[1] The meaning of "public interest corporation" under Article 2 of the Act on the Establishment and Operation of Public Interest Corporations

[2] In a case where a medical corporation Gap constitutes "public interest corporation" under Article 2 of the Act on the Establishment and Operation of Public Interest Corporations, the case holding that in light of the articles of incorporation, the corporation Gap is merely a non-profit corporation pursuing research and development of health and medical services incidental to the establishment and operation of a hospital, and does not constitute "public interest corporation" under Article 2 of the Act on the Establishment and Operation of Public Interest Corporations

[3] In a case where a medical corporation Gap issued a promissory note to Byung et al. as a result of the performance of a contract by succeeding to the obligation of construction expenses to Byung et al. for Byung et al. that was incurred in the process of the establishment of the Eul hospital by a comprehensive business transfer or transfer contract for the private hospital Eul which the medical corporation Gap entered into with Eul, the case holding that the court below did not err in the misapprehension of legal principles, etc. in holding that it is difficult to see that

[1] Article 32 of the Civil Act, Articles 1 and 2 of the Act on the Establishment and Operation of Public Interest Corporations, Article 2 of the Enforcement Decree of the Act on the Establishment and Operation of Public Interest Corporations / [2] Article 32 of the Civil Act, Articles 1 and 2 of the Act on the Establishment and Operation of Public Interest Corporations, Article 2 of the Enforcement Decree of the Act on the Establishment and Operation of Public Interest Corporations / [3] Article 64 of

[1] Supreme Court Decision 2010Da43580 Decided September 30, 2010

Medical Corporations, East Medical Foundation (Law Firm KCEL, Attorneys Cheong-dam et al., Counsel for the defendant-appellant)

Defendant 1 and two others (Law Firm L&W, Attorneys Hong Sung-l et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2009Na84501 Decided December 24, 2009

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

The grounds of appeal are examined.

1. As to the grounds of appeal Nos. 1 and 5

According to Article 32 of the Civil Act, Articles 1 and 2 of the Act on the Establishment and Operation of Public Interest Corporations (hereinafter “Public Interest Corporations Act”), and Article 2 of the Enforcement Decree of the Act on the Establishment and Operation of Public Interest Corporations, a public interest corporation under Article 2 of the Act on the Establishment of Public Interest Corporations, which is subject to the regulation of the Act on the Establishment of Public Interest Corporations, refers only to a corporation whose business purpose is purely academic, charity, etc. among non-profit corporations under Article 32 of the Civil Act, or a corporation which mainly engages in other businesses incidental to the above academic, charity, etc. with the purpose of its business (see Supreme Court Decision 2010Da43580, Sept. 30, 2010, etc.).

According to the records, Article 2 of the Plaintiff’s articles of incorporation, which is a medical foundation, provides that “The purpose of this corporation is to establish and operate a medical institution as a non-profit medical corporation, and contribute to the improvement of national health through research and development, etc. on health and medical services,” and Article 3 provides that “the establishment and operation of medical institutions, the establishment and operation of medical welfare facilities for the aged, the training and continuing education of medical persons and persons related to medical care, research and study on medical and medical care, and education on disease prevention and treatment,” as the Plaintiff’s business to achieve the above purpose. Examining these circumstances in light of the legal principles as seen earlier, the Plaintiff is merely a non-profit corporation pursuing research and development on health and medical services incidental to the establishment and operation

Therefore, this part of the ground of appeal, which is premised on the fact that the plaintiff constitutes a public-service corporation under Article 2 of the Public-Service Corporation Act, is without merit, without further examining the remaining points.

Meanwhile, the court below held that each of the instant promissory notes issued against the Defendants cannot be deemed as an act of disposal or an act of bearing obligations as to fundamental property as stipulated in Article 6(1) of the Plaintiff’s articles of incorporation. The court below did not err in the misapprehension of legal principles as to the interpretation of the articles of incorporation. Thus, the ground of appeal on this part

2. As to grounds of appeal Nos. 2, 3, and 4

After comprehensively taking account of the adopted evidence, the lower court acknowledged the facts as indicated in its reasoning, and determined that, although Nonparty 1 was liable for construction expenses incurred by the Defendants during the process of establishing the “○○○○ Hospital” as an individual hospital due to a comprehensive business acquisition and transfer contract between the Plaintiff and Nonparty 1, it was difficult to view that the Plaintiff’s act of entering into the said contract or the act of issuing each promissory note against the Defendants in accordance with the implementation of the said contract against Nonparty 1, etc. was in conflict with the Plaintiff’s interests.

Examining the reasoning of the judgment below in light of the records, the court below did not err in the misapprehension of the legal principles as to the time when basic property belongs to the incorporated foundation, or the legal principles as to the act of conflicting interests between the foundation and directors, or did not exceed the bounds of the principle of free evaluation of evidence in recognizing this part of the facts. Thus, we cannot accept the allegation in the grounds of appeal

3. Accordingly, 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.

Justices Ahn Dai-hee (Presiding Justice)