[1] The method of interpreting the intent in a case where the grounds for termination of the entry contract as determined by the parties to the entry contract are not clear

[2] In a case where a local government-invested company and a local government-invested company explicitly acknowledged the voluntary termination during the contract period while the local government-invested company and the local government-invested company are allowed to unilaterally terminate the contract only when there are certain grounds for termination such as the local government-invested company's default, etc., the case holding that the local government-invested company cannot terminate the contract at will during the contract period unless the above grounds for termination exist

[1] The specific legal relationship between a local owner and a local government-invested company is determined by the principle of private autonomy. As such, a local government-invested company and a local government-invested company may arbitrarily determine the grounds for termination of a local government-invested contract according to the terms of a local government-invested contract. If the grounds for termination of a local government-invested contract are not clear, it may lead to an issue of interpretation of intent. As such, when interpreting such intent of a party, it shall be reasonably interpreted in accordance with logical and empirical rules and the common sense of social norms and the common sense of transaction so that it conforms to the ideology of social justice and equity.

[2] In a case where a local government-invested company and a local government-invested company enter into a contract with a five-year contract period for a local government-invested company and agreed that a local government-invested company shall explicitly recognize the voluntary termination during the contract period and pay a certain amount with penalty to the local government-invested company, while the local government-invested company does not explicitly stipulate whether the local government-invested company may terminate the contract at will during the contract period, but provided that the local government-invested company may unilaterally terminate the contract only when there are certain grounds for termination, such as default on the local government-invested company and reduction of the number of vehicles, the case holding that the local government-invested company can terminate the contract only when there are such grounds for termination during the contract period, and that the contract cannot be terminated at will during the contract period unless such grounds for termination

[1] Articles 105 and 689 of the Civil Act / [2] Articles 105 and 689 of the Civil Act

Bocheon Business Corporation

Defendant

Suwon District Court Decision 2009Na30370 decided September 1, 2010

The part of the lower judgment against the Defendant is reversed, and that part of the case is remanded to the Suwon District Court Panel Division.

The grounds of appeal are examined.

In cases where a truck owner and a trucking transport business operator externally trust the name of his/her vehicle to a trucking transport business operator (hereinafter referred to as a "sub-owner") and the right to manage the ownership and the right to manage the vehicle; however, in cases where a trucking owner and a trucking transport business operator enter into a so-called "sub-in-in-out contract" with the intent to pay a certain amount of management expenses to the company to which the aforementioned land-in-in-house is placed in their own account upon entrustment of the right to manage the operation of the aforementioned land-in-house, such a contract constitutes a contract in which the elements of the title trust and the delegation are combined (see Supreme Court Decision 2009Da71534, 71541, Feb. 11, 2010). Meanwhile, the specific legal relationship between the land owner and the affiliated company is finalized by the principle of private autonomy, and thus, the land-in-house and the affiliated company should be reasonably interpreted through the parties' intent to terminate the contract in accordance with the principle of logic and equity.

According to the reasoning of the judgment below, the court below, based on the adopted evidence, found the following facts: (a) on July 1, 2007, the plaintiff entered into an entry contract with the defendant designating 200,000 won for the management expenses for the instant automobile; (b) on June 9, 2008, the plaintiff transferred the instant automobile to the Esbb Investment Guarantee Co., Ltd. (hereinafter “Nonindicted Company”); (c) around that time, the defendant entered into an entry contract with the non-party company with the management expenses at KRW 150,000 with the non-party company; (d) on February 19, 2009, the plaintiff acquired the instant automobile again from the non-party company with the truck transport business; and (e) on the ground that the non-party company terminated the entry contract at any time; and (e) on the premise that the transfer of ownership against the non-party company becomes subject to the execution of the transfer registration procedure for the transfer of ownership; and (e) determined that the plaintiff reached the defendant 1900 copy of the complaint.

However, such determination by the court below is difficult to accept in light of the aforementioned legal principles and the following circumstances.

First, according to the reasoning of the lower judgment and the evidence duly admitted by the lower court, the Plaintiff and the Defendant concluded a land entry contract with KRW 200,000 for the instant automobile on July 1, 2007, which was prior to the conclusion of the instant land entry contract, with respect to which the management fee was set up on July 1, 2007. Article 15 of the above contract provides that "the period of ground entry management shall be five years." Article 17 (2) of the above contract provides that "the Plaintiff may unilaterally cancel the contract without any due notice for performance in any of the following cases." Article 17 (2) provides that "if the Plaintiff is in arrears with the obligation of Article 5 and the Defendant for at least three months (Article 2), if the Defendant was in arrears with the payment of wages of his employee for at least three months (Article 3), if the Defendant’s management vehicle was transferred to a third party without the Plaintiff’s consent (Article 4), the Defendant’s right to manage the instant automobile shall be paid the damages to the Plaintiff."

However, the above contract as of July 1, 2007 provides that the defendant who is a branch owner shall explicitly recognize the voluntary termination during the contract period through Article 17(4) and pay a penalty of three million won to the plaintiff who is a branch owner. On the other hand, there is no explicit provision as to whether the plaintiff who is a branch owner can terminate the contract at will during the contract period, and Article 17(2) of the contract which provides for the termination of the branch owner's contract provides that the plaintiff can unilaterally terminate the contract only when there are certain grounds for termination, such as the defendant's default of obligation or reduction of the number of vehicles, which is a branch owner, and if there is no such grounds for termination, the contract cannot be terminated at will during the contract period. Thus, reasonable interpretation of the above contract provisions is made to deem that the contract can not be terminated at will during the contract period.

On the other hand, the court below determined that the plaintiff and the defendant entered into the instant provisional contract as impliedly on February 19, 2009, and did not decide whether the terms and conditions of the contract or the grounds for termination of the contract are specific. If the terms and conditions of the instant provisional contract are the same as those of the instant provisional contract as those of July 1, 2007, the plaintiff as the branch company cannot terminate the instant provisional contract at will unless the grounds for termination are stipulated in the contract.

On the other hand, the court below should have judged that the ground for termination of the contract of this case was voluntarily terminated by the delivery of a copy of the complaint of this case without examining whether the parties have set the contract term at the time of concluding the instant land entry contract, what is the specific contents of the instant land entry contract, what is the grounds for termination of the contract of this case, and if the contents of the term of the instant land entry contract and the grounds for termination of the contract of this case are the same as the contents of the contract of July 1, 2007, the court below should have judged whether the grounds for termination of the contract of this case were the grounds for termination of the contract of this case under Article 17(2). Thus, the court below erred by misapprehending the legal principles as to termination of the land entry contract of this case by failing to exhaust all necessary deliberations. The defendant's ground for appeal pointing this out has merit.

Therefore, without further proceeding to decide on the remaining grounds of appeal, the part against the defendant among the judgment below is reversed, and that part of the case is remanded to the court below 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 Shin Young-chul (Presiding Justice)