2016Da219020 Nullification of resolution by the board of directors

A

Medical Corporations B

Seoul High Court Decision 2015Na2029051 Decided March 24, 2016

August 24, 2016

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

The grounds of appeal are examined.

1. Claims related to the standing to sue or the interest of lawsuits;

A. A director of a corporation may terminate legal relations by unilaterally expressing his/her intention of resignation to a corporation. Since such declaration of intention is an independent act with the other party, in principle, it takes effect when the other party reaches the other party. It does not take effect upon the resolution of the board of directors or the approval of the competent authority. Moreover, such declaration of intention cannot be withdrawn in mind after the occurrence of the said declaration of intention (see, e.g., Supreme Court Decision 2011Du22334, Jul. 25,

Meanwhile, even if all or some of the directors of a corporation have resigned but failed to be appointed, or if the remaining directors are appointed later, they shall be null and void, and if there are no special circumstances to deem it inappropriate to have the resigned director perform the business of the corporation, the former director may perform the previous duties until he/she is appointed. Thus, there is a legal interest in claiming the defect in the resolution of the board of directors appointed as part of the duty and seeking confirmation of such invalidity, barring such special circumstances as above, the former director who resigned has no legal interest in seeking confirmation of invalidity of the resolution of the board of directors of the corporation (see, e.g., Supreme Court Decision 2001Da1171, Jan. 10, 2003).

B. The lower court acknowledged the following facts.

1) On August 22, 2014, the Plaintiff, as a director of the Defendant’s representative, agreed to succeed to all rights and obligations with respect to the Defendant’s operation to H, who is the Defendant’s director, and, in accordance with the terms and conditions of the agreement, left the date of preparation of the above resignation letter to grant H a supplementary right to use it when it is necessary to improve the officer.

2) On September 3, 2014, H prepared the minutes of the board of directors meeting as of September 3, 2014 with the content that a new director is appointed by filling the preparation date of the above director resignation as of September 3, 2014, and on September 12, 2014, H reported the Defendant’s appointment of executive officer with the aforementioned minutes attached.

3) The instant succession agreement provides that H shall invalidate the instant succession agreement in the event that a cause, such as the failure of the Plaintiff to timely repay the Plaintiff’s provisional deposit, etc., or that H shall compensate the Plaintiff for the loss or return of the Plaintiff’s representative position. It does not state that H withdraws the Plaintiff’s resignation in the event of nonperformance of the content of the instant succession agreement, or prohibit the use of the said director resignation.

4) On September 2, 2014, the Plaintiff informed H of the fact that H did not comply with the above succession agreement to implement a bank loan by August 31, 2014 and to reimburse KRW 250 million. H immediately submit a letter of resignation from office and a letter of resignation of the chief director. However, if H has a strong intent to operate a hospital (the Defendant hospital), it should ensure that the principal does not incur any civil, criminal and administrative responsibility in connection with the Defendant and D hospital, and that H president and his/her family members shall compensate for the amount of distribution with joint and several liability.

(b) By September 4, 2014, the content of “to present opinions and request performance” was presented, and on September 11, 2014, H sent a proof of content of seeking the implementation of the above succession agreement, including bank loans.

5) On September 18, 2014, the Plaintiff convened a board of directors and withdrawn the intention of resignation. In full view of the foregoing facts, around August 22, 2014, the Plaintiff, a representative of the Defendant, issued a letter of resignation to H, or around September 3, 2014, H, who was authorized to supplement the date of preparation of the letter of resignation, became effective as of September 3, 2014, and even if the Plaintiff withdrawn his/her intention of resignation on September 18, 2014, the said withdrawal has no effect. Accordingly, as the Plaintiff already lost its status as a director, there is no legal interest in seeking confirmation of invalidity of the resolution of the board of directors of the Plaintiff.

Nevertheless, the lower court, even though the Plaintiff had already lost the Defendant’s position as a director, did not examine whether there are special circumstances in which the Defendant had the right to seek a confirmation of invalidity of the resolution of the board of directors. In so doing, the lower court erred by failing to exhaust all necessary deliberations or by misapprehending the legal doctrine on the interest

2. Conclusion

Therefore, without examining 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.

Justices Park Jae-young

Justices Park Young-young

Justices Kim In-bok, Counsel for defendant

Justices Kim Jong-il