[1] Whether the act subject to avoidance under Article 391 subparagraph 1 of the Debtor Rehabilitation and Bankruptcy Act, which is an act subject to avoidance, includes a so-called biased act in the "act that the bankrupt knew that he would injure any bankruptcy creditor" (affirmative), and the content of subjective requirements required to be recognized as an intentional father for a biased act

[2] The burden of proof as to whether the beneficiary was unaware of the fact that the beneficiary did not harm the bankruptcy creditor at the time of the act subject to avoidance under Article 391 subparagraph 1 of the Debtor Rehabilitation and Bankruptcy Act (=beneficiary)

[3] In a case where the act subject to avoidance under the bankruptcy procedure is socially reasonable and inevitable, and it can be deemed that a general bankruptcy creditor should bear the reduction of the bankruptcy estate or the unfair business practices, whether the act is subject to the exercise of the right to set aside (negative), and the standard for determining the reasonableness of the act / The location of the burden of asserting and proving the fact that the requirements for denial are not met (=beneficiary

[4] In a case where a creditor returns the amount repaid to the creditor as a result of the debtor's act of repayment denied, whether the legal interest accrued from the date on which the repayment was performed should be returned (affirmative)

[1] Article 391 subparagraph 1 of the Debtor Rehabilitation and Bankruptcy Act / [2] Article 391 subparagraph 1 of the Debtor Rehabilitation and Bankruptcy Act, Article 288 of the Civil Procedure Act / [3] Article 391 of the Debtor Rehabilitation and Bankruptcy Act / [4] Article 397 (1) of the Debtor Rehabilitation and Bankruptcy Act

[1] Supreme Court Decision 2003Da271 Decided November 10, 2005 (Gong2005Ha, 1925) / [2] Supreme Court Decision 201Da5637, 56644 decided October 13, 201 (Gong2011Ha, 2351) / [3] Supreme Court Decision 2003Da65049 decided March 26, 2004 (Gong2004Sang, 723), Supreme Court Decision 201Da5637, 5644 decided October 13, 201 (Gong201Ha, 2011Ha, 2351) / [4] Supreme Court Decision 2005Da4399 decided October 11, 2007

Daejeon Mutual Savings Bank’s trustee in bankruptcy (Law Firm Sejong, Attorneys Lee Young-gu et al., Counsel for defendant-appellant)

Defendant (Attorney above-at-law)

Daejeon High Court Decision 2013Na11636 decided June 11, 2014

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

The grounds of appeal are examined.

1. Regarding ground of appeal No. 1

Not only so-called fraudulent act of absolutely reducing the debtor's general property, which is a joint security of all creditors, but also so-called biased act contrary to fairness with other bankruptcy creditors by affecting the debtor's property relations, such as repayment or provision of security to a specific creditor, but also includes so-called biased act contrary to equity with other bankruptcy creditors. Meanwhile, in order to be recognized as an intentional person, the debtor should have known that the debtor's act is detrimental to the bankruptcy creditors. In order to prevent the disqualification of the type of the act subject to denial as prescribed by the Act and to promote the balance between transaction safety and balance, if the debtor intentionally makes repayment or offering security to a specific creditor, it is necessary to recognize that only repayment or security is provided to a specific creditor in order to avoid the principle of equality of creditors applicable when bankruptcy procedures commence (see, e.g., Supreme Court Decision 2003Da2710, Nov. 10, 2005).

The court below held that the act of Daejeon Mutual Savings Bank’s repayment of deposit to the Defendant constitutes an act of revocation on purpose on the ground that it is reasonable to deem that Daejeon Mutual Savings Bank was aware that it would preferentially repay deposit claims to a specific creditor only in order to avoid the principle of creditor equality applied when the next bankruptcy procedure commences.

Examining the reasoning of the judgment below in light of the aforementioned legal principles and records, the above determination by the court below is just, and contrary to what is alleged in the grounds of appeal, there were no errors in the misapprehension of legal principles as to the subject of intentional avoidance, thereby failing to exhaust all necessary deliberations or exceeding

2. Regarding ground of appeal No. 2

Even if an act is subject to avoidance prescribed in subparagraph 1 of Article 391 of the Act, if a person who received a benefit from such act does not know the fact that he/she would injure any bankruptcy creditor at the time of such act, it cannot be denied, but such beneficiary's malicious intent is presumed, and thus, the beneficiary bears the burden of proof for the good faith (see Supreme Court Decision 2011Da56637, 56644, Oct. 13, 201, etc.).

Examining the reasoning of the judgment below in light of the above legal principles and records, the court below’s determination that there is no evidence to support the defendant’s assertion that the defendant did not know the fact that he would harm bankruptcy creditors is justifiable. Contrary to the allegations in the grounds of appeal, the court below did not err by misapprehending the legal principles on the recognition of the bona fide defense, failing to

3. As to the third ground for appeal

Even if the act subject to avoidance in bankruptcy proceedings is harmful to bankruptcy creditors, there may be cases where it is recognized that the act is socially necessary, reasonable or inevitable, depending on individual and specific circumstances at the time of the act, and thus general bankruptcy creditors need to suffer the reduction of the bankruptcy foundation or unfair business practices. In such exceptional cases, it shall not be subject to the exercise of the right to set aside under Article 391 of the Act in light of the guiding ideology or the concept of justice of the law, such as equality of creditors, protection of the debtor and coordination of the interests in bankruptcy. Here, the reasonableness of the act should be determined specifically in light of the principle of good faith and the idea of fairness, based on the following factors: (a) the debtor's property and business status at the time of the act; (b) the debtor's property and business status at the time of the act; (c) the purpose and intent of the act; and (d) the debtor's property and the intent at the time of the act; and (d) whether the creditor in collusion with the debtor or forced the debtor to perform the act.

The lower court determined that it is difficult to view that the instant repayment act constituted a case where a general bankruptcy creditor should be subject to reduction of the bankruptcy estate or unfair treatment on the sole basis of the fact that the Defendant was an elderly depositor who was unable to information and who was not directly interested with Daejeon Mutual Savings Bank.

Examining the reasoning of the judgment below in light of the aforementioned legal principles and records, the above determination by the court below is just, and contrary to what is alleged in the grounds of appeal, the court below did not err by misapprehending the legal principles as to the reasonableness of the act of repayment, thereby exceeding the bounds of the principle

4. As to the fourth ground for appeal

Article 397(1) of the Act provides that the exercise of the avoidance power shall restore the bankruptcy estate to its original state. The restitution following the exercise of the avoidance power refers to the restoration to its original state without being denied. As such, in cases where the creditor returns the amount repaid to the creditor as a result of the denial of the debtor's act of repayment, the legal interest accrued from the date of repayment shall also be returned to the creditor with negligence. On the other hand, in cases where the creditor exercises the avoidance power by lawsuit and claims the return of money due to restitution, the debtor shall be liable for delay due to delay in the repayment from the date following the day on which he/she is served with a copy of the complaint (see Supreme Court Decision 2005Da43999, Oct. 11, 2007).

In the same purport, the court below is just in holding that the defendant is liable to pay to the plaintiff interest and delay damages calculated at the rate of 5% per annum under the Civil Act from the date of withdrawal of deposit to the date of pronouncement of the judgment of the court below, and at least 20% per annum under the Act on Special Cases Concerning the Promotion, etc. of Legal Proceedings from the next day to the date of full payment, and contrary to the allegations in the grounds of appeal, there are no

5. Conclusion

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.

Justices Kim Chang-suk (Presiding Justice)