Whether a temporary director appointed by the Minister of Education and Human Resources Development has the authority to appoint a regular director pursuant to Article 25 (1) of the former Private School Act (negative), and whether the method of normalization under the former Private School Act, which did not provide for the method of normalization, should comply with the general principles of the Civil Act (affirmative)

Article 25 of the former Private School Act (amended by Act No. 7802 of Dec. 29, 2005); Article 63 of the Civil Act

Supreme Court en banc Decision 2006Da19054 Decided May 17, 2007 (Gong2007Sang, 873)

Plaintiff 1 and two others (KON Law Firm, Attorneys Kim Yong-han et al., Counsel for the plaintiff-appellant)

Absia (Law Firm Barun, Attorneys Kang Ji-hun et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2012Na90889 decided April 18, 2013

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

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

1. In light of the legislative purpose of the former Private School Act (amended by Act No. 7802 of Dec. 29, 2005; hereinafter the same) and Article 25 of the same Act as a special rule for Article 63 of the Civil Act, a separate provision for the reason, duties, duration of office and restrictions on the appointment of regular directors, etc., a provisional director appointed by the Minister of Education and Human Resources Development (hereinafter referred to as the "Ministry of Education") under Article 25 (1) of the former Private School Act shall be construed as a risk management manager in charge of operation of the school juristic person temporarily where it is impossible or is likely to cause damage to the school juristic person due to the vacancy of directors, and a temporary director appointed by the Minister of Education and Human Resources Development (hereinafter referred to as the "Ministry of Education") shall be construed as having the same authority as a regular director only for the act of operating the general school juristic person, unlike the temporary director under the Civil Act. Therefore, it is reasonable to deem that there is no authority to appoint a regular director (see Supreme Court en banc Decision 2006Da19054, May 1

Meanwhile, under the former Private School Act, where a school juristic person’s reason for selection and appointment of a provisional director is terminated, it is reasonable to settle the case back to the general principle of the Civil Act. This means a method of appointing a provisional director who has the authority to appoint a regular director pursuant to Article 63 of the Civil Act and then the provisional director appoints a regular director.

2. The facts found by the court below are as follows.

A. The Defendant was established by Nonparty 1 on December 1952, and around April 1954, the Defendant opened and operated ○○ University. Nonparty 2, the wife of Nonparty 1 around March 1, 1998, as the chief director, Nonparty 1, Plaintiff 3, and Plaintiff 2, respectively.

B. The Ministry of Education, around April 1998, implemented a comprehensive audit on Defendant and ○○ University, stating Plaintiff 1’s improper use of the school budget, etc., and had all of the Defendant’s directors dismiss from July 1998 to August 20 of the same year through the cancellation of approval for the director, etc. In accordance with the audit results, the Ministry of Education appointed 9 temporary directors pursuant to the former Private School Act, and thereafter appointed 2 period around December 1999, around December 2, 1999, around December 200, and around January 2002.

C. On February 6, 2003, Nonparty 2 asserted that the appointment of the third provisional director by the Ministry of Education was illegal disposition, and filed an administrative litigation seeking revocation thereof on or around March 2002. The Seoul Administrative Court en banc, which tried, required to terminate and normalize the provisional director system by appointing the defendant's regular director. However, the former Private School Act does not have any provision regarding the normalization method when the reason for the appointment of the provisional director is terminated, so eventually, Nonparty 2, who is a party to the lawsuit, and the Ministry of Education and the supplementary intervenor, appointed the defendant's regular director on the date for pleading under the agreement between the defendant, who is the party to the lawsuit, and the supplementary intervenor, and recommended the mediation to this effect to Nonparty 2 on the date for pleading.

D. Accordingly, the non-party 2, the Minister of Education, and the defendant have drawn up an agreement through consultation on the defendant's normalization plan over a ten-month period. The administrative litigation division decided on November 13, 2003, the mediation was made to the effect that "the defendant shall, upon considering the opinions of the members of the ○○ University, make up three members recommended by the board of directors from among the 23 candidates recommended by the president of the ○○○ University, three members recommended by the Ministry of Education, three members recommended by the Minister of Education, three members overseas, the president of the Korea-Japan, the president of the Korea-Japan, and one regular director recommended by the non-party 2, and the Minister of Education shall approve his appointment by the end of December 203, the Minister of Education shall convert the defendant into the system of regular directors from January 1, 2004 to the system of regular directors."

E. On December 17, 2003, Nonparty 2, Defendant president, and the Minister of Education agreed to appoint one person recommended by Nonparty 2, the president of ○○○ University and the president of the Dong department, three persons nominated by a temporary society from among the candidates listed in the recommendations in the preceding paragraph, one recommended by the Minister of Education, one person recommended by the Minister of Education, and two persons who have contributed to the Defendant’s finance (Provided, That where the entry of the person who has contributed to the finance was not confirmed by December 15, 2003, two persons recommended by the Minister of Education) as the Defendant’s regular director, and the said agreement to implement the normalization of the contents was prepared.

F. On March 17, 2004, the board of directors consisting of the fourth temporary directors, pursuant to the above agreement, Nonparty 3, 4 of the president of the ○○ University, Nonparty 5, Nonparty 6, Nonparty 7, and Nonparty 10, who were selected by an indefinite vote in the fourth temporary society among the candidates listed in the recommendations of the president of the ○○ University recommended by Nonparty 2, Nonparty 3, 4 of the president of the ○○○ University, and the Ministry of Education, were appointed as the Defendant’s regular directors. Nonparty 8, Nonparty 9, and Nonparty 10, who were selected by an indefinite vote in the fourth temporary society. The board of directors consisting of the regular directors, who decided whether to appoint the president of the ○○○○ University. Accordingly, the Defendant’s fourth temporary directors resigned on March 29, 2004.

G. On March 30, 2004, the Ministry of Education approved the resignation of the above temporary directors and the appointment of the regular directors appointed by the resolution of the board of directors of this case. On April 14, 2004, the Minister approved the appointment of the director for Nonparty 11 and the appointment of the chief director for Nonparty 5, the president of ○○○ University, the president of ○○ University, and around that time, Nonparty 2 withdrawn the above administrative litigation.

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

In this case, the Defendant’s normalization process was the wife of the founder of the Defendant educational foundation, which is an interested party, and the need to normalize the school foundation beyond the existing provisional director system in the litigation procedure for cancellation of the appointment of temporary directors filed by Nonparty 2, who is the former president, the Defendant: (a) sought the method of appointing the regular director by seeking the method of appointing the regular director; and (b) decided that the ○○○ University president, Nonparty 2, the Minister of Education, the temporary board of directors, etc. shall recommend or nominate each certain number of persons to become the regular directors under the agreement between the above Nonparty 2, the supervisory authority, the Minister of Education, and the principal at the time of the Defendant; and (c) made a recommendation for the method of coordinating the method of making the regular director photographs with the recommended persons, and then, (d) made a decision on all the regular directors in order by such procedure; and (e) the board of

Therefore, in this case, the method of converting the defendant into the fixed director system can be deemed to be a method that can be actually identical to the method under Article 63 of the Civil Code converting the provisional director into the fixed director system by appointing the fixed director in the non-transmission procedure at the request of an interested party, or a method that has substantial and procedural legitimacy to the extent equivalent thereto. Thus, it is reasonable to deem that the validity is recognized.

4. The court below held that since the resolution of the board of directors of this case was made through consultation with the non-party 2 representing the previous directors for a considerable period of time, the intention of all the parties related to the defendant was fully reflected, and even until now the founder's personnel activities are performed as directors, the above resolution of the board of directors can be exceptionally acknowledged its validity despite the defect in the appointment of a regular director. Although there are no somewhat inappropriate points in the reasoning of the court below, the decision of the board of directors of this case was just in its conclusion rejecting the plaintiffs' assertion in light of the validity of the resolution of the board of directors of this case, and it did not err in the misapprehension of legal principles

5. 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 In-bok (Presiding Justice)