[1] Whether the other party to the act is bona fide and has no gross negligence in order to take place in the liability of the company under Article 395 of the Commercial Act (affirmative), and the meaning of “serious negligence” in this case

[2] Whether Article 395 of the Commercial Act applies to cases where an apparent representative director performs an act under the name of the representative director (affirmative), and the standard for determining whether the other party to the act was maliciously or by gross negligence

[3] The scope of the burden of proof borne by the company to assert the invalidity of the transaction to a third party and the meaning of "serious negligence" of the third party in case where the representative director of the company committed so-called self-transaction without the approval of the board of directors

[4] The effects of a representative director of a corporation by abusing his/her authority for personal interests within the scope of his/her representative authority

[1] Article 395 of the Commercial Act / [2] Article 395 of the Commercial Act / [3] Article 398 of the Commercial Act, Article 288 of the Civil Procedure Act / [4] Articles 209 and 389 (3) of the Commercial Act, Article 107 (1) of the Civil Act

[2] Supreme Court Decision 2002Da40432 Decided July 22, 2003 (Gong2003Ha, 1765) Supreme Court Decision 2010Da10039 Decided March 10, 201 (Gong201Sang, 734) / [3] Supreme Court Decision 2003Da64688 Decided March 25, 2004 (Gong2004Sang, 701) / [4] Supreme Court Decision 2005Da3649 Decided July 28, 2005 (Gong2005Ha, 1415) Supreme Court Decision 2007Da23807 Decided May 15, 2008

Foreign Capital Capital Co., Ltd. (Law Firm Squa, Attorneys Song-yeong et al., Counsel for the defendant-appellant)

Almat Capital Co., Ltd. (Law Firm LLC, Attorneys Yoon Yong-op et al., Counsel for the defendant-appellant)

Dongbu ELD Co., Ltd.

Seoul High Court Decision 2012Na44534 decided January 11, 2013

The appeal is dismissed. The costs of appeal are assessed against the defendant.

The grounds of appeal are examined.

1. Regarding ground of appeal No. 1

The court below rejected the defendant's assertion that even if the plaintiff trusted the appearance formed by the non-party 1 or the non-party 2 did not directly contact the non-party 1 or the non-party 2, the defendant does not interfere with the defendant's liability for the company's act of expression representative director under Article 395 of the Commercial Act.

In light of the relevant legal principles and records, the above determination by the court below is just and acceptable, and contrary to the allegations in the grounds of appeal, there were no errors in the misapprehension of legal principles as to the other party who can claim the liability of the company against the act of

2. Regarding ground of appeal No. 2

The liability of a company under Article 395 of the Commercial Act does not arise where the other party to the act acted in bad faith or with gross negligence. Here, “serious negligence” refers to a situation in which it is deemed reasonable to deem that there is no need to protect the other party from the perspective of fairness as the apparent representative director has committed an act in his/her name as well as an act in his/her name by failing to know that the other party would have been able to be able to represent the company if he/she had been able to have been able to have been able to have been able to have been able to have been able to have been able to have been able to have been able to have been able to have been able to have been able to have been able to have been able to have been able to have been able to have been able to have been able to have been able to have been able to have been able to have been able to have been able to have been able to have been able to represent the company.

After citing the judgment of the court of first instance, the court below acknowledged the facts as indicated in its holding, and determined that the plaintiff knew or was grossly negligent in failing to know that the non-party 1 did not have the right to act on behalf of the defendant's representative director, considering the circumstances acknowledged by the adopted evidence, etc., it is difficult to recognize that the non-party 1 did not have the right to act on behalf of the defendant's representative director, solely based on the circumstance acknowledged by the adopted evidence.

Examining the records in light of the above legal principles, the above fact-finding and judgment of the court below are just, and there is no error in the misapprehension of legal principles as to malicious or gross negligence, incomplete hearing, or violation of the rules of evidence in the liability of the company for the act of the express

3. As to the third ground for appeal

The so-called self-transaction without the approval of the board of directors is null and void between the company and the director. However, in order to claim against a third party that the transaction is null and void due to a failure to obtain the approval of the board of directors, it shall be proved that the third party was aware of the absence of the approval of the board of directors in addition to the failure to obtain the approval of the board of directors due to the necessity to protect the third party acting in good faith. Although the third party acted in good faith, the same shall apply to the case of bad faith if it is proved that there was gross negligence in the failure to know the third party. In this case, the gross negligence refers to a situation where it is deemed reasonable to deem that there was no need to protect the third party from an equitable perspective (see, e.g., Supreme Court Decision 2003Da64688, Mar. 25, 2004).

Examining the records in light of the above legal principles, the court below is just in rejecting the defendant's assertion that the contract of this case is null and void since it is a director's act of self-transaction without the approval of the board of directors, since it is difficult to find the plaintiff that there was a bad faith or gross negligence with regard to the fact that the defendant's approval for the contract of this case was not granted. There is no error in the misapprehension of legal principles as to gross negligence, incomplete deliberation, violation of the

4. As to the fourth ground for appeal

The court below rejected the defendant's defense that Article 55 of the Financial Investment Services and Capital Markets Act, which provides for prohibition of compensation for losses, applies to a joint and several surety contract of this case between a financial investment business entity and an investor, and the defendant cannot be deemed directly applied to the joint and several surety contract of this case, since the defendant was not issuing company of the stock of this case, it cannot be deemed that the joint and several surety contract of this case violated the principle of shareholder equality

Examining the records in light of the relevant legal principles and statutes, the above determination by the court below is just and acceptable. Contrary to the allegations in the grounds of appeal, there were no errors in the misapprehension of legal principles as to anti-social legal acts

In addition, the court below did not explicitly determine the defendant's assertion that the joint and several guarantee contract of this case was invalid because it violated Article 341 of the Commercial Act prohibiting the acquisition of treasury stocks in principle or was conducted to avoid such restriction. However, according to the records, even if the defendant acquired the stocks of this case by exercising appraisal right pursuant to the joint and several guarantee contract of this case, there is no evidence to prove that the funds for acquiring the stocks of this case are made by the contribution of Alti Electronic Co., Ltd. (hereinafter " Alti Electronic Co., Ltd.") or that the profits and losses from the acquisition of the stocks belong to Alti Electronic Co., Ltd. (hereinafter " Alti Electronic Co., Ltd."). Thus, it cannot be deemed that the joint and several guarantee contract of this case violates the provisions of the Commercial Act concerning the prohibition of the acquisition of treasury stocks or is a de facto agreement to avoid such restriction (see, e.g., Supreme Court Decision 2009Da23610, Apr. 28, 2011).

5. Ground of appeal No. 5

An act by the representative director of a corporation within the scope of his/her representative authority shall be effective once of the act of the corporation, even though the representative director abused his/her authority for the purpose of pursuing his/her own interest or a third party, regardless of the company's profit. However, if the other party to the act knew or could have known the intention of the representative director, it shall be null and void against the company (see, e.g., Supreme Court Decisions 2005Da3649, Jul. 28, 2005; 2007Da23807, May 15, 2008).

Examining the records in light of these legal principles, the court below is just in holding that it is difficult to conclude that the plaintiff knew or could have known the fact that the non-party 1 entered into the joint and several surety contract of this case for the purpose of promoting the interest of himself or alti, regardless of the defendant's profit in light of the process of concluding the joint and several surety contract of this case, and there is no error in the misapprehension of legal principles as to abuse of representative authority

6. 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 So-young (Presiding Justice)