[1] The purport of Articles 85 subparag. 5 and 24(3) of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents, which stipulate that certain matters shall be resolved by the general meeting, and penal provisions which punish any executive of a union

[2] Whether a provisional director appointed by the court constitutes an "executive officer of a cooperative" under Article 85 subparagraph 5 of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (affirmative)

[1] Article 85 Subparag. 5 of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (hereinafter “Urban Improvement Act”) provides for punishing “executive officers of a cooperative who voluntarily promote the projects under each subparagraph of Article 24(3) without going through a resolution of a general meeting under Article 24,” and Article 24(3) provides for matters subject to a resolution of a general meeting. As such, the Urban Improvement Act requires a resolution of a general meeting regarding certain matters, and the penal provisions that punish the executive officers of a cooperative who violated the Act provide for a penal provision that directly affects the rights and obligations of the association members, thereby ensuring procedural opportunities for the association members to participate in such matters so that their will can be reflected in the rights and obligations.

[2] Article 21(1) of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (hereinafter “Urban Improvement Act”) provides that one head of a cooperative, a director, and an auditor as an executive officer of a cooperative (Article 21(1)). As to a cooperative, except as otherwise provided in the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents, Article 27 of the Civil Act provides that the provisions concerning incorporated associations shall apply mutatis mutandis (Article 27). Thus, Article 63 of the Civil Act shall apply mutatis mutandis to a case where there is no director who is an executive officer of a cooperative or where there is a shortage of number of directors as provided in the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents and Dwelling Conditions for Residents (hereinafter “Urban Improvement Act”), and Article 63 of the Civil Act shall apply mutatis mutandis to a case where a provisional director appointed by the court has the same authority as a regular director, and there is no special provision on the authority of a director appointed by the general meeting and a provisional director.

[1] Articles 24(3) and 85 subparag. 5 of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents / [2] Articles 21(1), 24(3), 27, and 85 subparag. 5 of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents; Article 63 of the Civil Act

[1] Supreme Court Decision 2009Do14296 Decided June 24, 2010 (Gong2010Ha, 1526), Supreme Court Decision 2014Do454 Decided April 23, 2015 / [2] Supreme Court Decision 62Da800 Decided March 21, 1963 (Gong2013Ha, 1195) Decided June 13, 2013 (Gong2013Ha, 1195)

Defendant

Defendant and Prosecutor

Attorneys Yoon Young-young et al.

Seoul Northern District Court Decision 2015No1123 decided December 10, 2015

The judgment below is reversed, and the case is remanded to the Seoul Northern District Court.

The grounds of appeal are examined.

1. As to the Prosecutor’s Grounds of Appeal

A. The summary of the facts charged in the instant case is as follows: (a) the Defendant, from May 201 to November 2013, 201, serves as the head of the cooperative of the Dongdaemun-gu Seoul Metropolitan Government ○○○○ 2 Complex (Secondary), Rebuilding Housing Association (hereinafter “instant association”); (b) was in office as the head of the cooperative from December 1, 2013; and (c) the said cooperative was in office as the head of the cooperative; (d) around April 23, 2013; and (e) around June 2013; (e) KRW 22 million around July 201, 2013; and (e) KRW 10 million around October 2013; and (e) KRW 190,900 around December 19, 2013; and (e) was in violation of Article 85 of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents.

According to the reasoning of the judgment below, on September 29, 2010, the court below found that the defendant was appointed as a temporary director of the instant association by the Seoul High Court 2010Ra258 decision and that the board of directors of the instant association held on May 26, 201 were appointed as an acting director for the president of the instant association on the ground that he was an oldest among the directors pursuant to Article 14(6) of the articles of association of the instant association. On the ground that the defendant cannot be deemed as an "executive of the instant association" as provided in subparagraph 5 of Article 85 of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for the reason that he was appointed as an acting director of the instant association and acting as the president of the association, among the facts charged in the instant case, the court below reversed the judgment of convictioning the defendant on April 20, 2013, and acquitted the instant association of KRW 60 million around June 26, 2013, and around 2013.

B. However, we cannot accept the judgment of the court below for the following reasons.

Article 85 Subparag. 5 of the Urban Improvement Act provides for the punishment of “executives of an association promoting projects under the subparagraphs of Article 24 (3) without going through a resolution of a general meeting under the provisions of Article 24, and Article 24 (3) of the same Act provides for matters to be resolved by a general meeting. The purport of Article 85 Subparag. 5 of the same Act is to ensure procedural opportunities for cooperative members to participate in matters that directly affect their rights and duties so that their will can be reflected in matters that are directly affected by the rights and duties of union members and to prevent the decentralization by union executives (see, e.g., Supreme Court Decision 2009Do14296, Jun. 24, 2010).

Meanwhile, Article 21(1) of the Urban Improvement Act provides that one president, directors, and auditors of a cooperative shall apply mutatis mutandis to a cooperative (Article 27), except as otherwise provided for in the Urban Improvement Act (Article 27). Thus, Article 63 of the Civil Act shall apply mutatis mutandis to a cooperative’s absence of a director who is an executive of a cooperative or short of the number of directors as provided for in the Urban Improvement Act and the articles of incorporation, and a court may appoint a provisional director. However, a provisional director appointed by a court shall, in principle, have the same authority as a regular director (see, e.g., Supreme Court Decisions 62Da800, Mar. 21, 1963; 2012Da4032, Jun. 13, 2013). In addition, the Urban Improvement Act does not expressly provide for the authority of a provisional director appointed by the general meeting of a cooperative, and the purport of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Areas, which provides for the temporary director appointment of a cooperative.

Nevertheless, solely based on its stated reasoning, the lower court rendered a not guilty verdict on this part of the facts charged, on the ground that the Defendant, appointed as a temporary director on behalf of the president of an association, cannot be a criminal subject of a violation of Article 85 subparag. 5 of the Urban Improvement Act. In so determining, the lower court erred by misapprehending the legal doctrine on the interpretation of Article 85 subparag. 5 of the Urban Improvement Act, thereby adversely affecting the conclusion of the judgment.

2. As to the Defendant’s ground of appeal

For the reasons indicated in its holding, the lower court affirmed the first instance judgment convicting the Defendant, on the ground that the Defendant, among the facts charged in the instant case, had the instant union borrow KRW 19.9 million from the Defendant, around December 2013, constitutes “loan of funds” as provided by Article 24(3)2 of the Urban Improvement Act. Examining the reasoning of the lower judgment in light of the records, the lower court’s determination is just and acceptable. In so doing, contrary to what is alleged in the grounds of appeal, the lower court did not err by misapprehending the legal doctrine on the interpretation of Article 24(3)2 of the Urban Improvement Act, justifiable act, emergency evacuation, and possibility of expectation of lawful act, thereby adversely affecting the conclusion of the judgment.

3. Scope of reversal

For the foregoing reasons, the part of the judgment of the court below not guilty should be reversed. However, the judgment of the court below should be reversed in its entirety, since the remaining guilty part and one punishment should be sentenced in concurrent crimes under the former part of Article 37 of the Criminal

4. Conclusion

Therefore, 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 Kwon Soon-il (Presiding Justice)