[2] The meaning of "when there is a substantial reason for making it difficult for the performance of the other party" under Article 536 (2) of the Civil Code that the prior performance obligor may refuse the prior performance

[3] In a case where the right of indemnity is exercised in advance after bankruptcy is declared against the person who has the right of indemnity, whether the guarantor of the right of indemnity may refuse to perform the guaranteed obligation as to the right of indemnity by applying mutatis mutandis Article 536(2) of the Civil Code (affirmative)

[4] In a case where the condition of the same claim is fulfilled after the declaration of bankruptcy, whether the bankruptcy creditor can offset it (affirmative)

[2] Article 536(2) of the Civil Act provides that a party who is liable for prior performance may refuse to perform his/her obligation when there is a substantial reason to make it difficult for the other party to perform his/her obligation. In such a case, the obligee holding prior performance obligation has changed circumstances that make it impossible for the obligee to perform the prior performance due to the reasons such as a debtor’s credit failure or aggravation of property status after the contract is made, and thereby making the obligee perform the prior performance obligation in accordance with the original terms and conditions of the contract contravenes the fairness and the good faith principle

[3] Where a person liable for indemnity exercises a prior right to indemnity after bankruptcy is declared against the person liable for indemnity, barring any special circumstance, it is difficult to expect that the guarantor of the obligation for indemnity uses it for the discharge of the entire principal debtor even if he/she complies with the prior right to indemnity for the discharge of the entire principal debtor. Thus, the guarantor of the obligation for indemnity may refuse to perform the obligation to guarantee the prior indemnity in accordance with the principle of good faith and the principle of equity, based on Article 536(2) of the Civil Act, until it is confirmed that the amount for indemnity will be used

[4] Article 95 subparagraph 1 of the Bankruptcy Act provides that "when a person bears an obligation to the bankrupt estate after the declaration of bankruptcy" as one of the grounds for the restriction of offset, but Article 90 of the Bankruptcy Act provides that a bankruptcy creditor may set off a conditional claim as a passive claim, so if the condition is fulfilled after the declaration of bankruptcy, such set-off shall be deemed legitimate.

1. On the first ground for appeal

According to the reasoning of the judgment below, the court below held that the payment guarantee in the form of credit transaction is ordinary guarantee in the form of a guarantee contract between a financial institution and a third party, and that the financial institution is established by entering into a guarantee contract between a financial institution and a guarantee contract between a financial institution and a customer, and thereby, the financial institution is obligated to perform the guarantee obligation in the case where the transaction partner is unable to perform the principal obligation, and therefore, it must be agreed to the effect that the performance of the guarantee obligation in the guarantee contract shall not be asserted as an unconditional and a guarantor's exemption from the obligation. Thus, the contents of the letter of payment guarantee in this case (Evidence No. 3) alone cannot be viewed as an agreement, and it does not constitute a so-called independent guarantee. In light of the records, the judgment of the court below is acceptable, and there is no violation of law by misapprehending the legal principles on the independent guarantee or failing to exhaust all necessary deliberations.

2. On the second ground for appeal

If a trustee guarantor received the advance reimbursement by exercising the right to demand a prior reimbursement, this would eventually result in receiving the principal debt to be borne by the guarantor for the obligee at the time of the prior reimbursement, interest accrued, expenses not to be paid, and other damages, and thus, this amount is in the nature of the expenses paid in advance by the trustee for the principal obligor. Therefore, the guarantor is obliged to use it for the discharge of the principal obligor, which is entrusted with the duty of due care, as a good manager (see Supreme Court Decision 88Meu10524 delivered on September 29, 198).

Meanwhile, Article 536(2) of the Civil Act provides that a party liable for prior performance may refuse to perform his/her obligation when there is a substantial reason to make it difficult for the other party to perform his/her obligation. In such a case, the obligee holding the prior performance obligation has changed circumstances that make it impossible for the obligee to receive the prior performance due to such reasons as a debtor’s credit default or aggravation of property status after the contract is made, and thereby making the obligee perform the prior performance obligation in accordance with the original terms and conditions of the contract go against the principle of fairness and good faith (see Supreme Court Decision 90Meu2435 delivered on November 23, 190).

In a case where a person who has a right to indemnity has received a prior indemnity from a guarantor of a right to indemnity, the obligation to pay it to the creditor and to discharge the principal debtor is in substantial relation with the payment of the surety obligation of the guarantor of the right to indemnity. In this case, where the guarantor of the right to indemnity exercises the prior indemnity after the bankruptcy is declared against the person who has the right to indemnity, barring any special circumstance, it is difficult to expect that the guarantor of the right to indemnity uses it for the discharge of the whole principal debtor, barring any special circumstance, it is difficult to expect limitation in bankruptcy proceedings. Thus, the guarantor of the right to indemnity may refuse to perform the obligation to guarantee the prior indemnity by applying Article 536(2) of the Civil Act, based on the principle of good faith and the principle of fairness, prior to the

In addition, since the defendant's right to refuse performance is not based on the premise of holding the right to claim a discharge under Article 443 of the Civil Code, the argument in the grounds of appeal on this point is without merit and there is no error of law in the misapprehension of legal principles as to the claim for a discharge in advance.

Furthermore, in the event that the plaintiff is paid the advance reimbursement, even if it is not the full amount in the bankruptcy procedure, it is possible to distribute it to the creditors. Thus, the judgment of the court below should have accepted the plaintiff's claim corresponding to the ratio. However, this is not only a new argument for the first time in the final appeal, but also a fact that the plaintiff actually distributed part of the claim to the creditor after the lawsuit of this case, and the judgment of the court below recognized the plaintiff's right to indemnity within the scope, it is not erroneous in the judgment of the court below for not

3. On the third ground for appeal

After the filing of the instant lawsuit, the lower court recognized the Plaintiff’s claim for reimbursement equivalent to the amount that the Plaintiff paid to the obligees, and accepted the Defendant’s claim for reimbursement equivalent to the amount actually paid out by using the claim for bills against the Dong Securities Co., Ltd. prior to the bankruptcy as the automatic claim.

Article 95 subparagraph 1 of the Bankruptcy Act provides that "when a person bears an obligation to the bankrupt estate after the declaration of bankruptcy" as one of the grounds for grounds for grounds for grounds for grounds for grounds for grounds for grounds for grounds for grounds of offset, but Article 90 of the Bankruptcy Act provides that a bankruptcy creditor may set-off conditional claims, so in such cases, even if the conditions are fulfilled after the declaration of bankruptcy, such set-off shall be deemed legitimate, and the guarantee of the right to indemnity in this case shall be deemed a kind of conditional obligation as a guarantee for future obligations. Therefore, the defendant's set-off is lawful, and there is no error in the misapprehension of legal principles of set-off

4. Conclusion

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 on the bench.

Justices Lee Jin-hun (Presiding Justice)