The meaning of the partnership agreement under the Civil Act / Whether the voluntary withdrawal of a partner shall be made by an expression of intent to other partners (affirmative), and whether it may be implicitly made (affirmative) / Whether the voluntary withdrawal of a partner may be made by an expression of intent to withdraw / Whether the voluntary withdrawal of the withdrawing partner belongs to the remaining partner (affirmative in principle)

Articles 105, 703(1), 704, 716, and 719 of the Civil Act

Supreme Court Decision 2005Da7405 Decided September 20, 2007

Plaintiff (Counterclaim Defendant) (Law Firm Shin & Yang, Attorneys Kim Tae-kwan et al., Counsel for the plaintiff-appellant)

Defendant-Counterclaim (Attorney Lee Dong-ho et al., Counsel for defendant-Counterclaim)

Busan High Court Decision 2013Na8236, 2014Na62 decided April 21, 2015

The judgment below is reversed, and the case is remanded to Busan High Court.

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

1. A partnership agreement under the Civil Act is a contract under which two or more persons mutually invest to jointly operate a business, and is deemed to be a partnership agreement only for an agreement to jointly operate a specific business (Article 703(1) of the Civil Act). A voluntary withdrawal of a partner shall be a kind of termination as to the partnership agreement, which is an expression of intent to other members. However, such expression of intent does not necessarily have to be explicitly and explicitly, and whether a voluntary withdrawal is made shall be determined in accordance with the general principles of interpretation of a juristic act. If a voluntary withdrawal of a partner is lawful, the portion of voluntary withdrawal of the withdrawing partner shall belong to the remaining members unless there is a special agreement (see Supreme Court Decision 2005Da7405, Sept. 20, 2007, etc.).

2. After recognizing the following facts, the lower court rejected the Defendant’s assertion that the instant partnership relationship terminated around that time, on the grounds that it is difficult to deem the Plaintiff (Counterclaim Defendant; hereinafter “Plaintiff”) to have withdrawn from the partnership with the Defendant (Counterclaim Plaintiff; hereinafter “Defendant”) around November 2002.

A. Since November 2002, the Defendant was a sole person in relation to the business registration of the instant hospital, the ownership of the building and site of the hospital, the debtor of the right to collateral security, and the financial account that manages the profits of the hospital, but such circumstance alone is insufficient to readily conclude that the Plaintiff left the partnership.

B. On June 11, 2004, the Plaintiff loaned KRW 515 million to the Defendant as operating expenses of the instant hospital, and KRW 100 million on August 11, 2004, and guaranteed the Defendant’s loan obligations to the National Agricultural Cooperative Federation on August 29, 2005, and participated in the financial issues of the instant hospital even after November 2002.

C. On April 29, 2004, the Plaintiff sold the site of the instant hospital to the Defendant and transferred the ownership of the instant hospital to the Defendant, but this was already scheduled at the time of entering into a partnership agreement, and it does not affect the existence of the instant partnership.

D. On October 10, 2007 and October 22, 2007, the Defendant sent to the Plaintiff an agreement and a written opinion stating that an additional investment equivalent to the previous shares should be made as much as the size of the instant hospital has been expanded by content-certified mail.

E. The Defendant remitted to the Plaintiff KRW 15 million per month for a considerable period, and, as alleged by the Defendant, if the said money includes the principal repayment amount of KRW 500 million in the liquidation money of the instant association, the Defendant should have paid new interest calculated on the basis of the remainder remaining after deducting the principal already repaid. However, the Defendant did not assert such assertion to the Plaintiff.

3. However, the lower judgment is difficult to accept for the following reasons.

A. The reasoning of the lower judgment and the record reveal the following.

1) At the time of the establishment of the instant hospital, Nonparty 1 and Nonparty 2 registered with the Defendant as joint business proprietor pursuant to the instant business agreement, and withdrawn from the said business partnership on November 2002. The Plaintiff, from the beginning, did not register as joint business proprietor of the instant hospital since the Plaintiff operated the hospital called “○○ Department” or was working at the said hospital. Since November 2002, the Defendant independently registered the instant hospital and operated the said hospital as the nominal owner of the instant positive and negative property, and the Plaintiff was a member of the said business association, and was not involved in the operation or diagnosis and treatment of the instant hospital, and did not exercise the authority to inspect the business and financial status of the association in accordance with Article 710 of the Civil Act.

2) After November 2002, the Plaintiff was fully reimbursed KRW 650 million as operating expenses. On April 29, 2004, the Plaintiff transferred the ownership of the site of the instant hospital to the Defendant, and was exempted from the obligation as a person who has pledged the property to secure the right to collateral security of the said association. On June 11, 2004 and August 11, 2004, the Plaintiff loaned KRW 615 million in total to the Defendant as the expenses for the operation of the hospital. However, in light of the fact that the Plaintiff filed a lawsuit seeking the return against the Defendant, it was based on a monetary loan contract separate from the instant contract, and the Defendant’s debt of loans to the National Agricultural Cooperative Federation on August 29, 2005, the Plaintiff did not have been able to claim that the Plaintiff had already been involved in the instant hospital’s investment in the Plaintiff’s investment in the Plaintiff and the Defendant’s relationship with the size of the operating expenses of the instant hospital.

3) On July 28, 1999, the Plaintiff and Nonparty 1 agreed to lease the site of the instant hospital owned by them without compensation for two years from the opening date of the hospital, and upon the termination of the free lease period, to refund the purchase price from the said association. In addition, in light of the fact that the Plaintiff, Nonparty 1, Defendant, and Nonparty 2 agreed to assume the investment obligation corresponding to the shares of the instant association around 1999, and the Plaintiff and Nonparty 1 did not have agreed to be exempted from the investment obligation on the instant hospital site, the Plaintiff and Nonparty 1 transferred the instant hospital site to the instant trade association, not the Defendant, but to recover the purchase price preferentially from the profits of the instant trade association, and the Plaintiff maintained their own shares as to the instant hospital site. However, the Plaintiff did not sell the Plaintiff’s shares to the Defendant on April 29, 204, which correspond to the shares of the instant hospital to the Plaintiff’s ownership.

4) As determined by the lower court, the Defendant remitted to the Plaintiff KRW 15 million per month for a considerable period, as determined by the lower court. However, the Defendant failed to immediately pay to the Plaintiff the liquidation amount equivalent to the Plaintiff’s share at around November 2002. On the other hand, on the one hand, from November 2000 to October 202 established by the instant hospital, the Defendant distributed the Plaintiff’s share of KRW 3.5 million per month from November 3, 2000, to October 3, 2002, and after November 200, paid the Plaintiff money of KRW 10 million per month regardless of whether the instant hospital’s profits accrue or not. In light of these circumstances, it is highly probable that the Defendant agreed to immediately pay the Plaintiff KRW 50 million per month of the settlement amount without setting the maturity period, and if the Defendant did not pay a large amount of debt, then the Defendant cannot be deemed to have agreed to have forced the Plaintiff to pay the settlement amount in installments, regardless of whether the principal would have been repaid in part of the agreement.

5) On October 10, 2007 and October 22, 2007, the Defendant sent to the Plaintiff an agreement and a written opinion stating that an additional investment equivalent to the previous shares should be made as much as the size of the instant hospital has been expanded by content-certified mail. However, the agreement and written opinion do not explicitly state that the Plaintiff’s share in the business should be acknowledged. However, in order for the Plaintiff to claim that the initial shares of the instant hospital were maintained as it is, it appears only to the purport that the Plaintiff should perform an additional investment obligation corresponding to the size of the hospital expanded during that period or the expenses already spent.

B. Examining these circumstances in light of the legal principles as seen earlier, the Plaintiff and the Defendant agreed on November 2002, instead of receiving the distribution of the profits corresponding to the shares of the hospital revenues from the Defendant, to liquidate the Plaintiff’s previous investments of KRW 147,099,016 and all rights to the hospital of this case with KRW 500 million. However, the Defendant agreed to allow the Plaintiff to pay the Plaintiff the settlement money and the damages for delay in installments by paying the cash of KRW 10,000 per month. The Plaintiff exempted the Plaintiff from the obligation without maintaining shares to the partnership and transferred the ownership of the site of the hospital of this case to the Defendant solely, and it seems that the Plaintiff impliedly expressed his intention to withdraw from the partnership of this case with Nonparty 1 and Nonparty 2, who are members of the other partnership of this case.

Nevertheless, without examining the aforementioned circumstances, the lower court rejected the Defendant’s assertion that the Plaintiff terminated a partnership’s business relationship by explicitly withdrawing from the partnership on November 2002, without examining the aforementioned circumstances, by misapprehending the legal doctrine regarding the expression of intent to withdraw from the partnership, thereby adversely affecting the conclusion of the judgment.

3. Conclusion

Therefore, without further proceeding to decide on the remaining grounds of appeal, the lower judgment is reversed, and the case is remanded to the lower court for further proceedings consistent with this Opinion. It is so decided as per Disposition by the assent of all participating Justices on the bench

Justices Lee Ki-taik (Presiding Justice)