Matters to be proved by a person who revokes his/her declaration of intent on grounds of mistake.

A person who revokes a declaration of intention on the ground of mistake must prove that the mistake had a critical effect on the declaration of intention, i.e., that he/she would not have made the declaration of intention if he/she had not made the mistake.

Article 109 of the Civil Act, Article 288 of the Civil Procedure Act

Korea Technology Credit Guarantee Fund (Law Firm Jeong, Attorneys Im Jae-chul et al., Counsel for the defendant-appellant)

Defendant

Busan High Court Decision 2006Na22067 decided October 9, 2007

The judgment below is reversed, and the case is remanded to Busan High Court.

The grounds of appeal are examined.

A person who revokes a declaration of intention on the ground of mistake must prove that the mistake had a critical effect on the declaration of intention, i.e., that he/she would not have made the declaration of intention if he/she had not made the mistake.

In full view of the adopted evidence, the court below acknowledged the fact that the non-party 1 entered into a credit guarantee agreement with the plaintiff non-party 2, and the defendant believed the non-party 1 as non-party 2 and jointly and severally guaranteed the obligation under the above credit guarantee agreement, and determined that the declaration of intention was revoked upon delivery of the statement of reasons for appeal containing the purport of revoking the defendant's indication of intent of joint and several liability to the non-party 2, even if the defendant knew that the non-party 1 and the non-party 2 were not the same person at the time of the joint and several liability agreement, inasmuch as there was no assertion and proof by the plaintiff as to the fact that the defendant knew that he was not the same person as the non

However, such judgment of the court below is hard to accept in light of the above legal principles.

According to the records, the primary debtor in the name of the above credit guarantee agreement is Nonparty 2, but in fact, Nonparty 1 was a joint guarantor at Nonparty 2’s request, and the defendant is recognized as a joint guarantor, but this fact alone is insufficient to deem that the defendant caused a mistake on the primary debtor and became a joint guarantor. Rather, according to the testimony of Nonparty 2, Nonparty 2 was working as the regular business of the wind industry operated by Nonparty 1, and had already divided the defendant several times in the company before the credit guarantee agreement and the joint guarantor, and Nonparty 2 visited the plaintiff together at first for the credit guarantee agreement with the authority delegated by Nonparty 2, and Nonparty 1 entered into a credit guarantee agreement with the authority of Nonparty 2, in particular, when visiting the plaintiff to sign and seal the credit guarantee agreement in this case, it is difficult to recognize that Nonparty 2 knew that Nonparty 2 was a joint guarantor and entrusted with the fact that the plaintiff was easily aware of the general practice of business operation or credit guarantee of the financial institution.

Furthermore, according to the records, the defendant becomes a joint and several surety upon the request of Nonparty 1 from the time when he became aware of Nonparty 1 in a golf range operated by himself and became a joint and several surety for several years. At that time, Nonparty 1 actually runs a winding industry and the credit guarantee agreement of this case was known that the loan of the winding industry was intended to run the winding industry. If there are circumstances, it would be more consistent with the empirical rule to view that the defendant would be a joint and several surety for the credit guarantee agreement of this case even if he knew Nonparty 1 to Nonparty 2, regardless of such mistake.

Nevertheless, the court below concluded that the Defendant entered into the instant joint and several surety contract with the principal obligor by mistake, and held that the burden of proving that the Defendant would have not expressed the intent of joint and several surety would have been erroneous, and dismissed the Plaintiff’s claim for the guaranteed obligation. The court below erred by misapprehending the legal principles on the burden of proof of cancellation of declaration of intent due to mistake and failing to exhaust all necessary deliberations, which affected the conclusion of the judgment. The ground of appeal pointing this out has merit.

Therefore, without further proceeding to decide on the remaining grounds of appeal, the lower judgment is reversed, and the case is remanded to the lower court for further proceedings consistent with this Opinion. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Kim Hwang-sik (Presiding Justice)