercising the right to claim compensation for expenses by the trustee after the termination of the trust contract cannot be deemed a mandatory provision. Under the principle of private autonomy, in the trust contract, the parties concerned can recognize the right to self-help sell the trustee's right to self-help after the termination of the trust contract. ① Article 19 of the trust contract in this case does not impose any limitation on the time of its exercise, ② Article 19 of the Trust Act does not have any provision, and ② Article 19 of the Trust Act recognizes the right to self-help sell the trustee's right to self-help as a trustee only during the trust contract term with the contents similar to Article 42 of the Trust Act, the above provision does not need to be established. As such, the defendant has the right to self-help sell the trust contract in this case after the termination of the trust contract.

The plaintiff argues that Article 19 does not apply after the termination of the trust contract, since Article 25 subparagraph 3 applies to the method of compensating for expenses after the termination of the trust contract. Thus, Article 25 subparagraph 3 of the above Article provides that if the trust property remains in the trust property with respect to the repayment method of the debt to a third party incurred in the course of performing the trust affairs at the time of termination of the trust contract, it may be reserved, and if the reserved amount is insufficient, the beneficiary shall deposit the trust property or obtain the consent of the third party who is the creditor, and (1) the trustee bears the liability to compensate for the debt to the third party incurred in the course of performing the trust affairs with his own property (Supreme Court Decision 2004Da3183, 31890 Decided October 15, 204).

Therefore, the purport of the agreement under Article 25 subparagraph 3 of the above is only the method of settling debts against the third party at the time of termination of the trust contract of this case, and it does not deny the possibility of concluding the special agreement under Article 19, which recognizes the right to self-help sale, and therefore, the plaintiff's assertion denying the validity of the special agreement under Article 19 on the ground of the existence of Article 25 subparagraph 3 of the above Article is without merit.

(3) Relationship between the duty to transfer ownership and the right to self-help sale

On the other hand, even if the right to sell self-help under Article 19 of the Trust Contract is recognized to the defendant, the right to sell self-help is not only a way to realize the defendant's right to claim compensation for expenses against the plaintiff, and the defendant can exercise his right to sell self-help even before the plaintiff compensates for expenses, and it is not extinguished by the plaintiff's right to claim the registration of transfer of ownership due to the termination of the trust contract in this case. Thus, the plaintiff can claim the registration of transfer of ownership by paying expenses and remuneration before the defendant exercises his right to sell self-help.

4. Relationship between the duty to compensate for expenses and the duty to transfer ownership;

A. The parties' assertion

In regard to the plaintiff's assertion that the defendant's obligation to transfer ownership to the plaintiff and the obligation to compensate for expenses to the plaintiff against the defendant are in a relationship of administrative affairs, so the defendant's obligation to compensate for expenses is deemed to be in a simultaneous performance relationship. Since the defendant's obligation to compensate for expenses is a prior performance obligation, and the defendant's obligation to compensate for expenses is recognized to be in a prior performance obligation to the plaintiff, so the plaintiff's obligation to perform the procedure for transfer of ownership is not "necessary to file a claim against the plaintiff."

B. Determination

(1) In this case, even if the trustee's obligation to transfer ownership and the beneficiary's obligation to compensate for expenses are mutually performed simultaneously upon termination of the trust under the Trust Act, if the trust contract provides a special agreement recognizing the trustee's right to self-help sale for the trustee's compensation upon termination of the trust, the trustee's right to self-help sale is similar to the right to security for which the registration of transfer is completed for the security for the claim (Supreme Court Decision 2003Da47621 Decided April 15, 2005). In this case, in light of the nature of the security right as above, the beneficiary's obligation to compensate for expenses, which is the secured obligation, is converted to the prior performance obligation of the trustee's obligation to compensate for expenses, which is prior to the trustee's obligation to transfer ownership registration. Thus, the plaintiff's obligation to compensate for expenses in this case is related to

(2) Furthermore, in relation to the defendant's argument that the plaintiff does not need to make a prior claim as a condition for prior performance, as in this case, where it is proved that the plaintiff has a prior performance relationship as to the case where the plaintiff claims the non-performance of conditions or simultaneous performance relation (the plaintiff claims for ownership transfer registration in the claim, but the plaintiff claims the simultaneous performance relation, such as preparatory documents, etc.). Even if the plaintiff's prior performance obligation is satisfied, if the defendant does not cooperate in the registration procedure while disputing the amount of the amount, etc., the plaintiff's claim shall not be entirely dismissed unless the defendant expresses his opposing opinion, and in such a case, it is necessary to claim in advance as a lawsuit for future performance (see, e.g., Supreme Court Decisions 96Da33938, Nov. 12, 196; 92Da5249, Apr. 27, 1993). As examined below, the plaintiff's prior claim for the registration of ownership transfer is without merit.

5. Scope of expenses and remuneration;

(a) The trial scope;

(1) The parties' assertion

In regard to the Plaintiff’s assertion that the loan and interest accrued after the termination of the instant trust agreement are not included in the expenses to be repaid by the Plaintiff, since they cannot be deemed to be the expenses necessary for achieving the purpose of the statutory trust deemed to exist under Article 61 of the Trust Act, the Defendant asserts that the statutory trust upon the termination of the instant trust agreement constitutes extension of the existing trust among the statutory trust, and thus, the loan and interest accrued after the termination of the trust are also included in the expenses to

(2) Determination

Article 61 of the Trust Act is a statutory trust in which the trust property is deemed to continue to exist until it is transferred to the person to whom the trust property is reverted. In a trust act, if the person to whom the trust property is reverted determines the person to whom the trust property is to be reverted, the original trust may be deemed to be extended. If the person to whom the trust property is to be reverted is the truster or his heir, the person to whom the trust property is to be reverted shall be presumed to be the so-called return trust for the purpose of returning the remaining property to the truster, in accordance with the principle of equity, and in accordance with the principle of equity. As long as the person to whom the trust

Meanwhile, in the case of a return trust where the person with the right to attribution is the truster, his heir, or his heir, has the authority to transfer the remaining property to the truster, his heir, or those who instruct the truster or his heir, and therefore, the person with the right to attribution should reimburse the expenses incurred during the statutory trust period. The financial expenses, such as the loan interest, etc. after the termination of the trust with respect to the expenses incurred during the original trust period, cannot be deemed as expenses necessary for accomplishing the purpose of the statutory trust deemed to exist under Article 61 of the Trust Act (Supreme Court Decision 2000Da25989 Decided March 26, 200), and ultimately, the loan or interest accrued after the termination of the trust contract of this case is not included in the scope of the plaintiff's obligation to compensate expenses.

B. Specific scope

(1) Comprehensively taking account of each of the statements and arguments in the evidence Nos. 6, Nos. 18, and 19-1 of the evidence Nos. 6, 18, and 19, on December 31, 2000, as of the end of the instant trust contract, the facts can be acknowledged such as the principal and interest of the Defendant’s loan, etc., KRW 17,963,967,427, trust fees, KRW 246,907,411, and KRW 18,210,874,838. As such, the Plaintiff is obligated to pay to the Defendant the aggregate amount and the amount related thereto, as well as a statutory delay of 5% per annum as stipulated in the Civil Act from January 1, 201 to the day of full payment.

(2) On this ground, the Plaintiff added additional interest rate to the interest rate borrowed from outside while depositing the funds borrowed from outside to its own account, which is null and void as it acquired a right to trust property contrary to Article 31 of the Trust Act. Thus, the Defendant’s loan subject to compensation should be limited to the principal and interest borrowed from outside.

(4) In light of the purport of the Plaintiff’s respective entries and arguments in the evidence No. 11, No. 15, No. 15, and No. 16, the Defendant, a trust company, takes a method of borrowing the required funds in advance on the basis of the entire trust business and keeping them in its own account without any method of raising them by businesses, which requires funds. It is possible for a trustee to raise funds on favorable terms based on the high level of foreign credit, and (2) to execute funds immediately at the time of the need for funds in a specific trust account, and (3) to minimize the expenses incidental to the borrowing of funds in the trust account without any fees, and (4) to raise funds in the trust account; (2) Article 5 of the Standards for Accounting of Real Estate Trust Companies, which is established by the Financial Supervisory Commission, provides for a difference between the trust account and the trust account in the interest rate of loans in its own account and the trust account, and Article 6 of the Act provides for a difference between the trust account and the trust account at least one-year interest rate of loans in its own trust account.

(3) In addition, the Plaintiff caused damages to the Plaintiff in violation of the fiduciary duty and fiduciary duty as a trustee by having the Plaintiff make profits of KRW 12,456,257,00 as the instant trust business without examining the validity of the instant trust contract at the time of the conclusion of the instant trust contract. After the completion of the business, the Plaintiff had the Plaintiff enter into the instant trust contract, and attempted to operate the trust property without permission and to dispose of the trust property at his discretion after the completion of the business. The amount of damages is equivalent to KRW 12,456,257,00, which is the profits the Defendant proposed at the time of the conclusion of the instant trust contract. The Plaintiff asserted that the amount should be deducted from the amount of compensation for expenses. Therefore, there is no evidence to prove that the Defendant, as the trustee, did not incur damages to the Plaintiff due to violating the fiduciary duty and fiduciary duty. Therefore, the said assertion is without merit.

6. Conclusion

Therefore, the defendant is obligated to pay to the plaintiff 18,210,874,838 won with 5% interest per annum from January 1, 2001 to the date of full payment, and the plaintiff is obligated to cancel the registration of the trust of each of the real estate of this case and to execute the registration procedure for transfer of ownership on December 31, 200. Thus, the claim of this case is justified within the scope of the above recognition, and the remaining claims are dismissed as it is without merit. Since the judgment of the court of first instance is improper in conclusion, the defendant's appeal is partially accepted and the judgment of the court of first instance is modified as above. It is so decided as per Disposition.

[Attachment List omitted]

Judges Choi Byung-chul (Presiding Judge)