[2] Purport of recognizing damages for delay based on the agreed rate under the proviso of Article 397(1) of the Civil Act / In cases where one of the parties claims a payment of interest based on the agreed rate by asserting that there exists a monetary loan for consumption, whether the parties seek damages for delay for the period after the due date for repayment of the loan claims (affirmative in principle), and whether the purport of claiming damages for delay based on the statutory interest rate is included in the lawsuit of demurrer raised by the obligor to exclude the executory power of the notarial deed of a loan for consumption (affirmative)

[2] Article 397(1) of the Civil Act provides that the amount of damages for non-performance of monetary obligations shall be calculated at the statutory rate, and the proviso provides that “If there exists an agreement that does not violate the restriction of statutes, the rate shall be calculated at that rate.” In the event that an agreement exists under the proviso of Article 397(1) of the Civil Act, the agreement would suffice only with damages for delay calculated at the statutory rate if the agreement is higher than the statutory rate, the obligor’s profits rather than the delay. Therefore, the damages for delay is recognized by the agreement, taking this into account.

In cases where one of the parties asserts that a loan for consumption was made and seeks a payment of interest based on the agreed rate, barring any special circumstance, damages for delay pursuant to the agreed rate shall be deemed to have been claimed for the period after the maturity date of the loan claim, and even if the agreed rate is not recognized, it may be deemed that the purport of seeking damages for delay at the statutory interest rate is included. The same applies to cases where the obligee claims damages for delay pursuant to the agreed rate in a lawsuit of objection raised by the obligor to exclude the executory power

1. Factual basis

According to the judgment of the court below, the following facts are revealed.

A. On December 26, 2012, Non-party 1 leased “○○○○○○○○○○○”, which was located in the ( Address omitted), Jinju-si, from the Plaintiff (Appointed Party; hereinafter “Plaintiff”) for KRW 50 million. Since Nonparty 1 was a person with bad credit standing, all contracts, including the said lease agreement, including the said lease agreement, were concluded in the name of Non-party 2.

B. On April 3, 2013, Nonparty 1: (a) borrowed KRW 30 million from the Defendant on June 3, 2013 at the due date; and (b) Nonparty 1 and Nonparty 2, the Plaintiff’s wife (hereinafter “Plaintiffs”) were jointly and severally guaranteed the said obligation.

C. Nonparty 1 and the Plaintiffs prepared the instant letter of delegation to the Defendant on the same day, stating that the amount of the loan was “30 million won”, and the letter of delegation to the Defendant necessary to commission the preparation of a notarial deed on the said loan.

D. Unlike the initial agreement, the Defendant loaned only KRW 10 million to Nonparty 1 on April 3, 2013, and KRW 200,000,000 on April 4, 2013, and KRW 12 million on the aggregate. After that, the Defendant, on May 2, 2013, requested the non-party 3 office of a notary public to attend the creditor and the debtor as his/her joint guarantor and to prepare a notarial deed by attending the office of the non-party 3 as his/her joint guarantor. On May 2, 2013, the Defendant was prepared a notarial deed of money loan for recognition of compulsory execution (hereinafter “notarial deed of this case”). The Defendant, the obligor, the obligor, the Plaintiffs (Guarantee Limit of KRW 40,00,000), the debt amount of KRW 30,00,000,00 for joint and several surety, and the interest rate of KRW 30,000.

E. After that, on the basis of the original copy of the instant notarial deed, the Defendant was issued a ruling to commence a compulsory auction of real estate on February 23, 2016, with regard to the real estate owned by the Plaintiffs, as the Jinwon District Court Jinwon-gu, Seoul District Court, Jinwon-do, 2016, around 1358.

2. The judgment of the court below

For the following reasons, the lower court determined that the interest portion among the notarial deeds of this case was null and void as it was prepared by the Defendant without legitimate authority.

A. Nonparty 1 and the Defendant did not expressly agree on interest, and did not state interest on the instant L/C certificate. However, Nonparty 1 and the Plaintiffs may recognize the fact that Nonparty 1 and the Plaintiffs prepared a power of attorney with the portion of interest on the instant power of attorney in blank and delivered it to the Defendant, in light of the fact that: (a) entering the instant power of attorney at an annual interest rate of 30% in the instant letter of attorney is considerably exceptional in trade practice.

B. In such a case, the Defendant is liable to prove that the above blank part was filled by the duly delegated authority. However, the evidence submitted by the Defendant alone is insufficient to acknowledge that there was an agreement between Nonparty 1 and the Defendant on the interest rate of 30% per annum, or that the Defendant was given the authority to supplement the blank part of the power of attorney, and there is no other evidence to prove otherwise.

3. Judgment of the Supreme Court

A. Generally, the interpretation of a juristic act is clearly confirming the objective meaning that the party gave to the act of representation. In a case where the objective meaning is not clearly revealed by the party’s language and text, it shall be reasonably interpreted in accordance with logical and empirical rules by comprehensively taking into account the contents of the language and text, the motive and background leading up to the juristic act, the purpose to achieve the agreement by the agreement, the party’s genuine intent, etc. (see, e.g., Supreme Court Decisions 2002Da23482, Jun. 28, 2002; 2014Da8543, 88550, Oct. 27, 2016). Furthermore, in a case where the power of attorney was delegated to another person or the power of attorney was prepared, the contents and scope of the delegated act shall be determined carefully by taking into account not only the contents of the language and text, such as power of attorney, but also the purpose and process of preparing the power of attorney (see, e.g., Supreme Court Decision 2011Da10923).

Article 397(1) of the Civil Act provides that the main text of Article 397(1) shall apply mutatis mutandis to the amount of damages for non-performance of monetary obligations at a statutory rate, and the proviso provides that “Where there exists an agreement that does not violate the restriction of statutes, the said rate shall apply.” The provision that the agreement ought to be followed when there is an agreement rate under the proviso of Article 397(1) of the Civil Act. If the agreement is higher than the statutory rate, there is any unreasonable ground for the obligor to gain profits rather than the delay of performance. Therefore, the damages for delay

In a case where one of the parties asserts that a loan for consumption was made and seeks a payment of interest based on the agreed rate, barring any special circumstance, damages for delay for the period after the due date of payment of the loan claims ought to be considered as claiming damages for delay based on the agreed rate, and even if the agreed rate is not recognized, the purport of claiming damages for delay at the statutory interest rate may be deemed to be included. The same applies to cases where the obligee claims damages for delay based on the agreed rate in a lawsuit of objection raised by the obligor to exclude the executor

B. According to the evidence duly admitted by the court below, the following circumstances are revealed.

(1) The Defendant did not have any personal relationship with Nonparty 1 or the Plaintiffs. It is very rare to deem that Nonparty 1 lent a lot of money for repayment to Nonparty 1 for a period of two months after the due date to repay only the principal without any agreement on the interest. Rather, deeming that the Defendant lent money on the premise of an agreement on the interest was in accord with the empirical rule or the general transaction concept.

(2) The Plaintiff urged the Defendant to discharge the guaranteed obligation amounting to KRW 40 million on May 8, 2014, and the Plaintiff presented a certificate of content resistanceing to this, and there is no assertion that the principal was only more than KRW 12 million, and that there was a violation of relevant Acts and subordinate statutes, such as the Interest Limitation Act, the Act on Registration of Credit Business, etc. and Protection of Finance Users, etc., and there was no assertion that there was no agreement of interest.

(3) On October 13, 2016, Nonparty 1 made it clear that the loan agreement of this case was a loan for consumption with interest payment, including: (a) Nonparty 1 made an appearance of witness to the case in which the Plaintiffs filed a complaint with the Defendant by fraud, fabrication of private documents, etc., and stated that “it was possible for the Defendant to pay off money if he had to lend money even if he had paid interest to him even though he had paid the interest.” (b) Nonparty 1 made it clear that the loan agreement of this case was a loan for consumption with interest payment, including: (c) Nonparty 1 made a statement that “N” and “it was intended to borrow money because the Defendant was either at the time or had not borrowed money.” (d) Nonparty 1 made a statement that the principal amount was fixed at KRW 12 million,000,000,000, which was paid to the Defendant.

(4) The Plaintiffs had the obligation to refund the lease deposit amount of KRW 50 million to Nonparty 1, and accordingly, jointly and severally guaranteed the above loan amount to Nonparty 1’s Defendant, and it is difficult to view that the guaranteed obligation is to be borne within that scope.

C. In light of the above Defendant’s career experience, the background of lending money, the payment of interest, the contents negotiated between the Defendant and Nonparty 1, the attitude of the parties thereafter, and general transaction practices, etc., it is reasonable to deem that Nonparty 1 agreed to pay interest on the borrowed money to the Defendant, and the Plaintiffs also jointly and severally guaranteed the Defendant’s debt. In addition, the interest rate of 30% per annum specified in Article 2(1) of the former Interest Limitation Act (wholly amended by Act No. 1227, Jan. 14, 2014) for which the Defendant entered into force at the time, is the highest interest rate of 30% per annum as stipulated in Article 2(1) of the former Interest Limitation Act (wholly amended by Act No. 12227, Jan. 14, 2014), and it is lower than the interest rate of 5% per month for which Nonparty 1 was initially presented by the Defendant. Accordingly, there is a consensus between Nonparty 1 and the Defendant as to interest, at least

Furthermore, the Defendant asserted a loan under a monetary loan agreement and interest at the rate of 30% per annum. As to the period after the maturity date of the loan claim, damages for delay pursuant to the agreed rate shall be deemed to have been claimed, and even if the agreed rate is not recognized, damages for delay at the statutory rate shall be recognized. Thus, even if the agreement on interest between the Defendant and Nonparty 1 is not recognized, the enforcement force shall be recognized as to damages for delay at the statutory rate after the maturity date of the loan principal.

Nevertheless, the lower court did not specifically examine and determine the content of the agreement and the scope of supplement right at the time of the instant loan for consumption, and did not have the Defendant’s authority to supplement the contents of interest, etc., and excluded the enforcement force on the portion exceeding KRW 12 million of the leased principal, deeming that the part concerning interest among the notarial deeds in this case was null and void. In so doing, the lower court erred by misapprehending the legal doctrine on the right to supplement blank, by misapprehending the bounds of the principle of free evaluation of evidence in violation of logical and empirical rules, or by omitting any judgment on damages for delay, thereby adversely affecting

4. Conclusion

Of the part of the judgment below against the defendant, the interest and delay damages for KRW 12 million are reversed, and this part of the case is remanded to the court below for a new trial and determination. It is so decided as per Disposition by the assent of all participating Justices on the bench.

[Attachment] List of Appointeds: Omitted

Justices Kim Chang-suk (Presiding Justice)