Matters to be asserted and proved by the company that asserts the invalidity of transactions without the approval of the board of directors between directors and directors;

Where a third party other than the company and a director make a transaction on behalf of the company on behalf of the company, the company for the safety of the transaction may not claim the invalidity to the third party unless it proves that the third party who is the other party to the transaction is in bad faith (not being aware of the approval by the board of directors), unless it is approved by the board of directors.

Article 398 of the Commercial Act

[Judgment of the court below]

Hanjin Food Industry Co., Ltd., Counsel for the plaintiff-appellee

Seoul High Court Decision 72Na444 delivered on May 31, 1973

The original judgment is reversed, and the case is remanded to the Seoul High Court.

The grounds of appeal by the plaintiff's agent are examined.

The provisions of Article 398 of the Commercial Act are problematic in harmony with the request for the protection of company's interests and the request for the protection of safety of transaction, which is the basic ideology of the Commercial Act. In transactions in conflict with the interests of a director and a company, it is reasonable to interpret that the company can assert the invalidity of such acts on the ground that the director can obtain the approval of the board of directors. However, in transactions on behalf of a third party and a director on behalf of the company, it is necessary to protect a third party acting in good faith in terms of the safety of transaction, so the company should not obtain the approval of the board of directors as to such transactions, and it is necessary to interpret that the invalidity can be asserted against the third party, the other party, as it is not necessary to prove and prove that the third party, who is the other party, is bad faith (not having obtained the approval of the board of directors).

In this case, the non-party 1 and the non-party 2 acquired the obligation to the plaintiff on behalf of the defendant company after they became the representative director or director of the defendant company, and the acceptance of the obligation on behalf of the defendant company after becoming the representative director or director of the defendant company, which constitutes a transaction under Article 398 of the Commercial Act on behalf of the director of the defendant company and constitutes a transaction under Article 398 of the Commercial Act on behalf of the director of the defendant company. Thus, the defendant company cannot assert the invalidity of the above transaction unless it proves and proves that the non-party 1 and the non-party 2 had acted bad faith. Thus, the original judgment should apply Article 398 of the Commercial Act to the act of taking over the obligation of the non-party 1 by the defendant company on behalf of the non-party 1, and it is unlawful to reject the plaintiff's claim on behalf of the defendant company, and it is reasonable to reverse the original judgment on this ground.

Therefore, it is so decided as per Disposition by the assent of all participating Justices.

Justices Ahn Byung-soo (Presiding Justice)