Whether a union may file a claim for distribution of residual property without following the liquidation procedure in cases where it is dissolved under the circumstances where the affairs such as collection of claims, repayment of debts, etc. reverted to the union, have not been completed (negative); and conditions on the premise that the claim for distribution of residual property can

Articles 721 and 724 of the Civil Act

Supreme Court Decision 97Da31472 delivered on December 8, 1998 (Gong1999Sang, 93) Supreme Court Decision 99Da35713 delivered on April 21, 2000 (Gong2000Sang, 1233) Supreme Court Decision 2004Da30682 Delivered on December 8, 2005

Plaintiff (Attorney Kim Jong-nam et al., Counsel for the plaintiff-appellant)

Defendant 1 and one other (Law Firm, Attorneys Kim Il-soo et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2004Na5951 decided Nov. 9, 2007

The appeal is dismissed. The costs of appeal are assessed against the plaintiff.

We examine the grounds of appeal.

Where the association is dissolved due to the achievement of its purposes, there is no remaining business of the association. However, where the association remains due to its dissolution, each union member may immediately request the association member who holds residual assets in excess of the distribution ratio within the scope of its residual assets distribution ratio without undergoing separate liquidation procedures. If the affairs such as collection of claims or repayment of debts have not been completed, it shall be deemed that all union members jointly own the residual assets, as long as special circumstances are acknowledged that the collection of claims or repayment of debts is possible even if the association members jointly own the residual assets without undergoing liquidation procedures, it shall not be deemed that the association is a remaining business to dispose of the remaining assets without undergoing liquidation procedures. Further, in the event of the dissolution of the association, a claim for distribution of remaining assets without undergoing liquidation procedures against other union members exceeds the distribution ratio. Thus, it shall be permitted that the above claim for distribution exceeds the distribution ratio within the scope of the remaining assets owned by the other union members. Thus, it shall be permitted that the entire association's claim for collection of claims or repayment of debts shall be decided within 2081 and 204.7.284.

In full view of the adopted evidence, the court below determined that only the damages claim amounting to KRW 70 million against Defendant 2 remains. The court below rejected the Plaintiff’s claim on the ground that according to the distribution agreement between the Plaintiff and the Defendants, the collection amount of the above damage claim should be preferentially appropriated for the payment of KRW 13,000,000 and KRW 32,405,00 for the non-party 1 and the non-party 2 in accordance with the distribution agreement between the Plaintiff and the Defendants. Thus, the above damage claim should be exercised by all the union members, but it cannot be exercised individually as a claim for distribution of residual property.

In light of the above legal principles and the records, it is deemed that the collection of damage claim, which is the property of the partnership, and the repayment of the unpaid investment amount against the non-party 1 and 2 is the remaining business of the partnership to be handled prior to the distribution of the remaining property among the union members. According to the facts acknowledged by the court below and the records, it is difficult to view that the remaining property that the plaintiff is able to actually distribute from the partnership before the collection of damage claim is completed is confirmed. Thus, even if the above remaining business is not completed, it does not constitute a special circumstance where the fair distribution of the remaining property is possible among the union members, and therefore, the plaintiff cannot claim the distribution of the remaining property against the defendants without the liquidation procedure.

In conclusion, the court below did not err in the misapprehension of legal principles as to the right to claim distribution of residual property or incomplete hearing as otherwise alleged in the ground of appeal.

The remaining arguments in the grounds of appeal are nothing more than dispute over the legitimacy of fact-finding by the court below which belongs to the exclusive jurisdiction of the fact-finding court, and as long as the claim for distribution of residual property of this case, which did not go through a liquidation procedure as seen above, cannot be permitted under the legal principles, it is without merit.

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 Yang Chang-soo (Presiding Justice)