[1] Purport that the consolidation of shares under the former Commercial Act requires procedures for public announcement and notification with a certain period of time; and whether the consolidation of shares becomes null and void in cases where one company actually does not go through the aforementioned procedures while consolidating shares (negative)

[2] The method of determining whether the authenticity of a document is recognized, and the requirements for recognizing the authenticity of a private document by witness's testimony

[1] The purport of the consolidation of shares under the former Commercial Act (amended by Act No. 4372 of May 31, 1991) requires procedures for public announcement and notification with a certain period of time is to identify a person who is to receive new share certificates and prevent the circulation of invalidated share certificates. In fact, where a resolution of a general meeting of shareholders is passed on the consolidation of shares in a single company, it is difficult to say that the company must grasp a person who is to receive new share certificates or recover old share certificates without necessarily necessary to collect the new share certificates through such procedures such as public announcement. Thus, if the registration of change was made by the resolution of the general meeting of shareholders on the consolidation of shares, it is reasonable to view that the merger takes effect at the time of registration of change even if it did not go through such procedures such as public announcement.

[2] Whether to acknowledge the authenticity of a document shall be determined by free evaluation, based on the overall purport of all evidence and arguments. Although there is no special restriction on the method of proving the authenticity of a private document, the method of proof shall be reliable. In determining the credibility of a document where the authenticity of the document is acknowledged by witness's testimony, the reasonableness of the contents of testimony, the witness's attitude of testimony, the consistency with other evidence, the interests of the witness in the case, and the relationship with the party shall be comprehensively examined.

[1] Articles 329(4), 440, and 441 of the former Commercial Act (amended by Act No. 4372 of May 31, 1991), and Article 5(2) of the Addenda (amended by Act No. 844 of April 10, 199) / [2] Articles 202 and 357 of the Civil Procedure Act

[2] Supreme Court Decision 94Da23746 delivered on October 11, 1994 (Gong1994Ha, 2961) Supreme Court Decision 98Da57198 delivered on April 9, 199 (Gong1999Sang, 849Sang), Supreme Court Decision 2001Da29254 delivered on April 8, 2003 (Gong2003Sang, 1073)

Hanyang Pharmaceutical Co., Ltd. (Law Firm Rate, Attorney Shin Sung-sung et al., Counsel for defendant-appellant)

Considering the fact that the corporation (Attorney Kim Jong-soo, Counsel for the defendant-appellant)

Seoul High Court Decision 2003Na35958 delivered on June 23, 2004

The appeal is dismissed.

The costs of appeal are assessed against the Plaintiff.

We examine the grounds of appeal.

1. As to the assertion on the validity of consolidation of stocks under the former Commercial Act

Article 329(4) of the former Commercial Act (amended by Act No. 4372 of May 31, 1991; hereinafter the same shall apply) provides that the amount per share of a stock company shall be at least 5,00 won (Article 329(4)). A stock company established prior to the enforcement of the said Act shall consolidate stocks by applying mutatis mutandis the provisions on the consolidation of stocks (Article 5(2) of the Addenda) to hold stocks of 5,00 won or more at par within three years from the enforcement date of the said Act (Article 441 of the said Act). In consolidating stocks, the purport of the consolidation of stocks and the submission of share certificates to the company within a specified period of not less than three months, and the purport of the consolidation of stocks and the submission of share certificates to the shareholders listed in the register of shareholders shall be individually notified (Article 440) and the effect of the consolidation of stocks at the expiration of the period of Article 440 (Article 441 of the said Act).

The purport of the consolidation of shares requires procedures for public announcement and notification with a certain period as above is to collect old share certificates in advance in order to identify a person who is to receive new share certificates and prevent the circulation of invalidated share certificates. In fact, if a company has passed a resolution of a general meeting of shareholders on the consolidation of shares in a single-person company, it is difficult to say that the company necessarily needs to identify a person who is to receive new share certificates or recover old share certificates through such public announcement procedures. Thus, if the registration of change has been made by a resolution of the general meeting of shareholders, it is reasonable to deem that the merger takes effect in the registration of change even if it did not go through such procedures such as public announcement.

The court below held that the consolidation of this case is null and void because the defendant company did not follow procedures for the consolidation of this case under the former Commercial Act. The fact that the defendant company did not follow procedures for public announcement under the former Commercial Act at the time of the consolidation of this case does not dispute the defendant company. However, the old shares are registered shares under the name of his relatives, etc. at the time of the consolidation of this case. The defendant company completed registration of change on the consolidation of shares with the amount of 5,000 won on August 24, 1987, and thereafter the merger of this case was made on the premise of the above consolidation of shares. The court below held that the merger of this case did not go through procedures such as public announcement in form, but it was effective at the time when the registration of change on the consolidation of shares was made. In light of the above legal principles and records, the fact finding and judgment by the court below is justified, and there is no error of law such as misunderstanding of facts and misunderstanding of legal principles as alleged.

2. As to the allegation that the judgment on the acquisition of the Defendant’s shares by Nonparty 2 was unlawful

A. Whether to acknowledge the authenticity of a document shall be determined by free evaluation based on the overall purport of all evidence and arguments (see Supreme Court Decision 2001Da29254, Apr. 8, 2003). Although there are no special restrictions on the method of proving the authenticity of a private document, the method of proving the authenticity of the document must be reliable. In determining the credibility of a document where the authenticity of the document is acknowledged by the witness's testimony, the reasonableness of the testimony of the witness, the attitude of the witness's testimony, the consistency with other evidence, the interest in the case of the witness, and relationship with the party (see Supreme Court Decision 94Da23746, Oct. 11, 1994; Supreme Court Decision 98Da57198, Apr. 9, 199). In light of the above legal principles and records, the court below has no errors in the misapprehension of the rules of evidence or evidence No. 624, Oct. 24, 199.

B. According to the reasoning of the judgment below, the court below concluded a contract on the transfer of the shares of the defendant company 1 to the non-party 2's children on May 28, 1996, which was owned by the non-party 1 and the non-party 2's share certificates after the above testimony of the non-party 3, and the testimony and evidence of the non-party 24, and the non-party 1 transferred the shares to the non-party 2, the non-party 2, the head of the defendant company's right to operate the company, and the non-party 2, the non-party 3, the non-party 9, the non-party 1, the non-party 1, the non-party 2, the non-party 1, the non-party 3, the non-party 5, and the non-party 1, the non-party 9, the non-party 1, the non-party 2, the non-party 9's share shares were transferred to the non-party 1, the non-party 9.

3. Therefore, the appeal is 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.

Justices Kim Young-ran (Presiding Justice)