The validity of borrowing money by a corporation to which shares belong in violation of Articles 38 through 41 of the Enforcement Decree of the Act on the Disposal of Property Belonging to Jurisdiction

Since the provisions of Articles 38 through 41 of the Enforcement Decree of the same Act are interpreted as internal supervisory regulations, even if a corporation to which shares belong borrows funds in violation of the same Act, it shall not be deemed null and void.

Articles 42, 38, and 41 of the Enforcement Decree of the Act on the Disposal of Property Belonging to Jurisdiction; Article 31 of the Act on the Disposal of Property Belonging to Jurisdiction

Kim Sung-sung et al.

The Southern Electric Power Corporation

Daejeon District Court Decision 62Na1227 delivered on April 27, 1963

The appeal is dismissed.

The costs of appeal shall be borne by the defendant.

The grounds of appeal by Defendant’s attorney are as stated in the separate appellate brief.

Since the provisions of Articles 38 through 41 of the Enforcement Decree of the Act on the Disposal of Property Belonging to the State apply mutatis mutandis to a corporation to which shares belong under the provisions of Article 42 of the same Decree, the court below erred in rejecting the defendant's defense on the ground that the defendant company is not a corporation to which the vested property belongs under Article 31 of the same Decree, but the provisions of Article 31 of the same Act concerning the appointment and dismissal of the tenant of the vested enterprise, which apply mutatis mutandis to a corporation to which the vested property belongs under the provisions of Article 42 of the Enforcement Decree of the same Act, is a provision concerning the appointment and dismissal of the tenant of the vested enterprise, and there is no provision concerning prior approval under Article 39 of the same Enforcement Decree, and it is reasonable to interpret the provisions of Articles 38 through 41 of the same Decree as the internal supervisory provision. Therefore, it cannot be said that the decision of the court below is invalid because the head of the headquarters of the defendant company did not obtain prior approval from the competent Minister for the borrowing of the funds of this case.

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

The judge of the Supreme Court (Presiding Judge) of the Red Madern (Presiding Judge) Madern Madern Madern Madern Madon