2014Da16104 (Mains) Confirmation of the existence of an obligation

2014Da16111(Counterclaim) Costs of goods

A Stock Company

person

B A.

Seoul High Court Decision 2012Na101581 decided January 17, 2014 (main office), 101598 (competence)

[Lawsuit] Judgment

June 10, 2016

The part of the judgment of the court below regarding the conjunctive claim is reversed, and that part of the case is remanded to the Seoul High Court. The remainder of the appeal is dismissed.

The grounds of appeal are examined.

1. Regarding ground of appeal No. 1

A. The interpretation of a juristic act is objectively established by the parties’ objective determination of the meaning that the parties gave to an act of expression. In the event of a conflict of opinion regarding the interpretation of a contract between the parties, where the interpretation of the parties’ intent as indicated in the contract document is at issue, it shall be reasonably interpreted in accordance with logical and empirical rules by comprehensively taking into account the contents of the text, the motive and background leading up to the agreement, the purpose to be achieved by the agreement, the parties’ genuine intent, etc. (see, e.g., Supreme Court Decision 200

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

(1) The Plaintiff is a company established for the purpose of supporting the market of small and medium enterprise products and engaged in the department store business, mail order business, electronic commerce transaction business, etc., and the Defendant is a company established for the purpose of e-mail, retail and service business, etc. Meanwhile, the company D, E, and F (hereinafter collectively referred to as 'G3 companies'; 'D', 'E', and 'F') is a distribution company related to the so-called special sales business, such as the point establishment business, and the actual operator of G3 companies is K.

(2) On October 2005, the Plaintiff entered into a contract with D to purchase and sell goods to carry out a special trading business, such as the Plaintiff’s point landing business, and continued to renew the contract with D. Around November 2009, the Plaintiff entered into a contract on entrustment with E and F with the same content as that of E and F. According to the entrustment contract, (1) points landing business and other business (corporate employees and employees welfare sunset business, etc.) are entrusted. (2) G3 purchases and supplies goods in its name, (3) supplies the goods to the Plaintiff’s customer company such as credit card company on behalf of the Plaintiff, etc., and (4) supplies the goods to G3 company through G3 company after purchasing the goods on behalf of the Plaintiff. (3) G3 companies obtained prior approval from the Plaintiff, and (4) the Plaintiff provided G3 companies with support for office space and communication expenses, etc.

After the conclusion of a contract on entrustment of business affairs, the Plaintiff provided a house with part of the Plaintiff’s head office, such as telephone and facsimile, and provided telephone and postal charges to G3 companies, and provided phone calls to the department to which the Plaintiff’s representative phone belongs, as if the Plaintiff was affiliated with the department to which the Plaintiff’s employee belongs, and carried out the business affairs, such as approval of the transaction by obtaining approval from the Plaintiff’s officer. In addition, the employees of G3 company used the name of the Plaintiff’s head office with the Plaintiff’s permission, and displayed e-mail with the Plaintiff’s employee when sending e-mail to the transaction partner. The Defendant et al., the Plaintiff et al., conducted all transactions after consultation with the executives and employees of G3 companies, including K, except in cases where the initial officer level of the transaction was agreed to start or start the transaction. As such, G3 companies actually carried out the Plaintiff’s unique sales business as if the Plaintiff’s department in charge of special sales transactions was actually an independent purchasing agency or sales.

(3) On January 2009, the Plaintiff entered into a contract with the Defendant for the supply of goods with the content that the Defendant would supply goods to the customer designated by the Plaintiff, and thereafter, the Plaintiff designated G3 companies as the Defendant’s purchasing place and ordered the Defendant to supply goods in the order of “G3 company Defendant ? Plaintiff” (hereinafter referred to as “instant transaction”).

However, in order to raise funds for the repayment of obligations arising from the investment in the home shopping business, and to raise funds for the repayment of obligations arising therefrom, K made circular transactions in which G3 supplied to 'G3 company Defendant ? Plaintiff ?3 company' in the original transaction order by using the fact that G3 is fully entrusted with the purchase business and the sales business by the Plaintiff, thereby making a transaction in which G3 company supplied to 'Plaintiff ?3 company' in the order of the original transaction order by using the fact that it was entrusted with the purchase business and the sales business by the Plaintiff, and made a transaction in which G3 companies would receive goods from the Defendant under the order of the customer company, such as credit card companies, by concealing the circulation transaction structure with respect to the Defendant, and by pretending that G3 companies directly supplied the goods to the Defendant, receive goods prices from the Defendant and again pay the goods to the Defendant via the Plaintiff (hereinafter referred to as the "processing transaction in this case").

(4) The instant processing transaction continues to continue for a considerable period of time with the expansion of its size on October 2010, and the Defendant paid KRW 517,374,200 to G3 as the price for goods, and thereafter demanded the Plaintiff to pay KRW 541,790,183 in addition to the profit that the Defendant paid to the Plaintiff as the price for the goods. However, the Plaintiff’s claim for the price was rejected on the ground that the Plaintiff did not actually entered into the I Military Logistics Center, the place where the goods were supplied by the Plaintiff. Examining the following circumstances revealed from the above facts in light of the legal principles as seen earlier, it is reasonable to view the instant transaction as a transaction connected between the Plaintiff and the Defendant and the goods supply transaction between the Defendant and the Defendant and the Defendant, which is ordinary goods supply transaction.

(1) In the instant transaction, the Plaintiff’s actual orders to the Defendant and the Defendant’s actual supply of goods to the Plaintiff were not scheduled. However, the former is due to G3 companies’ holding the Plaintiff’s business trustee status and the Defendant’s position as the Defendant’s purchasing place, and thus, it is possible to omit actual orders. The latter is due to the following: (a) subordinate distributors, such as G3 companies, directly supply goods to the customer company, such as credit card companies.

(2) The Defendant filed a claim against the Plaintiff for the price of goods, and sent to the Plaintiff a letter on the premise that the instant transaction was ordinary goods supply transaction. In this regard, the Defendant seems to have recognized the instant transaction as ordinary goods supply transaction.

(3) The G3 company issued a tax invoice to the Defendant and filed a claim for the payment. The Defendant issued a tax invoice to the Plaintiff and claimed the payment, which is premised on the fact that the instant transaction was between the Plaintiff and the Defendant and the Defendant, and between the Defendant and the G3 company.

D. As long as the instant transaction falls under ordinary goods supply transaction, the Plaintiff cannot be deemed to bear the duty to pay the goods to the Defendant in the instant processing transaction where there is no order issued by the Plaintiff according to the Plaintiff’s intent and the Defendant’s supply of goods. In addition, even upon examining the record, there is no special agreement between the Plaintiff and the Defendant that the Plaintiff bears the duty to pay the Plaintiff to the Defendant solely on the confirmation of the supply of goods. In the same purport, the lower court’s confirmation that there is no obligation to pay the Plaintiff’s goods and rejected the Defendant’s claim for the payment of the goods. In so doing, it is acceptable to affirm the lower

2. As to the grounds of appeal Nos. 2 and 3

A. An employer relationship under Article 756 of the Civil Act is the relationship in which a person executes affairs on behalf of another person under the direction and supervision of that person, and is usually based on an employment relationship, but it is sufficient to have a substantial command and supervision relationship in terms of delegation, partnership, contract, and any other relationship, and such direction and supervision relationship is determined depending on whether there is an objective relationship with which a person shall command and supervise (see, e.g., Supreme Court Decision 97Da13702, Aug. 21, 1998).

In addition, "business execution", which is an element for employer's liability, shall be deemed to be an act of performing business affairs without considering subjective circumstances when an employee's unlawful act is objectively deemed to be related to the employee's business activities or the performance of business affairs or the performance of such business affairs, and the issue of whether it is objectively related to the performance of business affairs should be determined by considering the degree of the employee's original duties and unlawful acts and the degree of the employer's responsibility for causing damages and the lack of preventive measures (see, e.g., Supreme Court Decision 200Da66119, Mar. 9, 2001).

B. We examine the above facts in light of the above legal principles.

(1) According to the instant entrustment contract, G3 companies shall perform the entrusted business with the Plaintiff’s approval, and the approval here means the approval for each individual transaction, so the right to decide on the size, period, price conditions, etc. of the individual transaction is reserved to the Plaintiff.

However, without having a separate department in charge of special sales and personnel in charge, the Plaintiff provided G3 companies with physical facilities, such as office space and office fixtures, and subsidized business expenses, such as communications fees, etc., by linking the employees of G3 companies with the Plaintiff’s representative telephone, and had gone through the same business organization as the Plaintiff’s business organization, and allowed G3 companies to use name cards under the Plaintiff’s control. Accordingly, the Defendant et al. approved or impliedly approved the employees of G3 to represent themselves as the Plaintiff’s employee. Accordingly, the Plaintiff et al., the Defendant et al., as the officers and employees of G3 companies and K were in charge of all transactions with the Plaintiff. As such, since the Plaintiff completed the special sales business by using their employees, including G3 companies and K, as it was part of its business organization or its employee, it should be deemed that it corresponds to the direction and supervision that expands et al. expanded its business area by such means.

In full view of these circumstances, K is merely a substantial operator of G3 companies who are entering into the instant entrustment contract with the Plaintiff, and even if it does not enter into an employment contract with the Plaintiff, the Plaintiff is objectively in a position to command and supervise K to the extent similar to that of the Plaintiff’s employees in relation to the execution of the express sales contract under the instant entrustment contract.

(2) Meanwhile, K, using the circular transaction structure of the instant processing transaction, concealed the fact of circular transaction with the Defendant, and in fact ordered G3 companies to make false orders to the Plaintiff, and accordingly, the Plaintiff’s orders against the Defendant are bound to be false orders. However, G3 companies, who received orders from the Defendant, obtained orders from the Defendant by deceiving the Defendant as if they were to supply goods to the customer company.

The part concerning the supply of goods in the K's deception is the operator of G3 company, which is the defendant's purchasing office, and the part concerning the receipt of the order against the plaintiff and the part concerning the order against the plaintiff against the defendant is the operator of G3 company, who is the plaintiff's business trustee under the contract of entrustment of business in this case, deceiving the defendant in the position of performing his duties like the plaintiff's employee in charge of special sales. Since the act done in the latter position constitutes an act of execution of the plaintiff's business objectively, the act of deception against the defendant in K should be deemed to have been done with respect to the plaintiff'

(3) Thus, unless there are special circumstances, such as the Defendant’s failure to know the fact of the instant processing transaction, the Plaintiff is liable to compensate the Defendant for the damages incurred from the instant processing transaction pursuant to Article 756 of the Civil Act.

C. Nevertheless, the lower court determined that the tort committed by K is not related to the Plaintiff’s business or affairs and rejected the Defendant’s claim for damages under Article 756 of the Civil Act. In so doing, the lower court erred by misapprehending the legal doctrine on employer liability, thereby adversely affecting the conclusion of the judgment. The allegation in the grounds of appeal assigning this error is with merit.

3. Conclusion

Therefore, the part of the judgment of the court below regarding the conjunctive claim is reversed, and that part of the case is remanded to the court below for further proceedings consistent with this Opinion. The defendant's remaining appeal is dismissed. It is so decided as per Disposition by the assent of all participating Justices.

Justices Kim Jae-young

Justices Lee In-bok, Counsel for the appeal

Justices Kim Yong-deok

Justices Lee Dong-won