2020Du42262. Revocation of disposition of a fine for negligence

Eastern Law Firm et al.

Dongsung Law Firm, Attorney Lee Dong-hwan et al.

Attorney Lee Dong-young

The Minister of Justice

Government Legal Service Corporation (Law Firm LLC)

[Defendant-Appellee] Plaintiff 1 and 2 others

Seoul High Court Decision 2019Nu64527 Decided June 12, 2020

November 26, 2020

All appeals are dismissed.

The costs of appeal are assessed against the defendant.

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

1. Whether the violation of the Guidelines for Preparation of Written Execution can be the grounds for disciplinary action against notary public;

A. According to the Notary Public Act, a notary public's duties are to deal with the preparation, etc. of notarial deeds at the request of the parties or other persons concerned and has "the status of a public official" as to such duties (Article 2). A notary public shall not refuse a commission for the preparation, etc. of notarial deeds without justifiable grounds (Article 4 (1)), and if a notary public refuses a commission, he/she shall not inform the client or his/her agent of the grounds for refusal (Article 4 (2)). A notary public may not make a document concerning matters in violation of Acts and subordinate statutes, null and void juristic acts or juristic acts which may be cancelled due to incompetence (Article 25). A notary public may raise an objection with regard to the handling of affairs by a notary public, and a notary public may again raise an objection to the Minister of Justice with regard to the disposition of the chief prosecutor of the district public prosecutor's office (Article 81). The Minister of Justice shall supervise a notary public (Article 78 (1)), the right to supervise a notary public, including cases where a notary public violates his/her duty of disciplinary action or order under Article 8 (2).

B. Generally, a superior administrative agency may establish an "administrative rule" which provides for the standards of interpretation and application of Acts and subordinate statutes to public officials under its jurisdiction or subordinate administrative agencies. A notary public has the status of a public official in connection with his/her duties, and the defendant is a supervisory agency against a notary public, so a notary public may individually and specifically issue an official order based on Article 79 subparagraph 1 of the Notary Public Act in the form of administrative rules, but may present a general standard or impose an obligation in the form of administrative rules. The defendant shall determine matters concerning the preparation of "a deed of execution by a notary public" (which is not a statutory term, but a notarial deed which is an executive title of compulsory execution pursuant to the Civil Execution Act, stating a declaration of intent to accept compulsory execution, and is a notarial deed that is an executive title of compulsory execution pursuant to the Civil Execution Act, in practice, to ensure the appropriateness and fairness of the affairs, and to prevent unjust infringement of the debtor's right in the process of preparing a deed of execution (hereinafter referred to as "the guidelines in this case"). This is the detailed guidelines that the defendant, a supervisory agency of a notary public, must comply with the upper administrative rules.

Therefore, if a notary public violates the instant guidelines in the performance of his/her duties, it can be seen that the notary public violates an official order based on Article 79 (1) of the Notary Public Act.

D. Meanwhile, in order to take a public official’s violation of an official order issued by a superior administrative agency or a supervisory authority as grounds for disciplinary action, the official order must be lawful and effective as not contrary to superior laws and regulations (see, e.g., Supreme Court Decision 2000Du7704, Aug. 24, 2001).

2. Effect of Article 4 of the Guideline;

A. “Administrative rules” are effective only within an administrative organization, unless there is a specific delegation of superior laws and regulations, and have no externally binding effect on citizens or courts. However, in a case where administrative rules relate to matters belonging to the discretion of an administrative agency that has set such administrative rules, barring special circumstances, such as lack of objective rationality, it is desirable to respect such administrative rules, barring special circumstances. However, if the contents of the administrative rules are contrary to superior laws and regulations, they are automatically null and void under the legal order in accordance with the unity of legal order and the principle of prohibition of inconsistency derived from the principle of a rule of law and order, and the internal effect of the administrative regulation cannot be recognized. In such a case, the pertinent administrative rules and the propriety of the measures taken by the administrative agency should be determined in accordance with the provisions of superior laws and the legislative purpose, etc. of the statutes (see, e.g., Supreme Court Decision 2013Du2001

B. The instant guidelines provide that not only credit service providers under Article 1 subparagraph 2 of the Act on Registration of Credit Business, etc. and Protection of Finance Users (hereinafter referred to as the "Credit Business Act"), credit card companies under the Specialized Credit Finance Business Act, banks under the Banking Act, cooperatives under the Agricultural Cooperatives Act, financial investment business entities under the Financial Investment Services and Capital Markets Act, mutual savings banks under the Mutual Savings Banks Act, community credit cooperatives under the Community Credit Cooperatives Act, community credit cooperatives under the Community Credit Cooperatives Act, credit cooperatives under the Community Credit Cooperatives Act, insurance companies under the Insurance Act, postal offices dealing with deposits and insurance under the Postal Savings and Insurance Act, debt collectors under the Postal Savings and Insurance Act, etc., a notary public under Article 4 provides that if a notary public prepares a deed of execution concerning claims and obligations under a monetary loan contract of a credit service provider, etc., he/she shall not prepare a deed of execution under subparagraph 1, 2 or 3 with respect to the appointment of an agent of the credit service provider, etc., a notary public who is not an agent of the other credit service provider, etc.

C. Article 4 of the Guidelines of this case can be seen as presenting the Defendant’s opinion of interpretation as a supervisory agency regarding the specific type of a case that can be included as “justifiable reason” as “justifiable reason for refusal of commission under Article 4(1) of the Notary Public Act.” Here, “justifiable reason” refers to an indefinite concept that has a possibility of various interpretation, but it is necessary to interpret the court’s interpretation and normative value judgment, and it cannot be said that the Defendant has any discretion on the interpretation and inclusion of the requirements.

D. Article 4 of the Guidelines of this case imposes an obligation to refuse a commission on a notary public in the form of administrative rules, in cases of claims and obligations arising from a monetary loan agreement of a "credit service provider, etc." with respect to a commission in the form of a dual agency permitted by law, and thus, is null and void in violation of the principle of "legal superiority". The specific reasons are as follows.

1) The Notary Public Act shall be in accordance with the relevant laws and regulations, such as real estate or ships, construction machinery, automobiles, aircraft

When one party commissions the preparation of a notarial deed stating the purport that he/she accepts a compulsory execution against a claim for the delivery and return of a movable asset registered and recorded, he/she shall not act on behalf of the other party or act on behalf of either of the parties (Article 56-3) and when entrusting the preparation of other notarial deeds, he/she shall allow the commission by an agent: Provided, That where a notary public prepares a notarial deed upon commission by an agent, he/she shall confirm the identity of the client and the commissioned agent by means of having the client submit a resident registration certificate or other certificate issued by a competent administrative agency and attached thereto (Articles 27 and 30), a certificate proving the power of attorney, a certificate of personal seal impression or a certificate of signature prepared by a competent administrative agency to prove the authenticity thereof, and shall read or peruse the certificate prepared by a notary public, and verify the absence of objection by the commissioned agent, and the notary public and the commissioned agent shall sign and seal the certificate (Article 38 (1) and (3)).

2) Article 124 of the Civil Act prohibits a person from acting as a principal and a person acting as a principal without the person’s consent, and does not prohibit a person from acting as a principal and a person acting as a principal if he/she so permits. In addition, the distinction between “a declaration of intent to conclude a contract and a declaration of intent to accept a compulsory execution” and “a declaration of intent to commission the preparation of an execution document.” As long as the former declaration of intent was made directly by the debtor himself/herself, it does not violate Article 124 of the Civil Act to delegate only the authority to act as to the latter and commission the commissioned agent to prepare an execution document (see, e.g., Supreme Court en banc Decision 72Da1183,

3) Article 6-2(1) of the Credit Business Act prohibits a person from acting on behalf of both parties to a contract by providing that, when a credit service provider enters into a loan agreement with the opposite contractual party, important matters, such as the amount of loan, interest rate of loan, and period for repayment, shall be stated in writing by the opposite contractual party. However, this is only applicable to a credit service provider registered under Articles 2 subparag. 1 and 3 of the Credit Business Act, and does not apply to other financial institutions. As long as an obligor has expressed his/her intent to accept the conclusion of a loan agreement and compulsory execution, it does not violate the above legal provisions to delegate the power of representation as to the “declaration of intent to commission

4) According to the Defendant’s explanatory materials (No. 6) on the background and purport of the instant guidelines, the “credit service provider, etc.” entrusts a specific notarial office with the preparation of a document of execution of a notarial deed one hundred and one hundred million won (hereinafter referred to as “collective agency commission”). The credit service provider, etc. demanded that the person unilaterally prepare and sign the document of execution in advance in the course of entering into a monetary loan contract with the other party, and the notary public, upon the formation of a flexible relationship between a credit service provider, etc. and a notary public entrusted with collective agency, has a problem such as not complying with the procedure of preparation of a notarial deed under the Notary Public Act and providing a notarial discount for illegal discount of fees, and thus, the notary public prepared Article 4 of the instant guidelines to regulate this.

Since the necessity of the regulation on the violation of the Notary Public Act is recognized, the legislative purpose of Article 4 of the Guidelines is deemed justifiable. In particular, if a notary public violates the procedures for signing a signature set forth in Article 38 of the Notary Public Act in the course of preparing an individual execution document, or makes a voluntary reduction of fees prohibited by Article 30 of the Notary Public Fee Rule according to delegation under Article 7(5) of the Notary Public Act, such act constitutes a violation of the Notary Public Act and constitutes grounds for disciplinary action under Article 82(1)1 of the Notary

However, as seen earlier, Article 4(1) of the Notary Public Act permits a request in the form of a bilateral agency, not a certificate of execution concerning a claim for the delivery and return of real estate, etc., so the fact that a "credit service provider, etc." committed a commission in the form of a bilateral agency in connection with a monetary loan contract does not constitute "justifiable reasons" of refusing a request under Article 4(1) of the Notary Public Act. Article 4 of the Guidelines of this case imposes an obligation on a notary public to refuse a request in the course of preparation of an execution document regarding a monetary loan agreement between a credit service provider, etc. and the other party, whether a monetary loan agreement entered into between a credit service provider, etc. and the other party is invalid in violation of relevant Acts and subordinate statutes, whether the declaration of intention of the other party to delegate the authority to request the preparation of an execution document, whether a request in connection with a monetary loan agreement made by a "credit service provider, etc." is an individual client or collective agent, and only the "credit service provider, etc." imposes an obligation on a notary public in the form of commission uniformly.

This is not an appropriate method to achieve the legislative purpose of Article 4 of the Guidelines, or is not a necessary minimum restriction, and thus, violates the principle of excessive prohibition under the Constitution.

3. Determination as to the instant case

A. According to the reasoning of the judgment below, the defendant was subject to the disciplinary action of this case by taking into account that the plaintiffs violated Article 4 of the guidelines of this case by failing to refuse to request the certificate of execution related to the monetary loan contract of a mutual savings bank and preparing the certificate of execution. Since Article 4 of the guidelines of this case is null and void, the plaintiffs' violation of Article 4 of the guidelines of this case cannot be a legitimate ground for disciplinary action. However, if the plaintiffs committed a specific act that directly violates the provisions of the Notary Public Act and subordinate statutes in the course of preparing the pertinent certificate of execution, it can be a legitimate ground for disciplinary action. However, since the disciplinary action of this case did not take specific violations of the plaintiffs as grounds for disciplinary action

B. In the same purport, the lower court determined that the grounds for disciplinary action of this case were not recognized. In so doing, the lower court did not err by misapprehending the legal doctrine on supervisory orders and disciplinary grounds pursuant to the Notary Public Act, contrary to what is alleged in the grounds of appeal.

4. Conclusion

Therefore, all appeals are dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Lee Dong-won

Justices Park Il-san

Justices Kim In-bok, Counsel for the defendant