[1] Whether a notary public violates an official order based on Article 79 subparagraph 1 of the Notary Public Act in case where a notary public violates the "Guidelines for Preparation of Execution Certificates" established by the Minister of Justice, which is a supervisory organ of the notary public, while performing his/her duties (affirmative)

[2] In order to take a public official’s violation of an official order issued by a superior administrative agency or a supervisory authority as grounds for disciplinary action, whether the official order should be lawful and effective unless it contravenes the superior laws and subordinate statutes (affirmative)

[3] In a case where the contents of administrative rules are contrary to the superior laws and regulations, whether they are automatically null and void (affirmative), and the court’s determination of whether the measures taken by an administrative agency under the above administrative rules are legitimate

[4] Whether Article 4 of the "Guidelines for Preparation of Execution Certificates" that imposes an obligation to refuse a commission on a notary public in the event that a credit service provider, etc. commission in the form of a bilateral agent in connection with a monetary loan agreement is null and void (affirmative)

[1] Generally, a superior administrative agency may establish “administrative rules” to establish guidelines for handling affairs or standards for interpretation and application of statutes to affiliated public officials or subordinate administrative agencies. A notary public has the status of a public official with respect to his/her duties, and the Minister of Justice is a supervisory agency with respect to a notary public, so a notary public may issue an official order based on Article 79 subparag. 1 of the Notary Public Act in the form of an individual and specific instruction, but may set general standards or impose duties in the form of

On October 1, 2013, the Minister of Justice enacted the “Guidelines for Preparation of Execution Deed” on October 1, 2013, for the purpose of setting forth matters concerning the affairs of preparation of a notary public’s “execution document” (this term is not the term under this Act, but the term referring to a notarial deed which serves as the executive title of compulsory execution under the Civil Execution Act, in practice and in practice) and ensuring the appropriateness and fairness of such affairs and preventing unjust infringement of the executive obligor’s rights in the course of preparation of the execution document. This is to be deemed to be an “administrative rule” stipulating detailed matters to be observed by a notary public without specific delegation of superior statutes by the Minister of Justice, who is the supervisory agency of a notary public, in the course of performing his/her duties. Accordingly, if a notary public violates the above guidelines in the course

[2] When a public official violates an official order issued by a superior administrative agency or a supervisory authority, the reason for disciplinary action should be deemed lawful and effective, unless the official order is contrary to the superior laws and regulations.

[3] “Administrative rules” are effective only within an administrative organization, unless there is a specific delegation of superior laws and regulations, and have no externally binding effect on citizens or courts. However, in a case where administrative rules relate to matters belonging to the discretion of an administrative agency that has set such administrative rules, barring special circumstances such as lack of objective rationality, the court is desirable to respect such matters, barring special circumstances. However, if the contents of administrative rules are contrary to superior Acts and subordinate statutes, they are automatically null and void under the legal order in accordance with the unity of legal order and the principle of prohibition of inconsistency derived from the principle of a rule of law and order, and the validity of administrative internal regulations cannot be recognized. In such a case, the court shall treat the pertinent administrative rules as nonexistent in the legal order and determine the legitimacy of the measures

[4] Article 4 of the "Guidelines for Preparation of Execution Certificates" imposes on a notary public an obligation to refuse a commission in the form of administrative rules in cases of claims and obligations arising from a monetary loan agreement of a "credit service provider, etc." with respect to a commission in the form of a two-party agency permitted by law, and thus, it shall be deemed null and void in violation of the "principle of Legal

[1] Article 79 subparagraph 1 of the Notary Public Act / [2] Article 78 of the State Public Officials Act / [3] Article 95 of the Constitution / [4] Article 95 of the Constitution

[2] Supreme Court Decision 200Du7704 Decided August 24, 2001 (Gong2001Ha, 2088) / [3] Supreme Court Decision 2013Du20011 Decided October 31, 2019 (Gong2019Ha, 2251)

Eastern Law Firm and four others (Law Firm East, Attorneys Lee Hy-young et al., Counsel for the plaintiff-appellant)

(2) The Minister of Justice (Attorney Choi Jong-hoon et al., Counsel for the plaintiff-appellant)

Seoul High Court Decision 2019Nu64527 decided June 12, 2020

All appeals are dismissed. The costs of appeal are assessed against the defendant.

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

1. Whether the violation of the Guidelines for Preparation of Execution Certificates can be the grounds for disciplinary action against a notary public;

A. According to the Notary Public Act, a notary public’s duties are to handle the preparation, etc. of notarial deeds at the request of the parties or other persons concerned, and has “the status of a public official” as to his duties (Article 2). A notary public is prohibited from refusing a commission for the preparation, etc. of notarial deeds without justifiable grounds (Article 4(1)), and if a notary public refuses a commission, he/she shall inform the client or his/her agent of the grounds for refusal (Article 4(2)). A notary public may not raise an objection against matters in violation of Acts and subordinate statutes, null and void juristic acts, or juristic acts which may be cancelled due to incompetence (Article 25). A notary public or interested person may again raise an objection to the chief public prosecutor of the district public prosecutor’s office to which he/she belongs with respect to the handling of affairs of a notary public, and the Minister of Justice may supervise a notary public and order a notary public (Article 78(1) and his/her supervisory authority to take disciplinary action against a notary public in violation of Article 78(2).1).

B. In general, a superior administrative agency may establish “administrative rules” to establish guidelines for the performance of duties or standards for the interpretation and application of statutes to affiliated public officials or subordinate administrative agencies. A notary public has the status of a public official with respect to his/her duties, and the defendant is a supervisory agency against a notary public, so a notary public may issue an official order based on Article 79 Subparag. 1 of the Notary Public Act in the form of an individual and specific instruction, but may present general standards or impose duties in the form

C. On October 1, 2013, the Defendant enacted the Guidelines for Preparation of Execution Deed (hereinafter “instant Guidelines”) with a view to ensuring the appropriateness and fairness of the work and preventing unjust infringement on the rights of the execution obligor in the process of preparing the Execution Deed by prescribing matters concerning the affairs to be prepared by a notary public’s “execution deed” (this refers to a notarial deed which serves as the executive title of compulsory execution under the Civil Execution Act, rather than this statutory term, stating a declaration of intent to accept compulsory execution, and is not the same as a notarial deed) and stating a declaration of intent to accept compulsory execution, and thereby, preventing the infringement on the execution obligor’s rights in the process of preparing the Execution Deed. This ought to be deemed to be “administrative rules” which provide for detailed matters to be observed by the Defendant, a supervisory agency of the notary public, without specific delegation of superior statutes. Therefore, if the notary public violates the instant guidelines in performing his/her

D. Meanwhile, if a public official violates an official order issued by a superior administrative agency or a supervisor, such official order must be lawful and effective unless it is against superior laws and regulations (see Supreme Court Decision 2000Du7704, Aug. 24, 2001, etc.).

2. Effect of Article 4 of the Guideline;

A. “Administrative rules” are effective only within an administrative organization, unless there is a specific delegation of superior laws and regulations, and do not externally bind citizens or courts. However, in a case where administrative rules relate to matters belonging to the discretion of an administrative agency that has set such administrative rules, barring special circumstances such as lack of objective rationality, it is desirable to respect such administrative rules, barring special circumstances. However, if the contents of administrative rules are contrary to superior laws and regulations, they are automatically null and void under the legal order in accordance with the unity of legal order and the principle of prohibition of inconsistency derived from the principle of a rule of law and order, and they cannot be recognized as administrative internal effectiveness. In such a case, the pertinent administrative rules and the propriety of the measures taken by administrative agencies should be determined in accordance with the provisions of superior Acts and subordinate statutes and legislative purposes (see Supreme Court Decision 2013Du20011, Oct. 31, 2019, etc.).

B. The instant guidelines provide that not only credit service providers under Article 1 subparagraph 2 of the Act on Registration of Credit Business, etc. and Protection of Finance Users (hereinafter “Credit Business Act”), but also credit card companies under the Specialized Credit Finance Business Act, banks under the Banking Act, cooperatives under the Agricultural Cooperatives Act and the Fisheries Cooperatives Act, financial investment business entities under the Financial Investment Services and Capital Markets Act, mutual savings banks under the Mutual Savings Banks Act, community credit cooperatives under the Community Credit Cooperatives Act, credit cooperatives under the Community Credit Cooperatives Act, insurance companies under the Insurance Act, postal agencies dealing with savings and insurance under the Postal Savings and Insurance Act, postal agencies under the Postal Savings and Insurance Act, debt collectors under the Fair Debt Collection Practices Act, etc. In preparing a certificate of execution of claims and debts under a monetary loan agreement of credit service providers, etc., a notary public under Article 4 provides that if a notary public prepares a certificate of execution of claims and debts under a credit service provider, etc., he/she shall not make a statement of intention to appoint an agent or agent of a credit service provider, etc. under subparagraphs 1 and 2, he/she shall not make such recommendation.

C. Article 4 of the Guidelines of this case can be deemed as having presented an interpretation opinion as a supervisory agency with respect to the specific type of the case that can be included as “justifiable cause” of the refusal of commission under Article 4(1) of the Notary Public Act. Here, “justifiable cause” refers to an indefinite concept that is likely to be interpreted diversely, but it is necessary to interpret the court’s interpretation and normative value judgment, and it cannot be deemed as having any discretion on the Defendant regarding the interpretation and inclusion of the requirements.

D. Article 4 of the instant Guidelines imposes an obligation on a notary public to refuse a commission in the form of administrative rules, in cases of claims and obligations arising from a monetary loan agreement of a “credit service provider, etc.” with respect to a commission in the form of a two-way agency permitted by law, and thus, it shall be deemed null and void in violation of the principle of the superior interest. The specific reasons are as follows.

1) When a notary public law entrusts the preparation of a notarial deed stating the consent to compulsory execution with respect to a claim made for the purpose of delivering or returning a movable property registered pursuant to the relevant Acts and subordinate statutes, such as real estate, a ship, construction machinery, motor vehicles, aircraft, etc., one of the other parties is permitted to act on behalf of the other party or not to act on behalf of the other party (Article 56-3) and when entrusting the preparation of other notarial deeds, he/she is allowed to act on behalf of the other party (Article 56-3). If a notary public prepares a notarial deed pursuant to a commission by an agent, he/she shall confirm the identity of the client and the commissioned agent by means of having the client submit a resident registration certificate or other certificate issued by the competent administrative agency (Articles 27 and 30), a deed certifying the right to act on behalf of the client and the commissioned agent, and a certificate prepared by the competent administrative agency on behalf of the other party and shall read the deed prepared by the notary public to the effect that the agent does not raise any objection, and shall sign and affix his/her seal thereon.

2) Article 124 of the Civil Act prohibits a person from acting on behalf of the said person and a person acting on behalf of the said person without the said person’s consent, and does not prohibit a person from acting on behalf of the said person. In addition, the distinction between “a declaration of intent to conclude a contract and a declaration of intent to accept compulsory execution” and “a declaration of intent to commission the preparation of an execution document.” As long as an electronic declaration of intent was made directly by the said person, it does not contravene Article 124 of the Civil Act to delegate only the authority to act on behalf of the said person on behalf of the said person to commission the preparation of an execution document (see Supreme Court en banc Decision 72Da1183, May 13, 197

3) Article 6-2(1) of the Credit Business Act prohibits both parties to a contract by providing that, in cases where a credit service provider enters into a loan agreement with the opposite contractual party, important matters, such as the amount of loan, interest rate on loan, repayment period, etc., shall be stated in writing by the opposite contractual party. However, this is only applicable to a credit service provider registered pursuant to Articles 2 subparag. 1 and 3 of the Credit Business Act, and does not apply to other financial institutions. As long as an obligor expresses his/her intent to accept the conclusion of a loan agreement and compulsory execution, it does not violate the aforementioned legal provisions to delegate the power of representation regarding “an expression of intent to commission the preparation of an execution certificate,” and

4) According to the Defendant’s explanatory materials (No. 6) on the background and purport of the enactment of the instant guidelines, the “credit service provider, etc.” entrusts a specific notarial office with the preparation of a document of execution of a notarial deed one hundred and one hundred million won (hereinafter “collective agency commission”). A credit service provider, etc. requires the other party to sign “the power of proxy to request preparation of an execution certificate” unilaterally prepared in the course of entering into a monetary loan contract with the other party, and a notary public who received collective commission between a credit service provider, etc. and a notary public who received collective commission form a favorable relationship between a credit service provider, etc. and a notary public has problems such as not complying with the procedures for preparation of a notarial deed prescribed by the Notary Public Act and providing a notarial deed at a non-face without verifying the authenticity of declaration of intention in face-to-face face, and providing a notarial commission at an illegal discount to regulate

Inasmuch as the need to regulate the violation of the Notary Public Act is recognized, the legislative purpose of Article 4 of the instant Guideline is deemed justifiable. In particular, if a notary public violates the procedure for confirmation and signature stipulated in Article 38 of the Notary Public Act in the course of preparing an individual execution document, or voluntarily reduces fees prohibited by Article 30 of the Rules on Fees for Notary Public in accordance with delegation of Article 7(5) of the Notary Public Act, such act constitutes a violation of the statutes of a notary public and constitutes grounds for disciplinary action under Article 82(1)1 of the Notary Public Act.

However, as seen earlier, the notary public Act permits a commission in the form of a bilateral agent, not a document of execution regarding a claim aimed at the delivery and return of real estate, etc... As such, the mere fact that the “credit service provider, etc.” committed a commission in the form of a bilateral agent in connection with a monetary loan contract does not constitute “justifiable cause” of the refusal of commission under Article 4(1) of the Notary Public Act. Article 4 of the instant guidelines does not impose a duty to refuse a commission on a notary public solely on the ground that the “credit service provider, etc.” committed an act of commission in the form of a bilateral agent in relation to a monetary loan contract. Whether a monetary loan contract concluded with the “credit service provider, etc.” is invalid in violation of relevant Acts and subordinate statutes, whether the declaration of intention of the other party to delegate the right to request preparation of an execution certificate is invalid, whether the “credit service provider, etc.” is an individual client or collective agent, and whether a notary public violates any provision of the notary public Acts and subordinate statutes in the course of preparation of an execution certificate pursuant to the commission.

3. Determination as to the instant case

A. According to the reasoning of the lower judgment, the Defendant was subject to the instant disciplinary action by taking into account the grounds for disciplinary action that the Plaintiffs violated Article 4 of the instant guidelines only by failing to refuse the commission of a mutual savings bank’s certificate of execution related to a monetary loan agreement.

Article 4 of the instant Directive is null and void, and thus, it cannot be a legitimate ground for disciplinary action that the Plaintiffs violated Article 4 of the instant Directive. However, if the Plaintiffs committed a specific act that directly violates the provisions of the Notary Public Act and subordinate statutes in the course of establishing the pertinent execution certificate, it may be a legitimate ground for disciplinary action. However, given that the instant disciplinary action did not take specific offenses of the Plaintiffs as grounds for disciplinary action, it is not subject to the court’s review

B. In the same purport, the lower court determined that the disciplinary cause of the instant disciplinary action was not recognized. In so doing, the lower court did not err by misapprehending the legal doctrine on supervisory orders and disciplinary grounds pursuant to the Notary Public Act, contrary to what is alleged in the grounds of appeal.

4. Conclusion

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

Justices Lee Ki-taik (Presiding Justice)