[1] Legal relations where property rights are transferred to the creditor for the purpose of securing the claim

[2] Requirements for the transfer of shares transferred for the purpose of securing bonds to the creditor by way of the settlement of attribution

[3] The obligee's assertion and burden of proof where the obligee acknowledged the receipt of the amount of repayment and claimed that it was appropriated for the repayment of other obligations

[1] In a case where a property right is transferred to a creditor for the purpose of securing a claim, the issue of which type of security contract is to be determined specifically by the party's intent at each individual case, or if not otherwise stipulated, it is presumed that it is a weak meaning of security for transfer requiring settlement between the parties.

[2] In order for a security right to shares transferred for the purpose of security of a claim to be transferred to a creditor finally and conclusively by exercising the security right to the shares, the creditor shall evaluate the shares at an appropriate price and appropriate the amount to the principal and interest of the secured claim at that price, and return the balance, or if the appraised amount falls short of the secured claim amount, it shall complete the settlement procedure by notifying the debtor of such contents, and it shall not be deemed that the secured claim has yet to be extinguished unless the settlement procedure

[3] With respect to the assertion that the obligor paid the money as a repayment of a specific obligation, the obligee recognizes the receipt by the obligee, and where the obligee asserts that it has been appropriated for the repayment of another obligation, the obligee must assert and prove that there was an agreement on the appropriation of another claim and that there was an agreement on the appropriation of another claim, or that the other claim is in the priority order

[1] Articles 105 and 372 of the Civil Code / [Provisional Registration Security] Articles 1 and 2 of the Provisional Registration Security Act / [2] Articles 105, 372 of the Civil Code / [3] Articles 1 and 2 of the Provisional Registration Security Act / [3] Article 261 of the Civil Procedure Act, Articles 476 and 477 of the Civil Code

[1] [2] Supreme Court Decision 97Da4005 decided Apr. 10, 1998 (Gong1998Sang, 1273) / [1] Supreme Court Decision 84Da2472, 2473 decided Oct. 22, 1985 (Gong1985, 1543), Supreme Court Decision 96Da3116 decided Nov. 15, 1996 (Gong197Sang, 97Da28528 decided May 26, 1992 (Gong1992, 1993); Supreme Court Decision 84Da2472 decided Oct. 23, 1993; Supreme Court Decision 97Da3979 decided Nov. 16, 1996 (Gong197Sang, 97Da19749 decided Nov. 36, 197) / [297Da39794 decided Jun. 39, 1997

Seoul High Court Decision 2001Na14888 decided May 1, 2012

Park Jong-won Co., Ltd.

Intervenor 1 and one other (Supplementary Intervenor Law Firm, Attorneys Lee Jae-hun, Counsel for the supplementary intervenor-appellant)

Daejeon High Court Decision 98Na749 delivered on February 10, 1999

The judgment of the court below is reversed, and the case is remanded to Daejeon High Court.

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

1. Fact-finding and judgment of the court below

A. According to the reasoning of the lower judgment, the lower court acknowledged the following facts by comprehensively taking account of the adopted evidence.

(1) A company established on September 11, 1989 for the purpose of running a golf course business, etc. with the approval of the golf course construction business plan on November 1, 1989 and constructed a golf course at the ( Address omitted), the defendant company and the company on July 22, 1994 agreed to borrow a total of KRW 4 billion from the plaintiff company at the rate of 2% per month, the due date for repayment, and December 30 of the same year until November 30 of the same year. The loan amount is used only for the golf course construction fund, and the case where the plaintiff company directly paid the construction cost to the golf course construction business operator, the defendant company shall be deemed as a loan to the defendant company. The defendant company acquired 300 membership rights and 10,200 shares (all registered shares issued by the defendant company and 1) among the shares of the defendant company, and the defendant company did not arbitrarily obtain the approval of the plaintiff company within the due date for repayment, and the defendant company and the defendant company did not pay the loan amount to the plaintiff company within 300.

(2) Under the loan agreement of this case, the Intervenor 1 provided 300 golf course membership rights to the Plaintiff Company. On August 1994, the Plaintiff Company entered into a contract with the Plaintiff Company to transfer 7,400 shares of the Defendant Company owned by himself and 10,200 shares out of the total 11,60 shares and 11,60 shares of the Defendant Company, which he held in title trust with the Intervenor 2. In addition, on October 21 of the same year, the Plaintiff Company and the Defendant Company assumed Plaintiff 2, the representative director of the Plaintiff Company, as joint representative director of the Defendant Company, as of October 21 of the same year. In the event the instant loan amount was fully repaid, Plaintiff 2 agreed not to exercise the authority as representative director, and the shareholders’ general meeting and the board of directors of the Defendant Company held on the same day were additionally appointed by Plaintiff 2 as representative director, and the Plaintiff 2 and the Intervenor 1 were registered as joint representative director of the Defendant Company.

(3) The Plaintiff Company paid the construction cost by cash or promissory note on behalf of the Defendant Company to the construction business operator who entered into the construction contract with the Defendant Company, and then received confirmation from the Intervenor 1 later, etc. from July 22, 1994, to December 9, 1994, the Plaintiff Company loaned the Defendant Company a total of KRW 3,998,063,761 in total, and thereafter, the total amount of loans exceeds KRW 4 billion until December 30 of the same year after payment of the construction cost. On the other hand, on December 24 of the same year, the Intervenor 1 notified the Plaintiff Company that the instant contract would be cancelled on the grounds that some promissory notes issued by the Plaintiff Company were not settled.

(4) On November 3, 1994, the Plaintiff Company received a provisional disposal order against disposal of the Intervenor 1’s 7,400 shares and 2,800 shares of the Intervenor 1’s 2,800 shares (hereinafter “the shares of this case”) from the Cheongju District Court Cheongju Branch. After the maturity date of the loan agreement of this case was expired, the Plaintiff Company reverted the shares of this case to the Plaintiff Company on January 31, 1995, and thereafter, the shares of this case were transferred to Plaintiff 2 again, and 60 shares were transferred to Plaintiff 3 and Plaintiff 4.

(5) On May 16, 195, the supplementary intervenor 1 held a general meeting of shareholders and the board of directors of the defendant company and dismissed the plaintiff 2 from office as joint representative director and director of the defendant company, and the plaintiff 2 brought a lawsuit against the defendant company at the Cheongju District Court Cheongju District Court for confirmation of non-existence of the general meeting of shareholders, etc. The dispute over the management rights of the defendant company occurred. The majority shareholder of the defendant company and the non-party 1, a director of the defendant company, asserted that he was the representative director and did not receive a resolution of the board of directors on the ground that the representative director was acting for the representative director, and did not receive the authority delegated by the representative director 1, the supplementary intervenor 1, who was the representative director, was convened on March 13, 1996 and dismissed the plaintiff 2 and the plaintiff 3 from office as director, and the plaintiff 2 and the non-party 1 were dismissed from office as representative director, and the defendant company and the non-party 1 were also dismissed.

(6) On March 13, 1996, an intervenor 1 filed a lawsuit seeking revocation, etc. of the resolution of the general meeting of shareholders with the same court, and filed an application for provisional disposition of suspending the performance of duties, such as a director, against the plaintiff 2, etc. on July 11, 1997, and the same court rendered a judgment to the effect that the resolution of the general meeting of shareholders is nonexistent, and that the plaintiff 2’s representative director and the director shall suspend the performance of duties and that the appointment of the non-party

B. The lower court determined as follows based on the foregoing facts.

The transfer of shares before the issuance of share certificates is established only by the declaration of intention between the parties in accordance with the general principle of the transfer of nominative claims. If the company fails to issue share certificates within six months after the incorporation, the transferee of shares by the declaration of intention between the parties can request the company to transfer the shares. If the share certificates were not issued even after six months have already passed since the time of the agreement for the transfer of shares for the purpose of securing bonds, the agreement takes effect as a transfer of shares. Thus, the transfer contract between the supplementary intervenor 1 and the plaintiff company is a transfer of shares to secure the loan obligations owed by the defendant company to the plaintiff company. However, if the transfer of shares was not made by the plaintiff company to lend at least four billion won to the defendant company in accordance with the loan contract of this case, the transfer of shares between the supplementary intervenor 1 and the plaintiff company constitutes a transfer of shares to secure the loan obligations owed by the plaintiff company to the plaintiff company. Thus, the transfer of shares to the plaintiff company is legitimate by the plaintiff company on January 31, 1995.

C. Furthermore, the court below rejected the plaintiff 2's defense that the plaintiff 2 took office as the representative director of the defendant company and acquired part of the purchase price of the golf course in its name, and the plaintiff company borrowed 1.8 billion won as a security for the golf course site owned by the defendant company on January 30, 1997. These sale price and loans are appropriated for the loan debt of this case and the secured debt of this case was extinguished. The plaintiff 2 took office as the representative director of the defendant company on April 24, 1996. The court below rejected the plaintiff 2's non-party 1.7 billion won loan loan amount to 70 billion won loan amount to 50 billion won loan amount to 1.7 billion won loan amount to the defendant company's non-party 2.7 billion won loan amount to 9.7 billion won loan amount to the defendant company's non-party 2's non-party 9.7 billion won loan amount to 9.7 billion won loan amount to the defendant company's non-party 1.7 billion won loan amount to 9.7 billion won loan amount to the plaintiff 9.7.

2. The judgment of this Court

A. In light of the records, the court below is just in finding that the defendant company borrowed a total of at least 4 billion won by December 30, 1994 under the loan agreement of this case with the plaintiff company, and there is no error of law such as misconception of facts or incomplete hearing due to violation of the rules of evidence, as otherwise alleged in the ground of appeal.

B. In a case where a property right is transferred to a creditor for the purpose of securing a claim, which form of security contract is to be determined specifically by the parties' will for each individual case, or, in a case where other special agreement is not recognized, it is presumed that the parties are presumed to be a weak and significant security that requires settlement procedures (see, e.g., Supreme Court Decision 84Meu2472, 2473, Oct. 22, 1985). As seen above, the transfer of the shares in this case was made for the purpose of securing a loan obligation of this case, and there is only an agreement on the disposal or attribution of a security in the case where the repayment period expires, and there is no agreement on the settlement of the shares in this case. Thus, it is reasonable to presume the transfer of the shares in this case as a security for transfer to a weak meaning that requires settlement procedures.

Meanwhile, in order to transfer the shares of this case to the Plaintiff Company, which is the creditor, after the security right to the shares of this case was exercised by way of the settlement of reversion, at an adequate price, the shares of this case that the Plaintiff Company acquired for the purpose of collateral are appraised at an appropriate price, and then appropriate the balance to the principal and interest of the secured claim, and return the balance, or when the appraised amount falls short of the secured claim amount, the Defendant Company shall complete the settlement procedure, such as notification with such contents, and it cannot be deemed that the secured claim has been extinguished unless the settlement procedure is completed (see, e.g., Supreme Court Decision 95Da11900, Jul. 30, 1996). In the records, there is no assertion or proof as to the fact that the Plaintiff Company completed the settlement procedure. Thus, even if the Plaintiff Company, as the mortgagee, has the right to seek a transfer of the shares of this case, if it is recognized that the secured obligation has been repaid, the Plaintiff Company loses its right to the shares of this case, and it cannot be deemed that the Plaintiff shares of this case has not been transferred.

In addition, with regard to the assertion that the obligor paid the amount of money for a specific debt, etc., the obligee recognizes the receipt by the obligee, but if the obligee asserts that it has appropriated the money for the repayment of other debt, the obligee has to assert and prove that there was an agreement on the repayment of other debt and that there was an order of statutory appropriation (see Supreme Court Decision 4290Da117, Jul. 27, 1957). According to the records, the Plaintiffs are at the court below's decision, following the resolution of the board of directors on June 25, 1996, that the Plaintiff Company sold 50 billion won to the Plaintiff Company and disposed of the amount of money for the repayment of other debt by the Plaintiff Company as part of the amount of money for the repayment of the other debt that the Plaintiff Company owes to the Defendant Company by paying the money for the payment of the loan in lieu of the loan in this case, and that there was no evidence to acknowledge the amount of money for the payment in excess of the amount of money for the repayment in excess of the amount of money for the Plaintiff Company's loan in this case.

In addition, the plaintiffs alleged in the court below that the 300 million fake membership which was offered as security to the original plaintiff company was replaced with 50 million fake membership 50 million won, 200 million won membership 20 million won, and then sold in lots to the plaintiff company and offered them as security to the plaintiff company or the Seoul Credit Union. The plaintiffs' assertion is that the 100 million fake membership 50 million won and 20 million won membership 20 million won are acquired as security like previous membership. However, according to the records, the plaintiffs' own assertion that the plaintiff company transferred part of them to another company, and even according to the court below's approval, it is difficult to view that the plaintiff company merely acquired part of them as security because it was hard to see that the plaintiff company merely acquired them as security, and it is difficult to consider that the plaintiff company had acquired them as security in accordance with the loan obligation or loan obligation without deliberation.

Nevertheless, as seen earlier, the court below rejected the intervenor's defense of payment solely on the ground that there is no evidence to acknowledge that the amount equivalent to the sale price has been appropriated for the debt of the loan of this case. The court below erred in the misapprehension of legal principles as to the burden of proof, which affected the conclusion of the judgment, and the intervenor's ground of appeal, which contains the same purport, has merit.

3. Conclusion

Therefore, the lower judgment is reversed, and the case is remanded to the lower court for further proceedings consistent with this Opinion. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Lee In-hee (Presiding Justice)