[1] In a case where partnership relations are terminated and a creditor remains due to the repayment of partnership debts, whether the person who holds the assets of the company deducted the partnership debts to the creditor's members from the assets of the company, calculated the amount of the remaining assets to be distributed, refund the remaining assets to the other members in proportion to the value of each member's investment among the remaining assets, and distribute the remaining assets to the creditor's members without any separate liquidation procedures by performing partnership

[2] In a case where a partnership relationship with two members terminates, and where the collection of a partnership claim against one of the union members is not completed, whether it is permitted to distribute the residual property through a simplified method without a separate liquidation procedure (affirmative) / In a case where one of the union members becomes liable for damages due to a tort, etc., and the partnership relationship terminates, and only the liquidation procedure for the distribution of partnership's property remains after the partnership relationship terminates, whether the other union members may claim against the above union members the distribution of residual property in the form of claiming the amount equivalent to the ratio of their own investment value among the damages claim amount arising from a tort, etc. (affirmative) / In a case where a partnership's assets exist other than one of the union members of two members, the details of the whole residual property, the legitimate distribution ratio, and the current holding of residual property among the union members, if it is possible to distribute the residual property fairly among the union members by a simple method without a separate liquidation procedure (affirmative), and whether the association's residual property claim can be offset or deducted from the association's residual property (affirmative in principle)

[1] In the event that partnership relations are terminated, the liquidation procedures do not take place in common or as a remaining business of the partnership, unless there is a separate agreement between the parties. However, if only the distribution of residual property remains, the liquidation procedures need not take place separately, and the remaining property shall be distributed in proportion to the value of the investment of each union member, unless otherwise stipulated among the union members. Thus, even if the partnership's obligations are not completed, the remaining property is distributed in proportion to the value of the investment of each union member. Thus, even if the partnership's obligations are not completed, if the creditor is a union member, the person holding the company's assets deducts the partnership's obligations from the company's assets to the creditor's assets, and then the remaining property can be distributed equally in a simplified manner without undergoing separate liquidation procedures by returning

[2] The distribution of residual property by a simple method without undergoing a separate liquidation procedure may be permitted under certain conditions even in a case where the collection work of one of the union members is not completed, etc., where one of the union members is a debtor.

In cases where one of the members of a cooperative comprised of two members is liable for damages to the cooperative due to a violation of the duty of due care of a good manager or a tort, etc., and the cooperative relationship is terminated and the remaining business of the cooperative is not remaining, and only the liquidation procedure called distribution of the cooperative property remains as a result of the cooperative’s remaining business, other members may claim against the cooperative members who suffered damages to the cooperative the amount equivalent to the share of their own investment value out of the amount of damages arising from a breach of the duty of a good manager’s duty of care or a tort, in the form of claiming the amount equivalent to

Furthermore, in cases where there are assets of a partnership other than partnership claims for one of the two partners of a partnership, if it is possible to distribute the remaining assets fairly among the partners because the details of the whole remaining assets, their legitimate distribution ratio, and the current holding of the remaining assets by each of the partners is accurately determined, the person holding the assets of the partnership shall calculate the amount of the remaining assets to be distributed, including the union claims against the debtor partners, and shall return the remaining assets to other partners including the debtor partners, and may distribute the remaining assets in a simple way without undergoing separate liquidation procedures through the repayment of the union claims from the debtor partners. In this process, it is allowed to offset or deduct the amount of the remaining assets to be distributed and the union claims to be paid from one of the two partners of the partnership is limited in the partnership agreement or the separate agreement between the parties. The same shall apply to cases where a person who has acquired the right to claim the distribution of the remaining assets from one of the union partners of two members is the debtor of the partnership claims.

[1] Article 724 of the Civil Code / [2] Article 724 of the Civil Code

[1] Supreme Court Decision 2007Da48370, 48387 Decided November 15, 2007 / [2] Supreme Court Decision 92Da2509 Decided April 24, 1992 (Gong1992, 1681) Supreme Court Decision 2016Da4638, 46345 Decided August 30, 2018 (Gong2018Ha, 1902)

Plaintiff (Counter-Defendant) 1 and one other (Law Firm Shin, Attorneys Song Jin-chul et al., Counsel for the plaintiff-appellant)

Defendant Counterclaim Plaintiff and one other (Law Firm Barun Law, Attorneys Kim Jong-soo et al., Counsel for the plaintiff-appellant)

Seoul High Court Decision 2018Na2035460, 2035477 decided January 11, 2019

The part of the judgment of the court below against the Defendant (Counterclaim Plaintiff) 1 regarding the main lawsuit by the Plaintiff (Counterclaim Plaintiff) is reversed, and that part of the case is remanded to the Seoul High Court. The remaining appeal by the Defendant (Counterclaim Plaintiff) 1 and the appeal by the Defendant (Counterclaim Plaintiff) 2 are dismissed, respectively. The costs of appeal by the Plaintiff (Counterclaim Defendant) 2 are assessed against the Defendant (Counterclaim Plaintiff) and the costs of appeal by the Plaintiff (Counterclaim Plaintiff Plaintiff) 2 are assessed against the Defendant (Counterclaim Plaintiff) 1.

The grounds of appeal are examined.

1. As to the part against the Defendant (Counterclaim Plaintiff; hereinafter “Defendant”) 1’s claim on the principal lawsuit by the Plaintiff (Counterclaim Defendant; hereinafter “Plaintiff”)

A. Based on its adopted evidence, the lower court determined that: (a) Defendant 1, Defendant 2, and Nonparty 1 entered into the first trade agreement of the instant case around 2012 with respect to the business set forth in the holding that the building was newly constructed and sold on the land located in Ansan-si ( Address omitted); (b) as the initial share ratio was set at 150%, Plaintiff 25%, and Nonparty 125%, each share was successively transferred; (c) as of January 15, 2016, Defendant 1 acquired shares of 75% and Nonparty 25% as of January 15, 2016; (d) as to the business set forth in the holding, Defendant 1 received as the sale price of 7,513,50,000 won, and the remaining amount of the remaining property distributed to the Plaintiff 1, 460% of the total property distributed to the Plaintiff 2,46% of the total property distributed to the Plaintiff 1,2016.

B. However, the lower court’s determination is difficult to accept for the following reasons.

1) In cases where partnership relations are terminated, unless otherwise agreed by the parties, the liquidation procedures do not take place as a common course or as a remaining business of the partnership. However, if only the distribution of residual property remains, the liquidation procedures need not take place separately, and the remaining property shall be distributed in proportion to the value of the investment of each partner, unless otherwise expressly stipulated among the partners. As such, even if the repayment of partnership debts is not completed, if the creditor is a partner, the person holding the assets of the partnership deducted the partnership debts to the creditor from the assets of the partnership company and calculated the residual property subject to distribution. In addition, the remaining property can be distributed equally in a simplified manner without undergoing separate liquidation procedures by returning to other partners the share in proportion to the value of the investment of each member among the residual property, and by performing the partnership debts to the creditor (see Supreme Court Decision 2007Da48370, 48387, Nov. 15, 2007, etc.).

To distribute residual property by means of a simple method without undergoing the liquidation procedures as above, it may be permitted under certain conditions even in cases where the collection work of one of the union members of the two unions is not completed, such as where one of the union members is the debtor.

In cases where one of the members of a cooperative comprised of two persons is liable for damages to the cooperative due to a violation of the duty of due care of a good manager or a tort, etc., which results in the failure to achieve its purpose, and where the remaining business of the cooperative is not remaining, only the liquidation procedure called distribution of the cooperative property remains as a result of the cooperative’s remaining business, the other union members may claim against the union members who suffered losses from the cooperative the amount of money equivalent to the share of their own investment value out of the amount of a breach of the duty of due care of a good manager or a claim for damages arising from illegal acts, in the form of claiming the amount equivalent to the share of the cooperative’s own investment value (see, e.g., Supreme Court Decisions 92Da2509, Apr. 24, 1992; 2016Da4638, Aug. 30, 2018).

Furthermore, in cases where there are assets of a partnership other than partnership claims for one of the two partners of a partnership, if it is possible to distribute the remaining assets fairly among the partners because the details of the whole remaining assets, their legitimate distribution ratio, and the current holding of the remaining assets by each partner is accurately determined, the person holding the assets of the partnership shall calculate the amount of the remaining assets to be distributed, including the union claims for the debtor union members, and shall return the remaining assets to other union members including the debtor union members, and may distribute the remaining assets in a simple way without undergoing separate liquidation procedures through the repayment of the union claims from the debtor union members. In this process, it is reasonable to deem that the offsetting or deducting the amount of the remaining assets to be distributed and the union claims to be paid from one of the union members of the two members of the partnership is limited in the partnership agreement or the separate agreement between the parties, barring special circumstances, such as where the person acquiring the right to claim the distribution of the remaining assets from one of the union members of the two members of the partnership is the debtor of the union claims.

2) According to the records, it is reasonable to view that Plaintiff 1 asserted that the aforementioned provisional payment should be deducted from the amount of the remaining property distributed by Plaintiff 1 as the ground for the principal claim in this case, on the grounds of the distribution of the remaining property to be paid by the Defendant. Defendant 1 also stated the preparatory document as of October 25, 2017 at the fourth day of the first instance trial, and thus, Defendant 1 asserted that the above provisional payment should be deducted from the amount of the remaining property distributed by Plaintiff 1.

In addition, in light of the above legal principles, if the company actually bears the obligation of provisional payment of KRW 215,50,000,00 as Plaintiff 1 was the person, it should be reflected in the residual property subject to distribution to the extent that it does not overlap with other details. Since Plaintiff 1 takes over the right to claim distribution of residual property from Nonparty 2, one of the union members of the union composed of two members, the company is entitled to receive the amount equivalent to the ratio of property distribution from Defendant 1, the remaining members of the association who hold residual property, unless there are additional circumstances that need liquidation procedures, such as the union's business remains to be handled separately after the union relationship is terminated due to the completion of its business purpose, unless there is any additional discovery.

However, in calculating the amount of residual property in accordance with the aforementioned legal principles, the lower court did not make any judgment on Defendant 1’s assertion on the deduction of provisional payments in order to distribute the residual property in accordance with the above legal principles, and did not examine and determine not only whether the company should reflect the pertinent provisional payments claim against Plaintiff 1 in its active property in the course of calculating the amount of the cited claim against Defendant 1 in the principal lawsuit against Plaintiff 1. In so doing, the lower court erred by misapprehending the legal principles on the distribution of residual property following the termination of partnership relations, etc., and omitting all necessary deliberation, thereby adversely affecting the conclusion of the judgment. The allegation contained in the grounds of appeal

2. As to the defendants' counterclaim claim

The lower court dismissed all of the Defendants’ counterclaim claims on the ground that the Defendants cannot be deemed to have reverted to the Defendants’ individuals or agreed to return them individually on the ground that the Defendants did not have any other claims to the Defendants, on the grounds that the Defendants sought payment of each of the provisional payments, share transfer expenses, and tax amount in the status of an individual who escaped from the partnership relations, not the aforementioned partnership relations. However, the Plaintiffs were deemed to have received each of the provisional payments from the partnership.

Examining the record in light of the relevant legal principles and records, the lower court did not err in its judgment by misapprehending the legal doctrine regarding the standing to sue, order of correction, etc., or by misapprehending the cost of transferring shares, by misapprehending the doctrine of pleading as to the portion of the amount of tax paid in substitution, or by omitting and

3. Conclusion

Therefore, the part of the judgment of the court below against Defendant 1 regarding the plaintiff 1's main lawsuit is reversed, and that part of the case is remanded to the court below for a new trial and determination. The remaining appeals by Defendant 1 and the appeal by Defendant 2 are dismissed, respectively. The costs of appeal by the plaintiff 2 are assessed against the defendants 2 and the costs of appeal by the defendant 2 against the plaintiff 1 are assessed against the defendant 2. It is so decided as per Disposition by the assent of

Justices Kim Jae-hyung (Presiding Justice)