Korea General Media (Law Firm Barun, Attorneys Park Dong-he et al., Counsel for the defendant-appellant)

Mayer Newspapers Co., Ltd. (Law Firm two others, Attorneys O Jong-ap et al., Counsel for defendant-appellant)

Defendant Intervenor (Law Firm LLC, Attorneys Park Yong-dae, Counsel for defendant-appellant)

October 25, 2018

Seoul Central District Court Decision 2015Gahap532325 Decided December 3, 2015

1. Revocation of the first instance judgment.

2. The defendant shall deliver to the plaintiff the shares listed in the attached list.

3. The part arising between the Plaintiff and the Defendant out of the total costs of the lawsuit is assessed against the Defendant, and the part arising from the supplementary participation is assessed against the Defendant.

4. Paragraph 2 can be provisionally executed.

The same judgment as the disposition (the plaintiff specified the stock certificates number to be delivered on the attached list and changed the purport of the claim).

1. Basic facts

The reasons stated in this part are as follows: (a) the Defendant’s Intervenor’s Intervenor’s Intervenor’s Intervenor’s participation in the Defendant’s Intervenor’s Intervenor’s participation in the Defendant’s Intervenor’s Intervenor’s participation in the Defendant’s Intervenor’s participation in the judgment

2. The parties' assertion

A. The plaintiff

On December 31, 2012, when the Plaintiff was in office as a director, the Intervenor entered into a share acquisition agreement with the Plaintiff (hereinafter “instant share acquisition agreement”). Since the instant share acquisition agreement is a transaction between directors and the company, it did not undergo a resolution of the general meeting of shareholders pursuant to Articles 383(4) and 398 of the Commercial Act. Therefore, since the instant share acquisition agreement is null and void, the instant share acquisition agreement is the lawful owner of the instant shares, and the Defendant must return the instant share certificate, which is delivered by Nonparty 1, the owner of the instant shares, who is the owner.

B. Defendant

1) The Defendant lawfully purchased the instant shares from Nonparty 1, the owner of the instant shares, and acquired them by succession.

2) Even if Nonparty 1 is the title trustee who is not the actual owner of the instant shares, the Defendant concluded a contract on the acquisition of the instant shares with Nonparty 1 possessing the instant share certificates and received the instant share certificates. The Defendant did not know that Nonparty 1 was not the owner of the instant shares at the time of concluding the contract, and did not have any gross negligence, and thus, acquired the instant shares in good faith.

C. Intervenor joining the Defendant

Even if there are circumstances in which the Defendant did not obtain the approval by the resolution of the general meeting of shareholders regarding the instant share acquisition agreement, the instant share acquisition agreement was concluded with the purpose of subsidizing funds to ○○○○○○○, which the Defendant held 65% shares in the Plaintiff, and the Plaintiff’s shareholders did not assert the invalidity of the instant share acquisition agreement even before about six years have passed, and the date of the agreement was approved by the board of directors. In full view of the fact that the Plaintiff’s shareholders did not assert the invalidity of the instant share acquisition agreement, it is obvious that the instant share acquisition agreement was approved even if a general meeting of shareholders was held at the time. Therefore, it is unreasonable to view the instant share acquisition agreement as null and void solely on the ground that the formal procedure was partially defective. Therefore, the Defendant’s claim for the instant case

3. Determination

A. The validity of the share acquisition agreement of this case

1) A director of a stock company under the Commercial Act shall be three or more directors (main sentence of Article 383(1)). A company, the total capital of which is less than one billion won, may be one or two (1) companies (proviso of Article 383(1)). In order for a director to engage in a transaction with a company, the board of directors shall, in advance, specify important facts about the relevant transaction in advance and obtain approval from the board of directors (Article 398 Subparag. 1). In cases of a company with one or two directors, the total capital of which is less than one billion won, one or more companies must obtain approval from the board of directors (Article 383(4)).

In full view of the purport of evidence No. 1-1, evidence No. 3, and evidence No. 4, the Plaintiff’s director at the time of the instant share acquisition agreement is recognized as being the Defendant’s Intervenor, Nonparty 2, and the Defendant’s Intervenor should undergo a prior resolution of the general meeting of shareholders in order to purchase the instant shares from the Plaintiff. However, barring any special circumstance, the instant share acquisition agreement is null and void without undergoing the approval procedure required under the Commercial Act, unless there is no evidence to acknowledge that the Defendant’s Intervenor was subject to the resolution of the general meeting of shareholders regarding the instant share acquisition agreement. Accordingly, the Defendant’s Intervenor’s lawful acquisition of the instant shares from the Plaintiff cannot be deemed as the owner who lawfully

2) The Defendant asserts that, if the Plaintiff had gone through a resolution of the general meeting of shareholders, it would have been able to obtain the approval of the instant share acquisition agreement as a matter of course, the validity of the instant share acquisition agreement should be recognized in light of the shareholders’ substantial intent. According to the overall purport of the statements and arguments as stated in the evidence Nos. 1, 2, 6, and 7, at the time of entering into the instant share acquisition agreement, the representative director of ○○ Daily was the Defendant, but ○○ Daily was the Defendant, and ○○ Daily’s shares were 65% of the Plaintiff’s shares. The Defendant held 40.01% of the Plaintiff’s shares, 30% of the Defendant’s shares, and 29.9% of the ○○ Daily’s shares were owned by Nonparty 3, the co-oper of the Defendant, and the Plaintiff’s 29.9% of the instant shares acquisition price, and it is recognized that the Plaintiff received 600 million won from the Defendant’s Defendant

However, according to the reasoning of the evidence No. 13 and the purport of the whole pleadings by the Defendant, 130 reporters of ○○ Day entered into the Korea Press Workers’ Union on March 30, 201, with the issue of management method of the Defendant’s Intervenor’s Intervenor’s collective participation, and ○○ Japan Labor Union announced a name that continuously and unconscientiouss conduct poor management on June 15, 201, and the Defendant filed an accusation as to the charge of breach of trust on April 29, 2012, and demanded the withdrawal. In addition, it is difficult for the Defendant to conclude that the Plaintiff’s share acquisition agreement was invalid by giving up the right to preferential purchase for new ○○○○○○ apartment’s old house in the process of selling the said new ○○○○○○ Housing, and that there was no doubt that the Plaintiff’s administrative misconduct between the Defendant’s Intervenor and the Defendant’s Intervenor’s Intervenor’s allegation that the above share acquisition agreement was invalid for the purpose of calculating the price of the Plaintiff’s share acquisition and acquisition based on the ground of 600 billion.

B. Whether the defendant acquired the shares of this case

1) Whether the acquisition by succession is recognized

A) Relevant legal principles

In accepting shares issued under the name of a third party and paid the acquisition price of shares by investing the shares in the name of the third party with the consent of the third party, the third party becomes a shareholder regardless of whether only the third party was actually a shareholder, but only the nominal party merely becomes a shareholder. This legal principle applies to cases where the name of the nominal party is trusted to another person in connection with the acquisition of shares, etc., and the mere nominal party cannot be viewed as a shareholder of the nominal shares under the title trust, and thus, even if the person who is merely the nominal party is a nominal person cannot be viewed as a shareholder of the shares held in the title trust, it cannot be legitimately acquired shares unless there are special circumstances such as bona fide acquisition (see Supreme Court Decision 200Da63622, Jun. 25, 2002).

B) Determination

(1) On January 25, 2013, the Defendant’s Intervenor entered into the instant title trust agreement with Nonparty 1 and held the title trust of the instant shares, but the Defendant’s Intervenor’s Intervenor cannot be deemed a lawful owner of the instant shares. Therefore, Nonparty 1 is merely a person entrusted with the name of the shareholder on the shareholder registry of the instant shares from the Defendant’s Intervenor, who is not the owner of the instant shares, and it cannot be deemed as a legitimate owner of the instant shares, and thus, constitutes an unentitled person. Therefore, Nonparty 1’s assertion on this part based on the premise that Nonparty 1 is a legitimate owner of the instant shares is without merit.

(2) Meanwhile, the Defendant asserted that Nonparty 1 agreed to acquire the ownership of the instant shares between Nonparty 1 and the Intervenor joining the Defendant on August 5, 2013, but the Intervenor’s Intervenor cannot be deemed as a lawful owner of the instant shares as seen earlier, and Nonparty 1 cannot acquire the instant shares by an agreement with the Intervenor joining the Defendant.

In addition, comprehensively taking account of the overall purport of the arguments in Gap evidence Nos. 18, Eul evidence Nos. 5, 6, and 10, the non-party 1 deposited KRW 600 million to the bank account designated by the defendant joining the defendant in order to resolve his criminal case from the defendant joining the defendant on August 5, 2013. At the time, the non-party 1 said that the defendant would return KRW 600 million to the defendant joining the defendant, but the defendant did not respond to this, and the non-party 1 did not accept the defendant's allegation that the defendant paid the non-party 1 to the defendant on September 24, 2013 in order to release the attachment of the plaintiff on September 23, 2008, the National Tax Service's share No. 256,986,100, and the non-party 1 paid the non-party 100 million to the defendant's defendant on September 24, 2013.

2) Whether to recognize bona fide acquisition

A) Relevant legal principles

The bona fide acquisition of share certificates is a system for protecting a person who trades in trust outside the right of possession of share certificates. The bona fide acquisition of share certificates is not recognized when the acquisition of share certificates is in bad faith or gross negligence (see Article 359 of the Commercial Act, Article 21 of the Check Act). The issue of whether a person has bad faith or gross negligence must be determined on the basis of the time of the acquisition. The term “ bad faith” refers to the acquisition by the previous holder, who knows that there is a defect in the delivery contract, that is, the former holder is an unentitled person, incompetent person, or lack of power of representation. The gross negligence refers to the lack of the duty of care required in the transaction (see Supreme Court Decision 9Da58471 delivered on September 8, 200). In addition, when the transferor takes over share certificates without any reasonable investigation as to whether the transferor is an unentitled person in light of the ordinary transaction standards, it shall be deemed that there is a gross negligence as referred to in Article 359 of the Commercial Act and the proviso to Article 21 of the Check Act (see Supreme Court Decision 2006Da68686.

Meanwhile, in order for a company to claim that a third party becomes null and void because it failed to obtain approval of the board of directors or a general meeting of shareholders (hereinafter “board of directors, etc.”) under Articles 398 and 383(4) of the Commercial Act, the company shall prove that the third party was aware of or was grossly negligent in not knowing the failure to obtain approval of the board of directors, etc. In this context, the gross negligence refers to a situation in which it is deemed reasonable to view that the third party was not in need of protecting the third party from the perspective of fairness, as it considerably violates the duty of care required under the general principles of transaction, such as believing that the transaction between the director and the company was necessary for approval of the board of directors, etc. if the third party had paid due attention to the fact that the third party was aware of the failure to obtain approval of the board of directors, etc. (see Supreme Court Decision 2012Da73530, Jun. 26, 2014).

B) the facts of recognition

(1) The shares issued in the △△ economy are 325,000 shares, and from December 31, 2012 to December 31, 2012, the register of shareholders in the △△ economy entered 120,00 shares issued in the △△ economy (the total number of shares shall be 36.92%, October 1, 200), Nonparty 3, who is a shapes of the Intervenor joining the Defendant, owns 90,00 shares (the total number of shares shall be 27.69%, October 1, 200), Nonparty 4, and Nonparty 5, respectively, 15,00 shares (the total number of shares shall be 4.62%, October 1, 200), Nonparty 1 owns 60,00 shares (the number of total number of shares shall be 18.46%, October 1, 200, 200; and the number of cement shares shall be 00,000 shares (hereinafter referred to as cement shares).

(2) On August 28, 2013, the Defendant made a negotiation with Nonparty 6 and Nonparty 3 on August 28, 2013, 295,00 shares (excluding shares owned by Nonparty 4 and Nonparty 5 among the total shares issued in the △△ economy, and with the intent to take over the management right of △△ economy (hereinafter “instant acquisition negotiation”). The main contents of the draft agreement on stock acquisition made in the process are as follows.

The share acquisition agreement contained in the main text of this Agreement is entered into between the Defendant’s Intervenor, Nonparty 3, Nonparty 1, and the Defendant (hereinafter “Buyer”) on August 28, 2013. The following words and expressions have the meanings as follows. The subject company refers to the △△ Economy. The subject company’s “stocks” means the seller’s △△△△, Nonparty 3, and the subject company’s 175,000 common shares (53.9% of the total number of issued shares) are the seller’s 175,00 shares per share issued by the company, and the seller’s 2nd shares are the seller’s 10,000 common shares issued by the company, and the seller’s 120,000 common shares issued by the company subject to the seller’s 10,000 shares (hereinafter “2nd shares”) are the seller’s 10,000 shares and the seller’s 3nd 14th 2nd 2nd 2nd 3rd 36.

(3) Although the initial stock acquisition agreement does not stipulate the purchase price in the initial draft, at the time of the preparation of the above draft, the Defendant presented 16 billion won to the Defendant’s Intervenor and Nonparty 3 as the purchase price of 175,000 shares on the draft of the above draft (hereinafter “first target shares”). As to the second target shares of 120,000 shares, there was an agreement that the Defendant would purchase the said shares at KRW 5 billion when the provisional attachment on the second target shares was cancelled.

(4) At the time of the acquisition negotiation of the instant case, Nonparty 1, the nominal owner of the instant shares, did not participate or present his opinion in the process of consultation between the Defendant, Nonparty 6, and Nonparty 3 on the purchase price.

(5) Meanwhile, at the time of the instant share purchase agreement, Nonparty 1 displayed the instant title trust agreement to Nonparty 7, Nonparty 8’s representative director, and Nonparty 9’s former director.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 16, 18, 19, Eul evidence Nos. 8 and 9, the purport of the whole pleadings

C) Determination

Comprehensively taking account of the following circumstances acknowledged by the facts and the purport of the entire pleadings, it is reasonable to deem that the Defendant was aware that Nonparty 1 was not a legitimate owner or disposal right holder of the instant shares at the time of entering into the instant share purchase agreement, as it was merely a title trustee of the instant shares, or even if not aware of the facts, it was due to gross negligence that was significantly lacking the duty of care required in the transaction. Therefore, the Defendant’s bona fide

(1) On August 28, 2013, the Defendant, while conducting the instant underwriting negotiations with the purport that it would first purchase the instant shares, including the instant shares, and there was no agreement with Nonparty 1, the nominal owner of the instant shares, up to 34.3% (60,000 shares/175,00 shares) of the instant shares, with Nonparty 1, the title owner of the instant shares. Rather, the Defendant negotiated the purchase price with Nonparty 3 and Nonparty 3 on the whole of the instant shares, including the instant shares.

(2) In the process of the acquisition negotiation of this case, the Defendant confirmed that 25,00 shares, which are part of the shares of this case, are in the name of △ cement, and confirmed that the above shares will not be acquired by the majority of the shares issued by the Defendant in the event of failure to secure the above shares, and stated in the draft of the stock acquisition agreement, “the seller shall deliver the confirmation letter of transfer of the shares issued by the company, which was authenticated by a notary public on the shares of △ cement holding at the time of receiving the purchase price for the shares of this case.” However, if the shares of this case are excluded from the shares of this case from the shares of this case, the shares of 15,000 shares (175,00 shares of this case - 60,000 shares of this case) will be more than 35.4% of the total shares of this case. In the case of Nonparty 1’s objection to whether to sell the shares of this case or to manage the shares of this case, the Defendant did not take any actual measures to confirm Nonparty 1’s intention to acquire shares.

(3) The defendant non-party 7, who led to the acquisition negotiation of this case and the conclusion of the share purchase contract of this case, is not only an expert in corporate acquisition and merger, but also the share transfer price agreed upon at the time of the acquisition negotiation of this case reaches a total of 21 billion won. As such, the defendant seems to have made a considerable investigation into the shareholder organization of △△△ economy, etc., and the non-party 3, etc. also appears to have expressed the owner of this case in order to sell the △△ economy during the above negotiation process. In addition to the above circumstances, it is reasonable to view that the defendant knew at the time of the acquisition negotiation of this case, that the non-party 1 was merely a person who lent the name of the shareholder of this case

(4) According to the overall purport of evidence Nos. 18 and 19, Nonparty 1 transferred the shares of this case to the Defendant from the time of the conclusion of the acquisition negotiation of this case and about 7 months from the time of the occurrence of the acquisition negotiation of this case, and did not present any material to the Defendant. This seems to be a sufficient reason for Nonparty 1 to raise doubt about the lawful holder of the share certificates of this case on the premise that Nonparty 1 was the title trustee of this case. Furthermore, the Defendant could easily confirm whether Nonparty 1 transferred the shares of this case to Nonparty 1 by asking Nonparty 3, who was the party to the acquisition negotiation of this case. Nevertheless, the Defendant concluded the share purchase contract of this case without any investigation as to whether Nonparty 1 was legitimate or lawful holder of the share certificates of this case.

(5) Even if the management premium is attached to the purchase price of the primary stock, as alleged by the Defendant, in light of the fact that the secondary stock subject to 120,000 shares did not carry with the management premium, and that the purchase price of 120,000 shares subject to 20,000 shares was agreed with the KRW 5,000,000 shares, the market value of 60,000 shares of this case, which were irrelevant to the management right, was at least 2,50,000 won. However, although the Defendant appears to have well known of the above value of the shares in this case during the process of the acquisition negotiation, it purchased 60,000 shares of this case at 60,000 won, which did not amount to more than half of them (the Defendant’s 1,050,000 won from the Plaintiff, but it appears that the Defendant purchased the shares of this case from the Plaintiff, which was an affiliated company of 0,000 won, not the market value of the Plaintiff’s shares.

(6) According to the evidence No. 18, Nonparty 1 appeared as witness of the first instance court (Seoul Western District Court Decision 2014Gahap36733, Apr. 9, 2015) of the case where the Defendant filed a claim for share transfer against △△ economy, and stated as follows. The purport of the agreement is to conclude the instant share transfer contract, and to inform the Defendant of the fact that the instant title trust contract was concluded and the circumstances leading the Defendant paid the money for the instant shares.

본문내 포함된 표 (주식가격을 정하면서) 제가 이야기하는 것은 제가 이 주식을 소유하는 과정에서 투입된 돈이 있는데, ◇ 회장님(피고보조참가인을 가리킨다)한테 상환한 6억 원 하고, 세금 낸 비용, 이자 비용 등을 다 계산하고, 그리고 ◇ 회장님한테는 특별히 개인적으로도 1억 원 드린 적이 있고 해서 그런 비용들을 다 주식매매대금으로 계산해서 ‘이정도는 있어야 될 것이다’(라는 것이다) // (원고에게)‘그동안 (이 사건 주식에 관하여) 들여온 돈 만큼은 받아야 되겠습니다.’라고 하니 (원고가)‘얼마나 되느냐’라고 해서, ‘이정도의 가격은 제가 받아야 제가 더 이상 피해는 없을 것 같다’ 그렇게 이야기했습니다.

(7) On April 10, 2014, Nonparty 1 sought the Defendant for the first time, and the Defendant immediately thereafter purchased the instant shares at a significantly low price as above from Nonparty 1 on April 10, 2014, and immediately thereafter Nonparty 1 appointed Nonparty 1 as a co-representative.

C. Sub-committee

Ultimately, the lawful owner of the instant shares is the plaintiff, and the defendant is still holding the instant share certificates in possession by Nonparty 1 without knowing or without knowing by gross negligence that Nonparty 1 was an unentitled person of the instant shares. Thus, the defendant is obligated to return the instant share certificates to the plaintiff.

4. Conclusion

Thus, the plaintiff's claim of this case shall be accepted on the grounds of its reasoning. Since the judgment of the court of first instance is unfair on the grounds of its conclusion, the plaintiff's appeal is accepted, and it is so decided as per Disposition.

[Attachment]

Judges Yu Hun-sung (Presiding Judge)