Supreme Court Confirms Government Defeat in Lawsuit to Reclaim Hong Eundong Land from Descendants of Pro-Japanese Collaborator Lee Hae-seung

The government ultimately lost a lawsuit seeking to reclaim land in Hongneung-dong, Seodaemun-gu, Seoul, owned by the descendants of pro-Japanese collaborator Lee Hae-seung, to the national treasury.

The land was solely inherited by Lee Woo-young, grandson of Lee Hae-seung and chairman of Grand Hilton Hotel, and then ownership was transferred to Jeil Bank through an auction. However, Lee repurchased the land. The judiciary ruled that under the Pro-Japanese Property Confiscation Act, even if the property is pro-Japanese property, rights already acquired by a third party who paid a fair price cannot be impaired, so the land is not subject to reclamation by the national treasury.

According to the legal community on the 6th, the Supreme Court's First Division (Presiding Justice No Tae-ak) upheld the lower court ruling that dismissed the Republic of Korea's claim for ownership transfer registration against Lee.

The court stated, "According to the proviso of Article 3, Paragraph 1 of the Pro-Japanese Property Confiscation Act, the rights acquired by Jeil Bank cannot be impaired. Therefore, the plaintiff's request to complete the ownership transfer registration based on the restoration of true ownership for the land in question, in place of the sequential cancellation of ownership transfer registrations under the defendant's name and previously under Jeil Bank's name, would impair the rights acquired by Jeil Bank and is not permissible. The lower court's judgment is reasonable," adding, "There is no error affecting the judgment in the dismissal of the appeal, such as misunderstanding the burden of proof under the proviso of Article 3, Paragraph 1 of the Pro-Japanese Property Confiscation Act, the possibility of infringement on third-party rights, the scope of third parties, or the principle of good faith."

Article 3, Paragraph 1 of the Pro-Japanese Property Confiscation Act stipulates that "pro-Japanese property shall be owned by the state at the time of acquisition, gift, or other cause of acquisition," establishing the state's ownership of pro-Japanese property. However, the proviso of the same paragraph states, "However, rights acquired by a third party in good faith or by paying a fair price shall not be impaired."

In other words, pro-Japanese property owned by pro-Japanese collaborators is treated as belonging to the state regardless of whether the acquisition was by inheritance or sale. However, if a third party, unaware that the property is pro-Japanese, acquires ownership from the collaborator, or even if aware, acquires ownership or rights by paying a fair price, the state cannot deny those rights.

The land in question was inherited by Lee from the pro-Japanese collaborator Lee Hae-seung, but since Jeil Bank, a third party, acquired ownership by paying a price, the state cannot claim ownership. Therefore, the Supreme Court ruled that the state cannot cancel the registrations under Lee's and Jeil Bank's names sequentially to restore ownership registration based on the original inheritance and then file a lawsuit against Lee for ownership transfer registration. Nor can the state directly claim ownership transfer registration based on restoration of true ownership against Lee.

Lee Hae-seung, a fifth-generation descendant of Jeongjo's father Jeongye Daewongun, was granted the highest noble title of Marquis among Korean nobility by the Japanese Empire and received the Korea Annexation Commemorative Medal on August 1, 1912. Due to his pro-Japanese activities, he was identified as a pro-Japanese collaborator by the Committee for the Investigation of Pro-Japanese and Anti-National Acts in 2007.

Seodaemun-gu, Seoul, discovered land suspected to be pro-Japanese property during a park development project in October 2019 and requested the Ministry of Justice to review whether it should be reclaimed by the state. Subsequently, the government filed a civil lawsuit in February 2021 to reclaim 27,905 square meters of forest land in Hongneung-dong, which was once owned by Lee Hae-seung and later by Lee.

Lee Hae-seung first acquired the land in 1917, and ownership passed to his grandson Lee in 1957. The land, which had a mortgage, was auctioned in 1966 and ownership transferred to Jeil Bank. The following year, Lee repurchased the land.

The first trial court ruled in favor of Lee, citing the proviso of Article 3, Paragraph 1 of the Pro-Japanese Property Confiscation Act, which excludes cases where a third party acquires property in good faith or by paying a fair price from state reclamation. The court held that even heirs of pro-Japanese collaborators should be considered third parties if they acquired the property by paying a fair price.

The first trial court stated, "The Pro-Japanese Property Confiscation Act does not provide any provisions regarding third parties," and "There is no reason to exclude heirs of pro-Japanese collaborators from the scope of third parties."

It concluded, "The defendant is a third party who acquired the land by paying a fair price, so the plaintiff cannot impair the defendant's rights to the land under the proviso of Article 3, Paragraph 1 of the Pro-Japanese Property Confiscation Act."

The Ministry of Justice appealed the first trial ruling, but the outcome did not change.

The second trial court stated, "Before the land was divided, it was auctioned and ownership transferred to Jeil Bank in 1966," and "It is sufficiently recognized that Jeil Bank acquired ownership by paying the auction price without knowing the land was pro-Japanese property."

It added, "The plaintiff is seeking ownership transfer registration against the current registered owner, the defendant, which would impair the rights previously acquired by Jeil Bank."

Regarding the plaintiff's claim that Lee, as an heir of a pro-Japanese collaborator, cannot be considered a third party under the proviso of Article 3, Paragraph 1 of the Pro-Japanese Property Confiscation Act and that Lee's claim to be a third party constitutes abuse of rights contrary to the principle of good faith, the court stated, "Since the ownership transfer registration based on restoration of true ownership sought by the plaintiff would impair the rights acquired by Jeil Bank and is not permissible, there is no need to further examine this part of the plaintiff's claim."

This content was produced with the assistance of AI translation services.