In the event that the primary obligation of the collateral security and the collateral security are the same obligation, whether the amount repaid by the exercise of the collateral security should be deducted from the maximum amount of collateral security (affirmative)

In order to guarantee an unspecified debt to be incurred in the future from a continuous credit transaction relationship, the guarantee amount is set and the same person provides a collateral guarantee in order to secure an unspecified debt, and the establishment and extinguishment of a collateral guarantee agreement and a collateral security agreement should be dealt with separately as a separate contract in principle. However, as long as a collateral obligation and a collateral security agreement are the same as a debt of the principal obligation and the collateral security agreement of the collateral security, unless there are special circumstances, the amount repaid by the execution of a collateral security shall be deducted from the guarantee amount of the collateral.

Articles 357 and 428 of the Civil Act

[Plaintiff-Appellant] Plaintiff 1 and 1 other (Law Firm Gyeong, Attorneys Park Jae-soo et al., Counsel for plaintiff-appellant)

Korea Asset Management Corporation (Attorney Jae-in, Counsel for defendant-appellant)

Defendant 1 and one other

Seoul High Court Decision 2002Na49448 delivered on April 17, 2003

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

In order to guarantee an unspecified debt to be incurred in the future from a continuous credit transaction relationship, the guarantee amount is set and the same person provides a collateral guarantee in order to secure an unspecified debt, and the establishment and extinguishment of a collateral guarantee agreement and a collateral security agreement should be dealt with separately in principle as a separate contract. However, as long as a collateral obligation and a collateral security agreement are the same as a debt of the principal obligation and the collateral security, unless there are special circumstances, the amount repaid by the execution of a collateral security shall be deducted from the guarantee amount of the collateral (see Supreme Court Decision 97Da34808 delivered on November 14, 1997).

According to the records, the principal obligation and the secured obligation of the right to collateral security, the guarantee limit amount of which are set, are the same obligation as a credit limit transaction agreement obligation to the National Bank of Korea Co., Ltd. (the principal obligation of the collateral security has not been shown to have been changed because the collateral guarantee was re-agreemented) and the collateral security and the collateral security are deemed as a overlapping security to secure the same obligation, unless there are special circumstances. Although the court below, although it states that some inappropriate statements on the relationship between the joint and several guarantee (re-guarantee) and the collateral security have been made for the purpose of securing the identical obligation, the court below did not have any errors in the misapprehension of legal principles as to the relationship between the joint and several guarantee and the collateral security, incomplete deliberation, mistake of facts and experience due to violation of the rules of evidence and experience, violation of the principle of free evaluation of evidence, deviation from the scope of the right to collateral security and defense, violation of the principle of pleading, etc., as argued in the Grounds for Appeal.

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 Han-gu (Presiding Justice)