[1] In a case where the matters to be entered in the articles of incorporation of the Incorporated Foundation are to be revised due to compulsory execution against the fundamental property of the Incorporated Foundation, whether permission from the competent authority should be obtained (affirmative), and in this case, whether permission from the competent authority is not a requirement for commencing an auction but a requirement for acquiring ownership of the successful bidder (affirmative)

[2] In a case where a mortgage is created on the basic property of an incorporated foundation, whether permission from the competent authority should be obtained (negative in principle)

[1] According to Articles 32, 40 subparag. 4, 42(2), 43, 45(3), and 45(1) of the Civil Act, an incorporated foundation shall have provisions concerning the assets of the incorporated foundation in its articles of incorporation, and the establishment and alteration of the articles of incorporation of the incorporated foundation shall obtain permission from the competent administrative agency. Therefore, in a case where the incorporated foundation must revise the articles of incorporation of the incorporated foundation due to an act of disposal of basic assets as stated in the articles of incorporation approved by the competent administrative agency, permission from the competent administrative agency should be obtained. This is the same case where a compulsory execution is conducted on the basic assets of the incorporated foundation, but the permission from the competent administrative agency is not necessarily required in advance. Thus, the permission from the competent administrative agency for the alteration of the articles of incorporation of the incorporated foundation is not a requirement for the commencement of auction, but a requirement for the acquisition of ownership by the successful bidder. Therefore, the execution court shall proceed with the auction procedure under a special condition to obtain permission,

[2] Since the creation of mortgage on the basic property of an incorporated foundation under the Civil Act does not constitute a case where the matters to be entered in the articles of incorporation should be modified unless there are special circumstances, it is unnecessary to obtain permission from the competent authority.

[1] Articles 32, 40 subparag. 4, 42(2), 43, and 45(1) and (3) of the Civil Act / [2] Articles 32, 40 subparag. 4, 42(2), 43, and 45(1) and (3) of the Civil Act

[1] Supreme Court Decision 85Ma720 Decided January 17, 1986 (Gong1986, 788), Supreme Court Decision 90Da8558 Decided May 28, 1991 (Gong1991, 1736), Supreme Court Decision 2012Da81630 Decided July 10, 2014, Supreme Court Decision 2014Ma1631 Decided October 17, 2014 / [2] Supreme Court Decision 2012Da81630 Decided July 10, 2014

Re-appellant

Gwangju District Court Order 2016Ra479 dated November 30, 2017

The reappeal is dismissed.

The grounds of reappeal are examined.

According to Articles 32, 40 subparag. 4, 42(2), 43, and 45(3) and (1) of the Civil Act, an incorporated foundation shall have provisions concerning the assets of the incorporated foundation in its articles of incorporation, and the establishment of the incorporated foundation and amendments to the articles of incorporation of the incorporated foundation shall be subject to the permission of the competent authority. Therefore, in cases where the incorporated foundation requires amendments to the articles of incorporation of the incorporated foundation due to an act of disposal of basic assets as stated in the articles of incorporation permitted by the competent authority, it shall obtain permission from the competent authority (see Supreme Court Decisions 90Da8558, May 28, 1991; 2012Da81630, Jul. 10, 2014; 2012Da81630, Jul. 10, 2014). This is not necessarily required to obtain prior permission from the competent authority for the alteration of the articles of incorporation of the incorporated foundation, but is not necessary to obtain permission from the competent authority for the successful bidder.

For reasons indicated in its holding, the lower court maintained the first instance court’s decision authorizing the rejection of sale, on the ground that the debtor foundation, at the time of the establishment of the instant mortgage, did not receive a written permission from the competent authority, and that the re-appellant, who is the highest bidder, did not submit a written permission from the competent authority, which is the special sale condition, in the instant voluntary auction procedure. In light of the aforementioned legal principles and records, some of the judgment of the lower court is not appropriate, but there is no error of misapprehending the legal principles as to the rejection of sale, contrary to what is alleged in the grounds for reappeal.

Therefore, the reappeal is dismissed. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Lee Ki-taik (Presiding Justice)