Shin Savings Bank and two others (Law Firm Shin & Shin, Attorneys Gyeong-soo et al., Counsel for the plaintiff-appellant)

Hyundai Swiss Savings Bank and four others (Law Firm continental Aju et al., Counsel for the plaintiff-appellant)

May 24, 2012

1. The plaintiffs' claims against the defendants are all dismissed.

2. The costs of lawsuit are assessed against the plaintiffs.

(2) The defendant 3,30,00 won and its interest thereon respectively to the 33,30,000 won, and 2, each of the plaintiff 33,300,000 won to Daejeon Mutual Savings Bank, Daejeon Mutual Savings Bank, Daejeon Mutual Savings Bank, to the 5th day of August 16, 2011, and its interest rate of 63,280,000 won and its interest rate of 20% per annum to the 360,000 won per annum to the 360,000 won per annum from the 167, 406, 30,000 won per annum to the 360,000 won per annum from the 167, 406, 30,000 won per annum to the 167, 30,000 won per annum to the 206, 36,00,000 won per annum of the complaint to the plaintiff 166, respectively.

1. Basic facts

(a) Conclusion of business and loan agreements and execution of loans;

1) On May 7, 2010, the Plaintiff and the Defendants entered into a business and loan agreement with EN&A (hereinafter “instant joint loan agreement”) with the Plaintiff and the Defendants on November 7, 2010, setting up a lender group to lend KRW 50 billion to ENA (hereinafter “instant joint loan agreement”), and at the time of the said new construction project, the Dongyang Construction Industry (hereinafter “Dongyang Construction Industry”) (hereinafter “Dongyang Construction Industry”) as a contractor of the said new construction project, jointly and severally guaranteed the debt of EN.

2) Loans by each lender of the instant loans prescribed under the joint loan agreement in the instant case were KRW 5 billion by the Plaintiff New Savings Bank (hereinafter “Plaintiff New Savings Bank”), KRW 5 billion by the Plaintiff Samsung Mutual Savings Bank (hereinafter “Plaintiff Samsung Mutual Savings Bank”), and Daejeon Mutual Savings Bank Co., Ltd. (Seoul District Court 2, 2012 in the instant lawsuit, Daejeon Mutual Savings Bank 2012Hahap1, and the bankruptcy administrator of Daejeon Mutual Savings Bank 400 million in the instant lawsuit. The trustee in bankruptcy of the Plaintiff Daejeon Mutual Savings Bank 200 billion in the instant lawsuit. The Plaintiff Hyundai Savings Bank 40 billion in the title of the Plaintiff Hyundai Savings Bank 200,000, KRW 1000,000,000,000,000,000,000,000 won, and KRW 300,000,000,000,000,000,000,00,000.

3) Under the instant joint loan agreement, the Plaintiff and the Defendant loaned each of the loans to Franchis in accordance with the instant joint loan agreement.

4) The main provisions of the instant joint loan agreement are as follows.

Article 1 (Definitions)

The term "financial-related contract (written)" refers to the agreement on the joint loan of this case and all other rights and documents entered into in connection with the joint loan agreement of this case.

Article 6 (Appropriation of Performance)

All amounts received by the lender or the proxy bank in accordance with the finance-related contract, including the instant joint loan agreement, shall be appropriated for the borrower’s account in preference to the following order of priority:

(A) All expenses and fees to be paid to the lender or the proxy bank under the finance-related contract including the instant joint loan agreement

(b) Overdue interest in loans

(C) Interest on loans

(d) Principal of loans

Provided, That if a lender has been forced to perform an obligation by compulsory execution, exercise of a security right, offset, etc., it shall be appropriated for the repayment of the obligation in the following order of priority:

(A) the costs incurred or borne by the lender for the recovery of the claim

(B) All fees under the instant joint loan agreement

(C) Principal of the loan

(d) Interest on loans

(e) Overdue interest in loans

In any of the above cases, the amount to be appropriated for the principal and interest of the loan shall be appropriated in proportion to the loan of each lender (hereinafter “distribution clause of this case”).

Article 13 (Matters to be Jointly Resolved)

The following matters shall be decided with the consent of all the lenders:

(A) Determination to extend the due date for repayment

Article 14 (Other Provisions)

Article 1 (Period)

The term of the joint loan agreement of this case begins from the date of conclusion of the joint loan agreement of this case (including this case) and terminates on the date when the borrower fully repaid the loan of this case under the joint loan agreement of this case or is late, or on the date when the borrower fully repaid the principal, interest, and other loans and agreements of this case and the amount to be paid by the lender in relation thereto.

(b) Agreement on extension of payment period of each lender;

1) On November 8, 2010, the following day after the date of the repayment of the agreement (on November 7, 2010, as Sundays), the Plaintiffs and the Defendant Hyundai Swiss Savings Bank obtained signatures and seals on the application for the extension of the due date of each obligation to pay loans from the Plaintiffs and the Defendant Hyundai Switzerland Savings Bank from the Green and East Construction Industry, and received a delivery of the minutes of the board of directors’ meeting and the certificate of personal seal impression prepared by each board of directors for the extension of the due date of each obligation to pay loans from the Plaintiffs and the Defendant Hyundai Switzerland Savings Bank.

2) In addition, Defendant Hyundai Swiss Savings Bank created and issued a board of directors’ minutes and an additional agreement (hereinafter “instant 1 additional agreement”) with the content that the period for repayment of loans by Defendant Hyundai Swiss Savings Bank was extended to six months on the same day, and that the 10 billion won deposit pledge (hereinafter “10 billion won additional agreement”) is established from the same construction industry. The same construction industry thereafter provided Defendant Hyundai Swiss Savings Bank with an additional security of KRW 10 billion pursuant to the instant 1 additional agreement.

3) In addition, Defendant Sejong Mutual Savings Bank extended the due date of payment for the foregoing day to one month, and Defendant Sejong Mutual Savings Bank extended the due date from the same construction industry, and, in accordance with the instant Additional Agreement, the said Additional Agreement provides Defendant Sejong Mutual Savings Bank with an additional agreement (hereinafter referred to as “the instant Additional Agreement”) to receive KRW 10 billion in total as well as KRW 1 billion in pledge rights of deposit and promissory notes of KRW 1 billion in security (hereinafter referred to as “2 billion in addition to the foregoing Deposit Pledge and Promissory Notes”), including KRW 10 billion in addition security and KRW 2 billion in addition, the said Additional Agreement was deemed as “the instant Additional Agreement,” and the instant Additional Agreement was “the instant Additional Agreement,” and thereafter, the said Additional Agreement and the Additional Agreement was formulated and issued. After that, the said Construction Industry provided Defendant Sejong Mutual Savings Bank with KRW 2 billion in addition to the instant Additional Agreement.

C. Recovery of individual loans by the Defendants

1) Defendant Sejong Mutual Savings Bank implemented an additional security of KRW 2 billion on January 26, 201, thereby appropriating all the repayment of loans to Defendant Sejong Mutual Savings Bank.

2) On August 16, 201, the Defendant Hyundai Swiss Savings Bank implemented an additional security of KRW 10 billion and appropriated all for the repayment of the Defendant Hyundai Swiss Savings Bank’s loans. Specifically, the Defendant Hyundai Swiss Savings Bank and the Defendant Hyundai Swiss2 Savings Bank covered each of the above Defendant’s loans worth KRW 33,300,000,000,000,000,000,000,000,000,000,000,000 won, and KRW 1334,000,000,000,000,000 won.

[Ground of recognition] Facts without dispute, Gap evidence 1 to 11-2, Eul evidence 3, 4, Eul evidence 8, Eul evidence 4-1 to Eul evidence 5, the purport of the whole pleadings and arguments

2. The parties' assertion

A. The plaintiffs' assertion

1) The plaintiff and the defendant, the lender of the joint loan agreement of this case, has the obligation to distribute the loans recovered by each lender to other lender in proportion to the amount of the loans of the lender pursuant to the distribution clause of this case. The maturity of the joint loan agreement of this case has been extended for six months more than the initial maturity under the agreement of the plaintiff and the defendant. The defendants are obliged to pay the amount of the loans recovered by the defendants as the execution of each additional security of this case.

2) Even if the Defendants did not consent to the extension of the due date and the due date has arrived, the instant joint loan agreement shall still be applied pursuant to Article 14(1) of the instant joint loan agreement until the full repayment of the loans under the instant joint loan agreement is made pursuant to Article 14(1) of the instant joint loan agreement. As such, the Defendants are obliged to distribute the collected loans to other lender regardless of the due date.

3) Therefore, the Defendants are liable for damages for unjust enrichment or violation of the distribution clause of this case, and the Defendants shall pay to the Plaintiffs the share of the Plaintiffs according to the respective loan ratio among the amounts that the Defendants received from the East Construction Industry as the execution of each additional security of this case.

B. The defendants' assertion

1) The period of repayment of the instant joint loan agreement is not extended without the consent of all the lender. Furthermore, the joint loan relationship under the instant joint loan agreement was terminated due to the extension of the period of repayment of the loan by part of the previous lender, and the extension of the period of repayment of the loan by part of the other lender.

2) Each of the instant additional security is not offered as a joint security for the instant joint loan agreement, but as it is provided for the security for repayment of individual loans by Defendant Hyundai Ss Savings Bank and Defendant Sejong Mutual Savings Bank, the instant additional security provisions cannot be applied to the amount recovered from the execution of each of the instant additional security.

3. Determination

A. The meaning of each lender’s agreement to extend the repayment period

1) First of all, as to whether the repayment period of the instant joint loan agreement has been extended by the agreement on extension of the respective repayment period of the lender prior to the initial repayment period, it is stipulated that the extension of the payment period of the instant joint loan agreement shall be made with the consent of all the lender under Article 13(1) of the instant joint loan agreement. However, in this case, the Plaintiffs in this case had not been provided with additional security and extended six months of the payment period without being provided with six months, Defendant Hyundai Switzerland Savings Bank had been provided with additional security of ten billion won and extended six months of the payment period, Defendant Sejong Mutual Savings Bank had been provided with additional security of KRW 2 billion and agreed one-month extension, green and Yangyang Construction Industry. As seen above, it cannot be deemed that each lender has agreed to extend the payment period of the instant joint loan agreement with the extension of the payment period of the above joint loan agreement with all the lender stipulated in the instant agreement. Thus, it is reasonable to deem that the Plaintiffs did not agree to the extension of the payment period of the above joint loan agreement without any evidence or evidence 12 months of each of the Plaintiffs.

Therefore, the maturity of the instant joint loan agreement came on November 7, 2010.

2) Furthermore, comprehensively taking account of the aforementioned facts and evidence Nos. 1 through 7, evidence Nos. 1 to 5, each of the statements No. 1 to 5, witness Nos. 2, 3, and Nonparty 4’s testimony, the following facts or circumstances are acknowledged, and each of the statements Nos. 1 and 1 to 11-2 of the witness’s testimony and evidence Nos. 1 to 11-2 is insufficient to reverse the recognition, and there is no counter-proof otherwise.

A) On the other hand, the Defendants clearly expressed their intent that the period of repayment of the instant joint loan agreement cannot be extended prior to the due date of the instant joint loan agreement, while the Defendants did not express any negative stance on the extension of the period of repayment until the due date of the instant joint loan agreement.

B) Accordingly, the East Construction Industry separately contacted with the Defendants and proposed that each of the instant additional security (the Defendant Hyundai Switzerland Savings Bank will provide KRW 10 billion additional security, and KRW 2 billion additional security to Defendant Sejong Mutual Savings Bank) in the event that the Defendants extended the repayment period. The Defendants accepted each of the above proposals.

C) On November 8, 2010, the Green and Yangyang Construction Industry agreed to extend the respective repayment period of the Plaintiffs’ loans to six months without providing additional collateral. On the same day, each of the respective repayment period of the Defendants and the Defendants’ respective loans extended to six months (Defendant Hyundai Swiss Savings Bank), one month (Defendant Sejong Mutual Savings Bank), and one month (Defendant Sejong Mutual Savings Bank), each of the instant additional loans was established, and each of the instant additional agreements was concluded.

D) The agreement between the above lender and the borrower (the plaintiff and the defendant) on each extension of the due date for the extension of the respective extension of the due date for the loans used inside the plaintiff and the defendant was made in the form in which each original and the defendant individually received signatures and seals on the application for extension of the due date for their loans and on the Dongyang Construction Industry (in addition, in the case of the defendant, additional written agreement of this case 1 and 2 added thereto), and there was no document in the joint name of the lender for extension of the due date for the joint loan agreement of this case at the time.

E) After the due date extended one month pursuant to the instant additional agreement (as of December 7, 2010), Defendant C-type Mutual Savings Bank notified Defendant C-type Mutual Savings Bank of its loan repayment by executing an additional security of KRW 2 billion on January 3, 2011. On the same day, Defendant C-type Mutual Savings Bank notified Defendant C-type Mutual Savings Bank, the representative bank of the instant joint loan agreement, of the repayment of the loan through the enforcement of additional security of KRW 2 billion. At the same time, the rest of the lender did not raise any objection to the said repayment of the loan by Defendant C-type Mutual Savings Bank.

F) In addition, on January 26, 2011, Defendant Hyundai 4 Savings Bank, an agent bank, returned to Defendant Hyundai Switzerland Savings Bank the remainder of interest and fees calculated by deducting the interest and fees accrued up to the six-month advance interest and fees, which had been paid as interest and fees after the maturity date of the instant joint loan agreement, on the ground that its loans were fully repaid. At the same time, the remaining lender did not object to the arrival date of the maturity date of only Defendant Sejong Mutual Savings Bank.

G) On April 15, 2011, the Gyeyang Construction Industry filed an application for commencing the rehabilitation procedure on April 15, 201, and did not repay the loan until May 7, 201, which is the due date for which the EM and Yangyang Construction Industry had been extended six months. Defendant Hyundai 4 Savings Bank, an agent bank, filed a claim for the public sale of the secured trust real estate agreed at the time of the instant joint loan agreement with the Luxembourg Trust, a trustee of the instant joint loan agreement, and in the public sale procedure, Defendant Hyundai Switzerland Savings Bank and Hyundai 2 Savings Bank purchased the secured trust real estate at KRW 32 billion (per 16 billion each), and at the time of distribution to the lender, the said purchase price was excluded from the distribution of the purchase price on July 25, 201.

H) Since then, Defendant Hyundai Swiss Savings Bank intended to appropriate funds for the repayment of Defendant Hyundai Swiss Savings Bank’s loans by implementing 10 billion won additional security, the Plaintiffs asserted that money due to the enforcement of additional security on August 8, 201 should be distributed in proportion to the instant distribution clause, and demanded Defendant Hyundai Swiss Savings Bank to pay the Plaintiffs’ share of funds.

I) On August 16, 2011, the Defendant Hyundai Swiss Savings Bank rejected the Plaintiffs’ above demands and appropriated the collected amount by exercising the additional security of KRW 10 billion in total for the repayment of the Defendant Hyundai Swiss Savings Bank’s loans.

(j) Meanwhile, according to Article 13(1)(a) of the instant joint loan agreement, at least 3/4 of the “decision on the transfer of rights to a third party under this Agreement by each lender” should be decided with the consent of the lender. However, on June 30, 2011, the Plaintiff New Savings Bank transferred the Plaintiff’s loan claim under the instant loan agreement to the Korea Asset Management Corporation without obtaining the consent of at least 3/4 of the lender (However, the said credit transfer agreement was rescinded by the Korea Asset Management Corporation on October 6, 2011).

3) In light of all the circumstances, including the fact that the period of repayment of the instant joint loan agreement became due on November 7, 2010, and the background leading up to the extension of the period of repayment by each lender and the execution of collateral, and the series of acts conducted by each lender at the time of repayment of loan or thereafter after the maturity of the instant joint loan agreement, the original and the Defendant agreed upon the extension of the period of repayment of each loan after the maturity of the instant joint loan agreement with each lender under the common perception that the joint loan relationship between the Plaintiffs and the Defendants formed under the instant joint loan agreement is terminated, and each lender agreed to extend the period of repayment in their individual positions. In the case of the Defendants, which had shown negative attitude in the extension of the period of repayment, it is reasonable to view that each of the instant additional loans extended the period of repayment by accepting the proposal of additional

B. Whether the repayment provision of this case applies to the execution of each additional security of this case

In light of the above facts, each of the instant additional security established by each of the instant additional agreements is provided by the Defendants as a result of an individual extension agreement, and it is not provided as a joint security with regard to the instant joint loan agreement. Therefore, it is reasonable to deem that the instant additional security under each of the instant additional agreements does not constitute a security subject to the instant repayment clause, which is the content of the instant joint loan agreement. Accordingly, the prior Plaintiffs’ assertion on different premise is without merit without further review.

4. Conclusion

Therefore, the plaintiffs' claims against the defendants are dismissed in its entirety as it is without merit. It is so decided as per Disposition.

Judges Han-hee (Presiding Judge)

Note 1) The term in the instant joint loan agreement is “many” (see Article 13).