[1] Where a company subject to division is jointly and severally liable pursuant to Article 530-9(1) of the Commercial Act, whether a company subject to division may be exempted from joint and several liability for the reason that the creditor did not raise an objection to an individual peremptory notice, or gave consent to division or merger through division, etc. because he/she did not submit an individual peremptory notice (negative)

[2] The elements for the division company to be divided and merged to be exempted from joint liability under Article 530-9(1) of the Commercial Act and to form a divided debt relationship under Article 530-9(3) of the Commercial Act

[3] In a case where Gap corporation's electrical construction business division was divided into Eul corporation and merged into Eul corporation, the case holding that the above joint and several liability division does not affect the circumstance where Eul corporation's joint and several liability was jointly and severally liable under Article 530-9 (1) of the Commercial Act, and the creditor's separate notice was omitted due to the relationship between Gap corporation's electrical construction business division and Eul's joint and several liability, since the written agreement stating the purport that Eul corporation shall bear only the obligation with respect to the property invested by Eul corporation was prepared and approved at the general meeting of shareholders of Gap corporation

[4] The legal nature of joint and several liability borne by the company subject to division pursuant to Article 530-9(1) of the Commercial Act (=non-joint and several liability)

[1] Under Article 530-9(1) of the Commercial Act, a company established through division or merger after division or a surviving company (hereinafter “division party company”) shall, in principle, be held jointly and severally liable for obligations other than those originally borne by each party to the plan of division or the written agreement of the merger after division. This joint and several liability is a statutory liability regardless of whether the creditor had completed an individual peremptory notice against the creditor. Thus, the circumstance such as the creditor who made an individual peremptory notice against the creditor, failed to raise an objection, or omitted individual peremptory notice because the creditor did not consent to division or merger after division does not affect the joint and several liability of the company subject to division under Article 530-9(1) of the Commercial Act.

[2] In order for a company established through division or surviving company after division (hereinafter “divided company”) to be exempted from joint and several liability pursuant to Article 530-9(1) of the Commercial Act and to establish a split-off relationship with which only the company liable to pay obligations under the original agreement to be borne by each party, it shall prepare a written agreement stating that the company which has received investments through division bears only the liabilities with respect to the invested property from among the obligations of the company to be divided (Article 530-9(3) and (2) of the Commercial Act, the latter part of Article 530-9(2) of the Commercial Act, and Article 530-3(1) and (2) of the Commercial Act, and the burden of assertion and proof as to whether such requirements are met is asserted to be in a split-off relationship, which is not a joint and several liability relationship between the divided company and the divided-off company. simply because approval of the general meeting of shareholders has been obtained by stating the property to be transferred to the other party to the merger after division, the company cannot be exempt from its original liability requirement.

[3] In a case where Gap corporation's electrical construction business division is divided into Eul corporation and merged into Eul corporation, the case holding that Eul corporation's joint and several liability burden of Eul corporation pursuant to Article 530-9 (1) of the Commercial Act shall not be affected by the joint and several liability, on the ground that the agreement stating that Eul corporation shall bear only the obligation with respect to the property invested by Eul corporation was prepared and approved by the general meeting of shareholders of Gap corporation pursuant to the above agreement pursuant to Article 530-9 (1) of the Commercial Act, and the above agreement is jointly and severally liable for any obligation other than the obligation to be borne by Eul corporation, and the purport that Eul corporation shall bear only the obligation with respect to the property invested by Eul corporation without the approval of the general meeting of shareholders is publicly announced in daily newspapers, and the creditor's separate peremptory notice was omitted due to the relation to the merger and division, etc.

[4] Where a company established through a division or a surviving company through a merger after division or a surviving company (hereinafter “division party company”) is jointly and severally liable for obligations other than those to be borne by each party to a division or a written agreement pursuant to Article 530-9(1) of the Commercial Act, it is a statutory liability imposed to protect creditors who are disadvantageously affected to the collection of claims due to a corporate division, and barring any special circumstance, it is difficult to view that there is a subjective joint liability between the party to a division company and the surviving company. Therefore, it is reasonable to view that the party to a division party is jointly and severally liable for obligations other than those to be borne by each party to a division or written agreement.

[1] Article 530-9 of the Commercial Act / [2] Article 530-3 (1) and (2), Article 530-6 (1) 6, and Article 530-9 of the Commercial Act, Article 288 of the Civil Procedure Act / [3] Article 530-3 (1), (2) and (4), Article 530-6 (1) 6, and Article 530-9 of the Commercial Act / [4] Article 530-9 (1) of the Commercial Act, Article 413 of the Civil Act

Plaintiff (Attorney Kim Dong-ho et al., Counsel for the plaintiff-appellant)

Nonparty 1 (Law Firm Namsan, Attorneys Jeon Dong-jin et al., Counsel for the plaintiff-appellant)

Seoul High Court Decision 2008Na106879 decided October 15, 2009

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

The grounds of appeal are examined.

1. Regarding ground of appeal No. 1

According to the reasoning of the judgment of the court below, the court below held that, citing the reasoning of the judgment of the court of first instance, the new Telecommunication is jointly and severally liable with the new L&C under Article 530-9(1) of the Commercial Act, on the premise that the new L&C did not directly succeed to the obligations it owes to the plaintiff before the division and merger, while combining the electrical construction sector divided by the new L&C corporation (hereinafter “new L&C”) with the electrical construction sector divided by the new L&C (hereinafter “new L&C”).

Therefore, the judgment of the court below is not erroneous in the misapprehension of legal principles as to the succession of the obligations of another company which is either omitted from the judgment as to whether the new E&C personnel directly succeeded to the obligations of the plaintiff due to the division and merger, or merged with the part of the company that is divided, and the issue of joint and several liability. The ground of appeal cannot be accepted.

2. Regarding ground of appeal No. 2

A. Under Article 530-9(1) of the Commercial Act, a company established through division or merger after division or a surviving company (hereinafter referred to as a “division party’s company”) shall, in principle, be held jointly liable for obligations other than those to be borne by each party’s respective division plan or written agreement of the merger after division. This joint and several liability is a statutory liability, regardless of whether a creditor had completed an individual peremptory notice against a creditor. Thus, the circumstance such as the creditor’s failure to raise an objection or the creditor’s consent to division or merger after division does not affect the joint and several liability of the company subject to division under Article 530-9(1) of the Commercial Act.

Meanwhile, in order for a divided company to be divided to be exempted from joint and several liability under Article 530-9(1) of the Commercial Act and to form a divided debt relationship with which only the company is liable to pay obligations under the original agreement of each party to the merger after division, the written agreement of the general meeting of shareholders stating the purport that only the company is liable to pay obligations with respect to its invested property among the obligations of the company to be divided after division shall be prepared (Article 530-9(3) and (2) of the Commercial Act, the latter part of Article 530-9(2) of the Commercial Act, and Article 530-3(1) and (2) of the Commercial Act). The assertion and burden of proof as to the fulfillment of such requirements is not a joint and several liability relationship between the divided company and the divided company. It cannot be said that the written agreement of the general meeting of shareholders has not satisfied the requirements for establishing a divided liability relationship, on the sole basis that the divided company obtains approval of the general meeting of shareholders, such as the value of property transferred to the other party to the merger after division.

B. According to the reasoning of the judgment of the first instance as cited by the court below, Nonparty 2, the representative director of L&W, was faced with the situation where the management status of L&W is not good, and requested Nonparty 1 to divide only the government-funded electrical construction sector and establish a new company specializing in the government-funded construction. Nonparty 1 shall divide the new construction sector from L&W to merge with the National Dormant, which is a Dormant, and he shall prepare a resolution of 206 of the Agreement on the Agreement on the Merger and Merger of 2006 (hereinafter “this case’s agreement”). Article 1(2) of the New Auction Agreement provides that, “No. 2 of the 206 new company’s new construction division and merger shall comprehensively succeed to the rights and obligations of the 20th new company’s new construction division and merger on the date of the 20th new company’s new construction division and the 20th company’s new construction division and merger.”

C. We examine the above facts in light of the legal principles as seen earlier. The written agreement of the instant case does not state the purport that only the debts owed to the property invested by the New T&A shall be borne by the New T&A, but the Plaintiff and Nonparty 2’s delegation of the approval or the minutes of the general meeting of shareholders to the Plaintiff holding the total outstanding shares of the New T&A to the agreement of the instant case where such purport is omitted. On the contrary, it cannot be found in the record that the written agreement of the new T&A is written to the effect that only the debts owed to the property invested by the New T&A are borne by the New T&A are borne by the New T&A, and there is no evidence to support the circumstance that the new merger agreement of the said new T&A is approved by the General meeting of shareholders. Thus, the New T&A is jointly and severally liable for debts other than those originally borne by the previous merger agreement of this case pursuant to Article 530-9(1) of the Commercial Act. In light of the fact that the initial public notice of the merger agreement of this case should take effect through the new merger agreement of the Plaintiff’s new T&A without any consent to the effect.

Although it is not appropriate for the court below to hold that the New Tech omitted individual peremptory notice on the ground that it is jointly and severally liable to the plaintiff, the conclusion that the New Tech is jointly and severally liable with the plaintiff by the New Tech pursuant to Article 530-9 (1) of the Commercial Act is just, and there is no error of law by misunderstanding the legal principles on joint and several liability under Article 530-9 (1) of the Commercial Act, which affected the conclusion of the judgment, as otherwise alleged in the ground of appeal.

3. As to the third ground for appeal

A. Where the company subject to division is jointly and severally liable for any obligation other than that to be borne by each party’s separate plan or written agreement pursuant to Article 530-9(1) of the Commercial Act, it is a statutory liability imposed to protect creditors who are disadvantageously affected to the collection of claims due to the division of company, and barring any special circumstance, it is difficult to view that there is a subjective joint and several liability between the party subject to division as to the statutory joint and several liability. Therefore, it is reasonable to view that the company subject to division has an in personam joint and several liability for any obligation other than that to be borne by each party’s separate plan or written agreement.

B. Examining the facts acknowledged by the court below, citing the reasoning of the judgment of the court of first instance, in light of the above legal principles, the loan obligations and the indemnity obligations of the Plaintiff of the New T&A to the Plaintiff are not determined to be succeeded to by the New T&A in the agreement of this case, but the New T&C bears the responsibility to repay the loan obligations of the Plaintiff and the indemnity obligations of the new T&A pursuant to Article 530-9(1) of the Commercial Act. Thus, the Plaintiff may claim against the New T&C Board for the full repayment of the loan and indemnity obligations to the Plaintiff.

Although it is not appropriate for the court below to consider the legal nature of the joint and several liability borne by the newly established Institute pursuant to Article 530-9 (1) of the Commercial Act as the joint and several liability under the Civil Act, not the joint and several liability under the Civil Act, the decision of the court below that made the above conclusion is just and there is no error of law by misunderstanding the legal principles as to the legal nature of the joint and several liability under Article 530-9

4. As to the grounds of appeal No. 5 (the indication of "No. 5" is based on the statement in the grounds of appeal)

Examining the reasoning of the first instance judgment cited by the court below in light of the records, the court below is just in holding that the plaintiff's filing of the claim in this case based on joint and several liability borne by the newly established Institute pursuant to Article 530-9 (1) of the Commercial Act does not violate the principle of good faith in relation to the newly established Institute. In so doing, the court below did not err by misapprehending the legal principles as to the good faith principle, as otherwise

5. As to the ground of appeal No. 6 (the indication of “six points” is based on the statement in the grounds of appeal)

Inasmuch as Article 418(2) of the Civil Act applies to quasi-joint and several liability or analogical application thereof, even if a quasi-joint and several liability jointly and severally liable fails to set-off his claim despite having the claim to set-off against the creditor (see Supreme Court Decision 93Da21521, May 27, 1994). Meanwhile, the set-off right held by the debtor against a third party may be the object of the creditor’s subrogation right, but in principle, it satisfies the requirements such as the existence and necessity of the claim and its preservation, and the arrival of the time limit (see, e.g., Supreme Court Decisions 95Da22917, Sept. 5, 1995; 2003Da1250, Apr. 11, 2003). In cases where a quasi-joint and several liability jointly and severally liable has the right to set-off against another creditor who has already acquired the right to demand reimbursement against the quasi-joint and several liability.

Examining the facts acknowledged by the court below by citing the reasoning of the judgment of the court of first instance in light of the above legal principles, it is merely a co-joint and several relationship between the new L&A and the non-joint and several obligation against the plaintiff. Even if the new L&A holds a claim against the plaintiff, it cannot be deemed that the new L&A can set-off itself with its claim by applying the application or analogical application of Article 418(2) of the Civil Act to the effect that the new L&A has a claim against the plaintiff, and the new L&A cannot exercise its right to set-off against the plaintiff by taking the right to set-off against the plaintiff by taking the right to claim reimbursement against the new L&A as the preserved right of the creditor of the right to claim reimbursement that can be acquired by the new L&A, without extinguishing its claim against

Although the reasoning of the court below is somewhat insufficient, the judgment of the court below that made the same conclusion is just, and there is no error in the misapprehension of legal principles as to the legal nature of the joint and several liability set-off under Article 530-9 (1) of the Commercial Act, which affected the conclusion of the judgment, as otherwise alleged in the ground

6. Conclusion

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.

Justices Park Si-hwan (Presiding Justice)