Whether the shares before the issuance of share certificates are naturally returned to the transferor if the transfer contract is rescinded after the incorporation of the company or six months have passed after the date of payment of new shares (affirmative)

Where six months have elapsed after the incorporation of the company or the date of payment on new shares, shares before the issuance of share certificates may be transferred only by the declaration of intention of the parties, and when the contract for transfer of shares is rescinded, shares transferred to the execution of the contract shall naturally return

Article 335(3) of the Commercial Act; Article 548(1) of the Civil Act

Supreme Court Decision 92Da16386 Decided October 27, 1992 (Gong1992, 3261), Supreme Court Decision 94Da47728 Decided March 24, 1995 (Gong1995Sang, 1731), Supreme Court Decision 94Da36421 Decided May 23, 1995 (Gong195Ha, 2226), Supreme Court Decision 94Da39598 Decided August 20, 196 (Gong196Ha, 2779)

Plaintiff (Attorney Kim Jong-jin, Counsel for the plaintiff-appellant)

Defendant (Seoul International Law Firm, Attorneys Park Jong-soo et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2001Na56760 delivered on April 18, 2002

The appeal is dismissed. The costs of appeal are assessed against the defendant.

The court below is justified in holding that the shares that were acquired by Nonparty 2 pursuant to the contract were naturally returned to the transferor upon the cancellation of the instant underwriting contract between Nonparty 1 and the Defendant, and that the shares that were acquired by Nonparty 2 pursuant to the contract was returned to the transferor after the incorporation of the company or six months after the date of payment of new shares. In so doing, the court below did not err by misapprehending the principle of trust and good faith or by misapprehending the legal principles, contrary to what is alleged in the grounds of appeal. Accordingly, this part of the grounds of appeal cannot be accepted.

On the other hand, the argument that the instant underwriting contract between Nonparty 1 and the Defendant is a contract for Nonparty 2, who is a third party, and so long as Nonparty 2 expressed an intention of profit, as long as Nonparty 2 expressed an intention of profit, the contract cannot be rescinded by Nonparty 1 as to the shares transferred to Nonparty 2, does not constitute a legitimate ground for appeal. Accordingly, this part of the grounds for appeal is unacceptable.

Therefore, all appeals are dismissed, and the costs of appeal are assessed and decided as per Disposition.

Justices Zwon (Presiding Justice)