[1] The effect of an act of acquiring or disposing of a school foundation's property or an act of bearing obligations without permission from the competent agency without deliberation and resolution by the board of directors (negative)

[2] In a case where an administrative agency’s written disposition but the content of the administrative disposition is unclear by itself, whether the content of the disposition can be interpreted differently from the language and text of the disposition, taking into account the process and purpose of the disposition, the attitude of the other party after the disposition (affirmative), and whether the administrative agency’s expression of intent to necessarily be accompanied by the administrative agency’s logical and logical intent at the time of taking the administrative disposition may be deemed as impliedly included in the administrative disposition in a case where it conforms to the administrative agency’s abstract intent and the other party’s knowledge

[3] Meaning of Article 16(2) of the Private School Act “When the chief director or a director conflicts with an educational foundation’s interest,” and whether it constitutes a case where the chief director or a director of an educational foundation is an operator or the representative director of the other party to the transaction of the educational foundation (affirmative in principle)

[1] Matters concerning the acquisition, disposal, and management of a school foundation's property are subject to deliberation and resolution by the board of directors (Article 16 (1) of the Private School Act); and where a school foundation intends to assume an obligation, it must obtain permission from the competent agency (Article 28 (1) of the Private School Act). Where a school foundation acquires or disposes of school foundation's property without deliberation and resolution by the board of directors under Article 16 (1) of the Private School Act, or performs an act of bearing an obligation without permission from the competent agency under Article 28 (1) of the Private School Act, such act shall

[2] Article 24(1) of the Administrative Procedures Act provides that, when an administrative agency takes a disposition, it shall be done in writing in a case where there is a special provision in other Acts and subordinate statutes, except in a case where it is necessary to process promptly or where a matter is insignificant. This is to ensure clarity of the content of the disposition and to prevent dispute over the existence of the disposition and to protect the rights and interests of the other party to the disposition. Thus, in a case where an administrative agency takes a disposition in writing, in principle, in a case where the administrative agency conducts a disposition. However, in a case where the language of the written disposition alone is unclear, the content of the disposition may be interpreted differently from the language of the written disposition, taking into account various circumstances, such as the details and purpose of the disposition and the attitude of the other party after the disposition. In particular, even if an administrative agency did not explicitly state clearly the intention that it must be accompanied as a matter of course in the course of rendering an administrative

[3] Article 18 of the former Private School Act (amended by Act No. 11216, Jan. 26, 2012; hereinafter the same shall apply) provides that “The intention of the board of directors shall be held by the majority of the registered directors, except as otherwise provided in the articles of incorporation, and a decision shall be made with the consent of the majority of the fixed number of directors as stipulated in the articles of incorporation.” Article 16(2) of the Private School Act provides that “If the interests of the chief director or the director conflict with the school juristic person, the chief director or the director shall not participate in the decision on the pertinent matter.” In this context, “if the interests of the chief director or the director conflict with the school juristic person, the interests of the chief director or the director conflict with the interests of the chief director or the school juristic person, and the performance of the duties as a good manager may conflict with the chief director or the director. In addition, it is reasonable to deem that there is a conflict of personal interests of the chief director or the director of the school juristic person.

[1] Articles 16(1) and 28(1) of the Private School Act / [2] Article 24(1) of the Administrative Procedures Act / [3] Article 18 (see Article 18(1) of the former Private School Act (Amended by Act No. 11216, Jan. 26, 2012); Article 16(2) of the Private School Act

[1] Supreme Court Decision 2014Da64752 Decided June 9, 2016 (Gong2016Ha, 910) / [2] Supreme Court Decision 2009Du18035 Decided February 11, 2010 (Gong2010Sang, 578), Supreme Court Decision 2017Da269152 Decided October 29, 2020 (Gong2020Ha, 2248) / [3] Supreme Court Decision 2010Da91831 Decided November 28, 2013

1. A school foundation's establishment of a private teaching institute (Attorneys Park Jong-he et al., Counsel for the plaintiff-appellant

[Plaintiff-Appellant] Plaintiff (Law Firm Yang Hun, Attorneys Yellow-hee et al., Counsel for plaintiff-appellant)

Daegu High Court Decision 2016Na22241 decided December 14, 2016

The judgment below is reversed, and the case is remanded to the Daegu High Court.

The grounds of appeal are examined.

1. Case summary

According to the reasoning of the lower judgment and the record, the following facts are revealed.

A. The Plaintiff entered into a contract to purchase part of the prospective site for the relocation of the instant school on November 201 and December 12, 201, while promoting the business of relocating the ○○ Industries High School to the North-gu Seoul Metropolitan City (hereinafter “instant business”).

B. Since then, the Plaintiff filed an application with the superintendent of the Daegu Metropolitan City Office of Education for approval of the funding plan for the instant project, which is the competent agency, pursuant to the reply from the superintendent of the Office of Education of Daegu Metropolitan City around January 25, 201 to the effect that “it is impossible to acquire a prospective school relocation site in the name of the Plaintiff before approval of

C. Accordingly, the Plaintiff entered into an implementation contract with the Defendant on March 201 with regard to the instant project, and the Defendant acquired the prospective site for the relocation of the instant school, and the Defendant first bears interest on the loans that the Plaintiff received from the Korea Foundation for the instant project, and the amount that the Plaintiff would pay to the Defendant was settled at the time of completion of the instant project.

D. Since then, the Plaintiff entered into an additional agreement with the Defendant around July 4, 201, following the Plaintiff’s demand from the Superintendent of the Office of Education of Daegu Metropolitan City to secure roads entering the prospective site for school relocation.

E. Since then, the Defendant purchased the prospective site for the relocation of the instant school in total of KRW 3.49 billion, and completed the registration of ownership transfer on February 7, 2012 and September 5, 2012.

F. Meanwhile, the Plaintiff paid to the Defendant KRW 3.5 billion on February 6, 2012, and KRW 7.5 billion on or around February 14, 2012, the sum of KRW 4.5 billion on or around February 14, 2012. The said KRW 7.5 billion includes the Plaintiff’s interest on the Plaintiff’s loan and the cost of opening access roads to the school (hereinafter “instant cost”).

G. The Plaintiff filed the instant lawsuit claiming the return of KRW 4 billion in the name of the instant expense that was paid to the Defendant on the ground that it was the Defendant’s unjust enrichment.

2. Determination as to the relevant assertion, such as the agreement on the instant apportionment of expenses and abuse of power of representation

For the reasons indicated in its holding, the lower court determined to the effect that it is difficult to deem that the Plaintiff and the Defendant concluded an agreement to pay the instant expense entirely to the Defendant, and that it is difficult to deem that the Defendant concluded an agreement to pay the instant expense. On the other hand, the lower court determined to the effect that it is difficult for the Plaintiff’s representative to conclude the instant expense settlement agreement by abusing his/her power of representation.

Examining the reasoning of the lower judgment in light of the record, the lower court did not err by misapprehending the legal doctrine regarding unjust enrichment or by failing to exhaust all necessary deliberations, exceeding the bounds of the principle of free evaluation of evidence against logical and empirical rules, or by omitting judgment, etc.

3. Judgment on the board of directors and the competent agency’s assertion on permission

A. The validity of the cost settlement agreement of this case

Matters concerning the acquisition, disposal, and management of property of a school foundation are subject to deliberation and resolution by the board of directors (Article 16(1) of the Private School Act); and where a school foundation intends to assume obligations, it shall obtain permission from the competent agency (Article 28(1) main sentence of the Private School Act). Where a school foundation acquires or disposes of property of a school foundation without deliberation and resolution by the board of directors under Article 16(1) of the Private School Act, or performs an act of bearing obligations without permission from the competent agency under Article 28(1) of the Private School Act, such act shall not be effective (see Supreme Court Decision 2014Da64752, Jun. 9, 2016).

This case’s expense settlement agreement constitutes a matter concerning the acquisition, disposal, and management of a school foundation’s property and an act of obligatory burden, and thus, if there is no deliberation or resolution by the board of directors of the Plaintiff or there is no permission from the superintendent of the Daegu Metropolitan City Office of Education which is the competent agency

B. Regarding permission by the competent authorities

1) Article 24(1) of the Administrative Procedures Act provides that, when an administrative agency takes a disposition, it shall be done in writing, except as otherwise expressly provided for in other Acts and subordinate statutes or in a case where it is necessary to process the administrative agency promptly, and in principle, to protect the rights and interests of the other party to the disposition by ensuring the clarity of the content of the disposition and preventing disputes over the existence of the disposition. Thus, in cases where an administrative agency takes a disposition in writing, in principle, whether a disposition has been made in accordance with the language and text of the disposition must be confirmed. However, where the language and text of the disposition alone is unclear, the content of the disposition may be interpreted differently from the language and text of the disposition (see Supreme Court Decision 2009Du18035, Feb. 11, 2010). In particular, even if an administrative agency did not explicitly state the intention that the administrative agency must necessarily be accompanied as a matter of course, if it conforms to the abstract intent of the administrative agency and if the other party can also be known, it can be seen as including the above declaration of intention in the administrative disposition (see.

2) Based on the circumstances stated in its reasoning, the lower court determined that the Plaintiff’s disposition of approval of the school relocation project implementation plan (which appears to refer to the approval of the school location change plan) against the Plaintiff of the Daegu Metropolitan City Superintendent of the Office of Education (which refers to the approval of the school location change plan) includes the permission of the instant cost settlement agreement, and rejected the Plaintiff’s assertion that the instant cost settlement agreement is null and void without the permission of the competent authorities.

Examining the reasoning of the lower judgment in light of the aforementioned legal doctrine, while the lower court’s reasoning was somewhat inappropriate, the lower court did not err by misapprehending the legal doctrine regarding permission and unjust enrichment by the competent agency under the main sentence of Article 28(1) of the Private School Act, or by exceeding the bounds of the principle of free evaluation of evidence against logical and empirical rules, or by failing to exhaust all necessary deliberations, or by omitting

C. Regarding the board of directors resolution

1) Based on the circumstances stated in its reasoning, the lower court rejected the Plaintiff’s assertion that the instant cost settlement agreement is null and void due to the lack of a resolution by the board of directors on the instant cost settlement agreement, on the ground that the 6th board of directors held on July 30, 2011 (hereinafter “Board of Directors”) passed a resolution on the instant cost settlement agreement.

2) However, the lower court’s determination is difficult to accept in the following respect.

A) Article 18 of the former Private School Act (amended by Act No. 11216, Jan. 26, 2012; hereinafter the same shall apply) provides that “The proceedings of the board of directors shall be held with attendance of the majority of the registered directors, except as otherwise provided in the articles of incorporation, and any decision shall be made with the consent of the majority of the fixed number of directors as stipulated in the articles of incorporation,” and Article 16(2) of the Private School Act provides that “if the interests of the chief director or the director conflict with the school juristic person, the chief director or the director shall not participate in the decision on the pertinent matters.” Here, “if the interests of the chief director or the director conflict with the school juristic person, the interests of the chief director or the director conflict with the interests of the chief director or the school juristic person as a good manager, and even in the case of the chief director or the representative director of the company transacting with the school juristic person, the chief director or the director of the school juristic person shall not be deemed to constitute a case of conflict with the interests of the chief director or the juristic person.

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

(1) According to Article 18 of the Plaintiff’s articles of incorporation, eight directors, including the chief director, shall be placed in the Plaintiff corporation. According to Article 28(2), the board of directors shall adopt a resolution with the consent of a majority of the fixed number of

(2) Among the eight registered directors of the Plaintiff, the board of directors of the instant case attended by the total of five members, including Nonparty 1, Nonparty 2, Nonparty 3, Nonparty 4, and Nonparty 5, and passed a resolution with the consent of all the members.

(3) At the time of the instant board of directors, Nonparty 1 was actually managing the Defendant as the Defendant’s director, and Nonparty 2 was the Defendant’s representative director.

C) We examine the above facts in light of the legal principles as seen earlier.

The cost settlement agreement of this case is an agreement under which the defendant bears the cost of this case on the basis of the agreement by the plaintiff to settle the costs of this case to the defendant, and must undergo deliberation and resolution by the board of directors pursuant to Article 16 (1) of the Private School Act. However, since the non-party 1 and the non-party 2 are the defendant's executive or representative director who is the other party to the agreement to settle the cost of this case concluded by the plaintiff, it constitutes a case where the personal interest of the non-party 1 and the non-party 2 and the plaintiff's interest conflict. Therefore, barring any special circumstance, it is reasonable

In light of the above circumstances, Nonparty 1 and Nonparty 2 did not have voting rights with respect to the cost settlement agreement of this case, and if Nonparty 1 and Nonparty 2 were excluded from voting rights, only three persons less than the majority among eight directors prescribed by the articles of incorporation were approved by the resolution of the board of directors of this case. Thus, there is considerable room to deem the resolution of the board of directors of this case was made without meeting the quorum, and it was invalid.

The Plaintiff appears to have asserted as above during the oral argument of the lower court. As such, the lower court should have deliberated closely on whether the directors present at the meeting of the instant board of directors have no voting rights due to the conflict of interest with the Plaintiff, and whether the quorum for the pertinent resolution is satisfied if not, then determined the invalidity of the resolution made by the board of directors of the instant case.

Nevertheless, the lower court rejected the Plaintiff’s assertion that the instant expense settlement agreement was null and void due to the lack of a resolution by the board of directors relating to the said agreement without examining the aforementioned circumstances, thereby adversely affecting the conclusion of the judgment by misapprehending the legal doctrine on the voting rights of directors whose interests conflict with the school foundation, thereby failing to exhaust all necessary

4. Conclusion

Therefore, the lower judgment is reversed, and the case is remanded to the lower court for further proceedings consistent with this Opinion. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Lee Ki-taik (Presiding Justice)