1. Case Overview
1) The Plaintiff purchased an apartment located in central Seoul ("인터넷 바카라") but registered ownership in the name of his younger brother. Later, ownership was transferred from the brother to the Defendant, the Plaintiff's son.
2) The 인터넷 바카라 became subject to a reconstruction project, and a reconstruction association ("Association") was established. Ownership of the 인터넷 바카라 was transferred to the Association based on a trust registration.
3) The Defendant, under the Association's management and disposal plan, entered into a sale contract with the Association for a newly reconstructed apartment ("New Apartment") corresponding to the 인터넷 바카라.
4) As the reconstruction project progressed, the 인터넷 바카라 was demolished and its registry closed, while ownership preservation registration for the New Apartment was completed in the Defendant's name.
5) The Plaintiff requested the Defendant to register ownership of the New Apartment in his (the Plaintiff's) name to restore genuine ownership, but the Defendant refused, claiming that the New Apartment was his own property acquired through his sale contract with the Association after the trust registration.
2. Our Role and Litigation Process
We represented the Plaintiff in a creditor subrogation lawsuit, asserting a claim for ownership transfer registration of the New Apartment based on restoration of genuine ownership, in substitution for the seller's position against the Defendant.
The key issues were:
1. Nature of the Nominee Trust: whether the relationships between the Plaintiff and his brother, and between the Plaintiff and the Defendant, constituted a three-party registration title trust or a contractual title trust; and
2. Possibility of Subrogation: whether the Plaintiff could exercise creditor subrogation rights given that the trust registration of the 인터넷 바카라 in the Association's name created a new third-party interest, and whether the title trust relationship concerning the 인터넷 바카라 could be deemed to continue to the New Apartment.
We argued that:
- the title trust agreements between the Plaintiff, his brother, and the Defendant constituted a three-party registration title trust, rendering the ownership transfer registrations to the brother and the Defendant void;
- the Plaintiff retained the right to demand ownership transfer registration from the original seller based on the sale of the 인터넷 바카라; and
- since the reconstruction project lawfully transformed ownership of the 인터넷 바카라 into that of the New Apartment through procedures such as management and disposal plan approval and subsequent public notice under the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents, the title trust relationship extended to the New Apartment. Therefore, the Plaintiff could demand the ownership transfer registration for the New Apartment, exercising the right in subrogation of the original seller.
The court fully accepted our arguments and ruled in favor of the Plaintiff. Consequently, the Defendant completed ownership transfer registration in the name of the original seller for the purpose of restoring genuine ownership, and the Plaintiff was then able to register ownership of the New Apartment in his own name.
3. Significance of the Judgment
Despite the demolition of the 인터넷 바카라 and completion of ownership registration of the New Apartment under the reconstruction project, the Plaintiff who had entrusted title of the 인터넷 바카라 to the Defendant was able to restore ownership of the New Apartment in his own name.
Previously, courts had denied such claims on the grounds that the 인터넷 바카라 and the New Apartment were not legally identical properties after reconstruction (see Supreme Court Decision 2008Da1132, dated June 23, 2009). However, this case marks the first judgment recognizing that, where reconstruction constitutes public-law replacement (gongyonghwankwon), the title trust relationship of the 인터넷 바카라 continues to the New Apartment, thereby allowing the title trustor to seek ownership transfer registration of the New Apartment.
