[1] The case where the liability of the guarantor can be limited in a continuous guarantee agreement

[2] The case affirming the judgment of the court below which did not limit the scope of the liability of the joint and several sureties in case where excessive damages for delay not anticipated at the time of guarantee were incurred because the joint and several sureties did not perform his/her obligation for a long time while the lawsuit disputing the liability for guarantee was pending

[3] In the case of a seizure, provisional seizure, or provisional disposition against the principal obligor, whether the interruption of prescription against the surety notified to the surety thereof takes effect (negative)

[1] In general, in a continuous guarantee agreement, the amount of the principal obligation to be returned to the guarantor’s expense is much more than the extent that the guarantor has anticipated or could have anticipated at the time of the guarantee. The scope of the guarantor’s liability may be limited within the reasonable scope, only in cases where circumstances are acknowledged that are contrary to the good faith principle, such as where the obligee knew the fact that the principal obligation significantly deteriorated the property status of the principal obligor, or where the obligee was unaware of such fact due to gross negligence, and where the obligee intentionally expands the transaction size without any notification or intention, etc.

[2] The case affirming the judgment of the court below which did not limit the scope of the liability of the joint and several sureties in case where excessive damages for delay not anticipated at the time of guarantee were incurred because the joint and several sureties did not perform his/her obligation for a long time while the lawsuit disputing the liability for guarantee was pending

[3] Article 169 of the Civil Code provides that "the interruption of the prescription shall take effect only between the parties and their successors." Meanwhile, Article 440 of the Civil Code provides that "the interruption of the prescription against the principal debtor shall take effect against the surety." Article 440 of the Civil Code provides that "The interruption of the prescription against the principal debtor shall take effect against the surety." Thus, Article 440 of the Civil Code provides that where a cause for the interruption of prescription against the principal debtor arises in order to protect the obligee or secure the security of the claim, the interruption of prescription shall take effect at the same time without any separate interruption measures against the surety, and even if the cause for the interruption of prescription is a seizure, provisional seizure, and provisional disposition, it shall not take effect

[1] Articles 2 and 429 of the Civil Act / [2] Articles 2 and 429 of the Civil Act / [3] Articles 169, 176, and 440 of the Civil Act

[1] Supreme Court Decision 94Da4044 delivered on June 30, 1995 (Gong1995Ha, 2549) / [3] Supreme Court Decision 86Meu1569 delivered on November 25, 1986 (Gong1987, 101)

Plaintiff (Law Firm Head, Attorneys Jeon Dog-young et al., Counsel for the plaintiff-appellant)

Korea Deposit Insurance Corporation (Law Firm Law, Attorneys No Young-gu et al., Counsel for the plaintiff-appellant)

Gwangju High Court Decision 2005Na1116, 1123 decided June 10, 2005

The appeal is dismissed. The costs of appeal are assessed against the plaintiff (Counterclaim defendant).

The grounds of appeal are examined.

1. After finding the facts as stated in its reasoning based on evidence, the court below held that the amount of debt borne by the plaintiff (Counterclaim defendant, hereinafter "the plaintiff") as joint and several surety should be limited to one billion won including the borrowed principal and its delayed payment damages. ① According to the agreement of this case, the provisions of Article 1 and the provisions of Article 3 concerning delay damages shall be provided for in the agreement of this case as one billion won, and the above provisions of Article 1 shall be provided for in the separate agreement of this case. ② The provisions of Article 3 of the above agreement concerning the scope of principal and interest or the loan obligations arising therefrom shall be provided for in the agreement of this case, and the above provisions of Article 3 shall not be provided for in the agreement of this case to the extent of liability of the guarantor unless the debtor performs his obligations established as above. Thus, it is clear that the above provisions of Article 1 and Article 3 shall not be provided for in the agreement of this case to limit the amount of damages incurred by the principal and interest of this case as well as the extent of damages incurred by the principal and interest of this case.

The Supreme Court precedents cited in the ground of appeal by the Plaintiff are not appropriate to be invoked in this case, since all of the cases conflict with this case.

2. According to the records, the plaintiff's joint and several guarantee of this case is limited to the principal debt to the debt incurred from the discount of bills and other transaction of bills within a certain limit and transaction period, and there is no limitation of the guarantee period, and the plaintiff agreed to jointly and severally assume the same amount of debt as the debt to be borne by the Hando Comprehensive Construction Co., Ltd. (hereinafter "Bando Construction") to the Hando Comprehensive Construction Co., Ltd. to the Japanese Mutual Saving and Finance Company. Thus, the court below rejected the plaintiff's assertion that the scope of the guarantee liability of this case should be limited according to the guarantee period, and the compensation rate for delay after the guarantee period should be applied differently on the ground that the contents of the contract of this case are the same as

3. In general, in a continuous guarantee agreement, the amount of the principal obligation to be returned to the guarantor's expense is much more than the extent that the guarantor has anticipated or could have anticipated at the time of guarantee. The obligee's excessive occurrence of the principal obligation is considerably worse due to the obligee's gross negligence, and thus, the obligee is unaware of the fact that the assets of the principal obligor considerably deteriorated or was not known due to gross negligence, the obligee can limit the obligee's liability to the reasonable scope (see Supreme Court Decision 94Da4044 delivered on June 30, 1995, etc.). However, even if the Plaintiff did not perform his/her obligation for a long time while proceeding to dispute the liability for guarantee, and the Plaintiff did not incur excessive damages for delay, which was not anticipated at the time of guarantee, this does not constitute an act contrary to the obligee's good faith, and thus, the lower court did not err in misapprehending the legal principles as to the scope of the Plaintiff's liability for guarantee.

4. Article 169 of the Civil Code provides that "the interruption of the prescription shall take effect only between the parties and their successors," while Article 440 of the Civil Code provides that "the interruption of the prescription against the principal debtor shall take effect against the guarantor," and Article 440 of the Civil Code provides that "the interruption of the prescription against the principal debtor shall take effect against the guarantor," and Article 440 of the Civil Code provides that where a cause for the interruption of prescription against the principal debtor arises in order to protect the creditor or secure the security of the claim, the interruption of prescription shall take effect at the same time without any separate interruption measures against the guarantor, and even if the cause for the interruption of prescription is a seizure, provisional seizure, and provisional disposition, the interruption of prescription shall not take effect

As to the Plaintiff’s assertion that Defendant Lessee (Counterclaim) was subject to a provisional attachment order on the semi-identical property, the primary debtor, for the interruption of the prescription period for the instant loan loan, but did not notify the Plaintiff as the guarantor, the interruption of prescription against the anti-identical case does not extend to the Plaintiff, the court below’s rejection of the ground that Article 440 of the Civil Act applies regardless of whether the guarantor has been notified of the interruption of prescription. Therefore, it is justifiable in light of the above legal principles, and there is no error in the misapprehension

5. Therefore, the appeal shall be dismissed, and all costs of appeal shall be borne by the plaintiff who is the losing party. It is so decided as per Disposition by the assent of all participating Justices.

Justices Shin Hyun-chul (Presiding Justice)