[Plaintiff (Defendant in Counterclaim), Appellant and Appellee] Plaintiff (Defendant in Counterclaim) 1 and 2 others (Attorneys of Kang Han Law Firm, Nam Ki-jeong and 1 other, as counsel)
[Defendant (Plaintiff in Counterclaim), Appellee and Appellant] Defendant (Plaintiff in Counterclaim) (Attorney Lee Mi-hwa, as counsel)
[Judgment Below] Seoul High Court Judgment 2018Na2059398, 2059404, dated November 14, 2019
[Order]
The part of the judgment below concerning the principal claim relating to the claim for return of the lease deposit and rent, and the part concerning the counterclaim relating to the alternative claim for reimbursement of loan interest, property tax (including related taxes), comprehensive real estate holding tax, comprehensive income tax, local income tax, and value-added tax paid on behalf of another, and the claim relating to rental business operating expenses, are reversed, and this part of the case is remanded to the Seoul High Court. The appeals filed by the Plaintiffs (Defendants in Counterclaim) as to the principal claim and the appeal filed by the Defendant (Plaintiff in Counterclaim) as to the counterclaim are all dismissed.
[Reasoning] The grounds of appeal are examined.
1. As to the Plaintiffs' (Defendants in Counterclaim, hereinafter "Plaintiffs") appeal regarding the claim for interest on the deposited money in the principal claim and the claim relating to rental business operating expenses in the counterclaim
The Plaintiffs did not state the grounds of appeal regarding this part in their petition of appeal, and did not submit a brief on the grounds of appeal regarding this part within the period for submission of the appellate brief.
2. As to the Plaintiffs' grounds of appeal
A. Determination as to the portion of Ground of Appeal No. 1 concerning the reimbursement of loan interest paid on behalf of another
The court below determined, for the reasons stated in its judgment, that the Plaintiffs are obligated to return to the Defendant (Plaintiff in Counterclaim, hereinafter "Defendant"), as unjust enrichment, an amount equivalent to the interest that the Defendant paid on the loan taken out in the name of construction funds for the building in this case, on the ground that the Plaintiffs obtained unjust enrichment by being relieved of that expenditure.
In light of the relevant legal principles and the evidence submitted, this determination by the court below is justified, and there is no error therein that misapprehends the legal principles on unjust enrichment and thereby affects the judgment.
B. Determination as to the portion of Ground of Appeal No. 1 concerning various taxes
(1) Under Article 107(1) of the Local Tax Act (지방세법), the "person who actually owns the property" who bears the obligation to pay property tax means the person who holds substantial ownership of the relevant land or property, regardless of whether that person is registered as the owner in the public record (see Supreme Court Decision 2010Du4964, decided December 13, 2012, etc.). In the case of a three-party title trust in which a title truster acquires real estate from the owner and, pursuant to a title trust agreement with a title trustee, has the ownership transfer registration for the real estate made directly from the owner to the title trustee, the title truster's status as a buyer is not fundamentally different from that of a buyer under an ordinary sales contract (see Supreme Court en banc Decision 2014Du43110, decided March 22, 2018). Therefore, if the title truster entered into a sales contract for the real estate and paid the entire purchase price, then even if the ownership transfer registration for the real estate had not been completed as of the property tax assessment base date, the title truster, as the person holding substantial ownership of the real estate, is obligated to pay the property tax, absent special circumstances.
However, even if the tax authority imposed a property tax assessment on the title trustee, who became the registered owner of the real estate under a three-party title trust, and the title trustee paid the property tax accordingly, it is difficult to hold that the title trustee thereby acquires a right to claim restitution of unjust enrichment equivalent to the property tax against the title truster or the title truster's heirs (see Supreme Court Decision 2018Da283773, decided September 3, 2020). This legal principle applies equally where the title trustee, under either a two-party title trust or a three-party title trust, has paid the comprehensive real estate holding tax imposed on the trust real estate, or the comprehensive income tax, local income tax, value-added tax, etc. related to rental income from a rental business conducted using the trust real estate.
(2) According to the reasoning of the judgment below and the record, the following facts are established.
(A) The deceased, Nonparty (hereinafter "the Deceased"), had the ownership transfer registration for the land in this case made in the name of the Defendant, the Deceased's younger sibling, pursuant to a three-party title trust agreement between them. In addition, the Deceased had the ownership transfer registration for the building in this case made in the name of the Defendant pursuant to a two-party title trust agreement, and accordingly, registered the rental business using the building in this case under the Defendant's name.
(B) The Deceased died on August 9, 2012, and the Plaintiffs inherited the Deceased's property.
(C) Since 2012, the Defendant paid 59,222,910 won in property tax, etc. imposed on the land and building in this case, 9,423,870 won in comprehensive real estate holding tax on the land in this case, and a total of 9,661,740 won in comprehensive income tax and local income tax for the year 2013 imposed in connection with rental income from the rental business using the building in this case. In addition, the Defendant paid 74,654,050 won in value-added tax imposed in connection with the rental business, of which 31,500,000 won was received from tenants but not paid over to the Plaintiffs (hereinafter, all of the above taxes are collectively referred to as "the taxes in this case").
(3) In light of the aforementioned legal principles and the facts as found above, even though the Defendant, as title trustee, paid the taxes in this case, the Plaintiffs, who inherited the position of the Deceased, the title truster, remain, as the actual owners of the land and building in this case, obligated to pay the taxes in this case. Therefore, it cannot be said that the Plaintiffs obtained unjust enrichment by being relieved of the obligation to pay the taxes in this case as a result of the Defendant's payment thereof. Accordingly, the Defendant does not have a right to claim restitution of unjust enrichment against the Plaintiffs for an amount equivalent to the taxes in this case.
(4) Nevertheless, the court below determined otherwise, holding that the Defendant has a right to claim restitution of unjust enrichment against the Plaintiffs for an amount equivalent to the taxes in this case, on the ground that the Plaintiffs obtained unjust enrichment by being relieved of the obligation to pay the taxes in this case as a result of the Defendant's payment thereof. This determination by the court below contains an error, as argued in the grounds of appeal, that misapprehends the legal principles on unjust enrichment and thereby affects the judgment. The ground of appeal pointing this out is well-founded.
3. As to the Defendant's grounds of appeal
A. Determination as to the scope of unjust enrichment to be returned by the Defendant
The court below determined, for the reasons stated in its judgment, that the Defendant had not returned to the Deceased 80,000,000 won out of the money received as the lease deposit for the building in this case, and rejected the Defendant's assertion that the Defendant had returned 30,000,000 won out of the said 80,000,000 won to the Deceased by using it as operating expenses for the academy in this case.
In light of the relevant legal principles and the evidence submitted, this determination by the court below is justified, and there is no error therein, as argued in the grounds of appeal, such as violation of the rules of evidence, misapprehension of facts, or inconsistency in reasoning, that affects the judgment.
B. Determination as to the expenditures for acquisition tax and other registration transfer costs and academy operating expenses
The court below determined, for the reasons stated in its judgment, that there was insufficient evidence to establish that the Defendant had spent the Defendant's own funds on the registration transfer costs for the land in this case and on expenses for operating the academy in this case, and accordingly rejected the Defendant's claim in this regard.
In light of the relevant legal principles and the evidence submitted, this determination by the court below is justified, and there is no error therein, as argued in the grounds of appeal, such as violation of the rules of evidence or misapprehension of facts, that affects the judgment.
C. Determination as to salary (representation expenses) and retirement allowance
The court below determined, for the reasons stated in its judgment, that there was insufficient evidence to establish that the Defendant had a claim equivalent to unpaid salary (representation expenses) and retirement allowance owed by the Deceased, and that the Defendant did not qualify as an employee under an employment contract eligible for retirement allowance, and accordingly rejected the Defendant's claim for salary (representation expenses) and retirement allowance.
In light of the relevant legal principles and the evidence submitted, this determination by the court below is justified, and there is no error therein, as argued in the grounds of appeal, such as misapprehension of legal principles, violation of the rules of evidence, misapprehension of facts, or inconsistency in reasoning, that affects the judgment.
4. Scope of Reversal
The court below granted the portion of the Plaintiffs' principal claim seeking the return of the lease deposit and rent under the lease agreement in this case, and granted the portion of the Defendant's counterclaim relating to the alternative claim for loan interest and reimbursement of the taxes in this case, and the claim relating to rental business operating expenses. The court below then, applying the Defendant's set-off defense, determined that part of the Plaintiffs' claim amount and the Defendant's aggregate claim amount had been extinguished in equal amounts by way of set-off, and, recognizing the Plaintiffs' obligation to pay the remaining balance of the Defendant's claim after set-off, granted part of the Defendant's counterclaim. However, inasmuch as the court below's determination regarding the Defendant's alternative claim for reimbursement of the taxes in this case contains the error noted above, it is necessary to recalculate the entire amount of claims that the Plaintiffs and the Defendant hold against each other subject to set-off, and to newly determine the amount extinguished by set-off and the remaining balance [see Supreme Court Decision 2016Da241515 (principal claim), 241522 (counterclaim), decided June 4, 2020]. Therefore, the part of the judgment below concerning the principal claim relating to the claim for return of the lease deposit and rent, and the part concerning the counterclaim relating to the alternative claim for reimbursement of loan interest and the taxes in this case, and the claim relating to rental business operating expenses, must all be reversed.
5. Conclusion
Therefore, without examining the Plaintiffs' remaining grounds of appeal, the part of the judgment below concerning the principal claim relating to the claim for return of the lease deposit and rent, and the part concerning the counterclaim relating to the alternative claim for reimbursement of loan interest and the taxes in this case, and the claim relating to rental business operating expenses, are reversed, and this part of the case is remanded to the court below for further hearing and determination; and the appeals filed by the Plaintiffs as to the principal claim and by the Defendant as to the counterclaim are all dismissed. This judgment is rendered by the unanimous opinion of the participating Justices, as set forth in the Order.
Justice Kim Seon-su (Presiding Justice), Lee Ki-taek, Park Jeong-hwa (Justice in Charge), Lee Heung-gu