Where the representative of a social welfare foundation disposes of the property of the social welfare foundation without the resolution of the board of directors, the validity of such disposal (Invalidity)

Examining the various provisions of Articles 1, 6, and 7 of the Act on the Establishment and Operation of Public Interest Corporations, which apply mutatis mutandis to social welfare corporations under Article 32 of the Social Welfare Services Act, and other provisions of the above Act, the purpose of Article 7 of the Act on the Establishment and Operation of Public Interest Corporations is to promote the sound development of public-service corporations and to have public-service corporations faithfully carry out their original business purposes by ensuring the smooth management and maintenance of property and the appropriateness of their finances, taking into account the special characteristics of public-service corporations. Thus, where the representative of a social welfare corporation disposes of the property of the social welfare corporation without the resolution of the board of directors, such disposal act is invalid.

Article 32 of the Social Welfare Services Act, Articles 1, 6 and 7 of the Act on the Establishment and Operation of Public Interest Corporations

Supreme Court Decision 84Ma591 Decided December 1, 1984 (Gong1985, 348) Supreme Court Decision 87Meu2406 Decided July 11, 1989 (Gong1989, 1210) Supreme Court Decision 97Da970 Decided December 11, 1998 (Gong199Sang, 111)

Plaintiff 1 and four others (Attorney Yoon-soo et al., Counsel for the plaintiff-appellant)

Social Welfare Foundation ○ Foundation

Seoul High Court Decision 99Na42164 delivered on March 17, 2000

All appeals are dismissed. The costs of appeal are assessed against the plaintiffs.

Examining the various provisions of Articles 1, 6, and 7 of the Act on the Establishment and Operation of Public Interest Corporations, which apply mutatis mutandis to social welfare corporations under Article 32 of the Social Welfare Services Act, and other Acts, the purpose of Article 7 of the Act on the Establishment and Operation of Public Interest Corporations is to promote the sound development of public-service corporations and to have public-service corporations faithfully carry out their original business purposes by ensuring the smooth management and maintenance of property and the appropriateness of their finances, taking into account the special circumstances of the public-service corporation. Thus, in cases where the representative of the social welfare corporation disposes of the property of the social welfare corporation without the resolution of the board of directors, such disposal act shall not be effective (see Supreme Court Decisions 84Ma591, Dec. 1, 1984; 87Meu2406, Jul. 11, 1989; 97Da970, Dec. 11, 1998, etc.).

In this regard, the court below is justified in rejecting the plaintiffs' assertion that the representative of defendant foundation's foundation's transfer of real estate held to the non-party, and that even if the disposal of basic property of defendant foundation was a resolution by the board of directors, it is not possible to oppose the non-party who is a bona fide third party, and it is not erroneous in the misapprehension of legal principles as to the resolution by the board of directors of public-service corporation

Therefore, all appeals are 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 on the bench.

Justices Song Jin-hun (Presiding Justice)