[1] In a case where a company division omitted an individual maximum procedure against known creditors under Articles 530-9(4) and 527-5(1) of the Commercial Act, the relationship between the newly incorporated company and the creditors of the divided company (=joint liability)

[2] The case holding that where a company newly incorporated as a result of the division did not exercise the right to indemnity against the company before the division when it jointly pays the guaranteed debt of the company before the division, the payment by subrogation shall not be subject to the denial of wrongful calculation

[3] The case reversing the judgment of the court below that revoked the corporate tax imposition disposition of the newly incorporated company on the ground that the act of waiver of the exercise of the right to indemnity against the company's subrogation and the company before the division was not subject to rejection of unfair calculation without examining whether the claim for indemnity due to subrogation can be included in the loss for the pertinent business year

[1] Where a divided company and a newly incorporated company do not bear joint and several liability for the obligations of the company prior to the division, there is a change in the debtor's liability property and has a significant influence on creditors' interests, so that creditors who are known to the company that is divided for the protection of creditors can be given a peremptory notice thereof (Articles 530-9(4) and 527-5(1) of the Commercial Act). Therefore, the change in the debt relationship between the divided company and the newly incorporated company into the divided company requires that the divided company should go through the individual peremptory notice procedure for the creditors known to the creditors. If such individual peremptory notice is omitted, it is reasonable to interpret that the divided company and the newly incorporated company are jointly and severally liable for repayment with the newly incorporated company that is divided.

[2] The case holding that where a company newly incorporated as a result of division did not exercise the right to indemnity against the company before the split-off in jointly paying the guaranteed debt of the company before the split-off, the company shall not be subject to the denial of wrongful calculation

[3] The case reversing the judgment of the court below that revoked the corporate tax imposition disposition against the newly incorporated company on the ground that the act of waiver of the exercise of the right to indemnity against the company's subrogation and the company before the division was not subject to rejection of unfair calculation without examining whether the claim for indemnity due to subrogation can be included in the loss for the pertinent business year

[1] Articles 527-5(1), 530-9(2) and (4) of the Commercial Act / [2] Articles 527-5(1), 530-9(2) and (4) of the Commercial Act, Article 52 of the Corporate Tax Act, Article 88 of the Enforcement Decree of the Corporate Tax Act / [3] Articles 19, 34(2) and (3), and 52 of the Corporate Tax Act, Article 19 subparag. 8, 62(1), and 88 of the Enforcement Decree of the Corporate Tax Act

[1] Supreme Court Decision 2003Da25973 decided Aug. 30, 2004 (Gong2004Ha, 1594)

Shin Il Engineering Co., Ltd. (Attorney Kim Jong-sung, Counsel for the defendant-appellant)

Head of Cheongju Tax Office

Daejeon High Court Decision 2004Nu2163 delivered on April 21, 2005

The part of the judgment of the court below concerning the disposition of imposing corporate tax for the business year 200 is reversed, and that part of the case is remanded to the Daejeon High Court. The defendant's remaining appeal is dismissed

We examine the grounds of appeal.

1. On the non-business-related provisional payment and the rejection of unfair act and calculation

Where a company that is divided and a newly incorporated company does not bear joint and several liability for the obligations of the company before the division, changes in the debtor's property and have significant influence on the creditor's interest, so that the creditors known to the company that is divided for the protection of creditors can be given peremptory notice thereof (Articles 530-9(4) and 527-5(1) of the Commercial Act). Therefore, the fact that the debt relationship between the company that is divided and the newly incorporated company is converted into a divided debt relationship must be the requirement that the company to be divided has sufficiently gone through individual peremptory notice to the creditors known to the company. If such individual peremptory notice is omitted, the effect of the divided debt relationship with the creditor cannot occur, and in principle, the company that is divided with the newly incorporated company shall be jointly and severally liable for payment (see Supreme Court Decision 2003Da25973, Aug. 30, 2004).

As acknowledged by the court below, insofar as the Seoul Metropolitan City Construction Co., Ltd. (hereinafter referred to as the “Seoul Metropolitan City Construction”) prior to the division divided the company and newly incorporated the Plaintiff company, and decided to bear only the Plaintiff’s obligation regarding the property invested in the Plaintiff company from among the obligations of the Taeil Construction prior to the division, but did not individually notify the creditors, the Plaintiff is jointly and severally liable for the obligations of the Kuil Construction prior to the division, in accordance with the

Therefore, the court below is just in holding that the payment by the plaintiff to the Korea Credit Guarantee Fund and the Korea Housing and Commercial Bank for the guaranteed liability of 8.477 million won for the limited partnership company of the Taeil Construction before the division (hereinafter "Gyeongwon Construction") and the Sejongwon Construction Co., Ltd. (hereinafter "Sewon Construction") is based on the plaintiff's responsibility to jointly and severally pay the amount of 1.9 billion won, and therefore, the payment by the plaintiff is based on the plaintiff's liability to pay the amount of 8.47 billion won out of the guaranteed liability of 8.7 billion won for the limited partnership of the Taeil Construction before the division. Therefore, the court below is justified in holding that the above subrogation by the plaintiff cannot be viewed as the provisional payment in charge of the Taeil Construction, which

Furthermore, in full view of all the circumstances, including the following circumstances: (a) the Plaintiff, as indicated in the record and the judgment of the court below, agreed to bear part of the guaranteed obligation of Kuil Construction before the division; (b) the ability to repay the obligation at the time of the above agreement; (c) the Plaintiff’s share of the guaranteed obligation of Kuil Construction at the time of the said agreement; and (d) the ratio of the obligation to be borne by the Plaintiff out of the amount of the guaranteed obligation of Kuil Construction at the time; and (e) the report on the transfer of construction, which was applied to Cheongbuk-do Governor, was accepted as the condition that the Plaintiff takes over all the obligations that had been mutually guaranteed in relation to the construction business before the division; and (b) the lower court is jointly and severally liable for the above guaranteed obligation of Kuil-il Construction before the division; (c) the amount of subrogated payment is 8.47 billion won,00 million won, among the total amount of the guaranteed obligation before the division; and (d) the act of exercising the right to demand reimbursement against the principal obligor and not exercise the right to reimbursement, as an unlawful act is justifiable.

2. As to the inclusion of the subrogation in deductible expenses

According to the facts and records established by the court below, at the time of the plaintiff's substitute payment for the guaranteed obligation of Taeil Construction prior to the above division, it was not possible for the plaintiff to exercise his claim for reimbursement due to a disposition on default by the head of tax office having jurisdiction over the payment of national taxes (81,000 million won by subrogation for the guarantee obligation of Taehee General Construction). Since the plaintiff's total amount of 4.85,00 million won by subrogation for the Gyeonghee General Construction is merely about 16.7% of the total guaranteed obligation amount for the Gyeonghee General Construction, and it is less than 3.3% of the total guaranteed obligation amount, there is no room to claim for reimbursement against other joint guarantors). The claim for reimbursement due to the subrogation for Sejong General Construction's guaranteed obligation has been able to exercise his claim for reimbursement since 2004 by obtaining a decision from the Cheongwon District Court.

In light of the above circumstances, it is reasonable to include the claim for reimbursement due to the performance of the guaranteed obligation to the ordinary construction among the claim for reimbursement due to the plaintiff's subrogation in deductible expenses in deductible expenses, considering the claim which cannot be recovered at the time of the above subrogation as the bad debt accrued during the pertinent business year. However, the claim for reimbursement due to the performance of the guaranteed obligation to the Sejong Construction cannot be deemed as satisfying the requirements for bad debt at the time of the above subrogation because it is possible to exercise the right for reimbursement as it is possible to exercise the right for reimbursement and it cannot

Nevertheless, without examining whether the above subrogation claim can be included in the loss for the business year 2000, each disposition of this case was unlawful solely on the ground that the waiver of the Plaintiff’s exercise of the right to indemnity against the above subrogation and sub-construction does not fall under the subject of wrongful calculation and thus, the court below’s revocation of the whole revocation of the disposition of this case was erroneous, which erred in the misapprehension of the legal principles as to the requirements for bad debt, thereby failing to exhaust all necessary deliberations, which affected the conclusion

3. Conclusion

Therefore, the part of the judgment of the court below regarding the disposition of imposition of corporate tax for the business year 2000 is reversed, and that part of the case is remanded to the court below for a new trial and determination, and the defendant's remaining appeal is dismissed. It is so decided as per Disposition by the assent

Justices Lee Hong-hoon (Presiding Justice)