In a case where Gap incorporated farming association supplied rice and miscellaneous rice to Eul incorporated farming association pursuant to a supply contract that provides rice and miscellaneous rice to Eul incorporated farming association, but failed to receive part of the sales proceeds, and thus sought a payment of a debt charge pursuant to its equity ratio against Byung who is a member of Eul incorporated farming association, the case holding that Gap incorporated farming association is merely entitled to seek a debt performance against Eul incorporated farming association, and it cannot be claimed against Byung et al.

It is a matter of seeking the payment of liability charges according to the equity ratio against Byung who is a member of the corporation Eul, as the farming association corporation supplied rice and miscellaneous rice pursuant to the supply contract that provides Eul with rice and miscellaneous rice to Eul's farming association corporation, but did not receive part of the sales proceeds.

As the Act on Fostering and Supporting Agricultural and Fisheries Enterprises was amended by Act No. 12961 on January 6, 2015, Article 17(3) newly established a provision that the liability of a member of an agricultural partnership shall be limited to the amount of investment made by the said member. The above provision also applies to cases where a creditor of an agricultural partnership exercises his/her rights against a member of the association, and does not bear any liability against a creditor of the agricultural partnership in excess of the amount of investment made by the member after the enforcement of the amended Act. In the case of an agricultural partnership, since the concept of partial performance of an obligation of investment by a member of the association cannot be presented, a member of the agricultural partnership bears any liability within the extent of the amount of investment actually made by the agricultural partnership, and therefore, a creditor of the agricultural partnership can seek a performance of obligation against the relevant agricultural partnership

Articles 16 (6) and (8), 17 (3), and Articles 1 and 3 of the Act on Fostering and Supporting Agricultural and Fisheries Enterprises; Articles 9 (2), 10 (1), and 12 (1) of the Enforcement Decree of the Act on Fostering and Supporting Agricultural and Fisheries Enterprises; Article 712 of the Civil Act

Jina Agricultural Association (Law Firm Namnam General Law Office, Attorneys Jin Tae-ho, Counsel for the plaintiff-appellant)

Defendant 1 and 9 others (Law Firm Jinjin, Attorneys Choi Jong-woo et al., Counsel for defendant-appellant)

April 29, 2020

1. The plaintiff's claims against the defendants are all dismissed.

2. The costs of lawsuit shall be borne by the Plaintiff.

The Defendants shall pay to the Plaintiff 5% interest per annum from May 21, 2018 to the delivery date of a copy of the complaint of this case, and 12% interest per annum from the next day to the day of full payment.

1. Basic facts

The following facts may be acknowledged as either of the parties to a dispute or as a whole by taking into account the whole purport of the pleadings in each entry in Gap evidence 1 through 5 (including a serial number; hereinafter the same shall apply):

A. The Defendants are members of the Geum-American Agricultural Partnership established for the purpose of selling and exporting rice and miscellaneous rice.

B. From 2016, the Plaintiff entered into a supply contract to supply rice and miscellaneous rice (hereinafter “instant contract”). Under the instant contract, the Plaintiff supplied rice and miscellaneous rice until May 21, 2018, but the gold-U.S. farming association did not pay KRW 314,295,160 out of the sales proceeds under the instant contract.

2. Determination

A. The plaintiff's assertion

Since Article 17(3) of the Act on Fostering and Supporting Agricultural and Fisheries Enterprises governing the legal relations of agricultural partnerships newly established a provision that the liability of a member or an associate member of an agricultural partnership shall be limited to the amount of investment paid, the Defendants are obligated to pay the debt charges of a gold farming partnership according to their respective shares by Defendant as stated in the attached Table, among the members of an association that has invested in a gold farming partnership.

B. Relevant statutes

The Act on Fostering and Supporting Agricultural and Fisheries Enterprises (hereinafter “Agricultural and Fisheries Business Entities Act”) which regulates legal relations of agricultural partnership corporations was amended by Act No. 12961 on January 6, 2015. The main contents relating to this case are as follows:

(3) Except as otherwise provided for in this Act, the provisions of the Civil Act concerning associations shall apply mutatis mutandis to agricultural partnership and fisheries partnership. (8) Except as otherwise provided for in this Act, a member of an agricultural partnership and an associate member of an agricultural partnership. (3) Except as otherwise provided for in Article 17 (Members of agricultural partnership and fisheries partnership, etc.) Article 11 (Enforcement Date of Act No. 12961, Jan. 6, 2015) Article 1 (Enforcement Date) of the Addenda (Act No. 12961, Jan. 6, 2015) shall apply to a member of an agricultural partnership and an associate member of an agricultural partnership.

C. Determination

1) Under the former Act on Fostering and Supporting Agricultural and Fisheries Enterprises (amended by Act No. 12961, Jan. 6, 2015) where a creditor of an agricultural partnership did not have any special provision as to cases where a creditor of an agricultural partnership exercises his/her right against a member, the legal doctrine of the partnership under the Civil Act is applied, and the creditor of the agricultural partnership could have claimed the performance of the obligation against each member at the time of the occurrence of the obligation under Article 712 of the Civil Act.

However, with the amendment by Act No. 12961 on January 6, 2015, Article 17(3) of the Agricultural and Fisheries Business Act newly established a provision that the liability of a member of an agricultural partnership shall be limited to the amount of investment paid by the said member. The above provision also applies to cases where a creditor of an agricultural partnership exercises his/her rights against a member of the association, and as to the obligations incurred from July 7, 2015 after the enforcement of the above amendment, the member shall not be held liable to a creditor of the agricultural partnership exceeding the amount of investment paid. In other words, in the previous case, it is reasonable to view that a member of the agricultural partnership should be held liable for the obligations of the association association according to the loss ratio or equal shares, but it is reasonable to view that the amended provision provides that

However, Article 16 (6) of the Agricultural and Fisheries Enterprises Act provides for matters necessary for the investment, etc. of an agricultural partnership pursuant to the Enforcement Decree of the same Act provides that a member of an agricultural partnership may make an investment in farmland, cash, or in kind as prescribed by the articles of association (Article 10 (1)). Meanwhile, an agricultural partnership shall include the methods of paying and calculating the amount of investment and the maximum amount of investment that a member is entitled to make by the articles of association (Article 12 (1)), and shall register the total amount of investment and the total amount of investment made at the time of registration of incorporation (Article 9 (2)). In the case of an agricultural partnership, the concept of partial performance of an investment obligation of a member cannot be presented. Accordingly, a member of the agricultural partnership shall be liable to the extent of the amount of investment actually made for the obligations of the partnership juristic person. Accordingly, a creditor of the partnership juristic person may seek the performance of its obligations against the relevant partnership juristic person, but may not seek it against the partner.

2) Under the premise that the Plaintiff may claim for the performance of the pertinent obligation against each partner at the time of the occurrence of the claim, the Plaintiff sought an amount according to each share ratio among the obligations of the Geum-U.S. Agricultural Partnership. The Plaintiff’s claim of this case is without merit on the ground that it violates the above provision stipulating limited liability within the scope of its investment and requires additional investment to the Defendants or is based on unlimited liability

3. Conclusion

Therefore, all of the plaintiff's claims against the defendants are dismissed. It is so decided as per Disposition.

[Attachment] List: omitted

Judges South-North (Presiding Judge)