[1] Whether a representative director's right of business operation or a shareholder's right may exercise a company's right of property against a third party directly or by subrogation (negative)

[2] Whether Articles 380 and 190 of the Commercial Act shall apply to legal relations between a third party other than a company (negative)

[3] The validity of an external transaction where the representative of a corporation did not undergo an external transaction that requires a resolution of the board of directors (affirmative with qualification)

[4] The meaning of "transfer of the whole or essential part of the business" under Article 374 (1) of the Commercial Code which requires a special resolution of the general meeting of shareholders

[5] Whether a special resolution of the general meeting of shareholders is required in a case where the business is already discontinued or discontinued at the time of disposal of business assets which are the basis of the existence of the company (negative)

[1] The representative director's business execution right, etc. is not a personal property right of the representative director, and the shareholder's right is not a specific claim. Thus, barring any special circumstance, the representative director's business execution right or shareholder's right can not be exercised directly or by subrogation the right to property such as a real right claim against a third party based on the company's shareholder's right

[2] Articles 380 and 190 of the Commercial Act do not apply to legal relations between third parties other than a company.

[3] Even where the representative of a corporation does not undergo a resolution of the board of directors, if the other party to the transaction knew or could have known that there was no resolution of the board of directors, the transaction is effective. In such cases, the other party's bad faith or negligence must be asserted and proved by the person who asserts the invalidity of the transaction.

[4] The "transfer of the whole or essential part of the business," which requires a special resolution of the general meeting of shareholders under Article 374 subparagraph 1 of the Commercial Code, means the transfer of the whole or essential part of the business organized for a certain business purpose and functioned as an organic whole. Even if the business of a company is not itself a disposal of the business property, if the result of such disposal is the same as the transfer or closure of the whole or essential part of the business of the company, such a special resolution is required.

[5] In a case where a company has already discontinued or suspended its business at the time of disposing of its business property which serves as the basis for the existence of the company, it cannot be said that the whole or part of its business is discontinued or suspended only due to such disposal, and in such a case, it does not require a special resolution

[1] Article 404 of the Civil Code, Articles 329 and 389 of the Commercial Code / [2] Articles 190 and 380 of the Commercial Code / [3] Articles 209 and 389 (3) of the Commercial Code / [4] Article 374 subparagraph 1 of the Commercial Code / [5] Article 374 subparagraph 1 of the Commercial Code

[1] Supreme Court Decision 78Da90 delivered on April 25, 1978 (Gong1978, 10824) / [2] Supreme Court Decision 91Da5365 delivered on September 22, 1992 (Gong1992, 2950) / [3] Supreme Court Decision 93Da1391 delivered on June 25, 1993 (Gong1993Ha, 217), Supreme Court Decision 94Da39253 delivered on October 28, 1994 (Gong1994Ha, 3124 delivered on January 26, 1996), Supreme Court Decision 94Da42754 delivered on September 26, 1996 (Gong196, 194, 1997) / Supreme Court Decision 97Da194979 delivered on June 29, 197

Plaintiff (Attorney Song-chul et al., Counsel for plaintiff-appellant)

Nowon-gu Co., Ltd. and two others

Sung Construction Co., Ltd.

Intervenor joining the Defendant

Seoul High Court Decision 93Na27118 delivered on December 21, 1994

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

The grounds of appeal are examined.

On the first ground for appeal

The court below rejected the plaintiff's assertion that the plaintiff is seeking the cancellation of registration of each of the above land in the name of the representative director or the shareholders of the old-age corporation of the court below on behalf of the above company, since the representative director's right to conduct business is not a personal property right of the representative director, and shareholders' right is not a specific right of claim. Thus, in the case of this case where there are no special circumstances, the representative director's right to conduct business or shareholders' right to claim property, such as a real right to specific goods that the company has against the third party based on the representative director's right to conduct business or shareholders' right cannot be directly or in subrogation. The above decision is just (see Supreme Court Decision 78Da90 delivered on April 25, 1978), and it is difficult to see otherwise even if the plaintiff is under the restriction of the representative director's exercise of right

In addition, in a creditor subrogation lawsuit, a person who intends to exercise the right of subrogation. Therefore, in this case where the plaintiff exercised the right of subrogation as the representative director or shareholder, and the plaintiff did not claim the right of subrogation as the right of subrogation, the court below cannot be deemed to be unlawful on the ground that the court below did not exercise the right of explanation as to the existence of specific claims. Since specific claims cited in the ground of appeal were not asserted until the closing of argument in the court below, the argument based on them cannot be accepted, and there is no error of law such as violation of the rules of evidence, incomplete deliberation, incomplete reasoning or misapprehension of legal principles, as argued in the ground of appeal.

Therefore, all of the grounds for appeal on this point cannot be accepted.

On the second ground for appeal

The court below held that if the plaintiff et al. invested as a shareholder and incorporated the above company, and the above company acquired the land in this case, it is owned by the company, and that the plaintiff et al. has a right to share in the above land separately from the company as a shareholder or an investor, or cannot be deemed to have held a title trust with the company. The judgment of the court below is just and there are no special circumstances to view the above different from the above in light of the records, and the records clearly indicate that the plaintiff's assertion about the right to revoke is a vicarious exercise of the right to revoke the plaintiff's right to revoke, and the court below rejected the above claim on the ground that there is no evidence to acknowledge the right to revoke the plaintiff's claim. Thus, there is no violation of the rules of evidence

Therefore, the grounds of appeal on this point are without merit.

With respect to the third and fifth points

The court below rejected the plaintiff's assertion that each of the above registrations is null and void, since all of the defendants, other than the defendant joining the defendant et al., who is not qualified as representative director of the above company, conspired with the defendant joining the defendant et al. and the defendant joining the defendant et al., and completed each of the above registrations in this case with the intent to make profits even though they knew that they would be harmful to the above company, and they made a false trade with the intent to make profits, and forged documents required for registration. In light of the records, the court below did not err in violation of the rules of evidence against the rules of logic or experience as alleged in the ground for appeal, and there is no error of law

Therefore, the grounds of appeal disputing this issue cannot be accepted.

On the fourth ground

After recognizing the facts based on the quoted evidence, the court below held that the above resolution of the general meeting of shareholders is just, and in light of the circumstances leading up to the convocation and resolution of the general meeting of shareholders in this case and the facts that the above defendant intervenor et al. possessed the share certificates corresponding to a majority of the company's shares and received the confirmation of the representative director, it is reasonable to deem that the above resolution of the general meeting of shareholders exists once or is directly related to the company's internal decision-making of the company, such as the resolution of the general meeting of shareholders, and that the above decision-making of the company cannot be deemed to exist, or that there is a serious defect to the extent that the resolution of the general meeting of shareholders cannot be deemed to exist, or that the external appearance of the company cannot be deemed to be irrelevant to the company's external appearance, such as by forging the minutes of the general meeting of shareholders or preparing a false meeting without going through the actual convocation procedure and the actual meeting procedure.

Furthermore, as the proviso of Article 190 of the former Commercial Act (amended by Act No. 5053 of Dec. 29, 1995) applies mutatis mutandis pursuant to Article 380 of the former Commercial Act, the court below rejected the plaintiff's assertion on the ground that the defendant joining the defendant's act of disposing of the land of this case as the representative director of the above company was valid before the judgment of non-existence of the resolution of the above general meeting of shareholders became final and conclusive. Since Articles 380 and 190 of the Commercial Act are not applicable to legal relations between third parties other than the company (see Supreme Court Decision 91Da5365 of Sept. 22, 1992), the court below rejected the plaintiff's assertion as to the part based on the status of the plaintiff as the provisional registration authority of the above land. However, according to the facts acknowledged by the court below, since the provisional registration under the plaintiff's name was established to secure the defendant's claim against the defendant corporation, the above company cannot be asserted merely against the defendants's registration under the name of this case.

Therefore, we cannot accept all the grounds of appeal on this point.

With respect to the sixth and seventh points

Even if a representative of a juristic person does not undergo a resolution of the board of directors, if the other party to the transaction knew or could have known that the resolution of the board of directors was not made, the transaction is valid. In this case, the other party's bad faith or negligence must be asserted and proved by the person who asserts the invalidity of the transaction (see Supreme Court Decision 94Da39253, Oct. 28, 1994). The judgment of the court below that there is no evidence to acknowledge the above points in light of the relevant evidence based on the records is just and acceptable.

Meanwhile, the transfer of the whole or essential part of the business which requires a special resolution of the general meeting of shareholders under Article 374 subparagraph 1 of the Commercial Act refers to the transfer of the whole or essential part of the business which is organized for a specific business purpose and function as an organic whole. Even if the business of the company itself is disposal of the non-business property, if it results in the same result as the transfer or closure of the whole or essential part of the business of the company, such special resolution shall be required in conducting such disposal. However, if the company has already discontinued or suspended the business at the time of disposal of the business property which is the foundation of existence of the company, it cannot be said that the whole or essential part of the business is discontinued or suspended only after such disposal. Thus, it is the opinion of the Supreme Court that the above special resolution of the general meeting of shareholders is not required (see Supreme Court Decision 95Da1460, Oct. 11, 1996). Accordingly, the above company's judgment is justified in its determination based on evidence, and it cannot be viewed that the above disposal of the land is not subject to a special resolution of the general meeting.

Therefore, the judgment of the court below shall not contain any error in violation of the rules of evidence, incomplete hearing, incomplete reasoning, or misapprehension of legal principles as asserted in the grounds of appeal.

In addition, the judgment of the court below is the convenience of the judiciary, and is contrary to Articles 7, 27 (1), (3), and 103 of the Constitution and its spirit, but it is merely an abstract assertion to criticize the conclusion of the judgment of the court below, and it cannot be viewed as a legitimate ground for appeal.

Therefore, all appeals are dismissed as without merit, and all costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices.

Justices Seo Sung-sung (Presiding Justice)