The validity of transfer of shares prior to issuance of share certificates

The transfer of shares before the issuance of share certificates is effective for the company, but the transfer is effective between the parties.

Article 335 of the Commercial Act

Supreme Court Decision 4290Da10 Decided April 6, 1957 (Supreme Court Decision 5391 delivered on November 12, 1959; Decision 4292Da527 delivered on November 12, 1959 (Supreme Court Decision 7571 delivered on November 24, 1960; Decision 4292Da874, 875 delivered on August 6, 197; Decision 2035Da1772 delivered on November 7, 1963; Decision 205Da1375 delivered on November 7, 1963; Decision 201Da1117 delivered on November 17, 1963; Decision 205Da1375 delivered on June 13, 2005; Decision 207Da1365 delivered on June 25, 201; Decision 203Da15371 delivered on June 13, 2015

Plaintiff

Defendant

Seoul Civil History District Court (80 Gohap327)

The appeal is dismissed.

Expenses for appeal shall be borne by the defendant.

The defendant shall pay to the plaintiff 1,00,000 won with an amount equal to five percent per annum from February 9, 1980 to the date of full payment.

Litigation costs shall be borne by the defendant.

Paragraph (1) may be provisionally executed.

The original judgment shall be revoked.

The plaintiff's claim is dismissed.

All the costs of lawsuit shall be borne by the plaintiff in the first and second instances.

On August 17, 1979, the Defendant acquired all of the shares owned by the Plaintiff, a shareholder of 5,000 shares of the non-party company, from the Plaintiff, who is a shareholder of 10,000 shares of the non-party company, together with the entire management rights of the non-party company, at KRW 11,00,000,000 out of the price, and there is no dispute between the parties to the agreement to pay to the Plaintiff on December 30, 197 of the same year the amount of KRW 3,000,000 as of October 3, 197 of the same year, and KRW 4,00,000 as of November 30 of the same year.

Since the above agreement was formally made to resign other directors such as the non-party 1 in relation to the management problem of the above non-party company, the above agreement is null and void as a false declaration of intent made in collusion. Even if not, since the above agreement was made through the plaintiff's deception, the above agreement was cancelled, it is a defense that the above agreement was cancelled. Thus, there is no evidence to conclude that the above agreement was a false declaration of intention made by the non-party 2 and the non-party 3, or that it was a declaration of intention made by fraud.

In other words, the defendant asserts that the above agreement was made without the issuance of the above non-party company's share certificates, and thus the above agreement is null and void. Thus, the claim for the payment of the agreement is unjustifiable. Thus, the transfer of shares before the issuance of share certificates has no effect against the company, but the transfer between the parties is effective.

In addition, the defendant asserts that the above agreement is valid but the plaintiff cannot respond to the plaintiff's claim because the plaintiff did not comply with the procedure for transfer of share certificates, and that the plaintiff did not have a simultaneous performance relationship with the payment of the above agreement and the execution of the procedure for transfer of share certificates. Thus, in full view of the above agreement between the plaintiff and the defendant, the above non-party company's share certificates have not yet been issued when considering the above agreement between the plaintiff and the non-party 1 and the non-party 4, the above non-party company's share certificates are not issued, and the documents necessary for transfer of share certificates are to be delivered to the plaintiff at the defendant's request regardless of the above payment of the transfer amount, and the defendant, taking office at the representative director of the above company and operated the above company's business on September 14, 1979 upon delivery of the above company's facilities, and according to the above agreement, the above agreement does not violate the procedure for transfer of share certificates and the above transfer of share certificates.

Therefore, the defendant is obligated to pay to the plaintiff the above contract amounting to 11,00,000 won and damages for delay at the rate of 5% per annum from February 9, 1980 to the full payment date as claimed by the plaintiff. Thus, the plaintiff's claim for this case is justified, and the judgment below in this conclusion is just, and therefore, the defendant's appeal is without merit, and the costs for appeal are assessed against the defendant who has lost. It is so decided as per Disposition.

Judges Yoon Il-young (Presiding Judge) Kim Jong-young