[1] Whether the bona fide acquisition is recognized even where the transferor of stock certificates is an unauthorized representative (affirmative)

[2] In a case where the transferor of registered shares under the former Commercial Code delivered share certificates with the seal affixed to the endorsement column to supplement the named part to the transferee, the validity of the transfer of shares (effective)

[3] Whether a foreign investor should obtain authorization under Article 6(1) of the former Foreign Capital Inducement Act even in cases where a foreign investor acquired shares owned by a domestic shareholder of a domestic company and title trust to a national (affirmative)

[1] The bona fide acquisition of share certificates is recognized not only where the transferor is an unentitled person, but also where the transferor is an unauthorized agent.

[2] The transfer of registered shares under the former Commercial Act (amended by Act No. 3724 of Apr. 10, 1984) can be made only by endorsement of share certificates or by delivery of share certificates and certificates of transfer signed and sealed by those who are indicated as shareholders. The endorsement of share certificates requires the name and seal of shareholders. However, in case where the transferor delivers share certificates with the intention to supplement the part signed and sealed by the transferor, the transferor grants the transferee the right to supplement the name of the endorser to the transferee, so it cannot be said that the transferor’s name is omitted and the endorsement has no effect.

[3] At the time of applying for authorization to acquire stocks of a foreign investor under Article 6 (1) of the former Foreign Capital Inducement Act (amended by Act No. 3691 of Dec. 31, 1983), the amount of stocks to be acquired by a foreign investor and the investment ratio shall constitute an important part of the approval of the Minister of Finance and Economy in relation to the management right of the foreign-invested enterprise. If a foreign investor is to acquire stocks owned by the foreign investor from a national of the foreign-invested enterprise, the number of stocks owned by the foreign investor or the share ownership ratio would result in a change in the number of stocks owned by the foreign investor. This constitutes a change in the initial approval contents, and if the foreign investor fails to obtain the approval, it is reasonable to deem that the foreign investor acquired stocks in its name or acquired stocks in another

[1] Article 359 of the former Commercial Act (amended by Act No. 3724 of Apr. 10, 1984); Article 21 of the Check Act / [2] Article 336 of the former Commercial Act (amended by Act No. 3724 of Apr. 10, 1984) / [3] Article 6 (1) of the former Foreign Capital Inducement Act (amended by Act No. 3691 of Dec. 31, 1983) (refer to Article 8-2 (1) of the current Foreign Investment and Foreign Capital Inducement Act)

[1] Supreme Court Decision 94Da5217 delivered on February 10, 1995 (Gong1995Sang, 1320) / [3] Supreme Court Decision 77Da2289 delivered on September 26, 197 (Gong1978, 1116)

Plaintiff (Attorney Han-Gyeong et al., Counsel for the plaintiff-appellant)

Defendant (Attorney Han-soo, Counsel for defendant-appellant)

Seoul High Court Decision 94Na38061 delivered on October 18, 1995

The judgment below is reversed and the case is remanded to Seoul High Court.

We examine the grounds of appeal.

1. On the first ground for appeal

Since the bona fide acquisition of share certificates is recognized not only where the transferor is an unentitled person but also where the transferor is an unauthorized representative (see Supreme Court Decision 94Da55217 delivered on February 10, 1995). The judgment below to the same effect is just, and there is no error of law by misunderstanding the legal principles as to the requirements for bona fide acquisition of share certificates. The argument is without merit.

2. On the second ground for appeal

The transfer of registered shares under the former Commercial Act (amended by Act No. 3724 of Apr. 10, 1984) can be made only by endorsement of share certificates or issuance of share certificates and certificates of transfer signed and sealed by the person who is indicated as a shareholder. The endorsement of share certificates requires the name and seal of the shareholder. However, in the case where the transferor delivers share certificates with the intention to supplement the original part to the transferee, it cannot be said that there is no validity of endorsement because the transferor's name has been omitted. Accordingly, according to the records, the non-party may only affix the name of the plaintiff in the form of endorsement of the share certificates of this case to the defendant and deliver the share certificates of this case to the defendant. Accordingly, the judgment of the court below is justified, and there is no error in the misapprehension of legal principles as to the method of transfer and the right to supplement the registered shares, such as the lawsuit, and there is no error in the misapprehension of legal principles as to the method of supplement of the registered shares.

3. On the third ground for appeal

According to the reasoning of the judgment below, the court below did not have any evidence that the above non-party knew that he was not a legitimate representative of the plaintiff, and in light of the facts acknowledged by the evidences of macroscopic evidence, it is difficult to view that the defendant was gross negligence on the part of the defendant because he did not confirm whether the above non-party was a legitimate representative of the plaintiff, and otherwise, the defendant acquired the share certificates of this case in good faith on the ground that there is no evidence that the defendant did not know that the non-party was not a legitimate representative of the plaintiff. In light of the records and comparison and examination of relevant evidence, the court below's above measures are just and acceptable, and there is no error of law by misunderstanding facts contrary to the rules of evidence, or by misapprehending the legal principles on the subjective requirements of bona fide acquisition, such as incomplete deliberation

4. On the fourth ground for appeal

A. According to the reasoning of the judgment below, the court below rejected the Plaintiff’s assertion that the above Nonparty, a foreign corporation, already owned 4,919 shares of the non-party company as a patent attorney at the time when it was no longer possible to acquire shares of the non-party company as a foreign corporation, because it was possible to obtain shares of the non-party company as a patent attorney at the time when it was entrusted with the management of the trademark rights of the non-party company as an agent, and the Defendant transferred the share certificates of this case to the non-party company as an agent, although it was recognized that the non-party transferred the share certificates of this case to the non-party as agent, and the non-party operated the non-party Korean branchr corporation as a non-party Y.K. and used the above trademark for the non-party Y.K., granted the non-exclusive license of the above trademark, and the dispute regarding the use of the above trademark occurred. The court below rejected the Plaintiff’s share certificates of this case on the ground that the above non-party acquired shares of this case from the non-party 13.

B. (1) However, the record reveals that the above non-party's share transfer contract was concluded by proposing that the above non-party's above non-party's share transfer contract should be transferred to the above non-party's owner in return for the use of the trademark, and as a result, the above non-party's share transfer contract was concluded. However, as the above non-party's share transfer contract had already been held 50% of the non-party's shares at the time, the non-party's share transfer cannot be acquired in its own name as a patent attorney with the non-party's relation that the non-party's share transfer could no longer be acquired in its own name. In light of the relevant provisions, the above non-party's share transfer contract was concluded with the defendant who was in charge of the business of the non-party's trademark in the Republic of Korea within the above non-party's commercial industry as the purchaser, and the defendant did not actually participate in the process of concluding the contract after the defendant later, and the above non-party's share transfer and the above non-party's share transfer of the above non-party's shares.

Nevertheless, the court below erred in finding the facts against the rules of evidence that the defendant did not recognize the title trust relationship with the Daca Industries on the ground that there is no evidence to see that the defendant is the title trustee of the shares of this case.

(2) Furthermore, Article 6 (1) of the former Foreign Capital Inducement Act provides that "When a foreigner intends to acquire or own shares or equity shares of a Korean corporate body or an individual company under this Act, he shall obtain the approval of the Minister of Finance and Economy. The same shall apply to the case where he intends to modify the contents of the approval." The amount of shares to be received by a foreign investor upon an application for approval for the application of the above Act to acquire shares of a domestic company by a foreign investor, and the investment ratio shall constitute an important part of the approval of the Minister of Finance and Economy in relation to the management rights of the foreign-invested company. If a foreign investor is to acquire shares owned by a foreign investor from a national of the foreign-invested company, the number of shares owned by the foreign investor or the shares owned by the foreign investor shall be changed because it constitutes a change in the initial approval ratio, and if the foreign investor fails to obtain the approval, it shall be deemed that the foreign investor acquired shares in its name or acquired shares in another person's name or has no effect (refer to this case).

Nevertheless, the court below's decision that Article 6 (1) of the former Foreign Capital Inducement Act does not apply to a case where a foreign investor holds a title trust with a national of the shares acquired from an existing shareholder of a foreign-capital invested company is erroneous in the misapprehension of legal principles as to the authorization of modification under the above provision. The arguments are with merit.

5. Conclusion

Therefore, the judgment of the court below is reversed and the case is remanded to the court below. It is so decided as per Disposition by the assent of all participating Justices.

Justices Lee Yong-hun (Presiding Justice)