[1] The purport of Article 63 of the Civil Code and the meaning of "where there is no director or there is no vacancy" and "where there is a possibility that damage will be caused thereby"

[2] In a case where the articles of incorporation of a corporation clearly separate a chief director who represents a corporation and a general director who has no power of representation from a director who clearly separates the chief director who is a director representing the corporation and a general director who has no power of representation from the corporation so that the representative authority of the corporation shall be exclusive to the chief director, and the chief director shall be directly elected by vote at the general

[3] In the articles of incorporation of a corporation, a director who has exclusive power of representation or a vice-chairperson who is an acting director shall be elected at a general meeting composed of members or representatives of a corporation. In a case where there is no vacancy or there is no director exclusive power of representation or vice-chairperson who is designated as such person acting for him/her, whether the court may appoint a temporary president exclusive power of representation or a temporary vice-chairperson who is an acting director under Article 63 of the Civil Code (affirmative) and the requirements and method for the appointment of a temporary president, etc. in this case

[1] Article 63 of the Civil Act / [2] Article 59 (1) of the Civil Act / [3] Articles 59 (1) and 63 of the Civil Act

[1] Supreme Court en banc Order 2008Ma699 Decided November 19, 2009 (Gong2010Sang, 1) / [2] Supreme Court Decision 2001Da7599 Decided March 14, 2003 (Gong2003Sang, 971)

Applicant (Law Firm LLC, Attorneys Yu-chul et al., Counsel for defendant-appellant)

Wereci Central Parental Association, an incorporated association

Appellant 1 and 3 others (Law Firm Roddd, Attorneys Shin-sik et al., Counsel for the plaintiff-appellant)

Seoul High Court Order 2018Ra20093 dated April 20, 2018

All reappeals are dismissed.

The grounds of reappeal are examined.

1. As to the grounds for reappeal as to the requirements for appointment under Article 63 of the Civil Act

A. Article 63 of the Civil Act provides, “When there is no director or there is a vacancy, and such vacancy is likely to cause damage, the court shall appoint a provisional director upon the application of an interested person or a prosecutor.” The court shall appoint a temporary director and make him/her deal with the duties of a director temporarily, inasmuch as there is a concern that the absence of a director is likely to cause damage to a corporation or a third party.” Here, “where there is no director or there is a vacancy for a director” means a case where there is no director or the number of persons stipulated in the articles of incorporation is insufficient, and “where there is a vacancy for a director” means that there is a concern that damage may occur to a corporation or a third party when a director is appointed according to the ordinary procedure for appointing a director (see Supreme Court en banc Order 2008Ma699, Nov. 19, 2009, etc.).

Meanwhile, a director is in principle representing each of the corporate affairs, but may otherwise be determined by the articles of incorporation, etc. (see the main text and proviso of Article 59(1) of the Civil Act). In addition, in cases where, pursuant to the proviso of Article 59(1) of the Civil Act, the articles of incorporation clearly separates the chief director who represents a corporation and the general director who has no representative authority, so that the representative authority of the corporation shall be exclusively assigned to the chief director, and that the chief director shall be directly elected by vote at a general meeting of shareholders comprised of members of the corporation, the general director shall not be deemed to have the authority to represent the corporation even in cases where the chief director is vacant because he/she does not have at all the representative authority of the corporation from the beginning (see Supreme Court Decision 2001Da7599, Mar.

As can be seen, the articles of incorporation provides that the president or vice-president, who has exclusive power of representation among the directors, shall be elected at a general meeting composed of juristic persons’ members or representatives. There are no vacancies between the president having exclusive power of representation or vice-president designated by such representative, and when damage is likely to occur therefrom, the court may, upon the application of an interested party or prosecutor, appoint a temporary president or temporary vice-president, the exclusive power of representation of the juristic person pursuant to Article 63 of the Civil Act. In this case, the court shall determine the requirements for appointment of a temporary president and a temporary vice-president, who has exclusive power of representation or acting director, in light of the circumstances such as the absence of the president or acting director or acting director, the contents of the articles of incorporation regarding the exercise of power of representation, the existence of a legitimate acting director prescribed by the articles of incorporation, the existence of a former representative or acting director, and whether the former representative or acting director is deemed inappropriate to continue performing his duties after the expiration of his term of office, and shall comprehensively consider the above requirements and the need for appointment.

B. Review of the reasoning of the lower judgment and the record reveals the following facts.

(1) The principal of this case is a corporation organized by ○○○ State’s △△△△△ and a clan member, who was a descendant after the king.

(2) The contents of the principal’s articles of incorporation are as follows. The corporation shall have the right to vote, election and voting rights at the general meeting (Article 7). Members shall comply with the articles of incorporation, regulations and matters to be resolved at the general meeting (Article 8). Not more than 20 directors, not more than 5-150 directors, and not more than 2 auditors shall be appointed as executive officers of a corporation (Article 11). Executive officers shall be elected at the general meeting and shall be appointed at the general meeting and shall be reported to the Administrator of the Cultural Heritage Administration without delay (Article 12). The term of office of executive officers shall be three years, and they shall be reappointed (Article 16). The chief executive officer shall represent a corporation and be appointed at the general meeting; the director shall be appointed at the general meeting; the director, deputy chief director, standing vice chief (standing director); and the director shall act for the chief executive officer (Article 17) and vice chief director among the members (Article 20-21).

(3) At the special meeting of November 20, 2013, the instant principal resolved to amend the articles of incorporation and to select the re-appellant 1 as the president of the instant principal. On April 30, 2014, the instant principal resolved to amend the articles of incorporation at the special meeting of April 30, 2014. From September 30, 2014 to the special meeting of November 20, 2013, the resolution of ratification was passed to elect 1 of the re-appellant as the president, among the special meetings of November 20, 2013. At the general meeting of January 7, 2015, the re-appellant sent 1 of the re-appellant as the president. However, in the instant case, on the grounds that both the resolution of the general meeting of the instant principal was invalid, the Seoul High Court confirmed that the resolution of amendment of the articles of incorporation at the special meeting of November 20, 2013 and the resolution of the instant principal of this case was declared to be null and void by the Seoul District Court 2014.

(4) At the special meeting of October 20, 2015, the principal of the case: (a) appointed the re-appellant 1 as the president of the case principal; and (b) decided to delegate the appointment of executive officers, including the vice president, to the re-appellant 1; (c) accordingly, the re-Appellant 1 appointed the re-Appellant 2 as the vice president; and (d) the re-Appellant 3 as the chief director and the chief of the accounting division. However, in the case of invalidity confirmation of the resolution of the general meeting, which was brought by the representative of the principal of the case, the judgment was rendered to confirm that the said resolution of the special meeting was null and void (Seoul Central District Court Decisions 2015Gahap5751, Dec. 1, 2016; 2016Na2087368, Jul. 7, 2017; 2017Da257500, Dec. 13, 2017).

(5) As the decision becomes final and conclusive that the resolution of the general meeting that elected the re-appellant 1 as the president of the principal of the case becomes null and void, the authority of the non-applicant 2, who was appointed as the representative of the president of the principal of the case until the judgment on the merits became final and conclusive, was all extinguished.

C. The first instance court determined that the second-appellant 1 was null and void, and the second-appellant 1 was unable to exercise the authority of acting chief director or acting chief director of the principal of the case and the second-party 2, the acting chief director of the court appointed by the court, and the second-party 1 was not present and the need to appoint the provisional vice chief director of the principal of the case in accordance with Article 63 of the Civil Code in order to avoid losses that may arise to the principal of the case.

In addition, the court below held that the court below's decision was not erroneous in the decision to appoint non-party 2 as the temporary vice-chairperson of the principal of the case, even though it is probable that the non-party 4 had the right to manage emergency affairs as the chief director (sub-chairperson) whose term of office expires, considering the overall situation of the principal of the case.

D. We examine the judgment of the court below in light of the aforementioned legal principles and records.

Pursuant to the articles of incorporation of the principal of this case, the general director shall not be deemed to have the authority to represent the principal of this case if the chief director and the vice chief director become vacant from the beginning. In addition, in light of the background leading up to the vacancy of the principal of this case and the dispute progress and status among the members of the principal of this case, it is not appropriate to allow the re-appellant 4 whose term of office as the chief director and the vice chief director already expired to perform the principal of this case, and there is no representative director or the representative director of the principal of this case, and considering the characteristics of the principal of this case, it is also acceptable to the judgment below that the appointment of the chief director to assist the duties of the temporary chief director is necessary.

Therefore, the lower court did not err by misapprehending the legal doctrine as to the requirements for the appointment of temporary directors under Article 63 of the Civil Act, contrary to what is alleged in the ground of appeal in this part, in so determining, that the court may appoint a temporary vice-chairperson of the principal in this case

2. As to the grounds for reappeal concerning qualifications, scope of duties or authority of temporary directors

The court below affirmed the decision of the court of first instance that appointed the non-applicant 2 as a temporary vice-chairperson, on the ground that it is reasonable to allow a neutral third party who is not a member to conduct the business of the principal of this case as a temporary vice-chairperson, inasmuch as the non-applicant 1 is not a member of the principal of this case, but is well aware of the current status of the principal of this case as the representative of the court appointed by the court, and the power between the principal of this case and the principal of this case has been separated about whether the non-applicant 1's qualification is recognized as chief director, and the financial management of the principal of this case has been deepened and the conflict has been deepened.

In light of the relevant legal principles and records, the lower court did not err in its judgment by misapprehending the legal principles on qualifications for temporary directors, scope of duties or authority.

3. As to the ground for reappeal as to the legitimacy of the appeal

The court below determined that the appeal by the above-appellant was unlawful on the ground that the rights of the Re-Appellant 1, Re-Appellant 2, and Re-Appellant 3 cannot be deemed to have been infringed due to the first instance court's decision, and there is no other evidence to prove

In light of the relevant legal principles and records, although there are some inappropriate parts in the lower court’s reasoning, the lower court’s conclusion that the appeal by the re-appellant is unlawful is acceptable is acceptable. In so doing, it did not err by misapprehending the legal principles, etc. that affected the conclusion of the judgment.

4. Conclusion

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

Justices Park Sang-ok (Presiding Justice)