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Double Sale of Real Estate and the Protection of the First Buyer

KIM SHIN 1

1동아대학교

Accredited

ABSTRACT

It is permissible for a seller of real estate to enter into double contracts for the sale of the real estate. However, it is the attitude of cases that, if the seller does not transfer the recorded title to the first buyer after receiving the intermediate payment from the first buyer and passes the recorded title to the second buyer, the crime of breach of trust is constituted. In addition, in case where the second purchaser's active participation in the seller's action, the second contract for the sale is invalid as an act against the social order set forth in the article 103 of the Civil Code, thereby protecting the first purchaser's status. This attitude does not conform to the provisions of the current Civil Code or Criminal Code and is not valid in terms of policy. First of all, the cases finding the double selling of real estate constitutes the crime of breach of trust (CBT) is based on the proposition that the nature of the crime is based on the theory of betrayal. However CBT was not enacted on the basis of the theory of betrayal. The attitude viewing that the seller is situated on the position of the person performing the buyer’s work by way of employing special relation of trust, the duty to cooperate for recording based on the theory of betrayal is not appropriate for the interpretation of CBT under the current Criminal Code. Such theory of cases not only brings in expansive interpretation of the provisions of Criminal Code but unclear result as to the relevant application of CBT. The recent en bank decision, making different conclusions in double sale of chattel and in double sale of real estate, cast a problem hard to solve. Once a real estate seller receives the intermediate payment from the first buyer, he or she cannot arbitrarily avoid the sale contract. Besides, it is not impossible or prohibited to make another sale contract and transfer the recorded title to a second buyer. It is the attitude of our civil law that ownership is transferred to one of the two buyers who completes the recording first, and the seller may pay damages to the buyer who has not obtained the ownership because of the other buyer’s completion of the recording. Nevertheless, the cases shows such attitude as guaranteeing the rights of the first buyer more than what the Civil Code guarantees, taking a harsh attitude against the seller and the second buyer threatening the seller or the second buyer with criminal punishment. Cases view that, though the double sales does not against the good public order and customs as a principle it violates the same when the second buyer actively engages in the double sales. This dose not comply with the general concept and elements of the good public order and customs generally recognized so far, and thus the reconsideration is required. Besides, the application of the theory of non-compliance with the good public order and customs results in going against the general principle of civil law because the first buyer, who is a mere creditor, prevails over the second buyer, who acquired the ownership of the real estate by completing the recording. In conclusion, the current attitude of cases have many problems in legal theory and are not desirable in view of policy and it is hoped that such attitudes should be changed in faithfully compliance with the provisions of Criminal Code and the legal theory therefor as soon as possible.

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