[1] Standard for determining whether a juristic act committed by a partner with unlimited liability in a limited partnership company constitutes a fraudulent act

[2] The meaning of "when a company cannot repay its obligations with its assets" under Article 212 (1) of the Commercial Code and the criteria for determining such "where the company cannot repay its obligations with its assets"

[1] Article 212(1) of the Commercial Act, which applies mutatis mutandis to a limited partnership company pursuant to Article 269 of the Commercial Act, provides that "each member of the unlimited partnership company shall be jointly and severally liable for payment of the company's obligations, if it is impossible to fully repay the company's obligations with its assets." Paragraph (2) of the same Article provides that "if compulsory execution against the company's assets is not effective, the former paragraph shall also apply to the case where the company bears its obligations, and the liability of the limited partnership company is naturally arising from the statutory provisions if the company bears its obligations, and it does not arise only when "if it is impossible to fully pay its obligations with the company's assets," or "if compulsory execution against the company's assets is not effective," it is reasonable to deem that the creditor constitutes such a case and determine whether the company's obligations constitute a fraudulent act, such as a payment contract in kind, etc., by proving that it falls under such case, the company's liability is limited to the limited partnership company's own assets and liabilities of the limited partnership company.

[2] Article 212(1) of the Commercial Act provides that "when the company's total debt cannot be fully paid with its company's assets" refers to a situation in which the company's total debt exceeds its total assets, i.e., the company's debt status. This shall be determined based on the total debt amount actually borne by the company and the total value of assets appraised by the company. It shall not be determined based on the total value of assets on the financial statements, such as balance sheet, and it shall not be determined based on the nominal debt amount and assets on the financial statements, such as balance sheet

[1] Article 406(1) of the Civil Act, Articles 212 and 269 of the Commercial Act / [2] Articles 212(1) and 269 of the Commercial Act

[1] Supreme Court Decision 2006Da65903 Decided May 28, 2009 (Gong2009Ha, 985) / [2] Supreme Court Order 2007Ma887 dated November 15, 2007 (Gong2008Sang, 353)

New Asia Trade Co., Ltd. (Law Firm Loex, Attorneys Kim Dong-dong et al., Counsel for the plaintiff-appellant)

Defendant (Law Firm, Kim & Lee LLC, Attorneys Ko Hyun-chul et al., Counsel for the defendant-appellant)

Supreme Court Decision 2006Da65903 Decided May 28, 2009

Seoul High Court Decision 2009Na47465 decided February 18, 2010

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

Examining the reasoning of the judgment below in light of the records, it is not sufficient to recognize that the evidence submitted by the court below alone constituted a fraudulent act by Nonparty 1 prior to one year prior to the filing of the lawsuit in this case, and that there is no evidence to acknowledge otherwise, and it is just to determine that there is no other evidence to acknowledge this. In so doing, the court below did not err by exceeding the bounds of the principle of logic and experience

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

A. Article 212(1) of the Commercial Act, which applies mutatis mutandis to a limited partnership company pursuant to Article 269 of the Commercial Act, provides that "each member of the unlimited partnership company shall be jointly and severally liable for the repayment of the company's obligations if the company's obligations are not fully paid out of its assets." Paragraph (2) of the same Article provides that "if a compulsory execution against the company's assets is not effective, the former paragraph shall also apply if the company bears its obligations, the liability of the general partner of the limited partnership company is naturally arising from the provisions of the Act if the company bears its obligations, and it does not occur only when "if the company's assets cannot be fully paid its obligations or compulsory execution against the company's assets are not effective" and it is reasonable to deem that the company's creditors have set forth the requirements for supplementary performance of liability to the general partner of the limited partnership company by proving that they fall under such cases (see Supreme Court Decision 2006Da65903, May 28, 2009).

Therefore, in determining whether a juristic act by a general partner with unlimited liability of a limited partnership company constitutes a fraudulent act, the said juristic act may be deemed to constitute a fraudulent act unless there are special circumstances, in case where the total amount of debts inherent to the general partner and the total amount of debts owed by the limited partnership company exceeds the total amount of assets inherent to the general partner with unlimited liability. However, in light of the fact that the liability of the general partner with unlimited liability of the limited partnership company lies in complementary nature as above, in a case where assertion and proof is made by the limited partnership company at the time of the said juristic act (Article 212(1) of the Commercial Act), it is reasonable to determine whether the juristic act constitutes a fraudulent act by comparing the total amount of debts inherent to the general partner with the total amount of assets inherent to the general partner without considering the debts owed by the limited partnership company (see Supreme Court Decision 201Da40763, Oct. 23,

Meanwhile, Article 212(1) of the Commercial Act provides, “when a company cannot fully repay its obligations with its assets” refers to a situation in which its total liabilities exceed its total assets, i.e., a situation in which its total liabilities exceed its total assets. This is determined on the basis of the total amount of liabilities actually borne by the company and the total amount of assets appraised by its actual value. It is not determined on the basis of the total amount of nominal liabilities and assets recorded in financial statements, such as balance sheet (see Supreme Court Order 2007Ma887, Nov. 15, 2007). Furthermore, it is not necessary to consider in principle the credit, effort, function (technology) and future revenues of the company in calculating its total assets.

B. (1) The court below held that the non-party 1, who is the general partner of the ship-general partner of the ship-general partner company (hereinafter "the ship-general partner"), did not assume any supplementary responsibility for the debt of the ship-general and therefore, it is not reasonable to determine whether the payment contract of this case constitutes a fraudulent act in favor of the non-party 1's financial resources of the ship-general in determining whether the payment contract of this case constitutes a fraudulent act in favor of the non-party 1 is in violation of the above legal principles. However, the court below held that the evidence submitted after examining whether the non-party 1 was able to fully pay the debt of the ship-general at the time the payment contract of this case was made in favor of the non-party 1 and there is no other evidence to acknowledge this. The court below held that the non-party 1's payment contract of this case constitutes a fraudulent act because the aggregate of the debt of the ship-general and the debt-specific to the non-party 1 exceeds

(2) The defendant alleged in the grounds of appeal that the value of the business rights of a ship without a license should be included in calculating the total amount of assets of the ship without a license. However, since the original business rights refer to the intangible asset value of the company's traditional, social credibility, conditions of location, the existence of special manufacturing technology or special transaction relationship, and the monopoly of the manufacture and sale, etc., which means the excessive profit-making ability to make profits more than that of other companies engaged in the same kind of business (see, e.g., Supreme Court Decision 2003Du7804, Apr. 9, 2004). Thus, in this case where there is no evidence to prove that the ship without a license acquired the business rights with a consideration in accordance with the adequate valuation methods, the defendant's above assertion is not acceptable, contrary to the assertion that the credit, effort, function (technology) and future revenues, etc. of the company, which are not subject to consideration in determining whether

(3) In addition, the court below seems to have not included the trademark value of the ship of Joseon in the total amount of assets of the ship of Joseon, until the date of closing argument in the court below, because the defendant did not submit as evidence the trademark register of the ship of Joseon Korea until the date of closing argument in the court below, and because the defendant did not submit objective evidence to acknowledge the trademark value. The court below's total amount of the defendant's oral argument cannot be viewed as the defendant's duty of completion of oral argument after the completion of oral argument in the status of non-party 1's claim exemption and resumption of oral argument after the completion of oral argument in the status of non-party 1's assets and debts, which was prepared after the actual inspection of assets and debts of Samduk Accounting Corporation of August 18, 200 before the actual inspection of the ship of Joseon, and after the actual inspection of assets and debts, which were made on March 31, 2002.

C. Ultimately, while the reasoning of the lower judgment is partially inappropriate, the lower court did not err by misapprehending the legal doctrine regarding the requirements for establishing fraudulent act against limited partnership companies with unlimited liability and the criteria for determining debts, etc., and by violating the duty of resumption of pleadings, contrary to what is alleged in the ground of appeal.

3. Regarding ground of appeal No. 4

A. A. The right to collateral security is a mortgage established by setting only the maximum amount of the debt to be secured and reserving the determination of an obligation in the future (Article 357(1) of the Civil Act), and is established for the purpose of securing a certain limit from a continuous transactional relationship to a certain extent in the future. Thus, separate from the act of establishing the right to collateral security, there is a legal act establishing the right to collateral security, and the burden of proving whether there was a legal act establishing the right to collateral security at the time of establishing the right to collateral security (see, e.g., Supreme Court Decisions 2003Da70041, May 28, 2004; 2010Da107408, Apr. 28, 2011).

B. The court below rejected the Defendant’s assertion on the following grounds: (a) the establishment of a mortgage on each of the instant real estate at the time of the instant accord and satisfaction contract was completed with Nonparty 2 and the maximum debt amount of KRW 300 million and each of the collateral amount of KRW 100 million; (b) however, when deducting the collateral amount of each of the instant real estate from the value of each of the instant real estate, Nonparty 1’s payment and satisfaction contract of the instant real estate did not constitute a fraudulent act because there was no value of each of the instant real estate; (c) based on the evidence submitted by the Defendant, the existence of each of the collateral amount cannot be deemed to exist, and there

In light of the above legal principles and records, the above judgment of the court below is just, and there is no error in the misapprehension of legal principles as to the presumption of registration and the allocation of burden of proof, as otherwise alleged in the

4. Conclusion

Therefore, the appeal is dismissed. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Park Il-young (Presiding Justice)