[1] The legal effect of depositing the business scope of a credit union to a non-member of the credit union in violation of the former Credit Union Act, which is limited to the receipt of deposits and installment savings from the union members (=effective)

[2] The case holding that the Korea Deposit Insurance Corporation is obligated to pay an amount equivalent to the deposit money to non-members who did not receive the deposit due to the suspension of payment from the above union since the act of depositing non-members into the credit union is effective under the former Depositor Protection Act

[1] Articles 39 (1) 1 (a) and 40 (1) of the former Credit Union Act (amended by Act No. 5739 of Feb. 1, 199) which limit the scope of business of a credit union to the receipt of deposits and installment savings from union members are not the effective regulation that limits the capacity of the credit union, but it is merely a regulation that regulates the principles that the credit union should observe with respect to the implementation of its business, and thus the use of such regulation is an illegal act, but its judicial effect is valid.

[2] The case holding that the Korea Deposit Insurance Corporation is obligated to pay an amount equivalent to the deposit money as insurance money to non-members who did not receive the deposit due to the suspension of payment from the above union since the deposit of non-members to credit unions is effective under the former Depositor Protection Act (amended by Act No. 5556 of Sep. 16, 1998)

[1] Articles 39 (1) 1 (a) and 40 (1) of the former Credit Unions Act (amended by Act No. 5739 of Feb. 1, 199) / [2] Articles 39 (1) 1 (a) and 40 (1) of the former Credit Unions Act (amended by Act No. 5739 of Feb. 1, 199); Articles 2 subparagraph 2 (f) and 31 (1) of the former Depositor Protection Act (amended by Act No. 5556 of Sep. 16, 199)

[1] Supreme Court Decision 2000Da38817 decided Nov. 14, 2000 (Unpublished in official gazette)

Plaintiff 1 and five others (Seoul Northern Law Firm, Attorneys Kwon Sang-hoon et al., Counsel for the plaintiff-appellant)

Korea Deposit Insurance Corporation (Attorney Soh Byung-il, Counsel for defendant-appellant)

Daegu High Court Decision 99Na6297 delivered on February 15, 2001

All appeals are dismissed. The costs of appeal are assessed against the defendant.

The grounds of appeal are examined.

1. On the first ground for appeal

According to the reasoning of the judgment below, the court below determined that, in light of the fact that it is difficult to recognize the special nature of a residential area and the fact that the Credit Union Act (amended by Act No. 5739 of Feb. 1, 1999) after the deposit contract of this case (amended by Act No. 5739 of Feb. 1, 1999) provides that non-members may make deposits and installment savings, the person who paid the investment shall be deemed as members, even if there is any defect in the requirements for common bond, and that according to the employment evidence of the plaintiffs, the plaintiffs shall have been granted the deposit and installment contract of this case, and thus, the plaintiffs shall be deemed as being admitted the number of members when entering into the contract of this case.

However, according to the records, although the plaintiffs were the persons who entered into the instant deposit contract with fugitives, they can know the fact that they did not make an investment. Thus, even if they were to receive a membership number from fugitives when they entered into the instant deposit contract with fugitives, they cannot be deemed to have acquired the status of fugitives as partners.

Nevertheless, the judgment of the court below that recognized the plaintiffs as fugitives members shall be erroneous in the misapprehension of legal principles as to the qualifications of union members.

2. On the second ground for appeal

Articles 39(1)1(a) and 40(1) of the former Credit Union Act (amended by Act No. 5739, Feb. 1, 199; hereinafter the same) which limit the scope of business of a credit union to the receipt of deposits and installment savings from its members, etc. are not the effective provision that limits the capacity of the credit union, but it is merely the enforcement provision that regulates the principles that the credit union should observe with respect to the implementation of its business, and thus the use of such provision must be deemed to be effective, although it is an illegal act (see Supreme Court Decision 2000Da38817, Nov. 14, 200). Thus, each of the instant deposit agreements shall be deemed to be effective.

Meanwhile, the former Depositor Protection Act (amended by Act No. 556 of September 16, 1998) provides that the insurance relationship between the defendant and the insured financial institution and the depositors, etc. shall be established when the depositors, etc. have claims, such as deposits, against the insured financial institution (Article 29(1)). Here, the term "deposits, etc." refers to investments, deposits and installment deposits received by a credit union pursuant to Articles 13 and 39 of the Credit Unions Act (Article 2 subparagraph 2(f)); the term "depositors, etc." refers to persons with claims, such as deposits, etc. against the insured financial institution (Article 2 subparagraph 3); claims, such as deposits, etc. include the principal, principal, interest, profits, insurance money and other agreed monetary claims (Article 2 subparagraph 4); when the insured financial institution is insured, the sum of deposits, etc. shall be paid to the insured financial institution at the request of depositors, etc. (Article 31(1)2); and the term "deposits, etc." means the sum of deposits, etc. (Article 2).).

Therefore, as seen earlier, as long as the deposit contract of this case was concluded in violation of the provisions of Article 39 (1) 1 (a) and Article 40 (1) of the former Credit Union Act even if the contract of this case was concluded in violation of the provisions of Article 39 (1) 1 (a) and Article 40 (1) of the former Credit Union Act, it is reasonable to view that the deposit of this case constitutes a deposit under Article 2 subparagraph 2 (f) of the former Depositor Protection Act. Therefore, the defendant is obligated to pay the amount equivalent to each of the deposits of this case to the plaintiffs who did not receive the refund of this case due to suspension of payment due to the suspension of scattering. The decision of the court below is justified in its conclusion, and the

3. Therefore, all appeals are dismissed, and the costs of appeal are assessed against the losing defendant. It is so decided as per Disposition by the assent of all participating Justices.

Justices Lee Yong-woo (Presiding Justice)