[1] In a case where a debtor transfers shares to a creditor for the purpose of collateral security and the creditor enters them as a shareholder on the register of shareholders, the person who is entitled to exercise shareholders' rights as a shareholder (=assignee) and whether the company can deny the exercise of shareholders' rights by the transferee

[2] In a case where Eul, a shareholder holding 2/3 or more of the total number of shares issued on the register of shareholders of Gap corporation, applied for a permit to convene a provisional shareholders' meeting to the court pursuant to Article 366(2) of the Commercial Act, the case affirming the order of the court below which admitted Eul's above application on the ground that Eul still is a shareholder, inasmuch as Eul is a mortgagee of Eul's shares, but Eul is no longer a shareholder due to repayment of secured debt, but there

[3] In a case where the appellate court made a written decision without opening a pleading or questioning an interested party, whether it may be deemed unlawful (negative in principle)

[1] In a case where a debtor transfers shares to a creditor for the purpose of securing debt and the creditor enters them as shareholders on the shareholder registry, the transferee can exercise shareholders' rights as shareholders, and the company cannot deny the exercise of shareholders' rights by the transferee who is shareholders on the shareholder registry.

[2] The case affirming the order of the court below which accepted the above application on the ground that, in case where Eul, who owns more than 2/3 of the total number of shares issued on the shareholder registry of Gap corporation, applied for permission to convene a provisional shareholders' meeting in accordance with Article 366 (2) of the Commercial Act, Eul corporation is a mortgagee of Eul's shares, and the secured debt was extinguished due to repayment and thus, it is no longer a shareholder, but the above application for permission to convene a provisional shareholders' meeting is an abuse of rights, and even if it was transferred to Eul for the purpose of debt security, it is still a shareholder as long as there is no measure such as claiming the return of shares, and the data submitted by Eul company cannot be deemed as an

[3] In examining a case of appeal, the appellate court’s decision whether to open the pleadings or to examine the interested parties belongs to the discretion of the appellate court (Article 134 of the Civil Procedure Act). Thus, barring any special circumstance, it cannot be deemed unlawful on the ground that the appellate court, without opening the pleadings or examining the interested parties, has reached a written examination decision.

[1] Article 372 of the Civil Act / [Transfer for Security] Articles 336, 337, 352, and 353 of the Commercial Act / [2] Article 372 of the Civil Act / [2] Article 372 of the Civil Act / [36, 337, 352, 353, and 366 (1) and (2) of the Commercial Act / [3] Article 134 of the Civil Procedure Act

[1] Supreme Court en banc Decision 2015Da248342 Decided March 23, 2017 (Gong2017Sang, 847) Decided May 26, 1992 (Gong1992, 200Ma6319 Decided March 22, 2001 (Gong2001Sang, 925)/ [3] Supreme Court Order 94Ma107 dated July 30, 1994 (Gong194Ha, 2239) (Gong200Ma6319 Decided March 22, 2001)

Co., Ltd.

P&D Co., Ltd. (Law Firm Pyeongan, Attorneys Lee Do-young et al., Counsel for the plaintiff-appellant)

Busan High Court Order 2019Ra5186 dated January 17, 2020

The special appeal is dismissed. The cost of the special appeal is borne by the special appellant.

The grounds of special appeal are examined.

1. Whether the applicant is a shareholder or an abuse of rights;

A. In a case where a debtor transfers shares to a creditor for the purpose of securing debt and the creditor enters them as a shareholder on the register of shareholders, the transferee can exercise shareholder rights, and the company cannot deny the exercise of shareholder rights by the transferee who is a shareholder on the register of shareholders (see Supreme Court Decisions 92Da84, May 26, 1992; 2015Da248342, Mar. 23, 2017).

B. According to the record, the following facts are revealed.

A special appellant is a company established for the purpose of real estate development and consulting business, and the applicant holds 21,300 shares out of 30,000 shares issued by a special appellant on the register of shareholders (hereinafter “instant shares”).

On March 29, 2019, the applicant filed a request for convening a temporary general meeting of shareholders with the purpose of meeting “excluding 1 of the representative director of the special appellant, 2 of the non-applicants, 1 of the directors, 2 of the non-applicants, and 1 of the directors, 2 of the re-elections, appointment of the directors, amendment of the articles of incorporation, and election of the Speaker pro tempore pro tempore,” but the special

C. The lower court accepted the applicant’s application for permission to convene the temporary shareholders’ meeting of this case for the following reasons.

Although the applicant filed a claim for the convocation of a temporary general meeting of shareholders as a shareholder holding 71% of the total number of shares issued by the special appellant, it is reasonable to permit the convocation of a temporary general meeting of shareholders pursuant to Article 366(2) and (1) of the Commercial Act, since the special appellant did not follow the procedures for the convocation of a temporary general meeting of shareholders without delay. The special appellant asserts that the applicant is the mortgagee of the shares of this case, and the secured debt cannot be deemed as a shareholder any longer due to repayment of the secured debt, and thus, the application for permission for the convocation of the temporary general meeting of shareholders of this case constitutes an abuse of rights. Although Nonparty 1, etc. appears to have transferred the shares of this case to the applicant for the purpose of debt security, the applicant is still a shareholder and the documents submitted by the special appellant do not constitute an abuse of rights.

The lower judgment is justifiable in light of the foregoing legal doctrine. In so doing, the lower judgment did not err by misapprehending the Constitution and the law that affected the trial.

D. On October 25, 2019, the special appellant asserts that the applicant is no longer a shareholder since the name of the instant shares was changed to one other on the register of shareholders on the register of shareholders on October 25, 2019. However, the foregoing assertion is a new argument in the special appellate trial, and thus, is not a legitimate special appeal against the order of the court below

2. Whether the right to a fair trial is infringed;

In order for an appellate court to decide whether to open oral arguments or to examine interested parties when deliberating a case of appeal, it is at the discretion of the appellate court (Article 134 of the Civil Procedure Act), and barring any special circumstance, barring any special circumstance, it cannot be deemed unlawful on the ground that the appellate court, without opening oral proceedings or examining interested parties, has reached a written decision only with a written hearing (see, e.g., Supreme Court Order 94Ma107, Jul. 30, 1994; Supreme Court Order 200Ma6319, Mar. 22, 2001). Therefore, it cannot be deemed that the appellate court, which was the appellate court, made a decision only with a written hearing, infringed the applicant’s right to a fair trial.

3. The instant special appeal is dismissed on the grounds that it is without merit, and the costs of the special appeal are borne by the special appellant. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Lee Dong-won (Presiding Justice)