[1] The presumption of entry in the register of shareholders and the burden of proving the title trust in the name of shareholders on the register of shareholders (=the party claiming the title trust relationship)

[2] Whether a specific preemptive right to new shares is transferred along with the transfer of shareholders' rights (negative), and in a case where a company issues new shares and limits a person to whom the right belongs to a shareholder listed in the register of shareholders at a certain point, whether the preemptive right belongs to a shareholder listed in the register of shareholders, regardless of whether it

[1] Articles 337(1) and 352 of the Commercial Act, Article 103 of the Civil Act / [title trust] Article 288 of the Civil Procedure Act / [2] Articles 337(1), 352, 354(1), 416, and 418 of the Commercial Act

[1] Supreme Court Decision 2007Da27755 Decided September 6, 2007, Supreme Court Decision 2007Da51505 Decided March 11, 201 (Gong2010Sang, 704) Supreme Court Decision 2010Da91916 Decided March 24, 201 / [2] Supreme Court Decision 94Da25735 Decided July 28, 1995 (Gong195Ha, 2965)

AD General Construction Co., Ltd. (LLC, Kim & Lee LLC, Attorneys Song Jin-hun et al., Counsel for the plaintiff-appellant)

Defendant 1 and five others (Law Firm Barun et al., Counsel for the defendant-appellant)

Busan High Court Decision 2012Na1962 decided July 3, 2014

The part of the judgment below against the Defendants is reversed, and that part of the case is remanded to Busan High Court. The Plaintiff’s appeal is dismissed.

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

1. As to the Defendants’ grounds of appeal

A. A person who is registered as a shareholder in the register of shareholders is presumed to be a shareholder of the company, and in order to reverse this, the person who bears the burden of proving that the shareholder’s rights are denied. Thus, in order to assert that the name of the shareholder in the register of shareholders was trusted and that of the nominal shareholder, the person who is the nominal shareholder has to prove the fact of borrowing the name in the register of shareholders (see, e.g., Supreme Court Decisions 2007Da27755, Sept. 6, 2007; 2010Da91916, Mar. 24, 2011).

The principle of free evaluation of evidence declared by Article 202 of the Civil Procedure Act means that it does not need to be linked to the formal and legal evidence rules, and does not allow a judge’s arbitrary judgment. Thus, the fact finding shall be in accordance with logical and empirical rules based on the principle of justice and equity, based on the admissible evidence that has gone through legitimate evidence examination procedures, and even if fact finding belongs to the discretion of a fact-finding court, it shall not exceed the limit (see, e.g., Supreme Court Decision 2009Da7198, 77204, Apr. 13, 2012).

B. The reasoning of the lower judgment and the evidence duly admitted reveal the following.

(1) On March 12, 1998, New Construction Co., Ltd. (the representative is Nonparty 1; hereinafter referred to as “New Construction”) acquired the land of 4.4 billion won, i.e., Dong name-mixed Co., Ltd. (hereinafter referred to as “Dong name-mixed”) and Defendant 2, as well as land of 14 billion won, i.e., Dong name-mixed Factory and its ancillary facilities and equipment, and fixtures owned by Defendant 2.

(2) After having taken over Dong name-con, Nonparty 3 was the representative director of Dong name-con, Nonparty 4 was the auditor, Nonparty 5 was the director, respectively, and Nonparty 4 was the non-party 3 among the total outstanding shares of Dong name-con (hereinafter “existing shares”) around 1998, the 9,600 shares of Dong name-con and the 8,800 shares to Defendant 1, who was the birth of Non-party 1, and the 7,200 shares respectively were registered as shareholders in the register of Dong name-con, and the 7,20 shares were registered as shareholders.

(3) ① Around February 20, 2001, Nonparty 3 resigned from the office of representative director of Dong name-mixed, and Defendant 1 was appointed as representative director of Dong name-mixed.

② On February 20, 2001, after the representative director was appointed, Defendant 1 appointed Nonparty 7 as auditor. Defendant 4, a branch office around April 6, 2002, appointed Defendant 4 as director. Around May 15, 2002, the trade name of the Dong name Consect was changed from May 15, 2002 to Defendant Daesung Consect Co., Ltd. (hereinafter “Defendant Daesung Consect”).

(4) Around February 26, 2001, Defendant 1 transferred 9,600 shares owned by Nonparty 3, the title trustee of the new construction, and transferred the ownership of 9,600 shares to Defendant 1 on the list of shareholders; ② A transfer of ownership of 7,200 shares from Nonparty 4, the title trustee of the new construction on the same day, to Nonparty 7, the title holder of Defendant 1 on the list of shareholders, and ③ transfer of ownership of 7,200 shares from Nonparty 5 and Nonparty 6, the title trustee of the new construction on the list of shareholders, and transfer of ownership of 7,20 shares from Defendant 1 on the list of shareholders to Defendant 3.

(5) Around December 26, 2006, Defendant Daesung Co., Ltd issued the above new shares according to the number of shares held by Nonparty 7, Defendant 1, Defendant 2, and Defendant 3, each of whom was shareholders on the shareholder registry at the time of offering new shares 40,000 shares.

(6) ① The list of shareholders in the year 2010 of the Defendant Daesung-Bcon is registered as the shareholders of the 24,000 share, the 14,400 share by Defendant 2, the 14,400 share by Defendant 3, the 11,200 share by Defendant 4, the 11,200 share by Defendant 4, and the 16,000 share by the 16,00 share by Defendant 4. ② Defendant 2 is the wife by Defendant 1, and Defendant 3 is the Dong branch by Defendant 1, and Defendant 4 is the Dong branch by Defendant 1, and the new branch by Defendant 1 is the 8 representative director by Defendant 1.

(7) Meanwhile, around February 20, 2001, Defendant 1 assumed office as the representative director of Defendant Daesung-uncon, and had been operating Defendant Taesung-con without any direction or involvement from Nonparty 1 until now, and there is no difference between New Construction and Non-party 1 exercising substantial rights as a shareholder of the existing shares asserted that Defendant 1 had a title trust.

C. On the grounds indicated in its reasoning, the lower court acknowledged the following facts: (a) around March 12, 1998, the new construction made payment of the price equivalent to KRW 4.4 billion from Defendant 2; and (b) around February 20, 2001, at the time when Defendant 1 was appointed as the representative director of Defendant Daesung-Bcon, he did not pay any price for the new construction for the acquisition of the company of Defendant Daesung-Bcon; and (c) on the grounds that there was no agreement or other disposal document to recognize that Defendant 1 acquired Defendant Sung-Bcon from Defendant 1’s new construction, the lower court, based on these circumstances, acknowledged that Defendant 1 received a new title trust agreement from Defendant 2 to Defendant 3 under the name of the new construction without any actual transaction with regard to the existing shares at the time of taking office as the representative director of Defendant Taesung-Bcon’s shares; and (b) determined that the remaining shares were delivered to Defendant 27, the Plaintiff’s transfer title of the name of the new owner.

D. However, examining the reasoning of the lower judgment in light of the reasoning of the lower judgment, the reasoning of the lower judgment, including the foregoing factual basis, and the facts revealed by the evidence duly admitted, it is difficult to accept the lower judgment for the following reasons.

(1) Unlike the entry in the list of shareholders of the Defendant Daesung-Co., Ltd., the Plaintiff bears the burden of proving that the name of the shareholder on the list of shareholders was trusted by new construction and that the Akdo Integrated Construction, Inc., a rehabilitation company succeeding to the new construction, was a real shareholder as the nominal borrower.

(2) However, as stated in the judgment of the court below, even if Defendant 1 did not pay money, etc. to the new construction for the acquisition of a company at the time when he was appointed as the representative director of the defendant Daesung-con on February 20, 201, and there was no contract or other disposal documents prepared for the acquisition of the company, in light of the following circumstances, it is insufficient to conclude that Defendant 1 trusted the presumption of the shareholder's right by the person registered as a shareholder on the register of shareholders on the ground that the new construction and the defendant 1 did not reveal the underlying relationship or substance relationship between the new acquisition of the shares and the acquisition of the shares, and that the new construction was a title trust of the existing shares to Defendant 1 on or around February 20, 201.

(3) (A) On the contrary, Defendant 1 was appointed as the representative director of the Defendant Daesung Concon in around 2001 and was transferred from Nonparty 3, Nonparty 4, Nonparty 5, and Nonparty 6, the title trustee of the new construction, and was transferred to Defendant 1, his branch, and the change of title by marriage was made in the name of Defendant 1, his branch, and the change of title by marriage was made in the name of the title trustee of the new construction, and became a substantial one shareholder of the Defendant Daesung Concon.

If a new construction is merely a mere title trust of the shares owned by Defendant 1, as alleged by the Plaintiff, it appears that there was no need to resolve the title trust relationship with the above Nonparty 3 and transfer all of the shares to Defendant 1 or his/her affiliated persons, etc., but there was no obvious circumstance to reasonably explain it.

(B) In addition, Defendant 1 changed the company’s trade name from the appointment of the representative director to the present, to indicate his name, and appointed his own land, relatives by marriage, etc. as an executive officer of Defendant Daesung-mixed, and operated his own business independently without the new construction or Nonparty 1’s instructions or involvement. On the other hand, it does not appear that the new construction or Nonparty 1 did not exercise any substantial right as a shareholder, such as participating in the major decision-making, such as the resolution of the general meeting of shareholders of Defendant Taesung-mixed with respect to the existing stocks for the ten-year period prior to the institution of the instant lawsuit, and did not indicate that he participated in the process of issuing new stocks or the exercise of management rights, which may have a significant impact on the shares or the management rights.

In light of these circumstances, the Defendants’ assertion that, around February 20, 2001, new construction did not entrust Defendant 1 with the management of the company or delegate the management of the company, but rather transferred all the management rights of the company with Defendant 1, including the existing shares, to Defendant 1, is more persuasive and more persuasive.

(C) In addition, at the time when Defendant 1 was appointed as the representative director of the Defendant Daesung Concon, the ratio of the capital ratio to the capital of Defendant Taesung Concon exceeds 814%, and the amount of the carried-over losses is not significantly high at KRW 1.1 billion.1 billion, and the new construction considerably aggravated compared to the management conditions in the year 198 in which the Defendant Daesung Concon was acquired.

Meanwhile, at that time, Defendant 1 was retired from a new construction, but he was aware of the risk of repayment due to the joint and several sureties of approximately KRW 3 billion for the debt of the new construction before that time. In fact, there was a fact that the land owned by Defendant 1 was sold voluntarily before and after the appointment of the above representative director and the proceeds of the sale was distributed to the mortgagee. On the other hand, it is not difficult to find the fact that the new construction, etc. paid the indemnity amount to Defendant 1, or that there was an obvious plan to avoid the above risk. In addition, Defendant Sungsung P&D borrowed the indemnity amount of KRW 1.6 billion in 198 and used it to repay the remainder of the debt to Defendant 2 of the new construction. Defendant 1 assumed office as the representative director and used it for the repayment of the debt of the said loan. It also appears that the risk of the above loan was newly established by paying the joint and several sureties for the above loan.

In light of these circumstances, it is not sufficient to view that there was a considerable amount of reasonable price to be paid for the acceptance of Defendant Dae-Sacon around February 2001, or that there was no payment for the acquisition and the transfer of existing shares between Defendant 1 and Nonparty 1.

E. Nevertheless, the lower court, on the grounds that there is insufficient reason to acknowledge that Defendant 1, etc. had fulfilled the burden of proof to reverse the presumption of shareholder by Defendant 1, etc. recorded in the register of shareholders, concluded that Defendant 1 was under title trust for the existing shares from new construction upon taking office as the representative director of the Defendant Daesung-U.S.M., and on that premise, accepted the Plaintiff’s claim to confirm the Plaintiff’s shareholders’ rights

Therefore, in so determining, the lower court erred by misapprehending the legal doctrine on the presumption of entry in the register of shareholders and the burden of proof of stock title trust, thereby failing to exhaust all necessary deliberations or exceeding the bounds of the principle of free evaluation of evidence against logical and empirical rules, thereby adversely affecting the conclusion of the judgment. The ground of appeal

2. Plaintiff’s ground of appeal

A. Pursuant to Article 416 of the Commercial Act, a specific preemptive right derived from the issuance of new shares by a resolution of the general meeting of shareholders or the board of directors is not a shareholder’s inherent right, but merely a specific right arising from a resolution of the general meeting of shareholders or the board of directors under the above Commercial Act. Therefore, the preemptive right is not transferred upon the issuance of new shares. Therefore, in a case where a company limited the person to whom such right belongs as a shareholder listed in the register of shareholders at a certain point of time by the resolution of the general meeting of shareholders or the board of directors, the preemptive right is reverted to a shareholder who can legally oppose the company, i.e.,, a shareholder listed in the register of shareholders, regardless of whether it is a substantial shareholder at the given point of

In addition, the reasoning of the written judgment is sufficient to indicate the judgment on the party’s allegations and other means of offence and defense to the extent that it can be recognized that the text is justifiable, and there is no need to determine all allegations by the party or all means of offence and defense (Article 208 of the Civil Procedure Act). Therefore, even if no specific and direct judgment on the party’s allegations is indicated in the court judgment, if it is possible to find out that the assertion was accepted or rejected in light of the overall purport of the reasons for the judgment, it cannot be deemed an omission of judgment. Even if the court did not actually make a decision, if it is obvious that the assertion would be rejected even if it was rejected, there is no error of omission of judgment due to the lack of influence on the conclusion of the judgment (see, e.g., Supreme Court Decisions 2006Da218, Jul. 10, 2008; 2011Da87174, Apr.

B. On the grounds indicated in its reasoning, the lower court: (a) acknowledged the issuance of the above new shares in proportion to the number of shares held by Defendant 1, Defendant 2, Defendant 3, and Nonparty 7, who were shareholders listed in the register of shareholders at the time of offering new shares on or around December 26, 2006; and (b) did not have any evidence to support that the new shares were paid for the above new shares; and (c) determined that the said new shares belonged to the new shares; and (d) concluded that the said shareholders acquired the said new shares.

C. Examining the reasoning of the lower judgment in light of the evidence duly admitted, the lower court’s aforementioned determination is based on the legal doctrine as seen earlier, and can be deemed to have rejected the Plaintiff’s assertion disputing the ownership of the said new shares on the ground of the legal doctrine on delegation. In so doing, contrary to what is alleged in the grounds of appeal, there were no errors by misapprehending the legal doctrine on the attribution of rights arising in relation to the subject of title trust and the delegation applicable

The Supreme Court precedents cited in the grounds of appeal are different from this case, and thus are inappropriate to be invoked in this case.

3. Conclusion

Therefore, without further proceeding to decide on the remaining grounds of appeal by the Defendants, the part against the Defendants in the judgment below is reversed, and that part of the case is remanded to the court below for further proceedings consistent with this Opinion, and the Plaintiff’s appeal is dismissed. It is so decided as per Disposition by the assent of all participating Justices

Justices Lee Ki-taik (Presiding Justice)