Where a representative director of a stock company performs an external transaction which requires resolution of the board of directors without going through the outside transaction, the effect of the transaction.

Even if the representative director of a corporation did not undergo a resolution of the board of directors with respect to external transactions, the above resolution of the board of directors is merely an internal decision-making of the company, so if the other party to the transaction did not know or have been able to know that there was no such resolution of the board of directors, the transaction should be interpreted as effective. Such bad faith of the other party is reasonable to interpret as valid unless it is asserted by the other party.

Article 209 of the Commercial Act

Supreme Court Decision 63Da254 Delivered on August 31, 1963

[Defendant-Appellant] Plaintiff 1

[Defendant-Appellant] Defendant 1 et al., Counsel for defendant-appellant-appellant

Seoul High Court Decision 77Na739 delivered on January 20, 1978

The judgment below is reversed, and the case is remanded to Seoul High Court.

The Plaintiff’s attorney’s ground of appeal is examined.

With respect to the second ground:

According to the reasoning of the judgment below, the defendant's disposal of important property must be decided by the board of directors, i.e., the transfer of property without a special resolution of the board of directors; if the above disposal of the property is invalid, it shall be decided by the articles of incorporation and regulations of the defendant company; if the defendant company's disposal of important property or important property is decided by the articles of incorporation and regulations of the board of directors; if the defendant company's disposal of the property with 30 million won as stated above, it shall be transferred as 3 million won for the transfer of the property; and if the defendant company's disposal of the property cannot be decided by the board of directors without a special resolution of the board of directors, it shall be decided by the board of directors as to the transfer of property without a special resolution of the board of directors (see, e.g., Supreme Court Decision 200,000 won for the transfer of property and 300,000,000 won for the property at issue, it shall be decided by the board of directors' resolution of the defendant company.

Therefore, without examining and determining the above point of view, the decision of the court below that the transfer contract as above was null and void solely on the ground that there was no resolution of the board of directors, shall be deemed to have been affected by the conclusion of the judgment by misapprehending the legal principles on the validity of the representative director's business execution without a resolution of the board of directors of the corporation, and thus, the decision of the court below shall not be dismissed without examining the other points in this regard, since the argument that can be seen as such is reasonable.

Therefore, the judgment of the court below is reversed, and the case is remanded to the Seoul High Court which is the court below. It is so decided as per Disposition by the assent of all participating Justices.

Justices Presiding Justice (Presiding Justice)