The Supreme Court rendered the 105-Tai-Shang-2384 Civil Decision of December 30, 2016 (hereinafter, the “Decision”), holding that if a name borrower who has registered a piece of real estate under the name of the individual whose name is borrowed under a name borrowing contract, such name borrower should not be deemed to have no disposal right.
According to the facts underlying this Decision, Appellee A asserted as follows. His inheritee B was the owner of the real estate at issue. After he was interdicted by the court, B’s legal guardian, or his spouse C, registered the transfer of the real estate to the Appellant as a result of a sale. Since B was unconscious and incompetent to handle the sale contract and register the ownership transfer, such registration was certainly invalid. Therefore, the Appellee sought a decision to compel the Appellant to cancel the registration of the ownership transfer of the real estate at issue in accordance with Article 767 of the Civil Code.
According to the Decision, name borrowing registration refers to an agreement under which the parties agree that one party will register his/her property in the name of the other party while still managing, using and disposing of the property on his/her own with the other party agreeing to the registration of such property in his/her name. Basically, such agreement is based on the trust between the name borrower and lender. If the provisions do not violate mandatory or prohibitive requirements or good social morals, the legal effect of contractus re innominati should be granted and relevant provisions concerning agent-client relationship under the Civil Code should apply by analogy. Therefore, since the name borrower’s registration of the ownership transfer of real estate registered under the name of the name lender to a third party does not violate the name borrowing contract, the name borrower should not be deemed to have no disposal right.
It was further pointed out in the Decision that since the real estate at issue was owned by C but registered under B’s name through a name borrowing arrangement, B was merely the name lender. When the real estate at issue was disposed of by C as the name borrower, it could hardly be deemed that C had no disposal right to register the ownership transfer to the Appellant. Therefore, it was concluded that the name borrowing contract did not have to be terminated, and that the original decision was reversed and remanded on the ground that the original decision was unlawful for insufficiency of its investigation.