The legal nature of the partnership business agreement between both parties who invest in cash and goods (land) and jointly establish and operate a joint stock company, and the sharing of expenses and profits for the joint management of the company shall be based on the share ratio, and whether either party is entitled to receive the distribution of residual assets if the partnership business agreement did not carry out liquidation procedures in accordance with the provisions of the Commercial Act on the liquidation of the company (negative)

[1] Article 103 of the Civil Code

[Plaintiff-Appellant] Plaintiff 1 and 1 other (Law Firm Doz., Counsel for plaintiff-appellant)

1.2.2

Red Profit (Attorneys Cho Hun-soo et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2002Na35654 delivered on March 28, 2003

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

1. The court below acknowledged facts based on its adopted evidence, and determined that the plaintiff company was a company established for the purpose of operating a partnership with the defendant, the defendant, the outer iron, the Leecheon-gu, the Park Jong-gu, the Park Jong-gu, and the Kim Jong-do, so if the plaintiff company failed to properly perform its part of investment, and the plaintiff was unable to maintain the initial partnership with the dispute, it should terminate and settle the partnership in accordance with legitimate procedures. However, the court below decided to arbitrarily distribute the real estate invested at the temporary general meeting of shareholders of this case by the defendant, the Leecheon-gu, and the majority shareholders, including the defendant and Leecheon-gu, who have special interests, without going through these procedures, without the exclusion of Kim Jong-do, and therefore, the registration of transfer of ownership of this case constitutes a crime of breach of trust as it undermines the rights of the plaintiff company and the shareholders, and therefore, the registration of transfer of ownership of this case, which was completed based on this procedure, is a registration invalidation of the cause of the invalidity

2. A partnership agreement with the purport that both parties jointly establish and operate a stock company by investing cash and in kind (land) and jointly manage the company according to the share ratio is based on the joint venture between the parties concerned as the name of the joint venture and the legal principles of the joint venture, and thus liquidation of the company shall also be conducted in accordance with the provisions of the Commercial Act on the liquidation of the company. Thus, insofar as a company is established pursuant to such partnership agreement and its substance is maintained, unless liquidation procedures are conducted in accordance with the Commercial Act on the liquidation of the company, one party may not receive the allocation of residual assets (see Supreme Court Decision 2001Da84381, Oct. 11, 2002, etc.).

However, if the partnership business relationship of this case was terminated or at least the defendant, the defendant, the defendant, etc. had tried to distribute the remaining assets by asserting the termination thereof, the defendant, etc. should first have been applied to the settlement procedure of the company (it can be applied to the settlement procedure under the partnership agreement under the Civil Act) in accordance with the liquidation procedure of the company (it can be applied supplementaryly to the settlement procedure under the partnership agreement under the Civil Act). In particular, even though the settlement of Kim Jong-un and the distribution of the real estate in this case should have been completed, it should be made illegal under the resolution procedure, and the transfer of the real estate in this case to the defendant by the representative director of the plaintiff company to the defendant is detrimental to the property interests of the plaintiff company and Kim Jong-young. Accordingly, the transfer of the real estate in this case by the representative director of the plaintiff company to the defendant is not merely an error in the resolution procedure but also an act of breach of trust or a tort by the defendant, etc. in collusion with the defendant, etc.,

The judgment of the court below to the same purport is just and acceptable, and there is no error in the misapprehension of legal principles as to the juristic act contrary to social order.

3. 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 Yoon Jae-chul (Presiding Justice)