Whether a “resolution of a general meeting” under Article 85 subparag. 5 of the former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents refers to a prior resolution (affirmative in principle), and where an executive officer of a partnership concludes a contract that becomes a partner’s burden, other than the matters stipulated in the budget, without going through a prior resolution of the general meeting, whether a crime of violating Article 85 subparag. 5 of the same Act is established (affirmative)

Articles 24(3)5, 25(2), and 85 subparag. 5 of the former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (Amended by Act No. 10268, Apr. 15, 2010); Article 35 subparag. 1 of the former Enforcement Decree of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (Amended by Presidential Decree No. 22277, Jul. 15, 2010)

Supreme Court Decision 2009Do14296 Decided June 24, 2010 (Gong2010Ha, 1526) Supreme Court Decision 2010Da105112 Decided April 28, 2011 (Gong2011Sang, 1043)

Defendant

Defendant

Seoul Northern District Court Decision 2013No1325 decided March 28, 2014

The appeal is dismissed.

The grounds of appeal are examined.

1. As to the grounds of appeal on each service contract concluded on November 4, 2009 and March 25, 2010

According to the former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (amended by Act No. 10268, Apr. 15, 2010; hereinafter “former Act”), “a contract that imposes a burden on members, other than the matters determined by the budget,” shall undergo a resolution of a general meeting (Article 24(3)5); an executive officer of a union who promotes such a contract at will without a resolution of a general meeting, shall be punished (Article 85 Subparag. 5). Matters concerning such a contract shall not be subject to the authority of the general meeting (Article 25(2) and Article 35 Subparag. 1 of the former Enforcement Decree of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents).

Article 24(3)5 of the former Act provides that “a contract that becomes a partner of an association, other than the matters stipulated in the budget, shall be deemed as a matter of resolution by the general meeting.” The purpose of Article 24(3)5 of the same Act is to ensure that such a contract directly affects the rights and obligations of the members of the association, and to ensure that the intent of the members of the association is reflected. To this end, it is interpreted as a penal provision under Article 85 subparag. 5 of the former Act. In light of the fact that it is difficult to recover if a contract was concluded and implemented without a prior resolution of the general meeting, as well as confusion in legal relations, and such situation may interfere with the free decision-making of the members, the term “resolution by the general meeting” under Article 85 subparag. 5 of the former Act refers to a prior resolution of the general meeting. Thus, if an executive officer of the association concluded a contract that becomes a partner of the association without a prior resolution of the general meeting, it shall be deemed that it constitutes a crime violating Article 85 subparag. 5 of the former Act. 20.

The lower court, on the grounds the grounds indicated in its reasoning, determined that the Defendant concluded a contract as indicated in its reasoning with the ○○ Plus, △△△ Planning, and Design △△△△△, etc., and furthermore, maintained the first instance judgment that found the Defendant guilty of all of the violations of the Act on the Maintenance of Urban Areas and Dwelling Conditions following the conclusion of each service contract, on the premise that each service contract concluded on November 4, 2009 and March 25, 201 was related to the holding of a general meeting of Nonindicted 1 Housing Reconstruction Project Cooperatives (hereinafter “instant association”) or that the assembly of the instant association held after the conclusion of each service contract was approved by ratification of each service contract at the general meeting of the instant association.

Examining the reasoning of the lower judgment in light of the evidence duly admitted by the lower court and the aforementioned legal doctrine, the lower court’s determination is justifiable, and contrary to what is alleged in the grounds of appeal, there were no errors by misapprehending the legal doctrine regarding Article 85 subparag. 5 of the former Act, or by misapprehending the bounds of the principle of free evaluation

2. As to the grounds of appeal on the service contract concluded on April 5, 2009

A. As to the assertion that the act constitutes a justifiable act

"Acts which do not violate social norms" under Article 20 of the Criminal Act refers to acts which can be accepted in light of the overall spirit of legal order or the social ethics or social norms surrounding it, and whether certain acts constitute legitimate acts which do not violate social norms and thus, are excluded from illegality shall be determined individually by rationally and reasonably considering the specific circumstances (see, e.g., Supreme Court Decisions 98Do2389, Apr. 25, 2000; 2007Do6243, Dec. 24, 2009).

The reasoning of the lower judgment and the evidence duly admitted by the lower court: (a) the Defendant served as the head of the instant association from January 17, 2009 to April 25, 2010; (b) Nonindicted 2, a member of the instant association, filed a lawsuit to nullify the establishment of the association on November 4, 2008 against the instant association (hereinafter “the case to nullify the establishment of the association”); and (c) the Seoul Northern District Court, on February 13, 2009, issued by the instant association at the time of application for authorization for the establishment of the association on February 13, 2009, issued a ruling that “the establishment of the instant association shall be confirmed as null and void; and (d) the Defendant, who submitted the petition of appeal to the instant association on November 4, 2008 to the Seoul Northern District Court 208 (hereinafter “the case to invalidate the establishment of the association”); and (d) the Seoul Northern District Court 201’s written consent or guidelines for calculating the amount of expenses to be determined to be 40.

Examining these facts in light of the legal principles as seen earlier and the purport of Article 24(3)5 of the former Act, “a contract that imposes a burden on the union members, other than the matters stipulated in the budget,” as the matters decided by the general meeting’s resolution, in the instant case where there is no evidence to prove that the Defendant had carefully examined the causes that the union lost, the possibility of winning the association in the appellate trial, the possibility of the agreement with Nonindicted Party 2, and other means or methods other than the conclusion of the relevant service agreement, etc. in addition to the conclusion of the relevant service agreement, in the first instance court of the case where the establishment invalidation confirmation is completed, it is difficult to view that the Defendant’s conclusion of the relevant service agreement with Nonindicted Party 3 without the resolution of the general meeting to constitute a justifiable act as stipulated in Article 20 of the Criminal Act.

On the premise that the conclusion of the service agreement related to the consent form does not constitute a justifiable act, the court below was just in maintaining the judgment of the court of first instance which found the Defendant guilty of violating the Act on the Maintenance of Urban Areas and Dwelling Conditions due to the conclusion of the service agreement related to the consent form among the facts charged in the instant case, and there was no violation

B. As to the assertion that it does not constitute “a contract that becomes a partner’s burden, other than the matters stipulated in the budget”

Examining the reasoning of the judgment below in light of the evidence duly admitted by the court below and the legal principles as seen earlier, even if the court below intended to cover the service cost under the service contract related to the consent from the tender bond for the construction project selected as the contractor at the general meeting for the selection of the contractor, it is reasonable to conclude that the agreement-related service contract constitutes “a contract that becomes a partner’s burden, in addition to the matters stipulated in the budget,” and there is no error in the misapprehension of legal principles as to Article 85 subparag. 5 of the former Act

3. Conclusion

Therefore, the appeal is dismissed. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Kim Chang-suk (Presiding Justice)