[1] Article 216(2) of the Civil Procedure Act provides that the court’s judgment as to the allegation of offsetting shall have res judicata effect, even though it is a judgment among the reasons for the judgment

[2] In order to recognize res judicata in a court’s judgment as to the allegation of offset, whether the need to equally treat the opposite claim and the passive claim from the point of view of res judicata should be recognized (affirmative)

[3] Whether a set-off defense in litigation takes effect only when a court makes a substantial judgment on a set-off (affirmative) / Whether “a judgment rejecting the Plaintiff’s claim by denying the claim by itself” and “a judgment dismissing the Plaintiff’s claim as a result of accepting a set-off defense although recognizing the existence of a claim,” differs in the scope of res judicata (affirmative), and in the latter case, whether there is a benefit of appeal to the Defendant (affirmative)

[4] In a case where the court rendered a decision recognizing the existence of a claim in whole or in part, and then rejected the counterclaim without recognizing the existence of the counterclaim, the scope of res judicata as to the judgment among the reasons for the decision that there is no counterclaim, and whether such a legal principle applies likewise to a case where the amount of the counterclaim is larger than the amount of the claim in question (affirmative)

[5] In a case where the Defendant asserted two or more opposing claims on the ground of offset, and the court recognizes the existence of one of the opposing claims and decides to offset them on an equal amount as part of the several opposing claims, and refuses to reject the part-off defense by deeming that all of the opposing claims exist, whether the total scope of res judicata may exceed “the balance of several opposing claims after the completion of offset” as to whether there is no other opposing claims (negative) and whether such legal principle equally applies in a case where the sum of principal and interest of the two or more opposing claims claimed by the Defendant exceeds the principal and interest of the passive claims recognized by the court (affirmative)

[6] In cases where a part or a third party is not designated as a manager under the partnership agreement, whether all the partners have the right to manage the affairs of the partnership (affirmative in principle) / Whether the partner who executes the affairs of the partnership should manage the affairs of the partnership with the care of a good manager (affirmative)

[7] In a case where one of the two members of a cooperative is liable for damages against the cooperative due to a breach of good manager's duty of care or a tort, etc., and the cooperative relationship is terminated and only the liquidation procedure remains, whether other members can claim the distribution of residual property in the form of claiming against the above members the money equivalent to the ratio of their own investment value out of the amount of damages arising from a breach of good manager's duty

[8] Whether the facts established in a civil case already established in the civil procedure constitute a valuable evidence (affirmative in principle), and in a case where it is difficult to accept the fact-finding of the final and conclusive civil judgment in light of the contents of other evidence submitted in the civil procedure in question, whether it may be rejected with a reasonable reasoning (affirmative)

[1] Article 216 (1) of the Civil Procedure Act provides that a final and conclusive judgment shall have res judicata only in cases where it is included in the text, and that in principle, a final and conclusive judgment does not have res judicata in principle. On the other hand, as the only exception, whether a claim alleging a offset under paragraph (2) is constituted or not shall have res judicata effect only in respect of the amount set-off. Notwithstanding the judgment among the above reasons for the judgment, the court’s judgment as to the allegation of offset recognizes res judicata effect in the judgment of the court as to the allegation of offset if it does not recognize res judicata effect, the purport of recognizing res judicata effect in the judgment of the court as to the allegation of offset is that if a dispute over the existence of the plaintiff’s claim for offset is modified into a dispute over the existence of the opposite claim (or automatic claim, hereinafter referred to as “sub-claim claim”) raised in another lawsuit later, thereby preventing the other party asserting a set-off from being disadvantaged by the double exercise of the opposing claim, as well as preventing the judgment on the existence of the plaintiff’s claim for offset.

[2] A case where res judicata is recognized in a judgment as to a offset claim means a case where a passive claim which is the object of the offset claim is the subject-matter of a lawsuit, or where it appears that such claim is substantially identical (such as the case where a plaintiff files a lawsuit of demurrer against a claim by asserting a offset), and where it is deemed necessary to treat the opposing claim (i.e., an automatic claim) that claims a offset and its passive claim equally from the point of view of res judicata.

[3] A set-off defense as a means of defense is a kind of preliminary defense, which is conducted on the premise that the existence of a claim is confirmed, and the effect of a set-off under substantive law takes place only when the court makes a substantial judgment on the set-off, such as the existence of a claim in the lawsuit in question, rather than a final and conclusive effect by the declaration of intent of set-off in the lawsuit in question. Therefore, where the plaintiff's claim itself is not acknowledged, the plaintiff's claim shall be dismissed without considering the legitimacy of the defendant's counterclaim. Thus, "the judgment dismissing the plaintiff's claim by denying the plaintiff's claim itself" and "the judgment dismissing the plaintiff's claim as a result of accepting a set-off defense" differs from the scope of res judicata effect pursuant to Article 216 of the Civil Procedure Act, and the defendant's judgment as to the latter is a benefit of appeal.

[4] In a logical structure of the part of the grounds for a final and conclusive judgment where the court rendered a judgment recognizing the existence of the whole or part of the passive claim, which is the subject matter of the lawsuit in question, and where the defendant further rendered a judgment rejecting the counterclaim of offset without recognizing the existence of the counterclaim claim (or automatic claim, hereinafter only referred to as the “sub-claim claim”) alleged by the defendant, the res judicata effect of the judgment on the grounds of the judgment that there is no counterclaim shall arise within the scope of “the principal and interest amount of the opposite claim that could have been judged to be extinguished from the amount equal to the principal and interest on the offset if the court admitted the existence of the counterclaim claim,” barring special circumstances. This legal doctrine applies likewise to the case where the amount of the counterclaim claim asserted by the defendant as the subject matter of the offset is greater than the amount of the previous claim in question which is judged as the subject matter of

[5] Where the Defendant asserted two or more opposing claims (or automatic claims, hereinafter referred to as “defensive claims”) due to a offset, and the court recognizes the existence of one or more opposing claims and determines a offset on an equal amount with some of several opposing claims, and rejects the partial offset, the part of the passive claims determined to be extinguished by an offset as above cannot be treated equally from the point of res judicata because it is not related to a dispute over the claims for which existence is not recognized among the opposing claims or the court's decision thereon. As such, the entire scope of res judicata effect in relation to the determination that there is absence of the opposing claims shall not exceed the balance of the passive claims after the completion of the offset as above. This legal principle likewise applies where the amount of principal and interest of two or more opposing claims asserted by the Defendant exceeds the amount of principal and interest of the passive claims recognized by the court, and even if the court recognizes the existence of the opposing claims as to the “defensive claims” and subsequently denies the difference between the opposing claims and the corresponding opposing claims at the time of offsetting set-off and the pertinent opposing claims at the point of set-off.

[6] Where a part or a third party is not designated as a manager under the partnership agreement, all partners shall have the right to manage the partnership affairs in principle with the care of a good manager in accordance with the partnership agreement (Article 707 and Article 681 of the Civil Code).

[7] In a case where one of the two members of a cooperative is liable for damages to the cooperative due to a breach of good manager's duty of care or a tort, etc., and the cooperative's remaining business is terminated because it is impossible to achieve its purpose, and the remaining business of the cooperative is not remaining, only the liquidation procedure for distribution of the cooperative's property remains. another member may claim against the cooperative members who suffered damages to the cooperative the amount equivalent to the share of his/her own investment in the amount of damages arising from a breach of good manager's duty of care or a tort, in the form of claiming the amount equivalent to the share of

[8] Although it is not bound by the facts established in a judgment on other civil cases, etc. in a civil trial, the facts established in the already established civil case shall be valuable evidence unless there are special circumstances. In particular, the same shall apply to cases where two previous and previous civil cases are identical to the parties and are entitled to a new claim as a result that does not conflict with res judicata. However, in such cases, where it is difficult to accept the facts established in the judgment on the relevant civil case in light of the contents of other evidence submitted in the relevant civil lawsuit, it may be rejected with reasonable reasoning. This legal principle also applies to cases where the parties did not accept the allegations of the parties on the grounds that there is no evidence to acknowledge them in the final judgment on the relevant civil case, or that there is no other evidence to acknowledge them otherwise.

[1] Article 216 of the Civil Procedure Act, Articles 492 and 493 of the Civil Act / [2] Article 216 of the Civil Procedure Act, Articles 492 and 493 of the Civil Act / [3] Articles 216, 390, and 422 of the Civil Procedure Act, Articles 492 and 493 of the Civil Act / [4] Article 216 of the Civil Procedure Act, Articles 492 and 493 of the Civil Act / [5] Article 216 of the Civil Procedure Act, Articles 492 and 493 of the Civil Act / [6] Articles 707 and 681 of the Civil Act / [7] Articles 681, 707, and 724 (2) of the Civil Act / [8] Article 202 of the Civil Procedure Act

[1] [2] Supreme Court Decision 2004Da17207 Decided July 22, 2005 (Gong2005Ha, 1396) / [3] Supreme Court Decision 2002Da34666 Decided September 6, 2002 (Gong2002Ha, 2413), Supreme Court Decision 2013Da46023 Decided November 14, 2013 (Gong2013Ha, 2212), Supreme Court Decision 2013Da95964 Decided June 12, 2014 (Gong2014Ha, 1382, 209) / [209Da64979 decided March 204, 209] Supreme Court Decision 2017Da2094964 Decided March 20, 205 (Gong2014Ha, 1382, Supreme Court Decision 2015Da3649479 decided March 29, 20946, Apr. 206, 209

Plaintiff (Counterclaim Defendant) (Law Firm Jeong-hoon, Attorney Kim Young-young, Counsel for the plaintiff-appellant)

Defendant Counterclaim (Attorney Seo-won et al., Counsel for the defendant-Counterclaim)

Seoul High Court Decision 2014Na54139 decided September 7, 2016

The appeal is dismissed. The costs of appeal are assessed against the plaintiff (Counterclaim defendant).

The grounds of appeal are examined.

1. As to the allegation in the grounds of appeal as to the res judicata of the offset defense

A. 1) Article 216(1) of the Civil Procedure Act provides that a final and conclusive judgment shall have res judicata only in cases where it is included in the text, and that in principle, a judgment in the reasoning of the judgment does not have res judicata in principle. On the other hand, the judgment of whether a claim alleging a offset under paragraph (2) is constituted or not, as the sole exception, has res judicata effect only on the amount set up against the set-off. Notwithstanding the judgment in the above reasoning of the judgment, the purport of res judicata effect recognition in the judgment of the court as to the allegation of set-off is to recognize res judicata effect in the judgment of the court. If a dispute over the existence of the plaintiff's claim is not recognized, if it is modified into a dispute over the existence of the opposite claim (or automatic claim; hereinafter referred to as "sub-claim claim") raised later in another lawsuit, thereby, the counter-party of the allegation of set-off may suffer disadvantage by double exercise of the opposing claim, and it is likely that the judgment on the existence of the plaintiff's claim of set-off might be unreasonable.

2) In a case where res judicata is recognized in a judgment on the claim of offset, it refers to a case where a passive claim that has been the object of offset is the subject-matter of a lawsuit (such as the case where the plaintiff files a lawsuit of objection by asserting a offset) which is judged as the subject matter of a lawsuit, or where it appears that such claim is substantially identical thereto (such as the case where the plaintiff files a lawsuit of objection by asserting a offset), and where it is deemed necessary to treat the opposing claim that has raised the offset and the passive claim equally from the point of view

Meanwhile, a set-off defense as a means of defense is a kind of preliminary defense that is usually conducted on the premise that the existence of a set-off claim becomes final and conclusive, not a final and conclusive effect by the declaration of intent of set-off in the lawsuit in question, but only when the court makes a substantial decision on set-off, such as the existence of a set-off claim in the lawsuit in question (see Supreme Court Decisions 2013Da95964, Jun. 12, 2014; 2012Da107662, Mar. 20, 2015). Therefore, where the Plaintiff’s claim is not acknowledged in itself, the claim of the Plaintiff shall be dismissed without considering the legitimacy of the Defendant’s defense, and thus, “the judgment dismissing the Plaintiff’s claim by denying the Plaintiff’s claim itself by accepting the Plaintiff’s claim itself while recognizing the existence of a set-off claim” and “the judgment dismissing the Plaintiff’s claim as a result of accepting the claim of the Plaintiff’s claim by 360Da1636164, Feb. 20136.

In light of the above legal principles and the provisions of the Civil Act concerning the appropriation of performance under Article 499 of the Civil Act, in the case of an offset, where the court rendered a judgment recognizing the existence of all or part of the passive claim, which is the object of the lawsuit in question, and then rejected the counterclaim without recognizing the existence of the claim asserted by the defendant as to the counterclaim, the res judicata of the judgment in the reasoning of the judgment that the counterclaim exists shall be deemed to occur within the scope of "the principal and interest of the opposite claim that could have been judged to be extinguished in the actual judgment as to the offset if the court admitted the existence of the opposite claim, and on the other hand, until the date of the offset of the corresponding claim" (see Supreme Court Decision 2002Da6043, Mar. 26, 2004). In addition, such a legal principle equally applies to the case where the amount of the claim asserted by the defendant as the object of a counterclaim is more than the amount of the previous claim in question, barring special circumstances.

3) In a case where the Defendant asserted two or more opposing claims on the ground of a set-off, and the court recognizes the existence of one of the opposing claims and determines a set-off on the equal amount of part of the several opposing claims, and rejects the part-off claim, the part determined to be extinguished by such set-off among the several opposing claims cannot be treated equally from the point of res judicata because it is not related to disputes concerning the claims for which existence is not recognized among the opposing claims, or the court's decision thereon. As such, the entire scope of res judicata effect in relation to the determination of non-existence of the opposing claims shall not exceed the balance of the several opposing claims after the completion of the set-off as mentioned above. Such legal principle likewise applies where the sum of principal and interest of the two or more opposing claims asserted by the Defendant exceeds the principal and interest amount of the passive claims. Even if the court finds that some of the opposing claims are set-off after recognizing their existence, the claim cannot be viewed as set-off at the point of set-off or the difference between the opposing claims and the pertinent opposing claims after the set-off as mentioned above.

B. Comprehensively taking account of the reasoning of the lower judgment and the evidence duly admitted, the following facts are revealed.

1) With respect to a claim for a loan, distribution, etc., which the Plaintiff (Counterclaim Defendant; hereinafter “Plaintiff”) seeks as the principal lawsuit, the Defendant (Counterclaim Plaintiff; hereinafter “Defendant”) claims a set-off against the Plaintiff’s claim for a loan, distribution, etc., by asserting that “the Plaintiff’s damage claim amounting to KRW 500 million due to the Plaintiff’s breach of the duty of care under the business operation agreement or tort”, and the loan from May 16, 2007 and the loan from September 19, 2007 as the opposite claim, set-off against the Plaintiff’s claim against the principal claim. In addition, the amount obtained by deducting a certain amount from the total amount of the above opposite claim is claimed as a counterclaim.

2) However, prior to the instant case, the Plaintiff filed a lawsuit against the Defendant seeking the payment of shares of KRW 20 million and damages for delay thereof (hereinafter “instant previous lawsuit”). In that case, the Defendant set-off defense against the Defendant by setting-off “Plaintiff’s damage claim of KRW 500 million due to breach of the Plaintiff’s duty of care under the business partnership agreement or tort.”

3) The appellate court of the instant previous suit determined that the Plaintiff’s claim against the Defendant was established at the stage of the cause of the claim, and determined as follows: (i) the set-off defense against the Plaintiff’s claim against the Defendant; (ii) the Defendant accepted the set-off claim against the Plaintiff’s claim against the Plaintiff, and the Defendant had the claim against the Plaintiff in the amount of KRW 2,805,627; and (iii) the Plaintiff’s claim against the Plaintiff’s claim against the set-off on March 19, 2014, which is the due date, was in a set-off position; (iv) the Plaintiff’s claim against the Plaintiff’s delay of payment was served on August 4, 2012 to the date of the foregoing set-off claim and the principal amount from August 4, 2012 to the date of the foregoing set-off claim; and (v) the remaining opposing claims alleged by the Defendant were set-off against the Defendant’s claim against the Defendant’s damages claim of KRW 2,805,01,010.

C. Examining in light of the legal principles as seen earlier, the part of the judgment that the court rendered in the prior suit of this case that the amount of litigation costs would be extinguished by an offset among the Plaintiff’s shares cannot be treated equally from the perspective of res judicata with the other opposing claims, including the above damage claim asserted by the Defendant in the lawsuit. Furthermore, in the prior suit of this case where it is assumed that the remainder of opposing claims, including the above damage claim asserted by the Defendant, has occurred, and it is determined that the part of the Plaintiff’s claim is offset against a part of the Plaintiff’s shares, it does not appear that it would be more behind March 19, 2014, which is the time point of offset against the claim for the amount of litigation costs determined by the actual offset as above. Therefore, the entire scope of res judicata in the judgment that there is no other opposing claims, including the above damage claim asserted by the Defendant as the counterclaim of the offset shall not exceed the principal amount 18,819,030 won after the set-off becomes extinct.

D. Thus, the plaintiff's ground of appeal pointing the purport that the whole amount of the damage claim (50 million won) which was judged non-existence of the counterclaims asserted as a offset defense in the previous suit of this case shall have res judicata effect on the judgment of non-existence of the claim. It cannot be accepted.

However, in this case, the lower court determined that each part of KRW 20 million, among the counterclaims against set-off against the Defendant’s damage claim arising from the Defendant’s breach of the duty of care under the Plaintiff’s business agreement, and the counterclaims against the claim claim, cannot be permitted as it goes against the res judicata of the judgment in the previous suit of this case. In so determining, the lower court erred by misapprehending the legal doctrine on the scope of res judicata effect of the judgment in the judgment on the claim for set-off, but only the Plaintiff did not reverse the lower judgment in this case where only the Plaintiff appealed, and cannot render a judgment more unfavorable to the Plaintiff. Therefore, the lower court’

2. As to the ground of appeal on the occurrence of claim for damages

A. (1) In the event that a part or a third party of a partner is not designated as a manager under the partnership agreement, all the partners, in principle, have the right to manage the affairs of the partnership with the care of a good manager in accordance with the partnership agreement (Article 707, Article 681 of the Civil Act).

2) In general, partnership relations are terminated by the occurrence of reasons prescribed by partnership agreements, agreement of all union members, success or failure of business which is the object of partnership, claim for dissolution, etc. (Supreme Court Decisions 95Da4957 delivered on May 30, 1997, 97Da31472 delivered on December 8, 1998).

3) Where one of the two members of a cooperative is liable for damages against the cooperative due to a breach of good manager’s duty of care or a tort, etc., and the cooperative relationship is terminated and the remaining business of the cooperative is not remaining, only the liquidation procedure called distribution of the cooperative’s property remains as a result of the cooperative’s failure to achieve its purpose, other members may claim against the cooperative members who suffered damage the amount of the cooperative the amount equivalent to the share of one’s own investment value out of the amount of damages arising from a breach of good manager’s duty of care or tort (see, e.g., Supreme Court Decisions 92Da2509, Apr. 24, 1992; 2004Da30682, Dec. 8, 2005; 2011Da10937, Jun. 14, 2012).

B. The fact-finding and judgment of the court below, which can be revealed by the reasoning of the judgment below, are as follows.

1) The Plaintiff and the Defendant contributed a certain amount of money and lent it to the obligor, and when the Plaintiff and one of the Defendant recover the principal and interest of loans from the obligor, they jointly engaged in credit business by distributing and settling them for each case of lending according to the amount of contributions made by the Plaintiff and the Defendant. Such business relationship between the Plaintiff and the Defendant constitutes an association under the Civil Act.

2) On September 19, 2007, when the Plaintiff, as a member of the above union, lent KRW 500 million to the Nonparty, the Plaintiff violated the duty of care to verify whether the Nonparty was able to repay the debt and to notify the Defendant of the collateral value presented by him, and to refuse to lend the loan, or to secure sufficient collateral in accordance with the agreement with the Defendant and to lend the loan. However, the Plaintiff did not notify the Defendant of such circumstance, and without any other security, lent the said money without any other security, thereby causing irreparable damage to the partnership.

3) As the above money could not be recovered from the Nonparty, the partnership relationship between the Plaintiff and the Defendant terminated because it is impossible to achieve the purpose, and the partnership’s affairs other than the distribution of the remaining assets of the partnership remain. The Plaintiff’s investments in relation to the said money are not the details of the investment. Therefore, the Defendant may claim against the Plaintiff for the distribution of remaining assets due to the termination of partnership relationship in the form of claiming compensation against the Plaintiff.

C. The lower court did not err in its judgment by misapprehending the legal doctrine on the occurrence of the right to claim damages against other members, contrary to what is alleged in the grounds of appeal.

3. As to the allegation in the grounds of appeal on the probative value of the final judgment in the relevant case

A. Although it is not bound by the facts established in the judgment on other civil cases, etc. in a civil trial, the facts established in the already established civil case are valuable evidence unless there are special circumstances. In particular, it is more true where two previous and previous civil cases are the same as the parties concerned and are entitled to a new claim as a result that does not conflict with res judicata. However, in such a case, where it is difficult to find facts in the judgment on the established civil case in light of the contents of other evidence submitted in the relevant civil procedure, it may be rejected with reasonable reasons (see Supreme Court Decisions 94Da47292 delivered on June 29, 1995, Supreme Court Decisions 200Da20748 delivered on July 4, 200, Supreme Court Decisions 2007Da3645 delivered on June 12, 2008, Supreme Court Decisions 2007Da3645 delivered on September 24, 2009; 2009Da329329 delivered on September 29, 2009).

B. According to the reasoning of the judgment below, the final and conclusive judgment of this case did not have any evidence to support the Defendant’s assertion that “the Plaintiff breached the duty of care in the partnership relationship,” while the lower court, as seen above, determined that the Plaintiff breached the duty of care as a member of the union, and explained the following circumstances on the ground of such determination:

1) Prior to September 19, 2007 or the next September 20, 2007, the Plaintiff already lent approximately KRW 3.2 billion to the Nonparty, who received KRW 500 million from the Defendant, to the Nonparty, and was not returned, but did not notify the Defendant.

2) The Plaintiff paid only KRW 270 million to the Nonparty out of KRW 500 million received from the Defendant. The remainder of KRW 230 million to the Nonparty was appropriated for the repayment of the principal and interest on the Plaintiff’s existing loan to the Nonparty, but the Plaintiff did not notify the Defendant thereof.

3) With respect to the above loan of KRW 500 million, it was impossible for the non-party to offer a collateral on the land (title 1 omitted), which was initially established by the non-party as a collateral, and the land (title 2 omitted) in Gyeonggi-do (hereinafter referred to as the "○○-ri land") was established as a substitute collateral. However, with respect to the land of 00 million, prior collateral was already established, prior collateral was already established; the non-party cancelled the registration of creation of a collateral on the fourth, fifth, and seventh priority; and the non-party created a collateral to the original and the defendant by cancelling the registration of creation of a collateral on the land of 00 million. However, the registered creation of a collateral cancelled as above was all cancelled by forgery and cancellation of the power of attorney in the name of the person who was the right to collateral security, and there was no value of the above 0

4) The Nonparty had no value of collateral due to the existence of senior security right to other land and buildings on which the right to collateral security was established by the Nonparty.

5) In such circumstances, it seems that the Plaintiff could have been suspected that he/she had expressed his/her intent or ability to implement a promise to repay money or cancel the registration of creation of senior mortgage.

C. Although the court below did not explicitly dismiss the final judgment of the previous suit of this case which was submitted as documentary evidence in the course of pleading, the above determination by the court below can be deemed to have rejected the fact-finding as to the "violation of the duty of care in the partnership relationship" of the final judgment of the previous suit of this case, and there is also a reasonable reason to reject such determination. The court below did not err by misapprehending the legal principles on the probative value of the relevant civil judgment, or by failing to exhaust all necessary deliberations, in violation of the principle of free evaluation of evidence, in violation

4. Conclusion

Therefore, the appeal is 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 on the bench.

Justices Kim Seon-soo (Presiding Justice)