2017Da274673 Objection

Class A Association

B

Seoul High Court Decision 2016Na2081759 Decided September 21, 2017

January 25, 2018

The judgment below is reversed and the case is remanded to Seoul High Court.

The grounds of appeal are examined.

1. A clan is a naturally created clan group composed of the members of the common ancestor for the purpose of protecting the graves of the common ancestor and promoting friendship among the members of the clan, and the clan property is essentially important factor in achieving the purpose of the clan. The purpose and nature of the clan, its character and nature of the clan property

In light of the nature of a clan, a resolution of a clan general meeting on the distribution of a clan property is null and void if the contents of the resolution are remarkably unfair or are contrary to good morals and other social order (see Supreme Court Decision 2007Da74775, Sept. 30, 2010).

In addition, the executive officers of a clan who are in a contractual relationship similar to the clans have the duty of care as a good manager as well as the rules of the clan or the resolution of the general meeting of the clans in managing and disposing of the property of the clans (see Supreme Court Decision 2007Do6554, Dec. 28, 2007).

2. A. Review of the reasoning of the lower judgment and the record reveals the following.

1) The Plaintiff is a clan that is the joint group of G, the 5th son E, the city group of CJ, and H, the son of G, the son of CF. From March 1, 2006, the Defendant served as the Plaintiff’s vice-chairperson or the general vice-chairperson from March 1, 2006, L served as the Plaintiff’s adviser from March 14, 2006 to October 2015, while K served as the Plaintiff’s vice-chairperson or the vice-chairperson (from March 1, 2006 to March 14, 2009, hereinafter “Defendant, etc.”).

2) On March 1, 2006, the Plaintiff: (a) held an ordinary general meeting on March 1, 2006; and (b) made a resolution to transfer the ownership registration of 35 lots of land in the name of the Plaintiff on the title trust to the network R, etc.; and (c) made a resolution to delegate all relevant powers to the president, who is the representative, when filing a lawsuit, etc. is necessary. On March 1, 2007, the Plaintiff passed a resolution to hold an extraordinary general meeting on March 1, 2007 and to pay 15% of the winning amount to the attorney, and to the contributor, including the litigation cost, etc. on March 14, 2009; and (d) made a resolution to appoint L as the president by holding an extraordinary general meeting on March 14, 2009; and (e) delegate all the authority pertaining to

3) On March 26, 2007, the Plaintiff appointed an attorney M as a legal representative and filed a lawsuit against the network R, etc. on the 110,380m square meters of land (hereinafter referred to as "land to be returned") for the registration of ownership transfer on the ground of termination of title trust, which was sentenced in the first instance court. However, on July 29, 2009, the Plaintiff was sentenced to a favorable judgment at the appellate court and the said judgment became final and conclusive around that time (hereinafter referred to as "the above lawsuit").

4) On November 26, 2009, the Plaintiff held a general meeting of shareholders (hereinafter referred to as the “general meeting of shareholders”) on November 26, 2009, and notified the winning of the case in the final soil return lawsuit, and made a resolution with the purport that an attorney-at-law, who represented in the lawsuit, shall make a donation of 15% of the recovered land and pay the purchase price by selling 15% of the recovered land (each 5%) to the third party, including the contributor, and the costs of lawsuit, to the third party, including the Defendant

5) On February 11, 2015, the Defendant filed an application with the Plaintiff for a payment order stating that the payment order shall be paid to the Plaintiff, which constitutes KRW 214,865,97, equivalent to KRW 5% of the refunded land, by the Seoyang-si District Court 2015j. 391, and the damages for delay thereof, and the said court issued the Defendant’s payment order on February 26, 2015, and the payment order became final and conclusive on April 10, 2015 due to the Plaintiff’s failure to raise any objection. Meanwhile, on March 23, 2015, the Plaintiff paid KRW 50 million to the Defendant as part of the amount to be paid according to the instant donation resolution.

B. Based on the above factual basis, the lower court rejected the Plaintiff’s assertion that the instant decision on donation was null and void in violation of Article 20 of the clans No. 20 that prohibits the distribution of clan property for the following reasons

1) Although Article 20 of the Constitution of the Republic of Korea provides that "the property of the plenary session shall be operated for the business necessary for the development of the clan and shall not be distributed to an individual of the members of the clan in principle, even according to the above provision, the distribution of the clan property is not absolutely prohibited, and even according to the above provision, the distribution of the clan property shall not be absolutely prohibited, and Article 21 of the Constitution of the Republic of Korea may be rewarded to the "person who has contributed to the development of the plaintiff", and since the distribution of the clan property and the reward may be made by the resolution of the general meeting of the clan because the distribution of the clan property

2) Considering that the Plaintiff recovered ownership of several parcels through a lawsuit seeking the return of land and that the Defendant et al. contributed to a considerable portion in the process, it is difficult to deem that three parties including the Defendant et al. suffered damage to the Plaintiff due to unnecessary litigation, and no other evidence exists to deem that the content of the instant donation resolution is considerably unfair or contrary to good morals and other social order.

3. A. However, examining the following facts and circumstances known by the reasoning of the lower judgment and the record in light of the legal principles as seen earlier, the lower court’s aforementioned determination is not acceptable.

1) 원고의 종헌에 의하면 '종중 및 종회는 숭조사상(崇祖思想)을 고취하며 회원 간의 친목과 화합 단결을 도모하고 영구히 선조의 얼을 현양(顯揚)케 하는 것을 목적으로 한다'고 하고(제4조), 이러한 목적을 달성하기 위하여 ① 선조의 유업심구(遺業尋究) 및 보존, ② 보첩(譜蝶)의 유지(維持) 증보(增補) 및 계도(啓導), ③ 종토(宗土) 및 종재 (宗財)의 수호관리(守護管理) 등 종중 및 종회 발전을 위해 필요한 사업을 시행하는 것으로 정하고 있다(제5조).

2) In addition, Article 20 of the Plaintiff’s Constitution provides that “In principle, the property of the clan shall be operated for the business necessary for the development of the clan, and shall not be distributed to individuals of the clan,” it shall be deemed that the whole will of the clan members, which is essential for the preservation, maintenance, and management of the clan’s property, is reflected in the achievement of the principal purpose of the clan, which is the protection and religious services of the

3) The fact that the defendant et al. performed duties necessary for the restoration of the clan property, such as filing a lawsuit for the return of the clan, is merely the duty of care of a good manager who is borne by the clan as a member of the clan for the achievement and development of the purpose of the clan.

4) Although the Plaintiff’s religious constitution provides that a person who has contributed to the development of the plenary session may be awarded a reward to “a person who has contributed to the development of the plenary session” (Article 21), taking into account the above, it is difficult to deem that it is justified to receive a donation of part of the recovered land or to receive the proceeds of sale on the sole ground that the Defendant et al., who only fulfilled his/her natural obligation to the clans through a lawsuit to return the clans

5) On March 1, 2007, before the resolution of donation was adopted at the general meeting of this case, the Plaintiff passed a resolution to pay 15% of the winning amount to the contributor, including litigation costs, if he/she won in a case where he/she won the winning amount at the general meeting of this case. However, in addition to the appointment of an attorney-at-law to act on behalf of the defendant in a lawsuit for the return of the clan, there is no objective data to verify the expenses in the records, such as whether or not the expenses have been incurred in the lawsuit for the return of the clan, and whether or not the expenses have been incurred. In particular, in the general meeting of this case, it is difficult to conclude that only 29 members including the defendant, etc. (18 persons directly present at the general meeting, and 11 persons who submitted the power of attorney), while attending the general meeting of this case, only the resolution was made to pay the winning amount to the 15% of the winning amount of the Plaintiff’s clan at the general meeting of this case, or that the defendant was delegated to the first five percent of the clan.

B. Ultimately, even if there is a portion contributed to the recovery of the clan property by three persons including the defendant, it is nothing more than performing the duties to be naturally an executive officer of a clan who bears the duty of care, so the resolution of donation of this case where the defendant et al. distributes to three persons including the defendant et al. the portion of the recovered clan property beyond the actual expenses or the reasonable remuneration within the reasonable scope and the recovery therefrom should be deemed null and void by significantly unfair or social feasibility. Nevertheless, the judgment of the court below otherwise determined is erroneous by misapprehending the legal principles on the distribution of clan property, which affected the conclusion of the judgment

4. Therefore, without further proceeding to decide on the remaining grounds of appeal, the lower judgment is reversed, and the case is remanded to the lower court for further proceedings consistent with this Opinion. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Supreme Court Decision 200

Justices Kim Jong-il

Justices Cho Jae-sik in charge

Justices Noh Jeong-chul