부동산명의신탁과 불법원인급여 ― 대법원 2019. 6. 20 선고 2013다218156 전원합의체 판결 ―

부동산명의신탁 약정의 불법원인급여 해당 여부를 검토했다.

I have participated as an expert witness in a recent Korean Supreme Court case (hereinafter referred to as the “Case”) related to the Act on the Registration of Real Estate under Actual Titleholder’s Name (hereinafter referred to as the “Act”). This paper reviews the Case. The main issue of the Case was whether a title trust agreement regarding real estate which was made in violation of the Act can be seen as the “illegal cause” under Article 746 of the Korean Civil Code, and therefore whether the trustee can invoke the illegality defense against the trustor’s claim to void the title transfer registration of the real estate under the trust agreement.

The Korean courts had consistently held that Article 746 cannot be applied under such situation, meaning that the title trustee cannot invoke the illegality defense when the title trustor attempts to void the registration under the title trust agreement. In this Case, the Supreme Court decided that now is the time to re-examine this issue by an en banc hearing as twenty years have passed since the Act was enacted. The Supreme Court confirmed the long-held position of Korean courts. This paper looked favorably on the holding of the Supreme Court for the following reasons.

First, consideration of the various provisions of the Act including Article 5(on penalty), Article 6(on fee to force performance), and Article 7(on the criminal sanctions) is thought to lead to the conclusion that the Act evidently presupposes that the title over the trusted real estate belongs to the trustor, not the trustee. Secondly, title trust agreement cannot be seen as an “illegal cause” under the Article 746 of the Korean Civil Code. The position that such agreement is an illegal cause argues that since such agreement violates the Article 103 of the Korean Civil Code on the treatment of legal acts violating public policy, such agreement becomes an illegal cause.

However, the two provisions are not the same in the policy goals they pursue, which suggests that Article 103 cannot be invoked as the ground to decide whether an agreement is an illegal cause under the Article 746. Thirdly, it is in violation of the Korean Constitution to allow the title trustee to use the illegality defense because it will result in the title trustor's property right being violated without any compensation. Fourthly and lastly, it is unjust to allow the trustee to hold the ownership title over the property in which he, too, was illegally involved. For the above-mentioned reasons, this paper concludes that the holding of the Case is appropriate.