Plaintiff (Law Firm LLC, Attorneys Lee Jong-soo et al., Counsel for plaintiff-appellant)

FDNN Co., Ltd. and four others

April 9, 2013

Busan District Court Decision 201Gahap1452 Decided December 15, 2011

1. Revocation of a judgment of the first instance;

2. Defendant F&C Co., Ltd.:

A. A. On September 23, 2010, at a special general meeting of shareholders, the Plaintiff was dismissed from office by the representative director and in-house directors, Nonparty 8 was respectively dismissed from the auditor, and Defendant 4 was appointed from office directors;

B. On June 20, 2011, at a special general meeting of shareholders, Nonparty 2 was appointed as both inside directors and representative directors, and Defendant 5 (Defendant 3 of the judgment of the Supreme Court) as auditors, respectively.

I confirm that each does not exist.

3. Ascertainment that the Plaintiff is in the representative position of Defendant F&C Co., Ltd.

4. We affirm that the Plaintiff and the Defendants are shareholders of 10,000 common shares issued by Defendant F&C Co., Ltd.

5. The total costs of the lawsuit are borne by the Defendants.

The same shall apply to the order.

1. Basic facts

A. On September 4, 2009, Nonparty 1 assumed office as the representative director of Defendant F&C Co., Ltd. (hereinafter “Defendant Company”), and on January 1, 2010, Nonparty 1 owned 100% (10,000 shares) of the Defendant Company’s shares. The Defendant Company was established on February 5, 2009, but did not issue the share certificates.

(b) Details of the change of the representative director of the defendant company recorded in the corporate register shall be as follows:

The appointment of Nonparty 1 on September 4, 2009 - the appointment of Nonparty 1 on May 6, 2010 - the appointment of Nonparty 9 on May 28, 2010 - the dismissal of Nonparty 1 on May 28, 2010 - the dismissal of Nonparty 2 on July 2, 2010 - the dismissal of Defendant 2 on July 7, 2010 - the appointment of Nonparty 1 on July 13, 2010 - the dismissal of the Plaintiff on September 29, 201 - the appointment of the Plaintiff on September 29, 201, the appointment of the joint representative of Nonparty 2 on October 19, 201 (Defendant 2), the appointment of the joint representative of Nonparty 10 on June 20, 201, and the appointment of Nonparty 2.

[Ground of recognition] Unsatisfy, entry of Gap evidence No. 1, purport of whole pleadings

2. Summary of the parties' arguments

A. The plaintiff

1) On March 29, 2010, the Plaintiff purchased the entire shares of the Defendant Company from Nonparty 1 to KRW 100 million, and, from January 2009 to March 29, 2010, the Plaintiff decided to substitute for the payment of KRW 210 million, which the Plaintiff lent to Nonparty 1 from March 29, 2009 to Nonparty 1. On the same day, the Plaintiff was registered as one shareholder in the shareholder registry of the Defendant Company. On July 13, 2010, the Plaintiff held a temporary general shareholders meeting to dismiss Nonparty 1 from office of representative director and resolved to appoint the Plaintiff.

2) Meanwhile, on May 6, 2010, Nonparty 11 and Defendants 2, 3, 4, and 5 (hereinafter “Nonindicted 11 and the remaining Defendants”) concluded a share acquisition agreement with Nonparty 1 to acquire the entire shares of the Defendant Company (Nonindicted 11,00 shares, Defendant 3,00 shares, Defendant 43,00 shares, and Defendant 43,00 shares) by assaulting and threatening Nonparty 1 with Nonparty 1, and the said agreement constitutes an unfair legal act.

On September 23, 2010, Nonparty 11 and the remaining Defendants asserted that they acquired the shares of the Defendant Company through the above share acquisition agreement, and held a temporary general meeting of shareholders on September 23, 2010, and dismissed the Plaintiff from the representative director and the inside director of the Defendant Company and Nonparty 8, respectively, and appointed Defendant 4 as the inside director on the same day. On June 20, 201, a special general meeting of shareholders decided to appoint Nonparty 2 as the inside director and the representative director, and Defendant 5 as the auditor. On May 6, 2010, the share acquisition agreement of Nonparty 11 and the remaining Defendants were null and void due to unfair legal acts, and each of the above resolutions was held by a person who is not a legitimate shareholder, and is not a legitimate shareholder of the Defendant Company, and there

3) Therefore, the Plaintiff seeks confirmation of the absence of a resolution of each provisional shareholders’ meeting as of September 23, 2010 and June 20, 201, and confirmation of the Plaintiff’s representative director’s status against the Defendant Company. The Plaintiff seeks confirmation of the remaining Defendants claiming that they are the shareholders of the Defendant Company as the shareholders of the Defendant Company.

B. The Defendants

1) The share sales contract concluded between the Plaintiff and Nonparty 1 on March 29, 2010 is null and void as a false conspiracy.

2) Even if the above domestic contract is valid, the above transfer of shares between the plaintiff and the non-party 1 was not notified or consented, but the non-party 11, the defendant 3, and the non-party 4 notified the above transfer on or around July 2, 2010 after acquiring shares from the non-party 1 on May 12, 2010. Thus, the above Defendants’ acquisition of shares cannot be asserted against the defendant 2 who acquired shares from the non-party 11 on the ground of the share purchase agreement as of March 29, 2010.

3) Therefore, the plaintiff's claim is not a shareholder of the defendant company, and is illegal or justifiable as there is no interest in confirmation.

3. Determination

A. Whether a share transfer contract dated March 29, 2010 is valid

First, we examine whether the Plaintiff purchased shares from Nonparty 1 on March 29, 2010 and became a single shareholder of the Defendant Company.

In full view of the statements in Gap evidence 1, 2, 3, 7, 14-1, 1, 2, and 14-2, 13-1, 2, and 14-2, and the testimony of non-party 1 as witness of the court of first instance, the plaintiff prepared a sales contract of the shares to purchase all the shares of the defendant company from non-party 1 on March 29, 2010, and the receipts that non-party 1 received KRW 100 million as shares transfer price. The above sales contract of shares bears the seal impression of the non-party 1, and the personal seal impression of the non-party 1 is affixed on March 22, 2010. Accordingly, the non-party 1 prepared a request for share transfer statement on the ground of the above share transfer contract to the defendant company, and the fact that the plaintiff was registered as a shareholder of the defendant company on March 29, 201, and that the non-party 2 submitted the above personal seal transfer statement to the defendant 20.

On the other hand, according to the records of evidence Nos. 6-2 and 8-2 and Nos. 12, and the fact-finding with the Busan District Court chief of Busan District Court on March 29, 2010, the register of shareholders signed two seals of the defendant company on May 28, 2010 and July 8, 2010, which were written by the plaintiff on July 7, 2010, were affixed with the seal impression affixed to the written resolution of the temporary general meeting of shareholders as of July 1, 2010. The other is the same as the seal impression affixed by the defendant Nos. 1 and 2, which was written on March 29, 2010, which was written on the non-party No. 1 under the name of the plaintiff Nos. 1 and 2, which was written on the non-party No. 1 and the other is not stated on the certificate of personal seal impression No. 2, which was signed on March 29, 2010.

B. Whether the validity of the transfer of shares on March 29, 2010 can be asserted against the Defendants

1) The transfer of shares before the issuance of share certificates under Article 335(3) of the Commercial Act is effective against the company at the expiration of six months after the company's incorporation. Since the transfer of shares before the issuance of share certificates is in accordance with the general principles of the transfer of nominative claim, it is reasonable to view that the transfer of shares before the issuance of share certificates is the notification of the transfer of nominative claim or the consent of the company, like the transfer of nominative claim. In a case where shares before the issuance of share certificates are transferred, the transfer of shares is completed to the transferee of shares who meets the requirements for notification of the transfer of shares or the consent of the transfer of shares without the certificate with the fixed date (hereinafter "first transferee of shares"), even if the transferee of shares twice acquired the shares (hereinafter "second transferee of shares") satisfies the requirements for notification or consent of the transfer of shares to the company after the issuance of share certificates, if the notification or consent is not based on the certificate with the fixed date, it is reasonable to view that the transferee of shares as the second transferee is not entitled to exercise the transfer of shares in the name of the company.

2) We examine whether the transfer of shares by Nonparty 1 to the Plaintiff or the Defendants satisfies each of the requisite requirements.

A) First of all, in relation to the transfer of shares to the Plaintiff by Nonparty 1, the representative director and the shareholder of the Defendant Company, on March 29, 2010, Nonparty 1, a shareholder of the Defendant Company, transferred all the shares of the Defendant Company owned by the Plaintiff to the Plaintiff and the Plaintiff was registered as one shareholder of the Defendant Company in the register of shareholders. This is reasonable to deem that Nonparty 1, the representative director of the Defendant Company, transferred the shares owned by the Defendant Company to the Plaintiff on March 29, 2010 and consented to the status of the representative director on the same day. However, “the notice or consent by the document on the fixed date,” means that the notice or consent must be a certified fixed date itself (see, e.g., Supreme Court Decision 2009Da49469, Jul. 14, 2011). Accordingly, the notification or consent of the transfer of shares must be made to the obligor, and thus, the notification or consent of the transfer of shares to the Plaintiff cannot be viewed as the notification or consent of the transfer of shares.

B) Next, in relation to the transfer of shares to the Defendants of Nonparty 1, according to the respective statements of Nonparty 1, Nonparty 1, Nonparty 1, and Defendant 3, and Defendant 4 on May 12, 2010, respectively, written a share transfer contract with the purport of transferring the entire shares of the Defendant Company to Nonparty 11, Defendant 1, and Defendant 3, and Defendant 4 on May 12, 2010, respectively. Defendant 2, Defendant 3, and 4 on July 2, 2010 thereafter, sent to the Defendant Company a certified letter of confirmation with the purport that the shares were transferred to the Defendant Company by attaching each of the said shares transfer contract to the Defendant Company.

However, even if the transferee of the bonds was delegated with the authority of the transferor to notify the transfer of the shares, if the transferee knew or could have known that the transferee was the agent of the non-party 1 in light of various circumstances surrounding the notification of the transfer of shares, it shall be effective pursuant to the proviso of Article 115 of the Civil Act. It shall be assumed that the transferee of the bonds was entrusted with the authority of the transferee to notify the transfer of shares by the non-party 1 to the non-party 4, and it shall not be deemed that the transferee's right of representation was lawfully granted to the plaintiff, and that the transferee was not present at the request of the non-party 1 to the non-party 4, and that the transferee was not present at the non-party 1 to the non-party 1 to the non-party 4, as the transferee's agent's statement that the transferee did not have the authority to notify the transfer of shares by the non-party 1 to the non-party 1, it shall be deemed that the transferee's statement was not destroyed by the transferee's legitimate authority.

3) Sub-decisions

Therefore, even though the Plaintiff did not meet the requirement of notification or consent of transfer by a certificate with a fixed date other than the consent of the Defendant company after the Plaintiff acquired the shares of the Defendant company from Nonparty 1, the person entitled to exercise the shareholder's right in relation to the Defendant company is still the Plaintiff, insofar as the Defendant 2, 4, and 3 who received the shares twice did not meet the requirement of notification or consent by a certificate with a fixed date.

C. Determination on the existence of a resolution of each general meeting of shareholders

According to the above facts, at the special general meeting of shareholders on September 23, 2010, the plaintiff is still in the status of the representative director of the defendant company, and as long as the plaintiff is not in the status of the representative director and the representative director of the defendant company, the non-party 8 is dismissed from the office director and the non-party 4 is appointed from the office director respectively, and on June 20, 201, the special general meeting of shareholders is appointed from the company director to the non-party 2 as the representative director and the non-party 5 as the auditor, and the resolution is made at the general meeting of shareholders held by the non-party 5 as the auditor, the resolution does not exist. Furthermore, as long as there is no special general meeting of shareholders on September 23, 2010, the plaintiff is still in the status of the representative director of the defendant company, and there is a benefit to seek confirmation that the plaintiff is the representative director

4. Conclusion

Therefore, the plaintiff's claim of this case shall be accepted on the grounds of all of its reasoning, and the judgment of the court of first instance is unfair on the grounds of its conclusion, so it is confirmed that there is no resolution of each of the above provisional shareholders' meetings, and it is confirmed that the plaintiff is the representative director and the shareholder of the defendant company. It is so decided

Judges Park Jong-hun (Presiding Judge)