Law Firm Jeong-jin, Counsel for the defendant-appellant

Attorney Kim Jae-hwan, and Shin Dong-dong

2. C.

[Judgment of the court below] Defendant 1 and 3 others

Magjin, E.S., Red Sheet

2017805 Judgment (Counterclaim)

1. As to the grounds of appeal Nos. 1 and 2

A. The title trust relationship is not necessarily established by an express contract between the truster and the trustee, but can be established by implied agreement. Whether there was an implied agreement on the title trust should be reasonably determined in light of social norms by comprehensively taking into account all the circumstances, including the relationship between the truster and the trustee, the motive and background leading up to the trustee’s custody of the relevant property, and the transaction details and mode between the truster and the trustee (see, e.g., Supreme Court Decision 2012Da42482, May 24, 2013). Furthermore, insofar as the establishment of a disposal document is recognized as authentic, the court should recognize the existence and content of the declaration of intent in accordance with the language stated in the disposal document, unless there is any clear and acceptable counter-proof evidence that denies the content of the document, unless there is a dispute over the interpretation of the contract between the parties, and thus, the interpretation of the parties’ intent expressed in the disposal document becomes an issue, should be reasonably interpreted in light of logical and empirical rules (see, e.g., Supreme Court Decision 2017Da17674, Jul.

B. The reasoning of the lower judgment and the evidence duly admitted by the lower court reveal the following facts.

(1) The Plaintiff is a person who is operating the original exporter and importer company (hereinafter referred to as 'Metema D') with the trade name 'D' in the Guatemala, and the Defendant B (hereinafter referred to as 'Defendant B') is a corporation incorporated for the purpose of manufacturing and exporting and importing textile materials on January 16, 2006. In addition, Defendant C is a person who is in the position of a director with the power of representation in Defendant B from May 24, 2006.

(2) At the time of establishment, Defendant B issued 10,000 share shares with par value of KRW 5,000. Defendant C accepted 5,050 share shares out of the above 10,000 share, 2,950 share shares out of the Plaintiff’s name, and 1,000 share shares out of the Plaintiff’s name, K and L, respectively. On May 24, 2006, K and L transferred 1,00 share shares to Defendant C, the father of Defendant C.

(3) On the other hand, on December 5, 2006, Defendant B opened a temporary general meeting of shareholders on December 5, 2006, and decided to issue 10,000 shares among the above 10,000 shares for capital increase. On December 29, 2006, Defendant C acquired 5,050 shares among the above 10,00 shares, P, 2,00 shares among them, and the remaining 2,950 shares in the name of E respectively.

(4) On February 8, 2007, when approximately one year has passed since Defendant B was established, the capital was established at USD 700,000,000 for the purpose of the business, such as the manufacture of textile materials and the coloring in a nearby vacant area in Vietnam. The F Limited Liability Company (F, hereinafter referred to as “F”) which is a single limited liability company, was established. According to the investment certificate issued by the R&D management department on the same day, according to the investment certificate issued by the R&D management department, Defendant B is written as having invested the whole USD 70,000 in capital.

(5) Around December 2007, F acquired the right to use the land located in the Vietnam Q industrial complex, and completed the construction of a new factory and office (hereinafter referred to as the "factory, etc. of this case," including the right to use the above land, factory and office) around August 2009. Meanwhile, with respect to the construction of the factory, etc. of this case on November 29, 2007, as to the construction of the factory, etc. of this case by e-mail, the Defendant C prepared a draft of the contract (hereinafter referred to as "the draft of this contract") for the clarity of ownership relationship with the Plaintiff at any time after the construction of the factory of this case by e-mail. The above draft contains an investment of 70,000 dollars in total for the investment of Defendant B. D and D have to be used from the investment site of Defendant B and D for all of its investment sites.

(7) Around September 2011, the Plaintiff transferred to Defendant C the KRW 29.5 million worth of Defendant B’s shares owned by it.

(8) On October 17, 2011, the Plaintiff and Defendant C confirmed that the factory located in the city where an empty space (including land and buildings) was located in the vicinity of the Sinnam Ho, and that it was owned by the Plaintiff. From December 2, 2010, Defendant C drafted a confirmation and an agreement that “it is confirmed that the aforementioned factory was leased and used by the Plaintiff” (hereinafter referred to as “instant agreement”), and Defendant B signed and sealed the instant agreement as a joint and several surety of Defendant C.

C. Examining the relationship with the Plaintiff and the Defendants, the details of the transaction between the Plaintiff and the Defendant C, the draft of the instant contract, and the preparation process and contents of the instant agreement in light of the legal principles as seen earlier, there is considerable room to deem that there was an implied title trust agreement between the Plaintiff and the Defendant B, which had decided to register F’s membership rights (hereinafter “instant membership rights”) in the name of the Defendant B at the time when the F was established.

(1) The investment certificate issued by the empty Corporation management department is indicated as the investment by Defendant B in the F’s capital amounting to 700,000 U.S. dollars. However, considering the fact that around February 8, 2007, the capital of Defendant B was less than KRW 100,000,000 and not more than one year after Defendant B was established, there is no room to regard the above capital amount as the amount actually invested by Defendant B.

(2) Rather, as indicated in the draft of the instant contract that Defendant C prepared on November 29, 2007 and sent to the Plaintiff, Defendant C agreed to bear USD 700,000 of the total investment cost for Defendant B and Vietnam investment. Under such agreement, the Plaintiff appears to have provided USD 700,000 to Defendant B.

(3) Around the time the draft of the instant contract was prepared, Defendant C and his father P were in the position of the largest shareholder holding 70.5% of the shares issued by Defendant B, and Defendant C was in the position of the representative director of Defendant B. When the instant membership right was registered in the name of Defendant B, Defendant C prepared the draft of the instant contract and sent it to the Plaintiff as a mail, indicating that the instant membership right is owned by the Plaintiff as a director of Defendant B and the largest shareholder.

(4) In full view of the fact that “F’s ownership in the draft of the instant contract refers to the fact that all of the instant contracts indicate “F has over-the-end D”, “F owns the instant factory, etc., and Defendant B signed and sealed as joint and several sureties under the instant agreement, it is understood that the part of the instant agreement refers to the fact that “the instant factory, etc. is identified as the Plaintiff’s ownership” is the ownership of the Plaintiff, not the Defendant B. It accords with the intent of the Plaintiff and the Defendants who prepared the instant agreement.

(5) On the other hand, the capital invested in F is USD 700,00. On the other hand, around September 201, Defendant C’s acquisition of the Plaintiff and Defendant B’s shares 5,900 shares (29.5% of the total issued shares) and payment of the purchase price is merely KRW 29,50,000. Considering that the F’s capital and the purchase price for the said shares 5,900 shares is significantly different, the Plaintiff and Defendant C, on the premise that Defendant B is not the owner of the instant employee’s rights at the time of selling and selling the said shares, determined the purchase price with the sales price of KRW 5,00,00.

D. Nevertheless, the lower court determined otherwise on the grounds stated in its reasoning that it is difficult to view the Plaintiff as the actual owner of the instant membership rights, instead of limiting the status of the fund provider for the establishment of F, and further, deeming the Plaintiff as the title truster who entrusted the instant membership rights to Defendant B. In so determining, the lower court erred by misapprehending the legal doctrine regarding the probative value of the disposal documents, etc., or by exceeding the bounds of the principle of free evaluation of evidence in violation of logical and empirical rules, thereby adversely affecting

2. As to the third ground for appeal

According to the reasoning of the judgment below, the court below determined that even if Defendant C continued to use the factory, etc. of this case, the Defendants did not have any obligation to pay to the Plaintiff the amount at the rate of USD 4,000 per month as stipulated in the instant agreement, even if it continued to use the factory, etc. of this case, the Defendants did not have any obligation to pay to the Plaintiff the amount at the rate of USD 4,000 per month as stipulated in the instant agreement, by considering the various matters to be settled between the Plaintiff and the Defendants.

In light of the relevant legal principles and records, although there are some inappropriate parts in the reasoning of the judgment below, it is just to determine that the plaintiff cannot seek monetary payment from January 1, 2016 to the completion date of delivery of the factory, etc. of this case by the rate of USD 4,000 each month pursuant to the instant agreement. In so doing, contrary to what is alleged in the grounds of appeal, the court below did not err by misapprehending the legal principles on the interpretation of

3. As to the fourth ground for appeal

Based on the evidence adopted by the court below, the court below acknowledged that the plaintiff transferred 30,00 US dollars to the defendant C at around September 201, 201, all of the 59,00 US$2,50,000 owned by the plaintiff under the name of the plaintiff, and the defendant C transferred US$30,000 to N’s account for the payment of the above stock transfer price on September 22, 201, and the exchange rate ($1,193) as of the above date of transfer ($1,193) exceeds KRW 35,790,000, but the defendant C transferred US USD 30,000 as above in consideration of the fact that the plaintiff invested in US$ 30,00 at the time of the establishment of the defendant B. The defendant C received a defense from the defendant C by determining that all of the claims against the plaintiff for the stock transfer price were extinguished by paying USD 30,000 as above.

In light of the reasoning of the lower judgment and the record, the lower court’s aforementioned determination is justifiable, and contrary to what is alleged in the grounds of appeal, the lower court did not err by misapprehending the legal doctrine regarding the allocation of burden of proof,

4. Conclusion

Of the part of the lower judgment against the Plaintiff, the part of the claim for confirmation of membership rights against Defendant B is reversed, and that part of the case is remanded to the lower court for further proceedings consistent with this Opinion. The remaining appeal is dismissed. It is so decided as per Disposition by the assent of all participating Justices

Justices Go Young-young

Justices Kim In-young

Justices Kim Jong-il