[1] Whether Article 395 of the Commercial Act applies mutatis mutandis to the act of an expression representative director who is not qualified as a director (affirmative)

[2] Requirements for imposing liability under Article 395 of the Commercial Act on a company for an act of a person appointed as a representative of the resolution of the general meeting of shareholders who prepared the minutes only without holding the meeting

[1] Article 395 of the Commercial Act / [2] Article 395 of the Commercial Act

[1] Supreme Court Decision 77Da2436 delivered on February 13, 1979 (Gong1979, 11790), Supreme Court Decision 91Da35816 delivered on July 28, 1992 (Gong1992Ha, 2547), Supreme Court Decision 97Da34709 delivered on March 27, 1998 (Gong198Sang, 1176) / [2] Supreme Court Decision 91Da14369 delivered on August 18, 1992 (Gong192, 2730), Supreme Court Decision 94Da7621, 7638 delivered on December 27, 1994 (Gong195, 661)

Plaintiff 1 and one other (Law Firm Barun, Attorneys Park Jae-sik, Counsel for the plaintiff-appellant)

Defendant (Attorney Jeong-sung et al., Counsel for defendant-appellee)

Seoul High Court Decision 2006Na65790 decided July 25, 2007

The ancillary claim part of the judgment below is reversed, and that part of the case is remanded to the Seoul High Court. The appeal against the main claim among the judgment below is dismissed.

The grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed).

1. Regarding ground of appeal No. 1

With respect to the plaintiffs' primary claim seeking the implementation of the procedure for ownership transfer registration of the real estate of this case based on the sales contract of this case, the court below acknowledged that the defendant company was a company established for the oil sale business of this case, and that there was no special resolution of the shareholders' general meeting of the defendant company at the time of the sales contract of this case, and held that the real estate of this case constitutes an important property which serves as the foundation of the defendant company's business of oil station. In doing such disposal, the special resolution of the shareholders' general meeting of shareholders under Article 374 subparagraph 1 of the Commercial Act is required. In this case, it is obvious that the court below rejected this part of the claim on the ground that such special resolution is null and void due to the absence of such special resolution. In light of the related legal principles and records, the above judgment of the court below is legitimate, and therefore, it cannot

2. Regarding ground of appeal No. 2

The court below rejected the plaintiffs' assertion that the defendant company should return the sales price of KRW 1.9 billion already received to the plaintiffs as unjust enrichment, if the plaintiff's preliminary claim that the sales contract of this case was null and void due to the lack of a special resolution of the general meeting of shareholders of the defendant company, and that the non-party 1 was a legitimate representative director of the defendant company at the time of conclusion of the sales contract of this case. Thus, the non-party 1 cannot be deemed to have received the sales price of this case from the plaintiffs. Thus, the court below rejected the above assertion on the premise that the defendant company

However, we cannot accept the above determination by the court below for the following reasons.

In a case where the sales contract of this case was null and void as seen earlier, the Defendant Company was obligated to return the purchase price of KRW 1.9 billion received by Nonparty 1, a representative director or representative director, to the original state as unjust enrichment. However, the lower court rejected the Plaintiffs’ conjunctive claim on the ground that Nonparty 1 was not a legitimate representative director of the Defendant Company at the time of the conclusion of the sales contract, and omitted the judgment as to the Plaintiffs’ assertion that Nonparty 1 constituted an apparent representative director.

Article 395 of the Commercial Act provides that in order to protect a third party who has trusted the appearance of a representative director in accordance with the legal doctrine or external appearance theory, a company which is responsible for the existence of such appearance shall be held liable for such act against a third party acting in good faith. It shall be interpreted that the above provision shall apply mutatis mutandis to a case where a company permits a third party who is not qualified as a director to use the name of an expressed representative director, and where a person who is not qualified as a director has neglected without any measure despite being aware that he/she is using the name of an expressed representative director at his/her own discretion and has not taken any measures, and where the above provision is passively implied, it shall be interpreted that the above provision shall apply mutatis mutandis (see Supreme Court Decision 97Da34709 delivered on March 27, 1998, etc.). Meanwhile, if it is deemed that an act of a person appointed as a representative director without convening a general meeting of shareholders and preparing the minutes of a general meeting of shareholders is attributable to the company, the company may be held liable in accordance with Article 395 of the Commercial Act.

The facts acknowledged by the court below and the following circumstances acknowledged by the records of this case. Even if Nonparty 2, the chief executive officer of the company, and Nonparty 3 and Nonparty 2, who were the chief executive officer of the company at the time of February 204, were employed respectively as the auditor, the defendant company was operating the gas station in this case, and it appears that Nonparty 1’s family members, including the above Nonparty 2, were taking part in the operation of the gas station, and the above decision was made to add the leasing business to the above business for the above purpose to the above company’s general meeting of shareholders, for the purpose of leasing the gas station to the above others, and the above company’s representative director and Nonparty 3 and Nonparty 4, who were the chief executive officer of the company, were not the chief director of the company and Nonparty 1, who were the chief director of the company at the time of the above provisional disposition, were not the representative director of the company, and were the representative director of the company, and were the representative director of the company and Nonparty 2, who were the chief director of the company.

Therefore, the court below decided whether the defendant company should be liable for the conclusion of the contract of this case and the receipt of the purchase price pursuant to Article 395 of the Commercial Act after examining the composition or operation form of the defendant company as above, the reasons why the non-party 1 prepared the minutes of the general shareholders' meeting as of February 14, 2004, and the situation where the non-party 1 entered into the contract of this case as the representative director of the defendant company prior to the conclusion of the contract of this case and the response attitude by the non-party 2, etc., and then rejected the plaintiffs' claim for return of unjust enrichment solely on the grounds as seen above. Thus, the court below erred by misapprehending the legal principles as to the representative director as stipulated in Article 395 of the Commercial Act or omitting all necessary deliberation, which affected the conclusion of the judgment by omitting the judgment on the plaintiffs' assertion about the representative director as to this point. Thus, the ground of appeal

3. Conclusion

Therefore, without further proceeding to decide on the remaining grounds of appeal, the part of the lower judgment’s conjunctive claim shall be reversed, and that part of the case shall be remanded to the lower court for further proceedings consistent with this Opinion. Of the lower judgment, the appeal regarding the main claim shall be dismissed. It is so decided as per Disposition by the assent

Justices Kim Nung-hwan (Presiding Justice)