Where a company in receipt of a notice of transfer of stocks prior to issuance of stock certificates completes a transfer of stocks in the name of a third party at its discretion and issues stock certificates, the relationship of attribution of stockholders’ rights

Even if the transfer of shares before issuance of share certificates is effective against the company when six months have passed since its incorporation, the transferee becomes a shareholder of the company regardless of whether the transfer of shares is entered in the register of shareholders, and even if a company which was notified of the transfer of shares thereafter has completed the transfer of shares on the register of shareholders to a third party other than a shareholder in order to secure the performance of obligations to the transferor of shares, and issued a registered share certificate to that third party, it cannot be deemed that the third party becomes a shareholder and the transferee loses the shareholder's right.

Articles 335(2) and 337(1) of the former Commercial Act (amended by Act No. 5053 of Dec. 29, 1995)

Supreme Court Decision 94Da47728 delivered on March 24, 1995 (Gong1995Sang, 1731), Supreme Court Decision 94Da36421 delivered on May 23, 1995 (Gong1995Ha, 2226), Supreme Court Decision 96Da12726 delivered on June 25, 1996 (Gong196Ha, 2309)

Plaintiff 1 and one other (Attorney Kim Du-chul, Counsel for the plaintiff-appellant)

Defendant 1 and one other (Defendant Law Firm Dong-dong Office, Attorney Lee Ba-hee, Counsel for the defendant-appellant)

Seoul High Court Decision 92Na58344 delivered on June 28, 1994

All appeals are dismissed. The costs of appeal are assessed against the plaintiffs.

The grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed).

In light of the above facts, the non-party 1 established the non-party 1 corporation's non-party 1's share certificates on October 17, 198, and held 54,600 shares of the above company to the non-party 2's 0 non-party 1's representative director at the time of the above company's entry into the 30-party 1's share certificates, and the above non-party 2's transfer of shares to the non-party 3's 10-party 1's 1's 30-party share certificates were not issued, and the above non-party 2's transfer of shares to the non-party 1's 0-party 3's 1's 10-party share certificates were not issued, and the above non-party 1's transfer of shares to the non-party 2's 1's 0-party 3's 1's 10-party share certificates were not issued.

First of all, the fact-finding by the court below is just and acceptable, and there is no violation of the rules of evidence such as theory of lawsuit, etc.

However, the court below held that Defendant 1’s act does not violate the above agreement with the plaintiffs, and Defendant 2’s act was lawful on the ground that it cannot be deemed that the above agreement was made. However, even according to the facts established by the court below, since the transfer of shares was made six months after the date of its incorporation and thus, the transfer of shares before the issuance of share certificates was effective against the company, the plaintiffs become the shareholders of the non-party company regardless of whether the transfer of shares is registered on the register of shareholders. Thus, the plaintiffs are in charge of issuing share certificates as representative director of the non-party company, and as such, Defendant 2 and the plaintiffs who were notified of the above transfer of shares by the plaintiffs and the above non-party 1, who promised to issue the share certificates should issue the share certificates to the plaintiffs, who are shareholders, unless there are special circumstances as to the above 30,000 share certificates, and the above decision of the court below is not justified since the above non-party 1 completed the transfer of share certificates under the name of the director of the above company, and issued the remaining share certificates to the non-party 1.

However, the plaintiffs acquired shares from the above non-party 1 and thereby became the shareholders of the company with respect to 30,000 shares that were acquired from the above non-party 1. Accordingly, even if the non-party company completed the transfer procedure on the register of shareholders and issued a registered share certificate to the non-party 3 who was not the shareholders, it cannot be deemed that the above non-party 3 becomes the shareholders and the plaintiffs lost their shareholders

Therefore, since the plaintiffs cannot be deemed to have suffered damages equivalent to the loss of shareholders' rights due to the above acts of the defendants, the claim of this case seeking compensation for damages due to the loss of shareholders' rights is to be dismissed, and the above mistake of the court below did not affect the judgment, and the above mistake of the court below is not justified, and there is no error in the misapprehension of legal principles as to the loss of shareholders' rights, shareholders' rights, stock transfer, and illegal acts as stated in the judgment of the court below

Therefore, all appeals are 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 Jong-soo (Presiding Justice)