The Supreme Court rendered the 109-Tai-Shang-222 Decision of April 23, 2020 (hereinafter, the “Decision”), holding that if it is proven that after a fund is contributed to acquire property registered in the name of another person, the ownership of the property is continuously exercised and the obligations are continuously assumed, such indirect fact may be used to prove that both parties have a contract of borrowing other’s name for real estate registration in place.
According to the facts underlying this Decision, the Appellant asserted that A, whose litigation was assumed by the Appellant, had established a contract of borrowing other’s name for real estate registration with the Appellee to the real estate at issue in the name of the Appellee. A also signed a contract of borrowing other’s name for real estate registration on a supplemental basis (hereinafter, the “Contract at Issue”). A subsequently terminated the contract of borrowing other’s name for real estate registration with the Appellee and requested the transfer registration of the ownership of the real estate at issue. A was deceased, and both parties were his inheritors. The Appellant requested the Appellee to conduct the transfer registration of the real estate at issue so that it would be jointly owned by both parties in accordance with the Contract at Issue and with Article 541, Paragraph 2 and Article 179 of the Civil Code, which was applied by analogy.
According to the Decision, “borrowing other’s name for real estate registration” refers to a contract where the parties agree that one party will register his property in the name of the other party while the property is still under his own management, use and disposal, and the name of the other party will be used for registration. Evidence that proves the establishment of a contract of borrowing other’s name for real estate registration is not limited to direct evidence. If it can be substantiated, generally based on other circumstances, that after contributing the fund to acquire the property registered in the name of the other party, the party has continuously exercised the ownership of the property and assumed obligations, such indirect evidence can be used to prove, by way of inference, that there is a contract for borrowing other’s name for real estate registration between the parties.
In addition, according to the Decision, if the following facts determined by the original trial court are generally considered: When A acted as an agent for entering into a purchase agreement with the real estate developer on behalf of the Appellee, he issued a promissory note as a security; after the transaction was established, he possessed the purchase agreement on the real estate at issue and documents such as invoices for the payment of the purchase price and the deed; after the purchase, he lived in that place with the Appellee; and he entered into the Contract at Issue with the Appellee to memorialize the legal relationship of borrowed name registration, whether these facts can adequately serve as favorable evidence to prove that A paid for the purchase of the real estate at issue and registered it under the name of the Appellee through borrowed name registration is not without question. If the Appellee at that time did not have the financial resources and the down payment and the mortgage loan were both paid by A, while A subsequently entered into the Contract at Issue with the Appellee, there is still room to explore whether the Appellant’s assertion that the relationship of borrowed name registration should exist between A and the Appellee was completely baseless. Without generally determine the results of evidence investigation, the original trial court was questionable when it merely applied various pieces of evidence separately to jump to the conclusion that there was no relationship of borrowed name registration between A and the Appellee and elected to render a decision unfavorable to the Appellant. In addition, the Appellee’s financial strength is critical to the finding of whether he contributed the fund and whether the relationship of borrowed name registration was established. The Appellant motioned that the Appellee should produce or the court should retrieve the Appellee’s bank statement on details of his deposit to prove that the Appellee did not have the financial means to purchase the real estate at issue and that the mortgage loan was paid exclusively by A. This is a very important offensive method. The original trial court was certainly inappropriate for failing to investigate and review this. Therefore, the appeal arguments criticizing the original decision for violation of laws and regulations and requesting its reversal are well-grounded.