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Can the Assignee from the Title Truster and the Subsequent Purchaser be admitted as the Third Party in Article 4 (3)?

  • DONG-A LAW REVIEW
  • 2012, (54), pp.571-602
  • Publisher : The Institute for Legal Studies Dong-A University
  • Research Area : Social Science > Law

Jaemoon Kwon 1

1숙명여자대학교 법학부

Accredited

ABSTRACT

According to the Act on the Registration of Real Estate under Actual Title holder's Name, no person shall register any real right to real estate under the name of the title trustee pursuant to the title trust agreement. This Act was enacted to prevent antisocial acts which abuse the real estate registration system, to normalize real estate transactions, and to stabilize real estate prices, by having any ownership and other real rights to real estate registered under the names of those having real rights so as to conform to the substantial relation of rights. To achieve this purpose, Article 4 functions as the most important measure. By this Article, any title trust agreement shall be null and void, and any change in the real rights to any real estate by a registration made under the title trust agreement shall be null and void. But this rule may arise some problems to the real estate market, because it denies the title trustee's real rights. As the bona fide acquisition (Civil Act Article 249) is not applied to the transaction of real estate, in case assigner is not title holder of real estate, no assignee can acquire real rights to it. So, Article 4 (3) provides the exception to this rule: Invalidity under paragraphs (1) and (2)) shall not be effective in respect of any third party. In this case, the main issue concerning the interpretation of the ‘Third Party’ in Article 4 (3) is this: the assignee from the title truster and the Subsequent Purchaser can be admitted as the Third Party. The Supreme Court's answer to this question is “no”. However, this answer seems half right, because the Subsequent Purchaser should be included in the meaning of the Third Party of the Article 4 (3). The reason is as follows: First, Contrary to the assignee from the transferee can be better protected by being exclude from the meaning of the Third Party, the Subsequent Purchaser can be better protected by recognized as the Third Party. Second, as to similar case, that is the fictious declaration of intention made in collusion with other party(Civil Act Article 108), prevailing opinion admits the Subsequent Purchaser be protected as the Third Party.

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