[1] In a case where a former director or auditor whose term of office has expired can perform his previous duties until a new director or auditor is appointed, whether there is a legal interest in seeking confirmation of invalidity of the resolution of the board of directors who appointed another director or auditor whose term of office has expired or who is later such another director or auditor (affirmative)

[2] The case holding that there is a legal interest in seeking confirmation of invalidity of a resolution of the board of directors who appointed a director by a director appointed by the Minister of Education, who was disqualified as a director due to a disposition of revocation of approval of appointment of director by the Minister of Education

[3] Whether an interested party of a school foundation may apply for dismissal of a provisional director to the Minister of Education and Human Resources Development where the temporary director system is maintained unfairly by the Minister of Education and Human Resources Development even after the grounds for appointment of temporary director

[4] Scope of authority of provisional directors under the former Private School Act, and whether provisional directors may appoint those who are not related to the formation of a school foundation as regular directors by excluding the previous directors’ intentions (negative with qualification)

[5] The method of determining the necessity of preservation in relation to the suspension of the performance of duties by the school foundation directors and the provisional disposition of the appointment of the acting director

[1] Notwithstanding the expiration of the term of office of all or some of the directors or auditors of a corporation under the Civil Act, if there is no appointed directors or auditors, or there is no appointed directors or auditors thereof, the resolution of appointment becomes null and void, and in case where other directors or auditors whose term of office has not expired are unable to perform their normal corporate activities, barring special circumstances where it is deemed inappropriate for the former directors or auditors whose term of office has expired to perform their corporate activities, the former directors or auditors may perform their previous duties until appointed directors or auditors are appointed. In this case, the former directors or auditors shall have legal interest in claiming the defect of the resolution of the board of directors who appointed directors or auditors whose term of office has expired as part of their duties, and in this case, there is a legal interest in seeking nullification.

[2] In a case where the full-time directors of the directors who were disqualified as directors due to a disposition of revocation of appointment of directors by the Minister of Education were gathered by the temporary directors appointed by the Minister of Education, and thereafter sought confirmation of invalidity of a resolution of the board of directors that appointed directors by the Minister of Education, the case holding that there is a legal interest in seeking confirmation of invalidity of the resolution of the board of directors, on the ground that there are special circumstances, under which it is no later effective and no other director whose term of office has expired and it is impossible to engage in the normal activities of the corporation, and that the temporary directors are inappropriate to file a lawsuit seeking confirmation of invalidity of a resolution of the board of directors, which contests the defects of the resolution of the board of directors, on the ground that the right to perform duties of the

[3] The interested parties of a school foundation may request the Minister of Education and Human Resources Development to appoint a provisional director in case where there are grounds for appointment of a provisional director under Article 25 (1) of the former Private School Act (amended by Act No. 7802 of Dec. 29, 2005). In addition, in case where the grounds for appointment of a provisional director have been settled, the Minister of Education and Human Resources Development may request the Minister of Education and Human Resources Development to dismiss a provisional director in case

[4] Temporary directors under the former Private School Act (amended by Act No. 7802 of Dec. 29, 2005) should be interpreted as limited to an act that falls under the ordinary business affairs of a school juristic person, unlike temporary directors under the Civil Act, and limited to an act that falls under the ordinary business affairs of a school juristic person, in order to maintain the continuity of a private school as well as to achieve administrative purposes. Therefore, it is unlawful to arbitrarily appoint those who do not have any relationship with the formation of a school juristic person and arbitrarily deprive them of the right to manage the school of the right to manage the school, as it causes a change in the governance structure of a school juristic person.

[5] The suspension of the performance of duties of a school juristic person's directors and the provisional disposition of the appointment of an acting director shall be taken into account not only the interests of both parties, but also the autonomy and public nature of the school juristic person. Although the respondent's procedures for the appointment of directors are defective, unless the respondent has verified special circumstances that the school juristic person is unable to recover from the school juristic person due to the failure of the performance of duties of the school juristic person, or that the student's right to education is not guaranteed due to the failure to operate a normal private school, it is likely to infringe the school juristic person's stable management and the student's legitimate right to education. Therefore, in determining the necessity for such preservation, more careful decision should be made by taking into account all the circumstances such as the student's interests.

[1] Article 250 of the Civil Procedure Act, Articles 58 and 691 of the Civil Act, Article 20 of the former Private School Act (amended by Act No. 7802 of Dec. 29, 2005) / [2] Article 250 of the Civil Procedure Act, Article 691 of the Civil Act, Articles 20 and 20-2 of the former Private School Act (amended by Act No. 7802 of Dec. 29, 2005) / [3] Articles 25 and 25-2 of the former Private School Act (amended by Act No. 7802 of Dec. 29, 2005) / [4] Articles 20-2, 25, and 25-3 of the former Private School Act (amended by Act No. 7802 of Dec. 29, 2005) / [3] Article 30 (1) of the Civil Execution Act, Article 25-3 of the Constitution

[1] Supreme Court Decision 97Da26142 delivered on December 23, 1998 (Gong199Sang, 216) Supreme Court Decision 2004Da65336 Delivered on March 25, 2005 (Gong2005Sang, 670) / [4] Supreme Court Decision 2003Da3625 Delivered on January 26, 2006 (Gong206Sang, 299)

Applicant 1 and four others (Law Firm Barun, Attorneys Kim Jung-soo et al., Counsel for the plaintiff-appellant)

Modified Prostitution et al. (Attorneys Hah Ho-bong et al., Counsel for the defendant-appellant)

Chuncheon District Court Decision 2004Kahap2 delivered on April 8, 2004

October 24, 2006

1. The petitioner's appeal is dismissed.

2. The costs of appeal shall be borne by the applicants.

The judgment of the first instance is revoked. The decision that the respondent shall not perform his duties as a director of a school foundation and the decision that seeks the appointment of an acting director of the respondent during the suspension period of the above duties, until the main decision of the lawsuit filed by the resolution of nullification of the board of directors of the school foundation which was filed by the applicant against the ordinary school foundation (hereinafter referred to as the "Standing Institute") was finalized on December 18, 2003.

1. Basic facts

(a) Establishment of commercial teaching institutes;

(1) On March 6, 1962, the Cheongam Institute, an incorporated foundation, which was established by the Cheongamiii (hereinafter “Cheongam Institute”). As the Cheongam Institute had obtained authorization for closure due to financial difficulties, etc., the Cheongam Institute came to obtain authorization for closure. On November 28, 1973, the applicant 1, who was the temporary director of the Cheongam Institute as of November 28, 1973, taken over the Cheongam Institute from the Kaami, and changed the name “Seoul Institute of School of School” on March 8, 1974.

(2) The applicant 1 purchased the school site in the U.S. Japan-dong District of Won-si, and contributed to the commercial school, and established a commercial zone school based on this.

(3) On September 21, 1981, the applicant 1 changed from eight persons including the applicant 1, etc. to eight persons including the applicant 1, with the approval of the Minister for Delivery of literature.

(b) Change of directors of the commercial teaching institute;

(1) As of April 28, 1990, the board of directors of the superior branch institute, which was operated mainly by the applicant 1, consisting of the applicant 1 and the director as the chief director and the director as of April 28, 1990, the applicant 1, the applicant Kimok-hee, the applicant Kim Jong-hee, the protocol, the protocol, the Kim Jong-chul, the applicant for non-application, and the applicant 1 whose term of office expires at the time of death. On April 28, 1990, the board of directors of the board of directors of April 28, 199, appointed the applicant 1 as the chief director and the director as the director, the applicant Kim Jong-hee, the right-type, the Kim Jong-m, and

(2) On May 8, 1990, the Standing Institute filed an application with the Minister of Education for the appointment of a director with the minutes of the above board of directors attached to the Minister of Education, and the Minister of Education approved the appointment on June 9, 1990, the board of directors of the Standing Institute was composed of the above directors and the applicant provisions who was appointed as the director on November 9, 1989.

(c) Inspection in school and appointment of temporary directors;

(1) After the abolition of the department of herb materials at the Superior University in 1992, there were academic problems surrounding the treatment of students in the above department and the revocation of appointment of full-time instructors.

(2) In March 1993, when the property of the applicant 1, who was a member of the civil party, was disclosed and the issue of the property held became a social issue, the prosecutor's office was bound by the suspicion of receiving money and valuables related to illegal admission, etc. on April 1993, when the prosecutor conducted an investigation.

(3) On April 21, 1993, all of the directors of the Standing Institute were responsible for the long-term internal decentralization and submitted a lump sum list around April 21, 1993. On May 1, 1993, the board of directors of the Standing Institute decided the resignation of all of the above directors under the presence of the president of the Standing Institute, the acting president of the Standing Institute decided on May 1, 1993. On the other hand, seven of the directors were appointed as new directors, such as Park Jong-won, Kim Jong-won, Kim Jong-sung, Kim Jong-young, Kim Jong-jin, Kim Jong-nam, Kim Jong-nam

(4) Accordingly, on May 4, 1993, the commercial teaching institute applied for the acceptance of the appointment of the above newly appointed directors to the Minister of Education.

(5) However, as a result of the fact-finding survey on the commercial teaching institute, the Minister of Education determined that the ordinary teaching institute applied for the approval of the appointment of directors to the Minister of Education on April 28, 1990, by falsely preparing and attaching meeting minutes of the board of directors, although the board of directors was not lawfully convened and formed, although it was not legally convened and established. The resolution of the appointment of directors on April 28, 1990 is null and void, and the approval of the appointment of directors is also null and void as a matter of course. Even if it is not so, even if the Minister of Education did not comply with an order of correction in accordance with the fact-finding survey on the operation of the juristic person conducted from March 27, 1993 to April 1, 193, on the ground that it was difficult to achieve the purpose of establishment of the school foundation due to the failure of the ordinary teaching institute to comply with the order of correction under the fact-finding survey on the operation of the juristic person, which was conducted from March 27, 1993.

(6) On May 1, 1993, the Minister of Education, at the same time, rejected the application documents for approval of the appointment of directors on the ground that a resolution of the appointment of directors on May 1, 1993, who appointed new directors on June 4, 1993, was made by an unauthorized person, or was made in violation of the convocation period under the Private School Act, and appointed temporary directors to normalize the operation of a private teaching institute pursuant to Article 25 of the Private School Act.

(d) Orderly appointing temporary directors;

After that, the Minister of Education has replaced the temporary directors whose term of office expires to new temporary directors in sequence, and due to this, the standing school has been operated as a management system for temporary directors for not less than 10 years until the appointment approval of the regular directors as described in the following e.

(e) Resolution of selection of regular directors and approval of the Minister of Education and Human Resources Development;

On December 31, 2001, nine provisional directors, including Lee Jae-soo, appointed as temporary directors of the Superior Institute by the Minister of Education and Human Resources Development on December 18, 2003, held a board of directors on December 18, 2003, and made a resolution (hereinafter “the resolution of the board of directors of this case”) to appoint the respondent as directors (hereinafter “regular directors”) in comparison with the temporary directors appointed by the Minister of Education and Human Resources Development, and the Minister of Education and Human Resources Development approved that the respondent is the director of the board of directors of the Respondent on December 24, 2003.

(f) The progress of criminal proceedings against the applicant 1;

On the other hand, the applicant 1 was indicted of the crime of interference with business and the crime of violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Embezzlement) on June 16, 1993 due to the suspicion that he received money from his parents and embezzled the money of the upper district school to pay as construction cost, etc., and was sentenced to three years of imprisonment for the crime of interference with business, the violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Embezzlement) and the crime of embezzlement. On October 16, 1993, the Seoul Criminal District Court sentenced the defendant not guilty of the crime of violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Embezzlement) and the crime of embezzlement. The Seoul High Court sentenced the defendant not guilty of the crime of violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Embezzlement) and one year and six months of imprisonment,

(g) Administrative litigation by applicants, etc.

(1) On June 4, 1993, the applicant 1, Kim Jong-hee, Cho Jong-hee, Kim Jong-chul, and Lee Jae-chul filed an administrative litigation against the cancellation of the approval for taking office for the director on June 4, 1993 and the rejection of the approval for taking office for the director on December 14, 1995. However, on July 4, 1996, the applicant's protocol was rejected in the Seoul High Court on November 8, 1993, and the applicant 1, Kim Jong-hee, Kim Jong-hee, and Lee Jae-chul on the non-applicant's petition was revoked on June 9, 1994, even if the above cancellation of the approval for taking office and the provisional director's appointment are revoked, the applicant cannot return to the director of the ordinary school or recover his status to perform the duties of director, and thus, the applicant et al. appealed appealed, but the appeal was dismissed on June 1, 199 (part of the appeal).

(2) On October 16, 200, the applicant 1 filed a lawsuit against the Minister of Education seeking revocation of the above disposition of approval for the modification of the articles of incorporation, where the Minister of Education approves the amendment of the articles of incorporation on the ground that the former executive officer of the Gayon Institute was changed from 8 applicants, including applicants 1 to 8, and the former executive officer of the Gayon Institute was changed from 100 to 8 persons, and the latter was dismissed on February 16, 2001 on the ground that the former executive officer of the Gayon Institute established at the Seoul Administrative Court was lawful since 8 persons, including Gayon, were the former executive officer of the Gayon Institute, and the latter was dismissed on October 15, 2002, but the latter appealed, but the Supreme Court rendered a judgment dismissing the appeal on October 28, 2004.

[Reasons for Recognition] Unsatisfy, Written Evidence Nos. 1, 3, 7, 8, Written Evidence Nos. 2 through 4, and the purport of the whole pleadings

2. Determination on the legitimacy of the instant petition

A. Applicant's assertion

On December 18, 2003, a regular director was appointed by the board of directors composed of nine temporary directors, such as this money name, etc. The provisional director appointed under Article 25 of the Private School Act only can perform an act that falls under the ordinary business affairs, as in the case of an acting director of a juristic person under the Civil Act, and the act of appointing a director has no authority to change the basic organization or important business of a juristic person and make a decision. As such, a resolution of the board of directors on December 18, 2003 that a temporary director appointed a regular director is invalid as well as a resolution of the board of directors on December 18, 2003 that the board of directors on December 18, 2003 did not convene a legitimate convening procedure in accordance with the articles of incorporation of the common school. Therefore, the resolution of the common school of the counterpart is null and void. Therefore, in order to preserve the respondent's right to seek nullification, it is necessary to suspend the performance of duties as a director and appoint an acting director.

B. Main safety defense of the respondent

The respondent asserts that the applicant has no legal interest in the standing institutes as well as in the standing directors of the standing institutes prior to April 28, 1990, and that the applicant has no legal interest in the standing institutes, so there is no legal interest in seeking nullification of the resolution of the board of directors of this case made after the resignation of the director, and therefore the applicant must dismiss the application of this case.

In this regard, although the applicants did not have the authority to appoint the regular directors of the commercial teaching institute, the provisional directors have appointed and retired the regular directors beyond their authority, so the applicants who are the immediately preceding directors of the directors who were subject to the disposition of revocation of the approval of the appointment of the director on June 4, 1993 can perform the duties of the regular director of the commercial teaching institute until the appointment of the regular director, and the applicants 1 succeeded to the status of the founder of the commercial teaching institute on December 18, 2003, and therefore, the applicants 1 can contest the invalidity of the resolution of the board of directors on December 18, 2003.

(c) Markets:

(1) As to the applicant 1’s founder of a commercial school or his successor to the status

As seen earlier, the fact that an applicant 1 has taken over a commercial teaching institute from the original Hongi, but it cannot be said that there is a legal interest in seeking a confirmation of invalidity of the resolution of the board of directors solely on the ground that the applicant has a good interest in the establishment of the school foundation (see, e.g., Supreme Court Decisions 63Da15, Apr. 18, 1963; 9Da43103, Nov. 23, 199; 2001Da1171, Jan. 10, 2003), barring any special circumstance, the applicant 1 cannot seek a confirmation of invalidity of the resolution of the board of directors of this case as the founder of the commercial teaching institute or his successor to the status thereof.

(2) As to claims as directors whose term of office expires

(A) Legal interest as a person holding an authority to perform duties

In the event that no successor director or auditor has been appointed, or another director or auditor whose term of office has expired, despite the expiration of the term of office of the former director or auditor, or the latter director or auditor was appointed, the appointment resolution becomes null and void, and in the event that another director or auditor whose term of office has not expired is not sufficient to perform activities of the normal corporation, the former director or auditor may perform the former duties until he/she is appointed, unless there are special circumstances to deem that it is inappropriate to allow the former director or auditor to perform the duties of the corporation. In this case, the former director or auditor has legal interest in claiming the defect of the chairman or director whose term of office has expired as part of his/her duties or the resolution of the board of directors who appointed the latter director or auditor, or the latter director or auditor to seek confirmation of invalidity thereof (see Supreme Court Decision 97Da26142, Dec. 23, 1998, etc.).

As seen earlier, the full-time directors of the directors who were disqualified for directors by the revocation of the approval for the appointment of directors on June 4, 1993 are those of the applicants. However, if the resolution of the board of directors of this case was not effective, there is no other director whose term of office has not expired, and thus no other director is available, the standing research institute is unable to engage in its normal activities. However, prior to the resolution of the board of directors of this case, there is no reason to seek confirmation of the invalidity of the resolution of the board of directors of this case as the parties who made the resolution of this case, and the temporary directors after the resolution of the board of directors of this case on June 4, 1993 including the immediately preceding temporary directors did not have any reason to seek confirmation of the invalidity of the resolution of the board of directors of this case. Accordingly, the right to dispute the defects of the board of directors of this case can not be deemed to be inappropriate for the applicants to have been appointed and appointed by the board of directors of this case as the 2nd executive officer before the expiration of the term as the 19th executive officer.

(B) Legal interest as an interested person of a school juristic person

Article 25(1) of the former Private School Act (amended by Act No. 7802 of Dec. 29, 2005) provides that the appointment of a provisional director shall be made even at the request of an interested party in cases where there are grounds for appointment of a provisional director, and that a provisional director shall hold office until such grounds for appointment cease to exist. An interested party of a school foundation may request the Minister of Education and Human Resources Development to appoint a provisional director if there are grounds for appointment of a provisional director, and where the Minister of Education and Human Resources Development unfairly maintains a provisional director system even though the grounds for appointment of a provisional director have ceased to exist (see Supreme Court Order 2005Ma53, Apr. 16, 2005).

Therefore, as seen earlier, if the applicants who were previous directors prior to the appointment of a temporary director of a common teaching institute and were retired before the expiration of the term cannot contest the validity of the resolution of the board of directors of this case, this would result in infringing upon the applicants’ right to request dismissal of temporary directors. Furthermore, the court’s judicial review as to the validity of the resolution of the board of directors is excluded, thereby infringing upon the applicants’ right to request a trial. Accordingly, the applicants are legally interested in the common teaching institute, which is a party to the common teaching institute.

3. Determination on the right to be preserved

A. Whether the resolution of the board of directors of this case is valid

As seen earlier, nine provisional directors, including Lee Jae-in, appointed the respondent as a regular director on December 18, 2003, and the Minister of Education and Human Resources Development approved the appointment of the above regular directors on December 24, 2003. We examine the validity of the resolution of the board of directors of this case.

Article 25 of the former Private School Act (amended by Act No. 7802 of Dec. 29, 2005) provides, “The Minister of Education and Human Resources Development shall appoint temporary directors at the request of an interested party or ex officio where the purpose of the relevant school juristic person is not achieved or it is deemed that damage is likely to occur if the relevant school juristic person fails to fill any vacancy of directors (Paragraph 1). Temporary directors shall make efforts so that the cause referred to in paragraph 1 can be resolved within the prompt time (Paragraph 2). In this case, temporary directors shall hold office until the cause referred to in paragraph 1 is removed. In this case, even if the cause continues for a long time, their terms of office shall be within two years, and they shall be reappointed only once (Paragraph 3). Temporary directors shall not be appointed as officers referred to in Article 20 (Paragraph 4).”

According to the above provisions, temporary directors have the authority to contribute to the achievement of the purpose of school juristic persons through normal operation of the juristic person and to prevent the occurrence of damages, and have the authority to temporarily exercise such authority until the cause of appointment of temporary directors is resolved, and they are not only subject to certain restrictions in their terms of office and reappointment as temporary directors, but also subject to restrictions in which they cannot be appointed as regular directors. In other words, temporary directors are granted temporary authority to achieve the purpose of the juristic person and to take measures to prevent damage, and are clearly different from regular directors in their authority and status.

As seen earlier, Article 25 of the former Private School Act provides for the grounds for appointment, duties, period of office, restrictions on appointment of regular directors, etc., the purport of Article 20-2 of the same Act concerning the cancellation of approval of taking office, and the comparison with temporary directors under Article 63 of the Civil Act, etc., the temporary directors under the Private School Act shall be interpreted as having authority for temporary crisis management who are appointed by the Minister of Education and Human Resources Development in order to maintain the integrity of private schools as well as to achieve administrative purposes, unlike temporary directors under the Civil Act.

Therefore, it is unlawful that temporary directors arbitrarily appoint those who have no relationship with the formation of the school juristic person as regular directors and deprive them of the right to manage the school, while completely excluding the previous directors of the school juristic person (only in the case where the previous directors of the school juristic person have donated or renounced the school juristic person in advance or given up the right to manage the school), as it brings about changes in the governance structure of the school juristic person.

Therefore, in this case where the applicant 1, who is the assignee of the commercial teaching institute, declared in advance that the property of the commercial teaching institute was donated to the State or society in advance, or the applicant who was the previous director before the appointment of the provisional director gave up the management right of the commercial teaching institute, the act of appointing the respondent who is not entirely related to the formation of the commercial teaching institute as a regular director without the full exclusion of the applicants who were the previous director from the intention of the previous director, is deemed to cause a change in the governance structure of the commercial teaching institute, and is null and void as it goes beyond the authority of the provisional director.

(b) Vindication of preserved rights;

Therefore, the resolution of the board of directors of this case is null and void, and it is proved that the applicant has a right to seek confirmation of invalidity.

4. Determination on the necessity of preservation

A. Criteria for determination

With respect to a dispute over a provisional disposition, an emergency or provisional disposition which is allowed by the person having the right to a provisional disposition until it becomes final and conclusive through a lawsuit on the merits, to prevent the present significant damages or imminent spread thereof. Whether such provisional disposition is necessary or not shall be jointly determined at the discretion of the court in consideration of the relationship between the parties according to whether to accept the application for provisional disposition in question, the anticipated failure in the principal lawsuit, and all other circumstances (see, e.g., Supreme Court Order 97Ma1473, Oct. 14, 1997). Furthermore, a school juristic person fails to provide necessary facilities and systems to enable education to the citizens on a low-level basis, and thus, serves as the subject of the Constitution (Article 31(1) of the Constitution) which provides for the State to ensure that the school juristic person is not able to secure or supplement the basic rights of the school juristic person in question, and thus, it is more likely that the school juristic person is able to secure or supplement the public interest of its directors by taking into account the various needs of the school juristic person.

(b) High level of vindication on the necessity of conservation;

On the other hand, with regard to the special circumstances such as the respondent's performance of duties that caused damage to school juristic persons or the student's right to receive education was infringed, the statement of evidence No. 14 through No. 31 alone is insufficient and there is no other supporting evidence. Rather, the applicant did not participate in the operation of the standing school until now after the temporary directors were appointed by the Minister of Education on June 4, 1993. Nevertheless, the fact that the temporary directors appointed by the Minister of Education have been operating the standing school normally after the temporary directors were appointed by the Minister of Education. The respondent is also operating the standing school normally without any specific internal or financial situation after December 18, 2003, the private school law grants the right to appoint temporary directors of the school juristic person to the competent agency, and thus, it is difficult to view that the applicant has a high level of authority to appoint temporary crisis managers in the event of the crisis of the school juristic person, taking into account the need to confirm the necessity of the appointment of the principal in the lawsuit and other circumstances of the entire parties.

5. Conclusion

Therefore, the petition of this case is dismissed as it is without merit, and the judgment of the court of first instance which rejected the petition of this case is unfair as it is concluded differently, but only the applicant appealed cannot change the judgment of the court of first instance disadvantageously to the applicant. Thus, the applicant's appeal is dismissed. It is so decided as per Disposition.

Judges Lee Sung-ho (Presiding Judge)