[1] Whether a school juristic person's action seeking confirmation of the absence or invalidation of a director's status against an individual director of the school juristic person is legitimate (=unapplicable law)

[2] Whether a temporary director under the former Private School Act has the authority to appoint a regular director (negative), and in a case where a temporary director was legally selected and appointed before the appointment of a temporary director and appointed a regular director after consultation with a retired regular director, etc., the validity of such appointment (=negative)

[1] A resolution of the board of directors of a school foundation is a school foundation, which is the subject of legal relations arising therefrom, and only by obtaining a confirmation judgment on the existence or validity of a resolution of the appointment of director against the school foundation, the resolution may remove the Plaintiff’s rights or legal status from an effective and imminent fashion. A judgment of confirmation against an individual who is not a school foundation does not have the effect on the school foundation, and thus, the lawsuit seeking such confirmation judgment is unlawful. This legal principle also applies to cases where a school foundation seeks a confirmation judgment on the existence or validity of a resolution of the appointment of director against the school foundation and seeks confirmation on the absence of the status of director as the defendant.

[2] In light of the basic rights of school juristic persons, the legislative purpose of the former Private School Act (amended by Act No. 7802 of Dec. 29, 2005), and Article 25 of the same Act as special provisions of Article 63 of the same Act on the grounds for appointment of provisional directors, duties, duration of office, restrictions on appointment of regular directors, etc., as a special rule for Article 63 of the same Act, provisional directors appointed by the Minister of Education pursuant to Article 25 of the former Private School Act shall be interpreted as a risk manager in charge of operating them temporarily in cases where the purpose of a school juristic person is not achieved or is likely to cause damage, unlike temporary directors under the Civil Act. Accordingly, temporary directors under the former Private School Act do not have the authority to appoint regular directors. As such, temporary directors under the former Private School Act do not have the authority to appoint regular directors, and there is no authority to appoint regular directors after consultation with the aforementioned temporary directors, and there is no authority to appoint regular directors after retirement.

[1] Article 250 of the Civil Procedure Act / [2] Article 16 (1) 4, Article 20, Article 25 of the former Private School Act (amended by Act No. 7802 of Dec. 29, 2005), Article 63 of the Civil Act

[1] Supreme Court Decision 90Da14058 delivered on June 25, 1991 (Gong1991, 1998) Supreme Court Decision 96Da6295 delivered on April 12, 1996 (Gong1996Sang, 1538) Supreme Court Decision 2006Da5970 Delivered on August 23, 2007 / [2] Supreme Court en banc Decision 2006Da19054 Delivered on May 17, 2007 (Gong2007Sang, 873) Supreme Court Decision 2008Da18925 delivered on July 23, 2009

Plaintiff 1 and one other (Law Firm Barun, Attorneys Lee Jae-sik et al., Counsel for the plaintiff-appellant)

School Foundation et al. and seven others (Bae, Kim & Lee LLC, Attorneys Shin Hyun-chul et al., Counsel for the plaintiff-appellant)

Busan High Court Decision 2008Na9853, 9860 decided April 8, 2010

The part against Defendant 2, 3, 4, 5, 6, 7, and 8 among the judgment below is reversed, and the part against the above Defendants among the judgment of the court of first instance is revoked, and this part of the lawsuit is dismissed. The part of the judgment of the court below concerning Defendant Educational Institute is reversed, and this part of the case is remanded to Busan High Court. The total cost of the lawsuit against the dismissed part is borne by the plaintiffs

1. Determination ex officio as to the legitimacy of a lawsuit

A. In a case where there is an immediate final and conclusive interest in a lawsuit seeking confirmation, i.e., obtaining a judgment of confirmation in order to eliminate the risk or apprehension with respect to the Plaintiff’s rights or legal status, it shall be allowed only where it is legally effective and appropriate. A resolution of appointment of director at the board of directors of a school juristic person is a school juristic person as a decision-making of a school juristic person, and thus, the subject of legal relations arising therefrom is a school juristic person. Thus, only by obtaining a judgment of confirmation with respect to the existence or validity of a resolution of appointment of director, it can remove the Plaintiff’s rights or legal status effectively and effectively. A judgment of confirmation against an individual who is not a school juristic person is not an incorporated juristic person, and thus, there is no immediate final and conclusive interest (see, e.g., Supreme Court Decisions 90Da14058, Jun. 25, 1991; 2006Da5970, Aug. 23, 2007).

B. On February 15, 2005, the plaintiffs sought confirmation that there is no or no status of the director or non-existence of the status of the director or non-existence of the director of the defendant's driving school as of April 13, 2006 who appointed the defendant 3 as the director against the defendant's teaching institute of the defendant's educational foundation (hereinafter "the defendant's driving school") as of February 15, 2005, the resolution of the board of directors as of April 13, 2006, the resolution of the board of directors as of May 17, 2006, the resolution of the board of directors as of April 23, 2007 who appointed the defendant 6 as the director, the resolution of the board of directors as of December 11, 2007, the defendant 7 as the chief director, and the defendant 8 as of December 14, 2007, against the defendant 2,3,4,5,67, and8.

However, in light of the legal principles as seen earlier, seeking confirmation of the absence or invalidation of the status of the director or president of the Defendant Institute against Defendant 2, 3, 4, 5, 6, 7, and 8 is not effective, and thus, the confirmation judgment does not affect the Defendant Institute and thus cannot effectively remove risks or apprehensions in relation to the rights or legal status of the Plaintiffs. Therefore, the lawsuit against the Defendants is unlawful.

Nevertheless, the lower court determined that the lawsuit against the said Defendants was lawful. In so determining, the lower court erred by misapprehending the legal doctrine on the interest in confirmation, thereby adversely affecting the conclusion of the judgment.

2. Determination on the grounds of appeal against Defendant Private Teaching Institutes

A. In light of the basic rights of school juristic persons, the legislative purpose of the former Private School Act (amended by Act No. 7802 of Dec. 29, 2005; hereinafter the same) and Article 25 of the same Act as special provisions on Article 63 of the Civil Act Article 63 of the same Act, which have separate provisions on the grounds for appointment, duties, duration of office and restrictions on appointment of regular directors, etc., provisional directors appointed by the Minister of Education pursuant to Article 25 of the former Private School Act shall be a risk management manager in charge of operation thereof temporarily in cases where the purpose of a school juristic person is not achieved or is likely to cause damage due to vacancy of directors, and it shall be interpreted that there is no authority to appoint regular directors, unlike temporary directors under the Civil Act, to appoint regular directors (see, e.g., Supreme Court en banc Decision 2006Da19054, May 17, 2007).

B. According to the reasoning of the judgment below, Defendant 2’s private teaching institute was established for the purpose of secondary education based on the spirit of 100, which was dispatched to the board of directors in Korea, and operated Defendant 2’s vocational high school, Brelel High School, Brelel High School, etc. under its jurisdiction on December 1963. The competent authorities, as a result of the special audit of the Office of Education, neglected to perform its duties, such as giving approximately KRW 19.7 billion to Defendant 2’s standing director (hereinafter “previous director”) under Article 20-2(1) of the former Private School Act; the Plaintiffs, who were employed as directors of Defendant 2’s private teaching institute, were also dismissed on May 31, 199, and the Minister of Education, on June 12, 199, appointed Nonparty 2 as Defendant 3’s standing director on June 7, 201.

In light of the above facts in light of the legal principles as seen earlier, the resolution of the board of directors of the second provisional board of directors composed of the temporary directors of the defendant's driving school was made without the authority to appoint the regular board of directors, and thus is null and void. As such, the resolution of the appointment of the regular board of directors appointed by the board of directors of the case in which the regular board of directors of the defendant's driving school appointed by the board of directors or the regular board of directors appointed by the board of directors of the case in which the invalid board of directors was made shall also be null

Nevertheless, the lower court determined otherwise, to the effect that, insofar as the second provisional board of directors of the Defendant Institute was sufficiently going through a practical consultation procedure as to the succession or recovery of the identity of the previous directors and Nonparty 1, who are the founder of the Defendant Institute and the previous directors, who are in the position of representing the previous directors, and the resolution was made by the board of directors in this case by reflecting their intent, the said resolution shall be valid, and that each resolution to appoint the above Defendants as directors or the president is valid. In so doing, the lower court erred by misapprehending the legal doctrine on the scope of the authority of the temporary directors appointed by Article 25 of the former Private School Act, thereby adversely affecting the conclusion of the judgment. The allegation in the grounds of appeal pointing this out is with merit.

3. Conclusion

Therefore, the part of the judgment of the court below against the defendants 2, 3, 4, 5, 6, 7, and 8 shall be reversed. Since this part of the case is sufficient to be directly tried by the Supreme Court, this part of the judgment of the court of first instance shall be revoked pursuant to Article 437 of the Civil Procedure Act, and this part of the lawsuit against the above defendants among the judgment of the court of first instance shall be dismissed. The part of the judgment of the court below concerning the defendant's private teaching institute shall be reversed, and this part of the case shall be remanded to the court below

Justices Park Si-hwan (Presiding Justice)