(a) Where a guarantee agreement can restrict a guarantor's liability for a continuous guarantee agreement;

(b) Where the guarantee limit is prescribed for a continuous guarantee agreement, the portion of the guarantor’s limitation of liability based on the excessive occurrence of the principal obligation;

(c) Where the ceiling on guarantee is stipulated for a continuous guarantee agreement, whether the ceiling includes incidental obligations to the principal obligation within the ceiling;

(d) Whether damages for delay on the guaranteed obligation itself should be borne separately from the upper limit of the collateral guarantee.

(e) Where the principal obligor has partially repaid the principal obligation exceeding the limit on the guarantee amount, whether the limit on the guarantee amount decreases;

A. In general, in a continuous guarantee agreement, the amount of the principal obligation to be returned to the guarantor’s expense is much higher than the extent that the guarantor had anticipated or could have anticipated at the time of the guarantee. The obligee’s excessive occurrence of the principal obligation is limited to the scope of the guarantor’s liability within the reasonable scope, provided that circumstances are acknowledged that are contrary to the good faith principle, such as where the obligee was aware of the significant aggravation of the property status of the principal obligor or was unable to know due to gross negligence, and where the obligee intentionally expands the transaction size without any notification or intention, etc.

B. Where a continuous guarantee agreement provides for a guarantee amount in advance, barring any special circumstance, the guarantor would have anticipated that the guarantee amount will be liable within the scope of the guarantee amount among the transaction amount between the obligee and the principal obligor. Therefore, it is difficult to deem that the guarantee amount was increased beyond the expected guarantee amount, on the ground that the principal obligation was excessive.

C. Where a continuous guarantee agreement provides for a ceiling, whether the ceiling should be based only on the total amount of the principal of the principal obligation and include incidental obligations, such as interest, delay damages, etc., shall first be governed by the intention of the parties to the contract. However, unless otherwise stipulated, the ceiling shall be interpreted as including incidental obligations, such as interest, etc.

(d) The guaranteed obligation is separate from the principal obligation, and any delay in the performance of the guaranteed obligation itself shall be borne separately from the ceiling of the collateral.

(e)where there exists a limit of continuing guarantee liability, unless any obligations remain within the limit of the guarantee, the remaining obligations shall be liable under the guarantee limit, regardless of whether they are partially repaid by the principal obligor, or any obligations arising out of a transaction within the said limit as a result of a transaction within the said limit.

(d)Article 429(a)(b) of the Civil Code;

(a)B.D. (3) Supreme Court Decision 94Da40439 delivered on June 30, 1995 (dong). Supreme Court Decision 91Da26348 delivered on April 28, 1992 (Gong1992, 1692), Supreme Court Decision 91Da35816 delivered on July 28, 1992 (Gong1992, 2547), Supreme Court Decision 94Da21931 delivered on April 7, 1995 (Gong195Sang, 1819). Supreme Court Decision 84Da1261 delivered on March 12, 1985 (Gong1985,540)

Attorney Yoon Young-han et al., Counsel for the defendant-appellant

[Defendant, Appellant] Korea-Sean Co., Ltd. and one other, Counsel for defendant-appellant-appellee and one other

Seoul High Court Decision 93Na43028 delivered on June 24, 1994

The part of the lower judgment against the Plaintiff is reversed, and that part of the case is remanded to the Seoul High Court.

The appeal by the defendant Han Han-man Stock Company is dismissed.

The costs of appeal against the dismissed portion shall be assessed against the above defendant.

1. We examine the Plaintiff’s grounds of appeal and the supplemental appellate brief submitted after the lapse of the period as well as the supplemental appellate brief.

(1) According to the reasoning of the judgment below, on June 19, 1986 and August 6, 198 of the same year, the court below concluded a guarantee contract with the non-party as a guarantee amount of KRW 1,980,000 on behalf of the non-party as to the transaction under the coal supply contract between the plaintiff and the non-party on two occasions, and the non-party supplied coal on credit by the plaintiff according to the agreement, with the remaining amount of KRW 2,374,319,760 on May 6, 198. The defendants, the guarantor, were liable for the guarantee within the limit of KRW 1,980,00,000, which is the guarantee amount of KRW 700,000,000, which is the guarantee amount of KRW 1,980,000,000, which is the guarantee amount of KRW 700,000,000,000,000,000.

In general, under a continuous guarantee agreement, the amount of the principal obligation to be returned to the guarantor’s expense is much more than the extent that the guarantor has anticipated or could have anticipated at the time of guarantee, and the liability of the guarantor may be limited to the extent that the circumstances acknowledged contrary to the good faith principle, such as where the obligee was aware of the significant aggravation of the financial status of the principal obligor, or where the obligee was unaware of the cause of excessive occurrence of the principal obligation due to gross negligence, and where the obligee was unaware of the fact that the financial status of the principal obligor significantly aggravated, or where he intentionally expands the transaction size without any notification or intention, etc. (see, e.g., Supreme Court Decisions 84Meu453, Oct. 10, 1984; 91Da14147, Oct. 8, 1991; 91Da9091, Dec. 24, 1991).

However, barring any special circumstance, where the guarantee limit is set in a continuous guarantee contract, the guarantor is anticipated to assume the liability for the guarantee within the scope of the guarantee limit out of the transaction amount between the creditor and the principal debtor. Thus, it is difficult to view that the liability for the guarantee was excessive. Meanwhile, in light of the records, the court below explained that ① the Plaintiff’s internal guidelines on the qualifications of the guarantor is merely a measure for securing the Plaintiff’s claims, and ② even if the Plaintiff supplied coal beyond the limit of the transaction limit against the guidelines, the guarantor is not liable only within the extent of the guarantee limit (which is consistent with the transaction limit). Thus, it is difficult to view the Plaintiff’s liability as the guarantor’s duty to be increased due to the transaction in excess of the above limit of the above limit of the amount of guarantee contract’s total amount of guarantee obligation, and thus, it is difficult to view that the Plaintiff had been aware that there was no other reason for the restriction on the liability of the Plaintiff to the extent that the Plaintiff continued to engage in the transaction by extending its financial structure despite the deterioration of the principal debtor’s financial structure.

Nevertheless, the court below's decision that limits the guarantee liability to below the guarantee limit is erroneous in the misapprehension of legal principles as to the limitation of the guarantee liability under continuous guarantee agreement or the principle of good faith.

(2) Where a continuous guarantee agreement provides for the limit of guarantee, whether the limit of guarantee should be based on only the total amount of the principal of the principal obligation, and whether the limit should include additional obligations such as interest and delay damages, etc., shall be interpreted as including incidental obligations, such as interest, etc., within the limit unless otherwise stipulated in the contract. However, unless otherwise stipulated, the limit of guarantee agreement in this case shall not be interpreted as based on only the principal obligation, and there is no evidence to prove otherwise in the record that there is no other special agreement, and thus, there is no error in the misapprehension of legal principles as to the extreme amount of the collateral guarantee agreement or in the violation of the rules of evidence at the time of original adjudication, unless the defendants bear the maximum limit of guarantee liability for all obligations, including interest and delay damages. The argument is without merit.

(3) The lower court rejected the Plaintiff’s assertion that the Defendants’ claims against the Plaintiff, the guarantor, are insufficient to extinguish the original of the above security deposit and the damages for delay, and that the remainder should be appropriated first to the damages for delay of the security deposit and then be appropriated to the principal in accordance with the legal principle of statutory appropriation, on the ground that the Defendants’ claims against the Plaintiff are not more than the limit of the amount of the guarantee.

However, since the guaranteed obligation is separate from the principal obligation, it shall bear damages for delay due to delay of the guaranteed obligation itself. Thus, the court below's decision denying liability for damages for delay of the guaranteed obligation itself is erroneous in the misapprehension of legal principles as to the nature of the guaranteed obligation or the limit of the guaranteed obligation. Therefore, the argument that points this out is with merit.

2. We examine the grounds of appeal by Defendant Han Han-so Stock Company.

(1) In a case where there is a limit of continuing guarantee liability, unless the remaining obligation remains within the limit of guarantee, the original adjudication is just to determine that the remaining obligation does not decrease the guarantee limit, and that the remaining obligation does not constitute a decrease in the guarantee limit, regardless of whether it was partially repaid by the principal obligor or any remaining obligation out of the obligation arising out of a transaction within the limit of guarantee (see Supreme Court Decision 84Meu1261, Mar. 12, 1985). Accordingly, in the same purport, the Plaintiff is liable for the guarantee limit, regardless of whether it was a remaining obligation or any remaining obligation out of the obligation arising out of a transaction beyond the limit of guarantee (see Supreme Court Decision 84Meu1261, Mar. 12, 195).

(2) As seen earlier, the appeal to the effect that the limitation of the guaranteed liability against the Defendants is unreasonable is too low is without merit, and there is no need to further examine the issue of whether the limitation of the guaranteed liability is too low.

3. Therefore, the part of the judgment of the court below against the plaintiff shall be reversed, and that part of the case shall be remanded to the Seoul High Court, and the appeal by the defendant Han Han-chul shall be dismissed, and the costs of appeal against the dismissed part shall be assessed against the defendant. It is so decided as per Disposition by

Justices Ahn Yong-sik (Presiding Justice)