[1] The transferee cannot set up against the third party because the transferor of the shares before issuance of the share certificate transferred the shares twice to a third party prior to the notification of transfer to the company, by meeting the requisite to set up against the third party, such as notification of transfer with a fixed date, etc. In the event that the third party actively participated in such act of breach of trust, the validity of the transfer

[2] The standards for determining the friendly relationship between the dual transferee of shares prior to issuance of share certificates and the status of shareholders listed in the register of shareholders

[3] Whether a third party acquires the opposing power after the date of the transfer notification or acceptance by a certificate with no fixed date, in case where the copy of the certificate has a fixed date after the transfer notification or acceptance (affirmative)

[1] The transfer of shares prior to the issuance of share certificates takes effect only with the declaration of intention by the parties, and the transferee of shares prior to the issuance of share certificates can independently request the company to change the ownership by proving that he/she acquired shares without any cooperation by the transferor, except in extenuating circumstances, but considering that the transferor, in order to oppose the transfer to a third party other than the company, must have the notification or consent by the certificate with a fixed date in accordance with the transfer of nominative claim, in order to set up against the transfer of nominative claim, the transferor bears the duty to enable the transferee to satisfy the requisite for setting up against the third party by notifying the transfer to the company. Therefore, if the transferor transfers the shares to the third party before giving notice of the transfer of the claim to the third party and satisfies the requirement for setting up against the third party, the transferee cannot set up against the third party. If the transferor actively participated in the act of the transferor's breach of trust by the third party, the transfer to

[2] A shareholder registered in the register of shareholders is recognized as a qualification-based effect of exercising shareholder rights even if he/she does not prove his/her actual rights with respect to the company, and does not mean that the establishment effect is recognized by the entry in the register of shareholders. Therefore, in cases where a dual transfer of shares prior to the issuance of share certificates is at issue, regardless of whether a change of ownership has already been made with respect to part of the dual transferee, who is the first holder of the shares should be determined as a holder of the right. In principle, in the case of a dual transfer of nominative claim, a joint transferee shall be determined by the date when the notice of transfer with a fixed date arrives at the company or after the date of the consent with a fixed date with the fixed date.

[3] Even if the notification of transfer does not have the opposing power against the third party by the certificate without the fixed date, if the notification of transfer or acceptance of the certificate without the fixed date obtains the opposing power against the third party, after the date, the third party obtains the opposing power. In light of the purport of the fixed date system, even if the copy has the fixed date other than the original copy, there is no difference in the judgment of opposing power.

[1] Articles 103 and 450 of the Civil Act, Article 335 (3) of the Commercial Act / [2] Article 450 of the Civil Act, Articles 335 (3) and 337 of the Commercial Act / [3] Article 450 of the Civil Act

[2] Supreme Court Decision 89Meu5345 delivered on July 11, 1989 (Gong1989, 1229), Supreme Court Decision 94Da36421 delivered on May 23, 1995 (Gong1995Ha, 2226), Supreme Court Decision 2004Do7112 delivered on June 22, 2006 (Gong2006Ha, 1289) / [3] Supreme Court Decision 87Da2429 delivered on April 12, 1987 (Gong1988, 840)

T. T. T. T.T.

Mamp Co., Ltd. (Law Firm Barun, Attorneys Jeong Jin-jin, Counsel for the plaintiff-appellant)

Seoul High Court Decision 2004Na59364 delivered on July 13, 2005

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

The grounds of appeal are examined (to the extent of supplement in case of any statement in the supplemental appellate brief filed after the deadline).

1. Regarding ground of appeal No. 1

Examining the reasoning of the judgment below in light of the records, the court below is justified in rejecting the defendant's assertion that the act of Nonparty 1, the representative director of the defendant company, prepared a certificate of stock custody and issued it to the plaintiff for the purpose of personal interest or abused it. The court below did not err in the misapprehension of legal principles as to the consent of stock transfer or the representative director's failure to exercise the power of representation or abuse, contrary to what is alleged in the grounds of appeal.

2. Regarding ground of appeal No. 2

The transfer of shares prior to the issuance of share certificates takes effect only with the declaration of intention of the parties, and the transferee of shares prior to the issuance of share certificates can, except in extenuating circumstances, independently prove that he/she acquired shares without the cooperation of the transferor, and may request the company to transfer its ownership by proving the fact that he/she acquired shares. However, considering that the transferor, in order to oppose the transfer to a third party other than the company, must obtain the notification or consent by the certificate with a fixed date in accordance with the transfer of nominative claim, the transferor must notify the company of the transfer to the third party so that he/she can satisfy the requisite for setting up against the third party. Therefore, it is reasonable to deem that the transfer to the third party is null and void as a juristic act contrary to social order, if the transferor transferred shares to the third party twice before giving notice of the transfer to the other third party and provided the notification of the transfer with the fixed date.

In light of the records, the court below acknowledged the following purport: the non-party 1 transferred the shares of the defendant company to the non-party 2 under the transfer of the shares of the defendant company to the non-party 2 in excess of the number of shares held by the defendant company; notified the defendant company with a fixed date to have opposing power against the third party; and the non-party 2 actively participated in the transfer of shares to the non-party 2 and the transfer of ownership based on the transfer of shares to the non-party 2 as an anti-social juristic act; and the decision of the court below that the transfer of shares to the non-party 2 and the transfer of ownership based on the transfer

3. As to the third ground for appeal

A shareholder registered in the register of shareholders is recognized as having the effect of exercising a shareholder's right even if he/she does not prove his/her actual right in relation to the company, and does not have the effect of establishing a new shareholder's right by entering in the register of shareholders. Thus, a person who is recognized as not having acquired stocks due to counter-proof is not entitled to exercise a shareholder's right on the ground that he/she received a transfer of ownership (see, e.g., Supreme Court Decision 89Meu5345, Jul. 11, 1989). Therefore, in cases where a dual transfer of shares is at issue prior to the issuance of share certificates, regardless of whether a transfer of ownership has already been completed for part of the dual transferee, it shall be determined as a priority holder. In this case, a double transferee shall be determined by the date when the notice of transfer with a fixed date arrives at the company or after the date of consent with a fixed date with the fixed date in accordance with the case of a double transfer of nominative claim (see, e.g., Supreme Court Decision 94Da36421, May 23).

Therefore, the court below should have determined the total number of shares held by Nonparty 1, the transferor, and examined the order of priority among double assignees including the plaintiff, based on the above criteria for determination. However, on different premise, the court below did not determine the order of priority among double assignees, including the plaintiff, and ordered the transfer procedure to the plaintiff immediately on the ground that the transfer of shares with respect to 10,000 shares, which is transferred to Nonparty 2 in the future, constitutes a double assignment in breach of trust, and is null and void by the defendant's active participation. Such decision of the court below is erroneous in the misapprehension of legal principles as to the opposing power against the third party in the transfer of shares before the issuance of share certificates, which affected the conclusion of the judgment.

In addition, even if the notification of transfer does not have the opposing power against the third party by the issuance of the certificate without the fixed date, if the notification of transfer or acceptance of the certificate without the fixed date is obtained after the notification of transfer or acceptance of the certificate with no fixed date, the opposing power against the third party is obtained after the date (see Supreme Court Decision 87Meu2429, Apr. 12, 1987, etc.). In light of the purport of the fixed date system, it is reasonable to deem that there is no difference in the judgment of opposing power even if the certificate was obtained by a copy other than the original copy, in the judgment of opposing power. Therefore, it is pointed out in the judgment of the court below that the plaintiff cannot be a certificate with the fixed date solely on the ground that it is a copy other than the original copy.

4. Therefore, the lower judgment is reversed, and the case is remanded to the lower court for further proceedings consistent with this Opinion. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Yang Sung-tae (Presiding Justice)