[1] In a case where there is a dispute over the interpretation of a juristic act between the parties, and the interpretation of the intent of the parties expressed in the disposition document is at issue, the method of interpreting

[2] The purpose of the provision of Article 150(2) of the Civil Act and the case where the condition may be deemed to have been fulfilled against the good faith and good faith

[3] The case affirming the judgment below that since the above continuous service clause is applicable to the case where Eul, a representative director of Gap corporation, entered into a partnership business agreement with Eul et al. to jointly operate the company, and among them, the continuous service clause stipulating that "if one of the partners voluntarily retires before the end of the obligation of continuous service, one of them retires at par value, the entire shares in possession shall be transferred to the representative director at par value. Where a withdrawal will not be arbitrary retirement, a certain ratio of the shares in possession shall be sold to the representative director at par value," and thereafter Gap decided to dismiss Byung et al. by holding a general meeting of shareholders, in case where Eul decided to dismiss Byung et al., it cannot be deemed that Eul et al. was dismissed without any cause, and Eul et al. was responsible for the removal of Byung et al. against the good faith and good faith, Byung et al. was obligated to sell part of the shares in possession of Gap corporation

[1] As long as the establishment of a disposal document is recognized as authentic, the court shall recognize the existence and content of the declaration of intent in accordance with the language and text stated in the disposal document, unless there is any clear and acceptable reflective evidence that denies the contents of the statement. In the event that there is a dispute over the interpretation of a legal act between the parties and the parties concerned, the interpretation of the parties’ intent expressed in the disposal document becomes an issue, the court shall reasonably interpret the document in accordance with logical and empirical rules by comprehensively taking into account the contents of the text

[2] Article 150(2) of the Civil Act provides, “If a party who is expected to benefit from the fulfillment of a condition has fulfilled such condition against the good faith and good faith, the other party may assert that the condition has not been fulfilled.” This provision includes the idea that the exercise of rights and the performance of duties is based on the basic principle of legal order that the said condition should be faithfully and faithfully, and any person shall not obtain benefit through an act contrary to the good faith and good faith. In a case where the parties fail to take due care of the other party’s interest in an unexpected circumstance that was unexpected at the time of the parties’ agreement, or take an attitude inconsistent with the other party’s reasonable trust and good faith, thereby going against the good faith and trust.

[3] In a case where Party B, a representative director of Party B, and Company C, entered into a partnership business agreement with Company B to jointly operate the Company, and the continuous service clause stipulating that “if one of the partners voluntarily retires before the end of the obligation of continuous service, one shall transfer the entire shares to the representative director at par value. Where a member retires without any arbitrary retirement, a certain ratio of the shares held shall be sold to the representative director at par value.” After holding a general meeting of shareholders and resolved to dismiss Party C, the case affirming the judgment below that the employee’s retirement from the company under the continuous service clause is divided into “private retirement” and “retirement without a voluntary retirement,” and each item constitutes an exclusive operation of each other, and that there is a violation of the obligation and the existence of a cause attributable to the partner’s breach of the obligation, and that it can be determined that Party C was dismissed from the exercise of the obligation of continuous service as a result of the exercise of the obligation of continuous service clause, such as “I, who is not a voluntary retirement,” and that the above provision can not be seen as applicable even if it was removed from the foregoing.

[1] Article 105 of the Civil Act / [2] Articles 2(1) and 150(2) of the Civil Act / [3] Articles 2(1), 105, and 150(2) of the Civil Act

[1] [2] Supreme Court Decision 2018Da223054 Decided January 14, 2021 (Gong2021Sang, 343) / [1] Supreme Court Decision 2002Da23482 Decided June 28, 2002 (Gong2002Ha, 1816), Supreme Court Decision 2014Da19776, 19783 (Gong2017Sang, 527) Decided February 15, 2017 / [2] Supreme Court Decision 2013Da2757 Decided May 14, 2015 (Gong2015Sang, 785)

Plaintiff (Law Firm, Kim & Lee LLC, Attorneys Kim Jong-soo et al., Counsel for the plaintiff-appellant)

Defendant 1 and two others (Law Firm Sejong, Attorneys Kim Jong-hun et al., Counsel for the defendant-appellant)

Seoul Central District Court Decision 2019Na4532 Decided June 25, 2020

All appeals are dismissed. The costs of appeal are assessed against the Defendants.

The grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed).

1. Factual basis

The reasoning of the lower judgment and the evidence duly admitted by the lower court reveal the following facts.

A. The instant company was established on September 21, 201 and runs film, broadcasting, and other multimedia and public performance-related service business. The Plaintiff is the representative director of the instant company, and the Defendants were inside directors.

B. As of December 31, 2013, the face value of the instant company’s shares is 500 won, and the total shares are 170,113 shares, among which Defendant 1 owns 17,767 shares, Defendant 2, and Defendant 3 respectively.

C. On June 27, 2014, the Plaintiff, Defendants, Nonparty 1, Nonparty 2, Nonparty 3, and Nonparty 4 entered into a partnership agreement with the instant company to jointly operate the instant company (hereinafter “instant partnership agreement”). Among them, the main contents of Article 6 (hereinafter “instant continuous service clause”) that set forth the obligation for continuous service are as follows.

(1) A partner shall serve in the company until “M&A; or one year after the time when an IPO was established.” If one of the partners voluntarily retires from the company before the end of the obligation to serve, all the shares of the company held shall be transferred at a par value to the representative director (a).

(2) If one of the partners becomes a member of the company, not an arbitrary retirement before the end of the obligation for continuous service, a certain percentage (100% for less than one year, 75% for more than one year and less than two years, 50% for less than two years, 25% for less than two years, 25% for less than three years, 25% for less than three years and less than four years, and 0% for more than four years) of the shares of the company of this case shall be sold at its face value to the representative director (paragraph (c).

(3) The shares acquired by the representative director as above are for the purpose of temporary delegation to grant old shares for the purpose of human being's participation, and there may be restrictions on voting rights with respect to these shares in the process of decision-making such as the prime class.

D. On September 17, 2014, the instant company held a general meeting of shareholders and resolved to dismiss the Defendants from office.

2. Whether the continuous service clause (c) of this case applies to a case where the Defendants were dismissed without any cause attributable to the Defendants (ground of appeal No. 1)

A. As long as the establishment of a disposal document is recognized as authentic, the court shall recognize the existence and content of the declaration of intent in accordance with the language and text stated in the disposal document, unless there is any clear and acceptable reflective evidence that denies the content of the statement. In a dispute over the interpretation of a juristic act between the parties concerned, where interpretation of the intent of the parties expressed in the disposal document becomes an issue, the court shall reasonably interpret the document in accordance with logical and empirical rules by comprehensively taking into account the content of the language and text, the motive and background leading up to the juristic act, the purpose to be achieved by the juristic act, the parties’ genuine intent (see, e.g., Supreme Court Decisions 2002Da23482, Jun. 28, 2002; 2014Da1976, Feb. 15, 2017).

B. On the following grounds, the lower court determined that this case’s continuous service clause (c) applies even where the Defendants were dismissed without any cause attributable to the Defendants.

The continuous service clause of this case is divided into two categories by stipulating the “voluntary resignation of the partner” in subparagraph (a) and (c) by stipulating the “a partner’s “a partner who is not a voluntary resignation,” and each item is exclusively composed of each other. Unlike the continuous service clause of this case, Article 7(b) of the instant agreement stipulates the violation of the partner’s duty and the existence of the cause attributable to the partner as the condition for the termination of a partnership agreement and the waiver of his right. Therefore, in light of the opposite interpretation, the term “a resignation which is not a voluntary resignation,” as stipulated in subparagraph (c) of the instant continuous service clause, should also be deemed to apply to the withdrawal of the Defendants without a cause attributable to the Defendants.

C. Examining the reasoning of the lower judgment in light of the foregoing legal doctrine, the lower judgment is justifiable, and contrary to what is alleged in the grounds of appeal, the lower court did not err by misapprehending the legal doctrine regarding the interpretation of a contract, or by exceeding

3. Whether the Plaintiff cannot assert fulfillment of conditions by leading the dismissal of the Defendants against the good faith and trust (ground of appeal No. 2)

A. Article 150(2) of the Civil Act provides, “If a party who is expected to benefit from the fulfillment of a condition has fulfilled the condition against the good faith and good faith, the other party may assert that the condition has not been fulfilled.” This provision includes the idea that the exercise of rights and the performance of duties is the basic principle of legal order that the said condition should be faithfully and in good faith (see Supreme Court Decision 2013Da2757, May 14, 2015). Any person shall not obtain benefit through an act contrary to the good faith and good faith. In any contingent circumstance unforeseeable at the time when the parties agreed on the condition, it may be deemed that the other party’s benefit is not adequately considered or the other party’s attitude contradictory to the preceding act that the other party has reasonably trusted, thereby infringing on the good faith and good faith (see Supreme Court Decision 2018Da23054, Jan. 14, 2021).

B. The lower court determined that the Defendants had a duty to serve in the Company by “M&A” or “one year after the date on which the instant company became an IPO” and that the Defendants had a duty to sell 50% of the shares owned by the instant company to the Plaintiff, the representative director, at par, pursuant to the instant continuous service clause (c). The reasons are as follows.

The Defendants asserted that the Plaintiff was the party directly benefiting from the fulfillment of the condition and led the Defendants to dismiss the Defendants in violation of the good faith and good faith. However, it cannot be concluded that the Plaintiff could not arbitrarily dispose of the shares to be transferred from the Defendants, and that the Plaintiff gains profits due to the fulfillment of the condition that the Defendants would be dismissed due to the restriction on the exercise of voting rights. The dismissal of the Defendants is conducted at a general meeting of shareholders. Shareholders, including institutional investors, were the best choice for their own interests, and the Plaintiff cannot be deemed to have dismissed the Defendants on a voluntary basis. The submitted evidence alone is insufficient to acknowledge that the Plaintiff led the Defendants to dismiss the Defendants against the good faith and good faith,

C. Examining the reasoning of the lower judgment in light of the foregoing legal doctrine, the lower judgment is justifiable, and contrary to what is alleged in the grounds of appeal, the lower court did not err by misapprehending the legal doctrine regarding the fulfillment of conditions contrary to the principle of trust and good faith under Article 150(2) of the Civil Act, or by misapprehending the fact beyond

4. Conclusion

The Defendants’ appeals are dismissed in entirety as it is without merit, 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 Lee Dong-won (Presiding Justice)