[1] The method of interpreting a contract in a case where there is a conflict of opinion between the parties on the interpretation of the contract and the interpretation of the intent of the parties

[2] The case holding that the court below erred by misapprehending the legal principles regarding the interest and interest accrued before the beginning of the first year and the interest accrued before the end of the first year and the interest accrued after the commencement of the first year in each of the following year in the case where: (a) Company A obtained a loan from the bank; (b) Company A, upon entering into a credit guarantee agreement with the Korea Technology Finance Corporation; (c) Company A, upon the commencement of rehabilitation procedures with respect to Company B; (d) the Korea Technology Finance Corporation partially repaid Company B’s loan obligations to the bank; and (e) the contract entered into a contract for partial transfer of the right to collateral that partially transferred the right to collateral; and (e) the contract stipulates that “the difference between the interest and the interest accrued before the date of the performance of the guaranteed obligation; and (e) the difference between the interest and the interest accrued before the commencement of the guaranteed obligation; and (e) the interest and interest accrued after the commencement of the first year in each of the first year in each of the following year shall be paid to Company B by reflecting the rate of 7.5 per annum and the second year in each year thereafter.

[1] In a case where there is a conflict of opinion on the interpretation of a contract between the parties, the interpretation of the parties' intent shall be reasonably interpreted in accordance with logical and empirical rules by comprehensively taking into account the contents of the contract, motive and background of the contract, the purpose to be achieved by the contract

[2] The case holding that: (a) Company A obtained a loan from Company B for the real estate owned by Company B; (b) Company A entered into a credit guarantee agreement with the Korea Technology Finance Corporation; (c) Company A, upon the commencement of rehabilitation procedures with respect to Company B; and (d) the Korea Technology Finance Corporation entered into a contract for partial transfer of a right to collateral security with Company B; (b) the Korea Technology Finance Corporation shall pay part of Company B’s loans under a credit guarantee agreement with Company B; and (c) the contract shall, upon the enforcement of the right to collateral security, appropriate the remainder of the interest and interest accrued from the date of the repayment of the loan to the date of the repayment of the principal; (d) the difference between the interest and the interest accrued from the date of the commencement of the loan to the date of the repayment of the principal; (e) the interest accrued from the date of the commencement of the first rehabilitation plan to the date of the second rehabilitation plan to the date of the commencement of each of the following year; and (e) the interest accrued from the commencement of the rehabilitation plan to the date of the second rehabilitation plan to the end of each year;

[1] Article 105 of the Civil Code / [2] Article 105 of the Civil Code, Article 252 (1) of the Debtor Rehabilitation and Bankruptcy Act

[1] Supreme Court Decision 94Da1142 Decided April 29, 1994 (Gong1994Sang, 1614), Supreme Court Decision 2015Da245145 Decided September 26, 2017 (Gong2017Ha, 2076)

Korea Technology Finance Corporation (formerly: Korea Technology Finance Corporation) (Law Firm Seowon, Attorneys Shin-man et al., Counsel for the plaintiff-appellant)

[Defendant-Appellant-Appellant-Appellee-Appellant (Law Firm LLC, Attorneys Jeon Tae-gu et al., Counsel for defendant-appellant)

Daejeon High Court (Cheongju) Decision 2015Na10272 decided January 12, 2016

The part of the lower judgment against the Defendant regarding the first priority appropriation claim shall be reversed, and that part of the case shall be remanded to the Daejeon High Court. The remaining appeals shall be dismissed.

The grounds of appeal are examined.

1. Case summary

According to the reasoning of the lower judgment and the record, the following facts are revealed.

A. On March 20, 2002, the Daegwon Co., Ltd. (hereinafter referred to as the “Mogwon”) established the instant collateral security right of KRW 4,550,000 with respect to real estate owned by Hana Bank Co., Ltd. (Seoul Bank Co., Ltd., Ltd. (hereinafter referred to as “ Hana Bank”) on March 20, 202, and has been granted loans from Hana Bank since around that time. On April 19, 2002, the Daeggwon concluded two credit guarantee agreements with the Plaintiff and provided them as collateral to the Hana Bank. The guarantee conditions of the credit guarantee agreement, such as the guaranteed amount and the term of guarantee, were changed several times, and the final guaranteed amount was KRW 298,400,000,000, respectively.

B. On October 26, 2009, the rehabilitation procedure was initiated for the Daegdong District on the condition that the Daegdong District was unable to repay its loans to the Hangdong District.

C. On December 18, 2009, the Plaintiff repaid KRW 703,524,173 out of the loans owed by the Daegdong District under a credit guarantee agreement, and entered into a contract for partial transfer of the right to collateral security (hereinafter “instant contract for partial transfer of collateral security”). Article 2(1) of the contract provides for the order of appropriation of dividends in the event the instant right to collateral security is implemented, the order of appropriation of dividends is stipulated in the first order, and the remaining claims (including attempted claims related to loans executed in excess of the estimated amount of loan by the rate of guarantee) as of the date of the distribution except for the non-loan loans extended by the transferor (creditor). The contract stipulates that the overdue interest and the agreed amount arising until the date of the performance of the guaranteed obligation of the guaranteed loan should be appropriated in the second order (hereinafter “Agreement 1” and “Agreement 2”).

D. On March 4, 2010, under the Asset-Backed Securitization Act, the Han Bank transferred all of the loans and collateral security-related rights to the Daegwon to the Joint Asset Management Co., Ltd., and the Defendant acquired the status of the assignee of the Joint Asset Management Co., Ltd. on March 30, 2010.

E. In the rehabilitation procedure for the Dae-dongll, the Han Bank reported the principal, the interest before commencement, and all of the interests after commencement with respect to the claims against the Dae-dong Team. The Plaintiff and the Defendant completed the procedure of reporting the change of name, etc. due to each subrogation and transfer contract.

On August 8, 2011, the rehabilitation plan was approved for the Daedong Team. According to this, the claims of the Plaintiff and the Defendant were each rehabilitation security rights, ① by the end of 2012, ② by the end of 2011, ③ the interest prior to commencement of the business shall be paid at the interest rate of 7.5% per annum, ③ the interest prior to commencement of the business shall be paid at the rate of 7.5% per annum from the beginning of 2009 to the end of 2011, and the interest accrued after the commencement of the business shall be paid at the end of each year.

F. On October 16, 2013, the public auction procedure was conducted with respect to the real estate on which the instant right to collateral security was created, and the Korea Asset Management Corporation prepared a distribution statement stating that the total amount of KRW 2,645,771,310 of the instant distribution amount, which was deducted from the sum of the sales proceeds and the deposit interest, was distributed to the Defendant, after deducting the senior delinquent expenses from the sum of the deposit interest.

2. As to the assertion of misapprehension of legal principles as to the scope of application under Article 250(2)1 of the Debtor Rehabilitation and Bankruptcy Act

The lower court determined that Article 250(2)1 of the Debtor Rehabilitation and Bankruptcy Act does not apply to the interest rate on delay of the first-class appropriation claim, on the grounds that the Plaintiff or the Credit Guarantee Fund is not in the position of guarantor, and there is no room for applying Article 250(2)1 of the same Act to the interest rate on delay of the second-class appropriation claim, and in relation to the second-class appropriation claim calculation, the public sale procedure of this case is the realization procedure on real estate owned by the Daedong Team, which is the debtor.

Examining the reasoning of the lower judgment in light of the records, the said determination by the lower court is justifiable, and contrary to what is alleged in the grounds of appeal, the lower court did not err by misapprehending the legal doctrine on the

3. As to the assertion of misapprehension of legal principles as to the interpretation of the agreement No. 1 and No. 2

A. In a case where there is a difference between the parties regarding the interpretation of a contract, and the interpretation of the parties’ intent is at issue, it shall be reasonably interpreted in accordance with logical and empirical rules by comprehensively taking into account the content of the contract, motive and background of the contract, the purpose to be achieved by the contract, the parties’ genuine intent, etc. (see, e.g., Supreme Court Decisions 94Da1142, Apr. 29, 1994; 2015Da245145, Sept. 26, 2017)

B. Based on its stated reasoning, the lower court determined that interest on the principal of the first priority appropriation claim from October 26, 2009 to December 31, 2012 should be calculated at the rate of 7.5% per annum, which is the interest rate modified according to the instant rehabilitation plan.

In light of the above legal principles and records, the above determination by the court below is just, and contrary to the allegations in the grounds of appeal, it did not err by misapprehending the legal principles on the interpretation of the contract for partial transfer of collateral security.

C. Based on its stated reasoning, the lower court determined that, inasmuch as the agreement on the overdue interest rate of the second-class appropriation claim was concluded between the Plaintiff or the Credit Guarantee Fund and the financial institutions, such as the Plaintiff or the Korea Credit Guarantee Fund, and the Korea Credit Guarantee Fund, there was an agreement between the Plaintiff or the Korea Credit Guarantee Fund, on the part of the Plaintiff or the Korea Credit Guarantee Fund, to pay the difference between the parties to the agreement and the amount equivalent to the difference between the parties to the agreement and the overdue interest in the compulsory execution procedure for the debtor’s property, it

In light of the aforementioned legal principles and records, the lower court did not err in its judgment by misapprehending the legal doctrine on the interpretation of the instant partial transfer contract, contrary to what is alleged in the grounds of appeal.

4. As to the allegation in the grounds of appeal that the calculation method of the first priority appropriation claim was erroneous

A. The lower court, in calculating the non-guaranteed rehabilitation security right under the instant rehabilitation plan, did not calculate items of interest (1 and 2 years) starting from the commencement of the rehabilitation plan (the first and second years) under the agreement, and determined that the amount of the principal is KRW 2,261,217,396 by omitting the “interest rate before commencement and commencement (1 and second years)” under the instant rehabilitation plan from the Defendant’s calculation of the amount of the claim, based on the rate of 7.5% per annum starting from the commencement date until December 31, 2012, and from the following day to the payment date, the interest at the interest rate of the relevant financial institution is calculated and included, and the interest at the rate in arrears from the date of the following day is calculated and included in

B. However, the above determination by the court below is difficult to accept in the following respect.

According to the instant rehabilitation plan following the alteration of rights, the rehabilitation security right shall be repaid in full at the end of the second year (2012), with the proceeds from sale of real estate held by factories, etc. at the end of the second year (2012), and the interest rate before commencement shall be 7.5% per annum (201), and the interest rate after commencement of repayment shall be 7.5% per annum at the end of the first year (2009, 2010), and the interest amount corresponding to the year of preparation (2009, 2010) shall be repaid at the end of the first year (201), and (4) if the repayment is not made at the due date, it shall be repaid by applying the overdue interest rate of the general loan of the relevant bank from the following day to the actual date of repayment, and (5) If the principal and interest amount to be repaid each year by the rehabilitation plan is not otherwise specified, it shall be repaid on December 30 (Provided, That on a legal holiday, before the previous business day) of the relevant year.

In accordance with such standards, the interest accrued during the first year (201) for the principal and the interest accrued during the year of preparation for the principal and the interest accrued during the first year (2009, 2010) for the interest accrued from the start of the start of the start of the start of the start of the start of the start of the start of the start of the contract, shall be repaid by the end of 2011, and by the end of 2012 for the second year (201) for the principal, and by the end of 2012, the interest accrued during the second year (2012) for the principal. Therefore, when calculating the rehabilitation security right of the said non-guarantee, the interest items should be calculated from the start of the rehabilitation plan of the instant case as well as each of the above interest and each of the start of the start of the start of the start of the contract shall be included in addition to the interest rate calculated by adding the general interest rate of the bank from November 13, 2013, which is the dividend date.

C. Nevertheless, on the grounds indicated in its reasoning, the lower court calculated a separate interest from the commencement date of the rehabilitation plan of this case to the dividend date only for the principal without calculating the items of the interest (1 and 2 years), and calculated the first priority appropriation claim by omitting the “interest accrued from the commencement date of the commencement (1st year) with respect to the interest accrued prior to the commencement date and the overdue interest accrued from the date following the due date of each repayment for the interest accrued to the commencement date to the dividend date. In so doing, the lower court erred by misapprehending the legal doctrine on alteration of rights under Article 252 of the Debtor Rehabilitation Act, thereby adversely affecting the remaining judgment. The ground of appeal

D. The Defendant asserts that, inasmuch as the principal, interest prior to commencement, and interest prior to the commencement of the claim against the Daegdong Team became final and conclusive according to each of the instant rehabilitation plans, the Defendant calculated the interest prior to commencement by dividing the interest prior to the commencement by the ratio of the amount of non-guaranteed loan claims under the agreement of No. 1 and the guarantee loan claims under the agreement of No. 2, and the amount of the guarantee loan claims under the agreement of No. 2, the lower court erred by misapprehending the legal doctrine on the alteration of rights under Article 252 of the Debtor Rehabilitation Act, if the lower court calculated the interest prior to the commencement by applying the rate of

However, as seen earlier, since the lower court did not separately calculate items of interest (1 and 2 years) after the commencement of the rehabilitation procedure in this case in calculating the first priority appropriation claim, the above assertion premised on the premise that the lower court calculated the interest interest after the commencement of the rehabilitation plan in this case is groundless. Moreover, even if the lower court calculated the interest at the rate of 7.5% per annum, which was the interest rate starting from the commencement date of rehabilitation from December 31, 2012 to December 31, 2012, based on the commencement of the principal, it is justifiable to calculate the interest after the commencement of the rehabilitation plan in this case, and there is no ground to view that the interest should be calculated after the commencement of the rehabilitation procedure in the same manner as otherwise alleged by the Defendant.

5. Conclusion

Therefore, the part of the lower judgment against the Defendant regarding the first priority appropriation claim is reversed, and that part of the case is remanded to the lower court for further proceedings consistent with this Opinion. The remaining grounds of appeal are dismissed as they are without merit. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Lee Ki-taik (Presiding Justice)