June 3, 2015

2. The costs of appeal shall be borne by the Defendant.

Purport of claim

The defendant shall pay to the plaintiff 3 billion won with 6% interest per annum from April 1, 2013 to the service date of a copy of the complaint of this case, and 20% interest per annum from the next day to the day of complete payment.

Purport of appeal

The judgment of the first instance is revoked. The plaintiff's claim is dismissed.

The following facts do not conflict between the parties, or can be acknowledged by comprehensively considering the following facts: Gap evidence 1-1-3, evidence 2-1 through 6, Gap evidence 4, 5, 11, 12, 13, evidence 14-1 through 3, Gap evidence 16, 17, 21, 30, evidence 5-3, evidence 5-2, Eul evidence 27, and 30; Eul evidence 27, and witness non-party 6's testimony and witness non-party 5's testimony; Eul evidence 24 cannot be trusted; Eul evidence 26 cannot be enough to reverse the recognition.

[1]

On December 19, 2011, the Plaintiff is a company that manufactures and sells electric machinery, and the Defendant was established by succeeding to the construction business sector upon division of the Daewoo Motor Vehicle Sales Corporation. The rehabilitation procedure was completed on December 30, 201.

○○○○ New Urban Co., Ltd. (hereinafter referred to as “○○○ New Urban Co., Ltd.”) was an executor of a land readjustment project in the lightyang-si, ○○○○○○○○○ District Co., Ltd. (hereinafter referred to as “instant project”).

[2]

around January 2012, the Defendant entered Nonparty 1, who had worked as a general president of △△ Construction Co., Ltd. (hereinafter referred to as “△△ Construction”), and appointed respectively as the president on February 3, 2012, and on March 27, 2012.

On March 2012, 2012, the Defendant decided to accept various places of business, including the instant project promoted by Nonparty 1, working in △△ Construction, following the procedures for deliberation by the Suwon Council.

Pursuant to ○○, around March 2012, the Defendant entered into an agreement with △△ Construction to jointly perform the instant project. This was practically recognizing a certain share of the construction work of △△ Construction.

In addition, on March 22, 2012, the defendant entered into a business agreement with the △△△△△△△△ District Land Readjustment Project Association (hereinafter “the instant association”), which provides that the Defendant shall execute the instant project, and that the Defendant shall perform the construction work, including the initial business fund and all public charges, and the construction cost of △△△△△△△△△△△△△△△△△△△ Project Association (hereinafter “the instant association”).

[3]

○ The Defendant did not raise funds to lend early business funds to ○○ New Urban Parcel, an executory agent, but Nonparty 1 requested the Plaintiff to lend funds to the Plaintiff.

On April 10, 2012, upon ○○ request, the Plaintiff entered into a contract to lend KRW 3 billion to ○○ New City Parcel (hereinafter “instant loan agreement”) with respect to the instant business.

○ In the instant loan for consumption, the repayment period shall be within six months from April 10, 2012, and the principal shall be three billion won plus dividends of three billion won, four times, and if ○○ New City Rent fails to pay dividends of three billion won, it agreed to transfer all business rights granted by the instant association to the Plaintiff at three billion won.

The loan agreement of this case was concluded at the office of the defendant's representative director, and this was formed by the defendant's representative director, non-party 1, the plaintiff's representative director, non-party 2, and non-party 3, the director of ○○ New City, etc., and non-party 5 of the defendant's vice president were also present temporarily in that office.

On April 10, 2012, Nonparty 1, the representative director of the Defendant, prepared at the above office, a written confirmation (hereinafter “instant confirmation”) stating the Plaintiff as follows.

In relation to the land readjustment project of Mineyang ○○○ District, I agree that (a) the indication of the period of loan secured by the land secured by the land secured by the recompense for development outlay will be repaid in accordance with the repayment schedule in the amount of KRW 3 billion and the total of KRW 6 billion of dividends and dividends of the leased principal leased to ○○ New Urban Site, Inc.

Provided, That the principal of a loan shall be paid by subrogation if the contents of the monetary loan agreement between the two companies mentioned above concluded on April 10, 2012 do not proceed.

On April 10, 2014

The above confirmed person's trade name: The Treatment Industry Development Corporation

Address: (Explanation omitted)

Representative Director:

As ○○, the address stated at the end of the instant confirmation letter was the address indicated in the Defendant’s corporate registry, and Nonparty 1 signed his name on the next side of the Defendant’s representative director Nonparty 1 stated “representative director” at the end of the day as above.

[4]

On the other hand, the defendant issued a certificate of payment guarantee that guarantees the payment of the farmland of KRW 3.5 billion directly from the Korea Exchange Bank on June 1, 2012 and delivered to the association of this case as the △△ did not raise the initial funds.

On July 2012, 2012, ○○ Accounting Firm prepared a business feasibility analysis report with respect to the instant project at the Defendant’s request, and this report contains a scaming plan stating that 3 billion won of the loans of the executor(s) will be immediately repaid.

○○ Nonparty 1 resigned from the office of the Defendant’s representative director in accordance with the Defendant’s resolution of the board of directors on October 12, 2012, and accordingly, the instant project was not carried out any more.

Until now, ○○ New City Land did not pay the Plaintiff the principal amount of KRW 3 billion and dividends of KRW 3 billion to the Plaintiff.

2. The parties' assertion

A. The plaintiff

On April 10, 2012, Nonparty 1, the representative director of the Defendant, prepared the instant letter of confirmation, and guaranteed the obligation to borrow KRW 3 billion to the Plaintiff in accordance with the instant loan for consumption, which was concluded by Nonparty 1 through a resolution of the Defendant’s board of directors. Although Nonparty 1 did not go through the Defendant’s board of directors, the Plaintiff was unaware of such circumstance, and there was no negligence in not knowing that Nonparty 1 did not go through the Defendant’s board of directors. Accordingly, the Defendant, as the guarantor of ○○ New Urban Site, is liable to pay the Plaintiff the above KRW 3 billion and delay damages therefrom.

Although Nonparty 1 did not follow the Defendant’s resolution of the board of directors, and was negligent in not knowing such circumstances by the Plaintiff, the Plaintiff believed that the instant certificate was valid and lent KRW 3 billion to ○○ New Urban Parcel, thereby resulting in losses not being reimbursed. Accordingly, the Defendant is liable to pay the Plaintiff the said KRW 3 billion and damages for delay.

B. Defendant

When preparing the instant confirmation document, Nonparty 1’s representative director did not affix the Defendant’s corporate seal without attaching the Defendant’s corporate seal, and signed his personal seal without attaching the corporate seal certificate. Therefore, the instant confirmation document is merely an individual’s declaration of intent, not the Defendant’s declaration of intent, and thus, the Defendant does not bear the guarantee obligation against the Plaintiff

Considering the Defendant’s declaration of intent in the instant certificate, it did not undergo a resolution of the board of directors of the Defendant, and the Plaintiff knew or could have known such circumstances, and thus, the Defendant’s declaration of intention is null and void.

Even if the Defendant bears the guaranteed obligation to the Plaintiff, since ○○ New Urban District, the Defendant transferred the instant right to execute the instant project by payment in kind to the Plaintiff, the obligation to borrow the Plaintiff, ○○ New Urban District, was extinguished, and accordingly, the Defendant’s guaranteed obligation was also extinguished.

3. Determination

A. The confirmation of this case

1) We examine the facts of recognition as seen earlier as follows.

Around March 2012, Non-party 1 worked as a general president of △△ Construction and was appointed as the representative director of the defendant. Around March 2012, the defendant decided to accept the project of this case promoted by Non-party 1 when working in △△ Construction, and entered into an agreement with △△ Construction to jointly carry out the project of this case. The defendant performed the project of this case on March 22, 2012. The defendant entered into an agreement with △△△, ○○ New Urban Project, and the project of this case on March 22, 2012, with the initial project funds and construction expenses, and the ○○ New Urban Project, and entered into a project agreement with the execution agency.

In light of these circumstances, even without the resolution of the board of directors, the defendant decided to participate in the project of this case as a contractor through internal decision-making procedures, such as the procedures for deliberation of the Suwon Council.

(4) The defendant's representative director requested the plaintiff to lend funds to ○○ New Urban Parcel. Upon such request, on April 10, 2012, the plaintiff entered into the loan agreement of this case to lend KRW 3 billion to ○○ New Urban Parcel. The loan agreement of this case was concluded at the defendant's representative director's office, and this was concluded at the defendant's representative director's office, the plaintiff's representative director's director's director's director's and the director's director's director's director's director's non-party 3 et al. were the mother's office, and the defendant's vice president's non-party 5 was also present temporarily in that place. On April 10, 2012, the defendant's representative director 1 prepared the certificate of this case at the above office to the plaintiff at the above office, which did not proceed with the contents of the loan contract of this case between the plaintiff and ○○ Urban Parcel.

In light of these circumstances, the defendant decided to participate in the project of this case as a contractor through internal decision-making procedures, such as the procedures for deliberation of the Suwon Council, and the defendant's loan of funds to ○○ New Urban Parcel and guarantee of this is necessary for the execution of the project accordingly.

(4) In the process of the business feasibility analysis prepared around July 2012, 2012, the Defendant issued a certificate of payment guarantee to guarantee the payment of the farmland diversion charges in the amount of KRW 3.5 billion directly from the Korea Exchange Bank on June 1, 2012, and issued it to the instant association. In addition, in the business feasibility analysis report prepared by the Samsung Accounting Corporation around July 2012, the implementation agent (○○ New Urban Parcel Deposit) was stated in the implementation agent’s loan plan to immediately repay the amount of KRW 3.0 billion.

In light of these circumstances, the defendant's representative director, non-party 1 prepared the letter of this case to the plaintiff on April 10, 2012, and the validity of the letter of this case inside the defendant cannot be deemed to be an issue. Rather, the defendant's repayment of the defendant's debt of KRW 3 billion to the plaintiff ○○ New City, which was recognized within the defendant's inside.

C. On April 10, 2012, upon Nonparty 1’s request by the representative director, the Plaintiff entered into a loan agreement for consumption with ○○ New City (hereinafter “○○”) and had no transaction with ○○ New City (hereinafter “○○ New City”). The Plaintiff’s assets and credit was a company whose assets and credit did not reach the Defendant.

In light of these circumstances, the Plaintiff appears to have lent KRW 3 billion to ○○ New Urban Parcel, because of the Defendant’s guarantee, and it is difficult to view that 3 billion won was lent to ○○ New Urban Parcel with knowledge that the Defendant’s guarantee would be null and void due to the Defendant’s lack of a resolution by the board of directors.

2) In full view of the above circumstances, it is necessary for the Defendant to decide to participate in the instant project as a contractor through internal decision-making procedures, such as the procedures for deliberation of the Suwon Council, and for the Defendant to guarantee the Defendant’s obligation of the borrowed money to the Plaintiff of ○○ New City under the loan agreement of this case. Accordingly, Nonparty 1’s representative director prepared the instant confirmation document to the Plaintiff on April 10, 2012, and Nonparty 1 was the intent to represent the Defendant in preparing the instant confirmation document.

In addition, the confirmation document of this case contains the name of the defendant's corporation and the name of the representative director, and since the representative director of the defendant non-party 1 received and signed his name in the confirmation document of this case, the objective intention expressed also is that the non-party 1 was the representative of the defendant. Since the representative act of the corporation is based on the method of indicating the name and the agency of the corporation, it is not recognized as the representative act of the corporation unless the corporate seal is affixed

Therefore, the confirmation of this case is recognized as the defendant's expression of intent, not as the non-party 1's expression of intention.

3) According to the evidence and evidence set forth above and evidence No. 32, the defendant's board of directors rules provide large amount of funds and guarantee acts as matters to be referred to the board of directors. However, when the defendant's representative director prepares the letter of confirmation to the plaintiff, it is recognized that the defendant's board of directors did not pass a resolution of the board of directors

However, even if the representative director of a corporation does not undergo an external transaction subject to a resolution of the board of directors, the resolution of the board of directors is merely an internal decision-making of the company. Thus, if the other party to the transaction knew or could have known that there was no such resolution of the board of directors, the transaction is effective. In this case, the party to the transaction must assert and prove that the other party to the transaction knew or could have known that the resolution of the board of directors was not adopted (see, e.g., Supreme Court Decisions 98Da2488, Oct. 8, 1999; 2000Da20670, Jan. 24, 2003).

There is no evidence suggesting that the representative director of the defendant, on April 10, 2012, the plaintiff was aware that the non-party 1 did not undergo a resolution of the board of directors of the defendant when preparing the certificate of this case to the plaintiff.

In addition, according to the above, the Defendant decided to participate in the instant project through internal decision-making procedures, such as the procedures for deliberation by the Suwon Council, and on April 10, 2012, the Plaintiff concluded the instant loan agreement to lend KRW 3 billion to the Plaintiff at the office of Nonparty 1’s representative director at the Defendant’s office of Nonparty 1, and on the same day, Nonparty 1 prepared the instant confirmation document to the Plaintiff at the same office of Nonparty 1. The representative director of the △△ Defendant’s △△ was not considered to have a problem in the effect of the instant confirmation document within the Defendant, after preparing the instant confirmation document to the Plaintiff. Rather, the Defendant’s repayment of the Defendant’s debt of KRW 3 billion to the Plaintiff of ○○ New Urban Parcel was recognized in the Defendant’s inside.

Therefore, even if the non-party 1 did not know that the defendant's representative director did not undergo a resolution of the board of directors in preparing the defendant's letter of confirmation to the plaintiff, it cannot be said that the plaintiff was negligent, and there is no other evidence to acknowledge this.

4) Therefore, the Defendant, as a guarantor under the instant written confirmation, is obligated to pay the Plaintiff the principal amount of KRW 3 billion borrowed by ○○ New Urban Parcel, as well as damages for delay calculated at the rate of 6% per annum as stipulated by the Commercial Act from April 1, 2013 to September 11, 2013, the delivery date of the copy of the instant complaint, as sought by the Plaintiff, and 20% per annum as stipulated by the Act on Special Cases concerning the Promotion, etc. of Legal Proceedings, from the next day to the day of full payment.

(b) Payment in substitutes;

1) The defendant asserts that, since ○○○ New Urban Parcel Co., Ltd. transferred the right to execute the instant project by payment in substitutes to the plaintiff, the debt to the plaintiff of ○○ New Urban Co., Ltd. under the loan agreement of this case was extinguished, and therefore, the defendant's debt was extinguished.

2) According to the evidence evidence Nos. 5, 6, Eul evidence Nos. 8, 9, 24, and 25, it is recognized that ○○ New City Project Co., Ltd., which is separate from ○○○ New City Co., Ltd., was an agent for the instant project, and Nonparty 2, who was the president of the Plaintiff, was an internal director of ○○ New City Co., Ltd., on November 16, 2012, notified the Plaintiff that ○○ New City Co., Ltd. would transfer the right to execute the instant project by payment in lieu of the loan debt pursuant to the loan agreement of this case.

According to the above facts, ○○ New Urban Parcels lose the right to vicariously implement the instant project on or around the beginning of August 2012, and thus it is impossible to transfer the right to vicariously implement the instant project to the Plaintiff by payment in lieu of the loan obligation under the loan agreement of this case. Thus, even if ○○ New Urban Parcels notified the Plaintiff on November 16, 2012 of the transfer procedure of the right to implement the instant project, even if ○○ New Urban Parcels notified the Plaintiff of the transfer procedure of the right to implement the instant loan, it cannot be extinguished by payment in lieu of the loan obligation to the Plaintiff pursuant to the loan agreement of this case. In addition, Nonparty 2, who was the president of the Plaintiff, was in the company of ○○ New Urban District Co., Ltd., the agent agent of the instant project. The Defendant’s assertion is without merit.

4. Conclusion

Therefore, the plaintiff's claim of this case is justified, and the judgment of the court of first instance is consistent with this conclusion, so the defendant's appeal is dismissed and it is so decided as per Disposition.

Judge Cho Young-young (Presiding Judge)