[1] In a case where a joint and several liability of an officer under Article 37-3(1) of the former Mutual Savings and Finance Company Act is performed against a deposit account holder under Article 37-3(1) of the former Mutual Savings and Finance Company Act, whether a deposit account holder is exempted from liability for damages under Articles 399(1) and 414(1) of the Commercial Act, which are borne by a credit cooperative due to the same act of neglect of duty (affirmative)

[2] The requirements for liability for damages sustained by a financial institution due to a substitute loan to an officer of the financial institution

[3] The requirements for liability for damages to an executive officer of a credit cooperative who took part in the above loan on the ground that multiple loans with different names fall under excess loans to the same person prohibited under the former Mutual Savings and Finance Act in substance

[4] Whether a substitute loan which is only an extension of the repayment period of an existing debt constitutes "payment, loan, or discount of bill exceeding the lending limit to the same person" prohibited under the former Mutual Saving and Finance Act (negative)

[1] Article 37-3(1) of the former Mutual Savings and Finance Company Act (amended by Act No. 6429, Mar. 28, 2001) provides that an officer of a mutual savings and finance company (excluding auditors) shall be jointly and severally liable with a credit cooperative for obligations related to deposits, etc. of the credit cooperative. This means that an officer who is responsible for insolvent management of the credit cooperative causes property damage to the credit cooperative by neglecting his/her duty of due care or duty of due care, such as participating in illegal or non-performing loans, and thereby, is jointly and severally liable with the credit cooperative within the scope of damages suffered by the credit cooperative due to his/her act. Thus, if a director or auditor of the credit cooperative causes property damage to the credit cooperative due to his/her failure to perform his/her duty of due care as a good manager, he/she shall be jointly and severally liable with the credit cooperative within the extent of damages suffered by the credit cooperative. Article 399(1) and Article 414(1)1 of the Commercial Act provides that all of the former Mutual Savings and Finance Company Act shall be liable within the extent of deposit obligation of Article 37(1) of the former Commercial Act.

[2] In the case of the so-called large loan that a financial institution provides a new loan only formally without actually receiving a loan, thereby practically extending the time limit for the loan, it may collect all the loan from an obligor at the time of extension of time limit, but if the time limit is extended, only if the time limit is extended with the knowledge of the debtor's financial situation that the extension of time limit becomes worse enough to recover the loan, it shall be deemed that a new damage has occurred due to extension of time limit, and it shall not be concluded that liability for damages equivalent to the amount of the unpaid loan is established solely on the ground that the extension of time limit is an act of breach of duty going against the provisions of the extension of time limit.

[3] In order for multiple loans different in the name of a lender to be held liable for damages equivalent to the amount of excess loans to an executive officer of a credit cooperative participating in the above loan on the ground that such loans fall under excess loans to the same person prohibited by Article 12 of the former Mutual Savings and Finance Company Act (amended by Act No. 5501 of Jan. 13, 1998), etc. in substance, it should be proved that the above multiple loans are not only a loan exceeding the lending limit to the same person in substance but also a loan exceeding the lending limit to the same person.

[4] Since the repayment loan is merely a extension of the repayment period of the existing debt and does not have the substance of the new loan does not fall under the "payment, loan, or bill discount exceeding the loan limit" prohibited by the former Mutual Savings and Finance Company Act (amended by Act No. 5501 of Jan. 13, 1998), it shall not include damages equivalent to the excess amount due to the loan limit to the same person and the amount thereof.

[1] Articles 37-3(1) and 37-2 (see current Article 37-3(1) of the former Mutual Savings and Finance Company Act (amended by Act No. 6429, Mar. 28, 2001); Articles 399(1) and 414(1) of the Commercial Act / [2] Article 605 of the Civil Act; Articles 399(1) and 414(1) of the Commercial Act / [3] Article 12 of the former Mutual Savings and Finance Company Act (amended by Act No. 5501, Jan. 13, 1998); Articles 399(1) and 414(1) of the Commercial Act / [4] Article 216(1) of the former Mutual Savings and Finance Company Act (amended by Act No. 5501, Jan. 13, 199; see current Article 26(1) of the Mutual Savings and Finance Company Act)

[1] Supreme Court Decision 2003Da65568 Decided September 29, 2005 (Gong2005Ha, 1685) / [2] Supreme Court Decision 2000Do1155 Decided June 27, 200 (Gong2000Ha, 1800) Supreme Court Decision 200Do3716 Decided June 28, 2002 (Gong2002Ha, 1877), Supreme Court Decision 2003Do2268 Decided July 25, 2003 / [4] Supreme Court Decision 2001Do2189 Decided June 29, 2001 (Gong201Ha, 1810)

Korea Deposit Insurance Corporation (Attorney Yoon Young-chul et al., Counsel for the bankruptcy)

Defendant 1

Defendant 2 and two others (Attorney transferred-type et al., Counsel for the defendant-appellant)

Daejeon High Court Decision 2002Na7037 delivered on June 2, 2005

The part of the judgment below against the Defendants is reversed, and that part of the case is remanded to Daejeon High Court. The Plaintiff’s appeal is dismissed.

We examine the grounds of appeal.

1. Plaintiff’s ground of appeal

Article 37-3 (1) of the former Mutual Savings and Finance Company Act (amended by Act No. 6429, Mar. 28, 2001); Article 37-3 (1) provides that an executive of a mutual savings and finance company (excluding auditors) shall be jointly and severally liable with a credit cooperative for obligations related to the deposit of a credit cooperative (hereinafter “mutual savings bank”). This provides that an executive of a mutual savings and finance company (excluding auditors) shall be jointly and severally liable with a credit cooperative for obligations related to the deposit of a credit cooperative. This provides that an executive who is responsible for the insolvent management of a credit cooperative shall be jointly and severally liable with a credit cooperative within the extent of damages suffered by the credit cooperative due to his/her act, such as taking part in an illegal or non-performing loan, and that an executive of a credit cooperative shall be jointly and severally liable with a credit cooperative within the extent of damages suffered by the credit cooperative (see Supreme Court Decision 2003Da6568, Sep. 29, 2005). 19 of the former Commercial Act provides that he/she shall be jointly liable for deposit claims under Article 394 of the Commercial Act.

According to the records, the court below's decision to limit the scope of liability to KRW 150 million by taking into account all the relevant circumstances, was affirmed, and the court below's decision to dismiss the above defendants' liability to pay 300 million won by paying in full the amount of the judgment on December 22, 2004 to the above reorganization financial corporation's non-party 1 for damages equivalent to the amount of the non-party 1's failure to repay to the bankrupt's treasury. Further, the court below's decision to limit the liability to the above defendants' damages equivalent to the amount of the non-party 2 and 3's non-party 3's non-party 1's non-party 3's non-party 3's non-party 1's non-party 3's non-party 1's damages liability in light of the above legal principles as stated in Article 37-3's non-party 4 of the former Mutual Saving and Finance Act's non-party 3's non-party 19's damages liability as to the above defendant 3's non-party 14.

2. As to the Defendants’ grounds of appeal

A. The part concerning the claim for damages due to the failure to recover loans from Nonparty 2

In the case of the so-called repayment loan that a financial institution provides a new loan only formally without the actual receipt of a loan and actually extends the term of loan from an obligor at the time of the extension of the term. However, if the term has been extended due to the extension of the term, it can only be deemed that a new damage has occurred due to the extension of the term, with the knowledge of the debtor's financial situation that the extension of the term has aggravated to the extent that the financial institution would not recover the loan, and it cannot be concluded that the liability for damages equivalent to the amount of the loan due to the failure to recover is established solely on the ground that the extension of the term is an act of breach of duty against the provisions of the extension of the term (see, e.g., Supreme Court Decisions 200Do1155, Jun. 27, 2000; 2003Do2268, Jul. 25, 2003).

The court below, based on the evidence of employment, found that the above loans were extended on May 29, 198 by Defendant 2, 3, and 4 with new loans with the approval of the court below on April 20, 1996 against the non-party 2 who was the non-party 1 who was the non-party 2. The above Defendants, who were executive officers of the bankrupt at the time of the above substitute loan, did not recover the loans, were liable to compensate for damages due to the non-party 2's violation of the above provisions on the loans under the mutual savings and finance company exchange and management rules as to the non-party 2's existing loans on April 20, 1996. However, the court below erred by misapprehending the legal principles as to the above loans which were the non-party 2's repayment obligation under the above provisions on the non-party 1's repayment obligation, which were the non-party 2's repayment obligation of the loans, and thus, it can be found that the above Defendants violated the above provisions on the above loans due date.

B. Claim for damages due to excess loans extended to the same person

In order for multiple loans in the name of a borrower to be held liable for damages equivalent to the amount of excess loans to an executive officer of a credit cooperative participating in the above loan on the ground that such loans fall under excess loans to the same person prohibited by Article 12, etc. of the former Mutual Savings and Finance Company Act (amended by Act No. 5501 of Jan. 13, 198) in substance, the above multiple loans must be proven not only that there is a lack of security as a loan exceeding the amount of loan to the same person in substance, but also that there was a lack of security as a loan exceeding the amount of loan to the same person. Meanwhile, it is merely an extension of the payment period for existing loans, but it does not fall under the "payment, loan or bill discount exceeding the amount of payment limit" prohibited by the former Mutual Savings and Finance Company Act, and thus, it should not be included in the occurrence of excess loans and the amount of damage equivalent to the amount of excess loans to the same person (see Supreme Court Decision 2001Do2189, Jun. 29, 2001).

Comprehensively taking account of the evidence duly admitted by the court below, it is acceptable that the court below determined that each of five bill discount loans with the total number of non-party 3, 4, 5, 6, and 7 as indicated in its reasoning was borrowed from the name of each of the above holders in order to avoid the restriction on the lending limit to the same person even though the actual borrower was non-party 8. However, it is hard to accept the court below's decision that the Defendants, who were an officer of the bankrupt at the time of each of the above loans, were performing each of

The court below reasoned that the Defendants were aware of the loan excess of the limit of 00 bills to the same person. The court below held that the loan excess of the limit of 00 bills was 60,000 won for each of the above 3,047,000 bills over 20,000 won were 60,000,0000 won and 60,0000 won were 0,0000 won and 60,000 won were 0,000 won and 60,000 won were 0,000 won and 60,000 won were 0,000,000 won and 6,000 won were 0,000 won and 6,000,000 won were 0,000 won and 6,000 won were 0,000,000 won and 6,000 won were 0,000 won and 6,000 won were 6,0.

Therefore, without further review and determination as to the above points, the court below concluded that the defendant's liability for damages equivalent to the excess amount of the loan limit of the same person against the non-party 8 out of each of the discount loans of this case is recognized on the basis of the circumstances as stated in its reasoning is erroneous in the misapprehension of the rules of evidence or misapprehension of legal principles as to liability for damages or substitute loan due to excess loans of the same person, which affected the conclusion of the judgment, and the defendants' ground of appeal pointing this out has merit.

3. Conclusion

Therefore, the part of the lower judgment against the Defendants is reversed, and that part of the case is remanded to the lower court for further proceedings consistent with this Opinion. The Plaintiff’s appeal is dismissed. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Park Jae-sik (Presiding Justice)