Korea Credit Guarantee Fund (Attorney Hong-chul et al., Counsel for the plaintiff-appellant)

New Bank Co., Ltd. (Law Firm Pacific, Attorneys Jeon Byung-hee et al., Counsel for the defendant-appellant)

Defendant 1 and two others (Law Firm Park & Park, Attorneys Seo-dae et al., Counsel for the defendant-appellant)

April 19, 2006

Seoul Central District Court Decision 2003Gahap81923 Delivered on April 21, 2005

1. The plaintiff's appeal against the defendants is dismissed in entirety.

2. The costs of appeal shall be borne by the plaintiff.

Of the judgment of the court of first instance, the part against the plaintiff against the defendant 1 and the part against the defendant 2 and 3 shall be revoked. The defendant 1 and 2 shall jointly and severally pay 83,788,003 won to the co-defendant 1 corporation, co-defendant 2, 4 of the court of first instance, and the plaintiff, and 82,56,493 won among them, 18% per annum from October 23, 2003 to the date of final delivery of the complaint of this case, and 20% per annum from the next day to the date of full payment. The defendant 3 and the defendant 2 shall cancel the pre-sale agreement concluded on December 5, 200 with respect to the above real estate, and the defendant 3 shall cancel the ownership transfer registration procedure concluded on October 23, 200 to the plaintiff with respect to the non-indicted 1, 207, Yongsan-gu, Busan-gu, and the provisional registration shall be cancelled on December 3, 2005.

1. Basic facts

A. Co-defendant 1 corporation of the first instance trial (hereinafter referred to as Co-defendant 1 of the first instance trial) concluded a credit guarantee agreement with the Plaintiff on May 15, 2002, setting the guaranteed principal of KRW 16 million and the term of guarantee as of May 14, 2003 (hereinafter referred to as the “credit guarantee agreement of this case”), Defendants 1, 2, and co-defendant 2, and 4 of the first instance trial jointly and severally guaranteed the indemnity obligation owed to the Plaintiff by the Co-Defendant 1 corporation of the first instance on May 15, 202.

B. The content of the credit guarantee agreement of this case is that when the Plaintiff fulfilled the guaranteed obligation in accordance with the credit guarantee agreement of this case, co-defendant 1 corporation of the first instance pays the amount of subrogation to the Plaintiff and the legal procedure expenses incurred in exercising or preserving the amount of subrogation, the penalty for delay, and the claim for reimbursement.

C. Co-defendant 1 of the first instance trial concluded a loan agreement with an auxiliary intervenor at a discount rate of KRW 200 million after submitting a credit guarantee statement under the credit guarantee agreement of this case to the auxiliary intervenor, and signed a loan agreement with the auxiliary intervenor, which is limited to KRW 98.5 million at a face value issued by Co-Defendant 6 Co-Defendant 6 of the first instance trial (Supreme Court Decision 2000,000 won at a face value, and the due date, and delivered and received the loan to the auxiliary intervenor.

D. After the Intervenor presented a bill for payment on the date of the payment of the Promissory Notes, but the payment of the Promissory Notes was refused, the Intervenor demanded the Plaintiff to discharge the guaranteed obligation. Accordingly, on October 23, 2003, the Plaintiff paid 82,556,493 won by subrogation to the Intervenor, including the loan principal of KRW 78,80,00,000 and interest KRW 3,756,493, and received the Promissory Notes from the Intervenor.

E. On December 5, 2002, Defendant 2 completed the provisional registration of the right to claim ownership transfer, such as the written claim, on the ground of the pre-sale agreement on the same date with respect to the instant real estate owned by Defendant 3, on the ground that the pre-sale agreement was made on the same date.

[Evidence] Evidence Nos. 1 and 2-3, Evidence Nos. 3-2, Evidence Nos. 5-1, 2, and 6, and the purport of the whole pleadings

2. As to the claim against the defendant 1 and 2

A. The parties' assertion

As a joint and several surety under the credit guarantee agreement of this case, the Plaintiff asserts that Defendant 1 and 2 are jointly and severally liable to pay 82,56,493 won, penalty of 260,570 won, and penalty of 970,940 won, including legal procedure costs of 970,940 won, to the supplementary intervenor, and damages for delay as to the payment by subrogation.

As to this, Defendants 1 and 2 claimed that the Plaintiff is liable to guarantee the Intervenor only on the discount of commercial bills. Since the Promissory Notes in this case are the financing notes, the Plaintiff is not liable to guarantee the loan, which is the discount of the said bills, and therefore, even if the Plaintiff paid the loan to the Intervenor at his own discretion, the Plaintiff cannot claim for reimbursement against the Defendant 1 and 2 pursuant to the credit guarantee agreement in this case.

B. Determination

According to the evidence No. 2-3, the Plaintiff entered into a credit guarantee agreement of this case and the credit guarantee agreement of this case issued by the Intervenor in the future, and stated that “this guarantee will be liable for the discount of commercial bills (tax invoices attached) issued in accordance with the business purpose of the Plaintiff and its ordinary business activities.” The above special agreement aims to limit the principal obligation to guarantee, and otherwise, it does not relate to the measures or obligations to be taken after the establishment of the guaranteed obligation by the Intervenor, and the need to verify the commercial bill in order to comply with the special agreement of this case is merely required at the stage of the establishment of the principal obligation, and it is not necessary to take any measures or obligations after its establishment, and thus, the special agreement of this case does not require the Intervenor to take any measures or obligations after its establishment, and if the bill, which is a bill to be issued by the Intervenor under the credit guarantee of this case, is not commercial bill of this case, it is not subject to the credit guarantee of this case, and therefore, it cannot be viewed that the Plaintiff is not liable for commercial bill of this case 200.

Therefore, as to whether the Promissory Notes are commercial bills belonging to the scope of the Plaintiff’s guarantee liability, there is insufficient evidence to acknowledge the Promissory Notes alone, and there is no other evidence to acknowledge it otherwise. Rather, in full view of the evidence No. 5-1 and No. 2, and the testimony of Nonparty 3 as witness of the first instance trial, joint Defendant 1 corporation of the first instance trial did not hold commercial bills since it did not incur sales since it did not occur at the time of receiving the loan from the supplementary intervenor as the discount of the Promissory Notes, and accordingly, it purchased the Promissory Notes of this case from Codefendant 6 corporation of the first instance trial, which did not have any transaction until at the time, at the time, KRW 1.5 million or KRW 1.85 million, and delivered the Promissory Notes of this case to the supplementary intervenor for a loan as a discount of the Promissory Notes. Accordingly, even if the Plaintiff paid the said Promissory Notes by subrogation, the Plaintiff cannot acquire the right to indemnity against the Defendant 1 and the joint guarantor, a joint guarantor.

Therefore, since the defendant 1 and 2's above assertion is well-grounded, the plaintiff's above assertion cannot be accepted.

C. As to the Plaintiff and the Intervenor’s other arguments

The Plaintiff and the Intervenor are without merit for the following reasons:

(1) In accordance with Article 5(2) of the Act on the Regulation of Terms and Conditions (hereinafter “Terms and Conditions Regulation Act”), if the meaning of the terms and conditions is not clear, it shall be interpreted favorably to the customer. Thus, if an intervenor fulfilled a considerable duty of care, it is alleged that if a subsidiary participant fulfilled a considerable duty of care, it should be interpreted that the Plaintiff bears the responsibility of guarantee even if a promissory note borrowed at the discount of the bill is a loan bill, but the purport of the special agreement is not clear.

(2) Although Article 6(1) and (2) of the Act on the Regulation of Terms and Conditions stipulate that the said special agreement is a clause which is unreasonably unfavorable to customers and thus null and void pursuant to Article 6(1) and (2)1 of the Act, there is no evidence that the said special agreement

(3) Paragraph (2) of the above special agreement is only an agreement between the plaintiff and the supplementary intervenor, and there is no such agreement between the plaintiff and the joint defendant 1 corporation of the first instance trial on the credit guarantee agreement of this case. Thus, the defendant 1 and 2, a joint guarantor of the credit guarantee agreement of this case, cannot refuse the plaintiff's claim for reimbursement based on the above special agreement. However, according to the evidence No. 1-3 of the above agreement, it can be acknowledged that the joint defendant 1 corporation of the first instance trial, under the credit guarantee agreement of this case, agreed to follow the terms of the guarantee agreement between the plaintiff and the supplementary intervenor. Thus, the above special agreement provisions can be evidence to determine the establishment

(4) The Plaintiff’s joint Defendant 1 corporation in the first instance court asserted that, by performing the guaranteed obligation against the Intervenor, the Plaintiff transferred the Plaintiff’s loan claims against the Intervenor Co-Defendant 1 corporation in the first instance court pursuant to the principle of subrogation, the Co-Defendant 1 corporation in the first instance court’s joint and several liability to the Plaintiff, and Defendant 1 and 2, the joint and several liability of the Intervenor, are also borne by the Plaintiff. However, even if the Co-Defendant 1 corporation in the first instance court, in accordance with the principle of subrogation, bears the obligation against the Plaintiff, it is not a debt corresponding to the loan claims held by the Intervenor, nor a debt according to the credit guarantee agreement in the instant case. Meanwhile, there is no evidence to acknowledge that the Defendants jointly and severally guaranteed the obligation to the Intervenor

(5) Defendant 1 and 2 knew that the instant promissory note was a financing bill, and they were joint tortfeasorss who received a loan from the Intervenor who received a discount on the bill with a financing bill. They asserted that there was no liability for reimbursement against the Plaintiff on the ground of the foregoing special agreement clause is contrary to the good faith principle. However, there is no evidence to deem that the said Defendants knew that the instant promissory note was a financing bill, or participated in the receipt of a discount on the bill.

3. As to the claim against the defendant 3

The plaintiff asserts that the provisional registration of the real estate of this case which the defendant 2 owned by the defendant 2 was completed on the ground of the pre-sale agreement, and that the above pre-sale agreement should be revoked as a fraudulent act and the defendant 3 has a duty to cancel the above provisional registration. However, as seen earlier, the plaintiff cannot be deemed to have a claim for indemnity against the defendant 2. Thus, the above assertion is without merit.

4. Conclusion

Therefore, the plaintiff's claim against the defendants relating to the credit guarantee agreement of this case shall be dismissed as all of the grounds for appeal, and the judgment of the court of first instance is just in conclusion, and the plaintiff's appeal against the defendants is dismissed as all of the grounds for appeal.

Judges Cho Jin-jin (Presiding Judge)