[1] The meaning of transfer of business and the standard for its determination

[2] The case holding that the transfer of business under the Commercial Act cannot be recognized on the ground that there is an implied contract for the transfer of business, and it cannot be viewed that the functional property as the source of revenue organized organically under the contract was transferred as a whole while maintaining its identity, even though it can be viewed that the transfer of business was in the same situation as that of the transfer of business in fact and economically in light of the circumstances of the transfer of business property

[1] The business under Article 42(1) of the Commercial Act refers to a functional asset as an organic integration organized for a certain business purpose. The term "functional asset as an organic integration" refers to the fact-finding relationship with tangible and intangible property and economic value, which constitute a business, functions as a source of profit, and the source of profit that is systematically combined with such fact-finding function as a source of profit, becomes an object of transaction like one goods. Thus, the issue of whether a business transfer exists shall be determined depending on whether the transferee continues to engage in the business activity such as the transferor, after the transferee transferred a functional asset as the source of profit that is systematically organized.

[2] The case holding that the transfer of business under the Commercial Act is not recognized as a transfer of business under the Commercial Act because it is a claim contract to transfer business assets, which are functional properties as an organic whole organized for a certain business purpose, as it is a contract to maintain its identity, so in order to recognize a transfer of business, the transfer of business should be presumed to have a contract for the transfer of business. However, in the process of the transfer of business assets, even if it can be deemed that the transfer of business actually occurred in the process of the transfer of business assets, and it can be deemed that there is an implied contract for the transfer of business, and that the transfer of business under the Commercial Act was not recognized as a whole while maintaining its functional identity as a source

[1] Article 42 (1) of the Commercial Act / [2] Article 42 (1) of the Commercial Act

[1] Supreme Court Decision 97Da35085 decided Nov. 25, 1997 (Gong1998Sang, 12) Supreme Court Decision 96Da8826 decided Apr. 14, 1998 (Gong1998Sang, 1315)

Dae Young-gu Co., Ltd.

Korea Deposit Insurance Corporation (Attorney Lee Jong-soo et al., Counsel for the plaintiff-appellant)

The bankruptcy trustee of Dongi Mutual Savings and Finance Company, Inc., and the defendant 1 and one other (Law Firm Shin, Attorneys Choi Jae-Gyeong et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2004Na42861 delivered on December 10, 2004

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

We examine the grounds of appeal.

1. According to the reasoning of the judgment of the court below, the court below, citing the reasoning of the judgment of the court of first instance, maintained the name of the non-party company 1 and the non-party 2's company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's new company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's company' 9.

Furthermore, the court below asserted that the defendant's assistant intervenor (hereinafter "the intervenor") who is a trustee in bankruptcy of the defendant, Dongdong Mutual Savings and Finance Company (hereinafter "Non-Party Mutual Savings and Finance Company") bears the principal amount of KRW 540,000,000 and overdue interest liability of KRW 312,20,967 against the non-party Mutual Savings and Finance Company (hereinafter "non-party Mutual Savings and Finance Company"), and that the plaintiff set off the plaintiff's above loan claims against the non-party Mutual Savings and Finance Company against the non-party Mutual Savings and Finance Company (hereinafter "non-party Mutual Savings and Finance Company"), and that the defendant did not have an insurance money to be paid to the plaintiff when the plaintiff deducts the amount of debts against the non-party Mutual Savings and Finance Company from the amount of claims such as the plaintiff's deposit, etc. under the Depositor Protection Act, the court below determined that the non-party Company was not 540,000,000,000 from March 13, 199 to pay the above principal and interest to the non-party Mutual Savings.

2. However, it is difficult to accept such recognition and determination by the lower court as they are.

A. First of all, the court below's aforementioned non-party company merely existed in the name of the plaintiff after the bankruptcy on August 16, 1995, and the plaintiff acquired the status of the non-party company as a trader with the non-party company since it actually acquired the business of the non-party company from 1995 to the status of the non-party company. Thus, the non-party company has the principal and interest of the loan against the plaintiff." In relation to the decision, ① although there was no separate agreement between the non-party company and the plaintiff that the plaintiff would accept the legal relation of the loan repayment obligation or loan of this case at the time of the actual transfer of business, there was no separate agreement between the non-party company and the plaintiff that the plaintiff would not take over the loan of this case at least, but there was no agreement that the plaintiff would not take over the obligation of the non-party company at the time of the actual transfer of business, it is clear that the plaintiff would not take over the obligation of the non-party company as to the non-party company's debt of this case.

B. Furthermore, as to whether a transfer of business was made between the non-party company and the plaintiff, the business under Article 42(1) of the Commercial Act refers to a functional asset as an organic integration organized for a certain business purpose. The functional asset as an organic integration here means that the facts with tangible and intangible properties and economic values function as the source of revenue by systematically combining each other, and that the functional asset as the source of revenue, which is an organic combination, serves as the source of revenue, becomes an object of transaction, such as a single goods. Thus, whether a transfer of business exists should be determined depending on whether the transferee continues the same business activity as that of the transferor after the transferee transferred the functional asset as the source of revenue organized (see Supreme Court Decision 96Da826 delivered on April 14, 198, etc.).

First, in light of the reasoning of the judgment below and the record, ① in this case, the customer of the non-party company succeeded to the plaintiff immediately after the establishment of the plaintiff, and the designation of the non-party company special military service designated by the non-party company succeeded to the plaintiff after the successful bid of the non-party company's factory, etc., and the facts with intangible and economic values constituting the business were transferred to the plaintiff. ② In addition, the major employees were transferred to the plaintiff and the officer of the non-party company, and it is difficult to deem that the labor relationship was succeeded to the non-party company's internal organization and business expenses. However, it is difficult to deem that the labor relationship was succeeded to, the non-party company's internal organization and business expenses were succeeded to the non-party company. ③ The non-party company's credit suspension of exercising the claim against the non-party company and allowing the plaintiff to establish and operate the non-party company on behalf of the non-party company continued to maintain the transaction relationship with the plaintiff. Accordingly, the plaintiff seems to have continued the outstanding debt transaction with the non-party company in its name.

However, in light of the reasoning of the judgment below and the records, the plaintiff acquired a successful bid on April 16, 1997, which was the most important business property from the non-party company (including the whole city's address omitted) and the site for the factory (the plaintiff purchased the non-party company's finished products from the non-party company in the production process, not from the contract, but from April 16, 1997, which was more than one year and seven months after the establishment of the plaintiff (the plaintiff sold only the factory site to the non-party Young-nam Corporation in order to prepare the successful bid price after being awarded the contract for the factory building and the site for the factory building, and the factory building, etc. seems to have been used as it is as the plaintiff's factory). ② The plaintiff used a part of the factory's office, etc., but the equipment installed in the factory was continuously used by the non-party company and the non-party company did not appear to have been partially involved by the plaintiff's officers and employees in the production process). Accordingly, the plaintiff purchased the building site and the non-party company's product supplied.

However, as seen earlier, since the transfer of business under the Commercial Act is a claim contract to transfer the business property, which is functionally organized for a certain business purpose, as a whole, as a whole, to maintain its identity, such transfer contract should be premised on the existence of such transfer contract. In light of the circumstances surrounding the transfer of the business property as seen above, it can be seen that, in fact and in light of the economic aspect of the transfer of the business property, there was an implied transfer contract between the representative director of the non-party company and the representative director of the plaintiff, and it is difficult to view that the plaintiff was transferred as a whole the functional property as a source of profit which is systematically organized from the non-party company, while maintaining its identity.

Nevertheless, the court below determined that there was a transfer of business between the non-party company and the plaintiff only for the reasons stated in its judgment. The judgment below erred in the misapprehension of legal principles as to the transfer of business under the Commercial Act which affected the conclusion of the judgment, or in mistake of facts against the rules of evidence, and therefore, the ground of appeal

3. Therefore, 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 Park Jae- Jae (Presiding Justice)