2019.5.2
Alex Liao
The Supreme Court rendered the 107-Tai-Shang-1498 Civil Decision of May 2, 2019 (hereinafter, the “Decision”), holding that if a victim requests that a company’s legal representative and the company assume joint and several liability for compensation pursuant to Article 23, Paragraph 2 of the Company Act, the two-year statute of limitations for tort damages claims under the Civil Code should apply.
The Appellant in this case asserted as follows. Appellee A, who was the Chairman of Company B, took out a loan externally in the name of Company B without the approval of Company B’s board or shareholders’ meeting and forged one Company B’s IOU and one promissory note carrying the same amount with Company B as the drawer to secure the loan. As a result, the Appellant misbelieved that Company B was the borrower and delivered NT$17 million. Therefore, Company B was requested to pay the loan at issue in conjunction with Appellee A in accordance with Articles 28 and 184 of the Civil Code and Article 23 of the Company Act.
According to this Decision, Article 23, Paragraph 2 of the Company Act provides that if the execution of a company’s business by the company’s legal representative causes any damage to another person due to violation of laws and regulations, the legal representative and the company shall be jointly and severally liable to such person. The legislative objective of this provision is that since a company’s legal representative is required to comply with laws and regulations when executing business, the legal representative should certainly be held liable if laws or regulations are violated. In addition, since the company enjoys rights and assumes obligations as a legal entity, the company should assume joint and several liabilities so as to protect the victims.
In addition, it was further pointed out that since the legislation in Taiwan adopts an approach to combine civil and commercial codes, except when single laws are separately formulated since it is not preferably to combine them due to their characteristics, if certain matters are not stipulated under commercial laws but are still compatible with the nature of commercial laws, relevant provisions under the Civil Code should still apply. Based on the foregoing reasons, in case the execution of a company’s business by its legal representative causes any damage to others due to any violation of laws or regulations, if the company shall be liable for tort under Article 28 of the Civil Code, the two-year statute of limitations under Article 197, Paragraph 1 of the Civil Code shall apply. When a victim also claims joint and several liabilities against the company’s legal representative and the company in accordance with Article 23, Paragraph 2 of the Company Act, since the liabilities are derived from tort and there is no special provision about the statute of limitations on such damages claims under the Company Act, the provision on the two-year statute of limitations on damages claims for tort under Article 197, Paragraph 1 of the Civil Code, which does not go against the nature of commercial laws, certainly applies. In addition, the statute of limitations on the damages claims for tort should commence when the claimant actually becomes aware of the damage and of the compensation obligor, not when the claimant learns about a prosecutor’s indictment of the compensation obligor for an offense caused by tort or when the court hands down a guilty decision.
Therefore, the Appellant in this case had learned about the tort facts when receiving a letter of attestation from Company B in 2010. Therefore, the Appellant’s claim for damages against the Appellee, which had not been asserted pursuant to Article 23, Paragraph 2 of the Company Act and Article 28 of the Civil Code until 2014, exceeded the two-year statute of limitations. Therefore, the trial court’s dismissal of the Appellant’s suit to seek joint and several payment based on Company B’s statute-of-limitations defense was not inappropriate.