1. The term "business operator" means the business operator's business operator's business operator's business operator.

Lee Jae-gu Co., Ltd. (Attorney Kang Jae-won et al., Counsel for the defendant-appellant)

September 14, 2007

Jeju District Court Decision 2006Gadan813 Decided November 22, 2006

1. The part of the judgment of the court of first instance against the plaintiff shall be revoked.

2. The defendant shall pay to the plaintiff 52,305,242 won with 24% interest per annum from October 17, 2005 to the day of full payment.

3. All costs of the lawsuit shall be borne by the defendant.

4. Paragraph 2 can be provisionally executed.

1. Purport of claim

The defendant shall pay to the plaintiff 60,568,992 won and 52,305,242 won with 24% per annum from October 17, 2005 to the date of full payment, 8,236,750 won with 6% per annum from September 15, 2005 to December 15, 2005, and 20% per annum from the next day to the date of full payment.

2. Purport of appeal

The same shall apply to the order.

1. Scope of the judgment of this court;

The Plaintiff sought against the Defendant the amount of KRW 52,305,242, and KRW 8,263,750, which was supplied to the Defendant under a contract for the supply of building materials, including other days, pursuant to a contract for the supply of building materials. The first instance court accepted only the part of the Plaintiff’s claim (2) and dismissed the claim (1).

On the other hand, since only the plaintiff appealed, the scope of the trial of this court is limited to only the part of the plaintiff's claim (i.e., the part against the plaintiff).

2. Judgment on the plaintiff's claim

(a) Facts of recognition;

The following facts may be acknowledged in full view of the purport of the whole pleadings in each entry of Gap evidence 1-1, 2, Gap evidence 2, and Gap evidence 4-1 through 9.

(1) The Plaintiff Company is a corporation established for each business purpose, such as wholesale and retail business of building materials, and civil engineering and construction business.

(2) Around March 2005, the Plaintiff Company and the Defendant Company entered into a contract with the Defendant Company on the supply of approximately 300 tons of the broken-out generated power at the site of the church and its affiliated kindergarten construction work (hereinafter “instant construction site”) at the time when the Defendant Company entered into a contract with Nonparty 1, and the Defendant Company entered into a contract with the Defendant Company to pay in cash the delivered amount from January 16 to the 15th day of each month, and from the 16th day of each month to the end day of each month, the amount shall be paid in cash, and if the Defendant Company exceeds the agreed payment date, 10% of the remaining amount and its additional dues shall be paid in proportion to 24% per annum from the following day to the date of full payment.

(3) Under the instant supply contract, the Plaintiff Company supplied the Defendant Company with a total of KRW 172,550,220,000,000, in total, up to October 3, 2005.

(4) Meanwhile, the Plaintiff Company was paid KRW 125,00,000 out of the total value of the said steel contract.

(b) Markets:

According to the above facts, the price for the steel delivery supplied by the plaintiff on October 3, 2005 was due on October 16, 2005, which is the payment date stipulated in the supply contract of this case, and the price for the steel delivery supplied prior to that date also arrived at the due date on October 16, 2005. Thus, barring any special circumstance, the defendant company is obligated to pay the plaintiff company the price for the steel delivery delivery of KRW 52,305,242 [ = 47,50,220 for the non-paid steel delivery of KRW 47,550,220 for the non-paid steel delivery of KRW 125,00 for the non-paid steel delivery of KRW 125,75,00 for the non-paid steel delivery of KRW 125,00 for the non-paid steel delivery of KRW 4,755,02 for the late payment of delay rate from October 24, 2005 to the late payment date.

3. Judgment on the defendant's defense

A. The defendant's assertion

On June 22, 2005, as the Defendant Company was divided into a new construction company and the Defendant Company for the purpose of construction business, etc., the rights and obligations under the instant steel supply contract were comprehensively succeeded to the Plaintiff Company. Accordingly, on August 2, 2005, the new construction company notified the Plaintiff Company of the division of the company and supplied the Plaintiff Company to the new construction company thereafter. Since the instant steel supply claim claimed by the Plaintiff was a debt incurred after the Plaintiff notified the Plaintiff of the division of the company, the Defendant Company is not liable.

(b) Markets:

(1) Facts of recognition

According to Gap evidence 9, Gap evidence 11, Eul evidence 2-1 to 3, Eul evidence 3-1 to 3, Eul evidence 5, Eul evidence 6, Eul evidence 8-1, 2, Eul evidence 9, Eul evidence 10, Eul evidence 14 (except for the non-trust trust part), and according to the testimony (except for the non-trust trust part) of non-party 2 and 3 of the first instance trial witness, the following facts are acknowledged:

(A) After the conclusion of the instant supply contract, the Defendant Company decided to divide the company into a separate way by having it take charge of a new line of business pertaining to the building work business and the engineering work business (hereinafter “new line of business”), and prepared a division plan and approved by the special resolution of the general meeting of shareholders on May 9, 2005, and completed the division registration on June 22, 2005.

(B) According to the division plan, ① the capital of the newly incorporated company is divided into part of the capital of the defendant company and KRW 500 million (Article 1 and Article 5); ② the newly incorporated company takes over the amount of debt in relation to the building work business and the civil engineering work (Article 9); and the liabilities prior to the division are jointly and severally liable by the defendant company and the newly incorporated company (Article 10); ③ the shares of the newly incorporated company are allocated by the shareholders of the defendant company in proportion to their shares held (Article 6); and the promoters of the newly incorporated company shall become the representative director of the defendant company (Article 7).

(C) New construction and existing defendant company established due to division are the same as the location of the principal office, the director, and the representative director, and also similar.

(D) At the construction site of this case, Nonparty 2, an employee of the Defendant company, had confirmed the acceptance of reinforcing bars, etc. before the company was divided. Nonparty 2 signed the confirmation of acceptance on the transaction statement with the Defendant company even after the division.

(E) Meanwhile, around August 2005, Nonparty 4, who works for the Defendant Company’s accounting as well as for the company’s corporate division, requested the Plaintiff Company’s accounting staff to change the person to whom the Plaintiff was supplied at the time of issuing a tax invoice according to the supply of steel by telephone. Accordingly, the Plaintiff Company entered the person who was supplied after the end of August 2005 in the tax invoice as a new one.

(F) In relation to the payment of the instant steel contract, the Defendant Company paid the price under the name of the Defendant Company to the Plaintiff on August 3, 2005, which was after the division of the Company.

(G) Meanwhile, the Plaintiff’s confession was revoked by asserting that the amount of KRW 48,386,075 out of the amount of the amount of the reinforcing bars supplied by the Defendant Company to March 2005 through July 2005, including the amount of steel bars supplied by the Plaintiff Company prior to the division of the Defendant Company, remains at the date of the first instance court’s pleading. However, the Plaintiff’s confession is not effective since it was insufficient to recognize that the said confession was contrary to the statement and due to mistake, since it was insufficient to recognize that the said confession was against the statement and due to mistake on the date of the fifth instance court’s pleading.

(2) Determination:

(A) Determination on the validity of the obligations arising from the corporate division

1) First, according to the above facts of recognition, since the defendant company was divided into June 2005 and the rights and obligations relating to the construction site of this case were comprehensively succeeded to the new construction site of this case in accordance with the division plan, it shall be deemed that the new construction has comprehensively succeeded to the rights and obligations relating to the contract for the supply of the steel of this case (in this sense, the plaintiff among the plaintiff's assertion, supplied the steel in accordance with the supply contract with the defendant company, and thus the defendant company cannot oppose the plaintiff's claim due to the division of the company).

2) However, in a case where a company that is divided and divided continues to exist after the division as in the instant case, barring any special circumstance, liability property of the company is generally divided into the company that is divided and the newly incorporated company is deemed to be jointly and severally liable for the company that is divided to protect creditors of the company prior to the division. However, the Commercial Act does not have any provision regarding the “liability of the company prior to the division,” which is the subject of joint and several liability, and thus, it should be interpreted in accordance with the legislative intent of protecting creditors.

3) On the instant case, ① the instant contract was concluded prior to the division of the Defendant Company, and at the time, the Plaintiff Company was deemed to have concluded the instant contract with the trust in the property of the Defendant Company’s liability. ② The instant contract was established contrary thereto by succession only to the amount of KRW 500 million out of the Defendant Company’s capital, and its responsible property has been reduced to the Defendant Company. ③ The instant contract was supplied for a certain period of time, but the time of supply is supplied at the request of the Defendant Company, and the price is supplied at the time of supply, and the so-called continuous contract was received at the time of supply. The instant contract was not planned to conclude a separate individual contract on each individual transaction at the time of supply in addition to the basic contract. In view of the fact that the Plaintiff Company did not undertake a separate contract on each transaction at the time of supply in accordance with the said contract, it is reasonable to view that the instant contract constitutes a joint and several obligation as defined in the Commercial Act, even if the individual supply in accordance with the instant supply contract was made after the division of the Defendant Company.

4) Therefore, the Defendant Company is jointly and severally liable with the Plaintiff despite the division of the Company. Therefore, the Defendant’s assertion premised on the fact that the instant claim for the price for the reinforcing is a company’s claim after the division that does not constitute joint and several liability is without merit.

(B) Next, the Defendant’s assertion, and the New Zealand notified the Plaintiff Company of the division of the company, and thereafter, there was an implied agreement between the Plaintiff and the New Zealand to conclude the instant steel supply contract, and thus, it would be concluded that the Plaintiff Company supplied the New Zealand with the iron bars.

In light of the above, the tax invoice issued by the Plaintiff Company after the end of August 2005 upon the request of the new accounting account, and the transaction statement issued by the Plaintiff Company after the end of August, 2005 is still indicated as the person being supplied with the Defendant Company, and the signature of Nonparty 2, who had been in charge of the acquisition of materials at the construction site of this case before the division, is the same as the Defendant Company and the new owner of the headquarters and the representative director, etc. of the company, and there is no interest in the issue of the tax invoice in the name of the Defendant Company or the new owner of the new owner of the new owner of the new owner of the new owner of the new owner of the new owner of the new owner of the new owner of the new owner of the shares. Since the new owner of the new owner of the shares divided, the Defendant Company did not conclude the contract with the Plaintiff Company for the new owner of the new owner of the new owner of the shares or the new owner of the new owner of the shares by changing the contract to the effect that the Plaintiff Company and the new owner of the new owner of the new owner of the new owner of the company did not have agreed.

4. Conclusion

Therefore, the plaintiff's claim, which is the scope of the trial for the original trial, shall be accepted for the reasons that it is reasonable, and since this conclusion is unfair for the part against the plaintiff in the judgment of the first instance, the plaintiff's appeal shall be accepted and the part against the plaintiff in the judgment of the first instance shall be revoked and the decision shall be ordered to pay the above amount to the defendant. It is so decided as per

Judges Jeong Jong-ju (Presiding Judge)