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

The grounds of appeal are examined.

1. The liability for damages to a third party by a director of a stock company under Article 401 (1) of the Commercial Act is a requirement for the director to neglect his/her duties due to bad faith or gross negligence. Thus, the failure to perform the company's obligations due to ordinary transactions cannot be deemed to have neglected his/her duties in bad faith or gross negligence. However, where a director's act of loyalty in his/her duties and breach of duty of care is illegal, it constitutes a case where the director neglected

In a case where the representative director externally represents the company and externally directs the management of affairs, and is an institution with duties and authority to faithfully perform his duties for the company and to pay attention to the company as a whole with the care of a good manager, it is reasonable to deem that the representative director neglected his duties in bad faith or gross negligence, in a case where the representative director does not have any interest in the company's business operations without being entrusted with the whole business affairs of another person, and thus, he neglected his duties.

(see, e.g., Supreme Court Decisions 2002Da70044, Apr. 11, 2003; 2009Da95981, Feb. 11, 2010). 2. Review of the reasoning of the lower judgment reveals the following facts.

Around March 2015, the Defendant consented F to use the name of the representative director of C Co., Ltd. (hereinafter referred to as “C”) as the Defendant, and registered his corporate register around that time, but the Defendant did not perform the duties as the representative of C, and F performed all internal and external affairs of C.

B. K, the representative director of the Plaintiff, obtained a loan from F on the security of livestock products from F around October 2016, and is under the name of the borrower.