[2] Where the representative director of a corporation knew or could have known that he/she did not make an external transaction without a resolution by the board of directors, the validity of the transaction (Invalidity)

[3] The case holding that the judgment below which invalidated the issuance of a promissory note does not err in the misapprehension of legal principles, in case where Eul's representative director of Gap corporation's corporation, who was extremely worse due to its financial condition as a company with the total capital of 6 billion won and the total assets of 19.2 billion won, was issued a promissory note amounting to 2.8 billion won and did not go through the resolution by the board of directors in accordance with the Byung corporation's proposal actively involved

1. As to the ground of appeal on the necessity of resolution by board of directors

Article 393(1) of the Commercial Act provides that a large-scale borrowing of assets of a stock company shall be determined by a resolution of the board of directors. Here, whether it constitutes a large-scale borrowing of assets should be determined depending on whether it is reasonable to entrust the decision of the representative director in light of various circumstances, such as the value of the relevant borrowed assets, the size of the company, the situation of the company’s business or assets, management status, purpose and place of use of the relevant assets, the ordinary business relations of the relevant company, and the conventional handling of the relevant company (see Supreme Court Decision 2007Da23807, May 15,

According to the reasoning of the judgment below, as of August 1, 2009, when each of the Promissory Notes was issued, the court below acknowledged that, as of August 1, 2009, the total amount of capital of the Plaintiff Company was 5,967,240,50 won, total amount of assets was 19,199,000,000 won (based on the quarter of 2009), the total amount of assets was 122,61,305 won in year 207, and 757,383,357 won in year 2008, and that, around July 2009, the Plaintiff Company rejected the Plaintiff Company’s claim for the issuance of the Promissory Notes with respect to its liabilities of KRW 289,950,000 in consideration of the following facts:

Upon examining the records in light of the above legal provisions and legal principles, the above judgment of the court below is just, and there is no error in the misapprehension of legal principles as to large-scale borrowing of assets necessary for the resolution of the board of directors under Article 393 (1) of the Commercial Act, as

2. As to the ground of appeal on the legal effect of the board of directors resolution defects

If the representative director of a corporation did not undergo a resolution of the board of directors with respect to external transactions, and the other party to the transactions knew or could have known that there was no such resolution of the board of directors, the transaction has no effect on the other party (see, e.g., Supreme Court Decisions 94Da33903, Apr. 11, 1995; 96Da48282, Jun. 13, 1997).

According to the reasoning of the judgment below, the court below determined that each of the above promissory notes was null and void since the Defendant was actively involved in the management of the Plaintiff Company since it became the largest shareholder of the Plaintiff Company on February 28, 2008, and even around August 2009, when each of the promissory notes of this case was issued, on the grounds that the Plaintiff Company unilaterally assumes large-scale liabilities due to the issuance of each of the promissory notes of this case (excluding the above part of KRW 189,929,095) and the Defendant’s representative director and the Nonparty, the former representative director of the Plaintiff, were in a private village relationship with the Plaintiff Company through the Nonparty, and the Defendant was actively involved in the Plaintiff Company’s management since it became the largest shareholder of the Plaintiff Company through the Nonparty. Furthermore, even around August 2009, as at the time of the issuance of each of the promissory notes of this case, the Defendant did not know or could not know that each of the promissory notes of this case was issued by the board of directors of each Plaintiff.

In light of the above legal principles and records, the above judgment of the court below is just, and there is no error in the misapprehension of legal principles as to the legal effect of transactions lacking resolution by the board of directors, which affected the conclusion of the judgment.

3. As to the grounds of appeal omitting judgment

According to the records, the defendant's preparatory document dated January 11, 201 stated that the plaintiff's assertion that the issuance of each of the Promissory Notes in this case is invalid is against the good faith principle, but there is no entry that the defendant stated the above document at the date of pleading in the original judgment (which is not stated in the above written statement). Therefore, the ground of appeal on this part that the court below omitted the judgment on the above assertion is without merit.

4. Conclusion

Therefore, the appeal is dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices.

Justices Kim Yong-deok-soo (Presiding Justice)