[1] Where a corporate representative committed a tort against a corporation, the starting point of the short-term statute of limitations for claim for damages due to a tort

[2] The case holding that the court below erred in the misapprehension of legal principles in holding that the extinctive prescription for the right to claim damages against Eul shall run from the time when the representative director of Gap corporation was aware of Eul's tort, in case where Eul corporation's act was exempted from Eul's obligation without due process such as resolution by the board of directors, thereby causing damage to Eul corporation, Gap corporation's audit was requested to maintain Eul's act, or did not take all necessary measures such as reporting it to the board of directors or the general meeting of shareholders, etc.

[1] The short-term statute of limitations for a claim for damages caused by a tort refers to the date when the representative becomes aware of the damage and the perpetrator, and in the case of a corporation, the date when the representative becomes aware of the damage and the perpetrator. However, in case where the representative of the corporation commits a tort against the corporation, the profit of the corporation and the representative is contrary to the profit of the representative of the corporation, so it is difficult to expect the representative to exercise the right to claim damages therefrom, and the representative of the corporation is generally denied the right of representation. Therefore, it is insufficient to say that the representative of the corporation becomes aware of the damage and the perpetrator. Therefore, in the above case, the short-term statute of limitations shall proceed only when another representative, executive, employee, or employee who has the authority to properly preserve the profit of the corporation becomes aware of the fact that the former becomes aware

[2] The case holding that the court below erred in the misapprehension of legal principles as to the establishment of joint tort, in case where Gap's act of exempting Eul's obligation and assistance by intention or negligence was objectively jointly related and as long as joint tort was established due to the occurrence of damage to Eul's company, it is difficult to expect that other executives, employees, etc. who have the authority to properly preserve Gap's interest will exercise the right to claim damages on behalf of Eul, and thus, it is necessary to determine whether the statute of limitations expires because other executives, employees, etc. who have the authority to properly preserve Gap's interest should determine whether the statute of limitations expires because the court below erred in the misapprehension of legal principles as to the establishment of joint tort, in case where Eul's act of exempting Eul's obligation and assistance by intention or negligence was committed at the time of the act of exempting Eul's obligation, or did not take all necessary measures such as reporting it to the board of directors or the general meeting of shareholders, etc.

[1] Article 766(1) of the Civil Act / [2] Articles 760 and 766(1) of the Civil Act

[1] Supreme Court Decision 2002Da11441 decided Jun. 14, 2002 (Gong2002Ha, 1658)

Suwon Enterprise Co., Ltd. (Law Firmcheon & Yang, Attorneys Cho Jae-soo et al., Counsel for the defendant-appellant)

Defendant 1 and three others (Bae, Kim & Lee LLC, Attorneys Han-soo et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2011Na73665 decided February 3, 2012

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

The grounds of appeal are examined.

1. A. The starting point of the short-term extinctive prescription for a claim for damages caused by a tort is from the date when the representative becomes aware of the damage and the identity of the perpetrator. However, in case where the representative of a corporation commits a tort against a corporation, the profit of the corporation and its representative is contrary to the profit of the representative, so it is difficult to expect the representative of the corporation to exercise the right to claim damages, and the representative is generally denied, and the representative of the corporation is not sufficient to recognize the damage and the perpetrator. Therefore, in the above case, the above short-term extinctive prescription runs only when the representative, executive or employee who has the authority to properly preserve the profit of the corporation becomes aware of the fact to the extent that the other representative, executive or employee who has the authority to claim damages can exercise the right to claim damages, and if the above executive or employee committed a joint tort with the representative of the corporation, the date when the above executive or employee becomes aware of the starting point of the short-term extinctive prescription should be determined (see, e.g., Supreme Court Decision 2002Da1

B. In the case of a joint tort under Article 760 of the Civil Act which causes damage to another person jointly, if one of the persons jointly commits a joint tort without requiring a joint perception among the actors, as well as if the joint act is objectively jointly related to the joint act, the joint tort is established as a consequence of the occurrence of damage caused by the pertinent joint act.

Meanwhile, Article 760(3) of the Civil Act provides that an aided or an assistant shall be deemed a joint tortfeasor, thereby imposing liability on an aided or an assistant as a joint tortfeasor. Here, aiding and abetting refers to all direct and indirect acts enabling or facilitating a tort. Not only a case of commission, but also aid and abetting by negligence including cases where a person obligated to act enables or facilitates the commission of a tort due to omission that does not take all measures to prevent it. In such a case, negligence refers to a violation of this duty on the premise that the aided or abetting has a duty of care not to assist a tort. In order to impose liability on an aided or abetting, there is a proximate causal link between aiding and abetting and the tort committed by a aided or abetting person (see Supreme Court Decision 2006Da78329, Jun. 14, 2007, etc.).

An auditor is a necessary permanent institution that has the authority to audit the performance of duties of a director, and has the authority to audit overall affairs of a director, including an accounting audit, and to request a director to report on his/her business and to investigate his/her affairs and financial status (Article 412 of the Commercial Act). If a director commits an act in violation of Acts and subordinate statutes or the articles of incorporation and thus causes irreparable damage to a company, he/she may request a director to maintain such act (Article 402 of the Commercial Act). A director may convene a board of directors and a temporary general meeting of shareholders (Article 412-3 and Article 412-4 of the Commercial Act). On the other hand, the auditor has the authority to make a statement at a board of directors (Article 391-2 (1) of the Commercial Act). On the other hand, he/she bears the duty to perform duties delegated to a company with due care as a good manager, and if it is deemed that a director commits or is likely to commit such act, he/she shall report it to the board of directors (Article 391-2

In light of the authority and duty of the auditor under the Commercial Act, if the auditor fails to take such necessary measures despite the discovery of the director's violation of the statutes or the articles of incorporation, the auditor's duty of care as the auditor shall be deemed not to have been fulfilled properly.

2. According to the facts and records acknowledged by the court below, at the time when the deceased non-party 1 (hereinafter "the deceased") who was the representative director of the plaintiff company committed an illegal act that individually exempted the plaintiff's obligation to pay the construction price to the plaintiff company on December 22, 2006 without going through the resolution of the board of directors on December 22, 2006, the non-party 3 was the auditor of the plaintiff company, and the non-party 3 did not take all necessary measures such as requesting the deceased to maintain such illegal act or reporting it to the board of directors or the general meeting of shareholders. The non-party 3 did not request the non-party 2 to pay the construction price until the deceased died, and the plaintiff company did not request the non-party 2 to pay the construction price. The statement of the outstanding amount of the plaintiff company's business settlement in 208 and 209 to the non-party 2 was not written.

Examining these facts in light of the above legal principles, the non-party 3, as the auditor of the plaintiff company, did not take necessary measures despite the duty of action to prevent the deceased's illegal act, which is the representative director recognized by the court below, thereby enabling or facilitating the deceased's illegal act. Thus, this constitutes an intentional aiding and abetting act or at least negligence aiding and abetting the deceased's failure to fulfill his duty of care as an auditor, as seen earlier. Further, the act of aiding and abetting the non-party 3's intentional or negligent act of exempting the deceased's obligation is objectively jointly related and objectively, causing a single result, i.e. the extinction of the plaintiff's claim against the non-party 2, and thus, proximate causal relation exists between the damage of the plaintiff company.

In addition, as long as Nonparty 3 committed joint tort with the deceased who is the representative director of the Plaintiff company, it is difficult to expect that he would exercise the right to claim damages against the deceased on behalf of the Plaintiff company. In such a case, Nonparty 3 cannot be seen as running the extinctive prescription of the right to claim damages against the deceased from the time when he became aware of the deceased’s tort. According to the records, as alleged by the Plaintiff company, it can be known that Nonparty 4 was in office as the representative director of the deceased and each of the representative directors at the time of the deceased’s tort. Thus, if it is not in a joint tort with the deceased, if it is not in a relationship with the deceased, Nonparty 4 and other officers, employees, etc. who have the authority to properly preserve the interests of the Plaintiff company, should determine

Nevertheless, the court below determined otherwise by deeming that the deceased’s act and the non-party 3’s act do not constitute a joint tort, and that the non-party 3 had the authority to properly preserve the interests of the Plaintiff as an auditor, and that the extinctive prescription has expired since the time when he became aware of the deceased’s unlawful act. Thus, the court below erred by misapprehending the legal principles on the establishment of joint tort, thereby affecting the conclusion of the judgment. The ground of appeal

3. Therefore, without further proceeding to decide on the remaining grounds of appeal, 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 Chang-soo (Presiding Justice)