Japanese government had intended to establish the Forest Ownership in accordance with the modernized laws and terminate the ownership disputes through the project for surveying the forest. This research is purposed to analysis the survey report for the land in disputes called Bunjangjijoseo(『紛爭地調書』) in Kimhae, Kyungsang Province and review how to treat the customary Forest occupation by Kimhae Citizen at the project process. During the Project, 191 disputes for 285 lots were occurred in Kimhae which was over most area in Kimhae. At that time, the Forest was occupied by Kimhae citizen in the manner of grave, sales & purchase, Planting trees, recording on land registration and certification, drafting a plan and others. However, the forest without ownership relation for long time was enlisted as the state forest at the state forest identification(or classification) survey which was made on and about 1911-12 year, and then leased to the 3rd parties on the condition of planting trees. This caused the Japanese to occupy the most of forest with considering the land area and lots. Consequently, the parties to the dispute for the forest were the local residents and the state as well as the local residents and Japanese who had leased the forest. Most of disputes in Kimhae area were for the state forest and settled in favor of the leaseholder except 10 lots. The settlement of the disputes over the forest in Kimhae was the process to create the state forest. The Japanese government unilaterally admitted and recognized the ownerless mountains as the state ones based on the modernized ownership conception. Further, the previous ownership interests and rights over the forest were not recognized on the unconditional basis of the current Planting trees and actual result. In consequence, the state forest was reproduced and enlarged, and most of the Japanese who were the leaseholders won the cases, were able to push on planting trees and have more chance to secure the ownership interest on the forests. This made the local resident in Kimhae unable to exercise their influence over the forest slowly and to join the operation of forest resources under the control of the Japanese.