[1] Requirements for establishing a representation by an indication of granting of power of representation under Article 125 of the Civil Code

[2] In order to constitute an employee with a partial comprehensive power of attorney, whether a juristic act on behalf of the business owner must be naturally included in the scope of the business (affirmative)

[3] Whether Article 14 of the Commercial Act concerning an expression manager may apply mutatis mutandis to an employee who uses a similar name that may be mistaken as an employee with a partial comprehensive power of attorney (negative)

[1] Apparent representation by the indication of granting of power of representation under Article 125 of the Civil Act is established when a certain person acts with a third party on behalf of the principal regardless of the nature or validity of a basic legal relationship between the principal and the person who act as his/her agent, in performing a legal act with the third party on behalf of the principal.

[2] An employee with a partial comprehensive power of attorney under Article 15 of the Commercial Act refers to a commercial employer with a power of attorney to perform all acts other than trials on a specific type of business or specified matters. Thus, the employee's contents of business must be included in the employee's legal act on behalf of the business owner.

[3] Article 14(1) of the Commercial Act provides that where an employee who does not fall under a manager uses a name seen as a manager, such employee shall be deemed to have the same authority as the manager of the head office or branch office, except for a judicial act as an expression manager, in order to protect the other party who trades with trust in the name of a manager. However, in the case of an employee with a partial comprehensive power of attorney, the Commercial Act does not provide for the purpose of protecting the other party’s trust in the similar name that may be mistaken as such employee. Thus, it would be likely to excessively expand the liability of business caution to protect an employee who does not fall under a partial comprehensive power of attorney. Since Article 125(1) of the Commercial Act provides that where an employee who does not fall under a partial comprehensive power of attorney uses a name similar to that of an employee and performs a legal act, the other party to the transaction shall not be deemed to have the same authority as the manager of the main office or branch office. However, in the case of an employee who has partial comprehensive power of attorney, Article 756(1) of the Commercial Act can be applied mutatis mutandis.

[1] Article 125 of the Civil Code / [2] Article 15 of the Commercial Code / [3] Articles 14(1) and 15 of the Commercial Code, Articles 125 and 756 of the Civil Code

[1] Supreme Court Decision 97Da53762 delivered on June 12, 1998 (Gong1998Ha, 1875) Supreme Court Decision 2001Da31264 delivered on August 21, 2001 (Gong2001Ha, 2051) / [2] Supreme Court Decision 99Da25969 delivered on January 25, 2002

Sinit Co., Ltd. (Law Firm, Kim & Lee, Attorneys Jeon Byung-soo et al., Counsel for the defendant-appellant)

The Compact Co., Ltd. (Law Firm Spare, Attorneys Kim Gyeong-soo et al., Counsel for the plaintiff-appellant)

Seoul High Court Decision 2005Na37682 decided Feb. 6, 2007

Each appeal is dismissed. The costs of appeal are assessed against each party.

1. As to a claim for the price of goods

A. In order to establish an expression agency in excess of the authority under Article 126 of the Civil Code, the person representing the representative must have the basic power of attorney and there is a reasonable ground to believe that the other party has the authority to do so. In light of the records, the non-party 1 is a class 3 member who is called the director at the two business teams of the defendant Gangnamnam branch office and worked as the director at the business team of the defendant Gangnamnam branch, and regularly visited the defendant's business partner and proposed communications services appropriate therefor. Accordingly, if the business partner wants to provide new communications services, he merely prepared the matters related thereto as a business promotion report and reported them to the non-party 2, who is the business team leader, and did not have the authority to conclude a contract related to the business on behalf of the defendant. Thus, it cannot be said that the non-party 1 had the basic power of attorney to act on behalf of the defendant, and therefore, it cannot be accepted without examining whether the plaintiff believed that the non-party 1 had the power of attorney to conclude the contract of this case.

Although there is no inappropriate point in the reasoning of the judgment of the court below, the rejection of the plaintiff's above assertion is correct as a result, and there is no violation of the rules of evidence or misapprehension of the legal principles as to the expression representation under Article 126 of the Civil Act, as alleged in the ground of appeal

B. The expression agency by the indication of the granting of power of representation under Article 125 of the Civil Act is established when a person acts with a third party on behalf of the principal regardless of the nature or validity of the basic legal relationship between the principal and the person who acts as an agent, and the principal has expressed his power of representation to the third party in doing the legal act on behalf of the principal. Thus, even according to the records, there is no evidence to prove that “the defendant conferred the power of representation on the conclusion of the contract of this case to the non-party 1.” Thus, the plaintiff’s assertion that the non-party 1’s act of concluding the contract of this case constitutes an expression agency under Article 125 of the Civil Act cannot

Although there is no inappropriate point in the reasoning of the judgment of the court below, the rejection of the plaintiff's above assertion is correct as a result, and there is no violation of the rules of evidence or misapprehension of the legal principles as to the expression representation under Article 126 of the Civil Act, as alleged in the ground of appeal

C. An employee with a partial comprehensive power of attorney under Article 15 of the Commercial Act refers to a commercial employee with a power of attorney to perform all acts other than trials on a specific type of business or specified matters. Thus, in order to constitute such an employee, it should be naturally included in the content of the employee’s business to conduct a legal act on behalf of the business owner (see Supreme Court Decision 99Da25969 delivered on January 25, 2002, etc.).

The court below rejected the plaintiff's assertion that the non-party 1 was an employee of the general authority of the defendant's employees, since the non-party 1 was not an employee of the company at the time of the sales contract at the time of the defendant's 203 business team, and the non-party 1 was an employee of the company at the time of the sales contract at the time of the defendant's 203 business team and the director of the company at the defendant Gangnamnam branch, and the non-party 1 was an employee of the company at the second team of the defendant Gangnamnam branch at the time of the sales contract at the time of the defendant's 203 business team and regularly visited the defendant's customer's new demand for communication and proposed communication services appropriate therefor. Accordingly, if the customer wants to provide new communication services, he did not have the authority to conclude a contract related to the business on behalf of the defendant. According to the business contract management guidelines at the time of the defendant's 203 business team, the non-party 2 also the business team leader at the time of the company.

In light of the above legal principles and records, we affirm the fact-finding and judgment of the court below as just, and there is no error of law such as violation of the rules of evidence or misunderstanding of legal principles as to employees with a partial comprehensive power of attorney, as alleged in the plaintiff's grounds of appeal.

D. Article 14(1) of the Commercial Act provides that where an employee who does not fall under a manager uses a name seen as a manager, such employee shall be deemed to have the same authority as the manager of the head office or branch office, except for a judicial act as an expression manager, in order to protect the other party who trades with trust in the name of a manager. However, in the case of an employee with a partial comprehensive power of attorney, the Commercial Act does not provide for the purpose of protecting the other party’s trust in the similar name that may be mistaken as such employee. Thus, the act of attorney may excessively expand the liability of the manager, and where an employee who does not fall under a partial comprehensive power of attorney uses a name similar to that of an employee, the other party to the transaction shall not be deemed to have the same authority as the manager of the main office or branch office. However, in the case of an employee with a partial comprehensive power of attorney, the other party to the transaction shall not be deemed to have the provisions of Article 125(1) of the Civil Act or Article 756(1)4 of the Commercial Act.

On the premise that Article 14 of the Commercial Act with regard to an employee who has a partial comprehensive power of attorney should be applied mutatis mutandis to an employee, the Plaintiff’s assertion that Nonparty 1 should be deemed an employee with the same authority as an employee who has a partial comprehensive power of attorney pursuant to Article 14 of the Commercial Act, on the premise that Article 14 of the Commercial Act with regard to an expression manager should apply mutatis mutandis to the case of an employee with a partial comprehensive power of attorney. Thus, the Plaintiff’s assertion that Nonparty 1 used the name

Although there is no inappropriate point in the reasoning of the judgment of the court below, the rejection of the plaintiff's above assertion is correct as a result, and there is no violation of the rules of evidence or misapprehension of the legal principles as to the expression manager, as otherwise alleged in the ground of appeal

2. As to the claim for damages on the basis of employer liability

A. As to the Defendant’s assertion that “the instant device transaction was conducted solely on documents for the sole purpose of financing without the transfer of the actual object, and the Plaintiff cannot be held liable for employer’s liability because the instant sales contract concluded with Nonparty 1 was either aware of or was gross negligence, as it did not constitute the Defendant’s execution of business,” the lower court rejected the said assertion on the grounds that there was no sufficient evidence to acknowledge that the instant transaction was a false processing transaction, and that there was no evidence sufficient to acknowledge that the instant transaction was a false processing transaction, and that there was no evidence sufficient to acknowledge that the Plaintiff knew or was gross negligence even if the instant transaction was a false processing transaction.

In light of the records, the court below's measure is just and acceptable, and there is no violation of the rules of evidence or misapprehension of the legal principle on the exemption of employer's liability, as otherwise alleged in the defendant's ground of appeal.

B. The fact-finding or determination of the ratio of comparative negligence in relation to damages falls under the exclusive authority of the fact-finding court unless it is deemed that it is considerably unreasonable in light of the principle of equity (see, e.g., Supreme Court Decisions 95Da17267, Jul. 25, 1995; 2001Da62251, Jan. 8, 2002).

The court below, after compiling the adopted evidence, found facts as stated in its reasoning. The defendant was negligent by failing to perform his duty of care to thoroughly manage the supervisor and the employee of Nonparty 1 without authority, and on the other hand, the plaintiff did not investigate and confirm whether Nonparty 1 has the authority to conclude the contract of this case on behalf of the defendant at the time of concluding the contract of this case. In light of all the circumstances such as the circumstances of the contract of this case, the court below determined that the plaintiff's negligence is reasonable to limit the defendant's liability to 80% on the ground that the rate of contribution to the occurrence of the damage of this case seems to exceed 20%.

In light of the above legal principles and records, the court below's finding of the negligence ratio is just and acceptable, and there is no violation of the rules of evidence or misapprehension of legal principles as to comparative negligence, as otherwise alleged in the grounds of appeal by both parties.

3. Conclusion

Therefore, each appeal is dismissed, and the costs of appeal are assessed against each losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Kim Ji-hyung (Presiding Justice)