The purpose of legislation under Article 37-3 (1) of the former Mutual Savings and Finance Company Act which provides for the responsibility for joint repayment to oligopolistic stockholders for the debts related to the deposits, etc. of the mutual savings

In light of the legislative intent of Article 37-3 (1) of the former Mutual Savings and Finance Company Act (amended by Act No. 203 of Jan. 28, 2000), which provides for the liability for jointly and severally with the mutual Savings and Finance Company for the obligations related to deposits, etc. to oligopolistic stockholders, a joint repayment liability shall not be imposed on the executives or oligopolistic stockholders who are not related to the insolvent management of the mutual Savings and Finance Company. However, the mutual Savings and Finance Company may be established in the form of a partnership company, a limited partnership company, or a stock company until the forms of the mutual Savings and Finance Company are unified into a stock company in the background of imposing the unlimited repayment liability on oligopolistic stockholders, regardless of what form the mutual Savings and Finance Company does not separate the ownership and management of the mutual Savings and Finance Company. Considering the fact that oligopolistic stockholders of the mutual Savings and Finance Company are equal to those of the members of the unlimited partnership company, a limited partnership company, and the principle of shareholders' limited liability or the principle of fault liability of officers under the Commercial Act, it cannot be acknowledged that there is a reasonable causal relation between the oligopolistic stockholders.

Article 37-3 (1) of the former Mutual Savings and Finance Company Act (amended by Act No. 6203 of Jan. 28, 2000)

Constitutional Court en banc Order 200Hun-Ga5 and 6, 2001Hun-Ga26, 200Hun-Ba34, 2002Hun-Ba34, 2002Hun-Ga3, 7, 9, and 12 (Hun-Ga No. 72)

Korea Mutual Savings and Finance Corporation (Attorneys Lee Young-young et al., Counsel for the plaintiff-appellant)

Korea Deposit Insurance Corporation, which is the trustee in bankruptcy, Kim Jong-sung, and Park Jong-soo (Attorney Kim Jong-soo, Counsel for the plaintiff-appellant)

Daejeon District Court Decision 9Da10749 delivered on February 5, 2003

July 25, 2003

1. The judgment of the court of first instance is modified as follows.

The plaintiff has confirmed the bankruptcy claim of KRW 116,409,185,852 against the Cheongsung Bank Co., Ltd.

2. The costs of the lawsuit are assessed against the defendant in both the first and second instances.

1. Purport of claim and incidental appeal

The decision is as follows (the plaintiff extended the purport of the claim in the trial).

2. Purport of appeal

The judgment of the first instance is revoked, and the plaintiff's claim is dismissed.

1. Basic facts

The following facts are not disputed between the parties, or they can be acknowledged by taking into account the following facts: Gap evidence 1 through 6, Gap evidence 7-1, Eul evidence 26, Eul evidence 27, Eul evidence 4-2, Eul evidence 4-3, Eul evidence 5 (the evidence No. 26 is the same as Eul evidence No. 4-1, Eul evidence No. 27 is the same as Eul evidence No. 6); Eul evidence No. 27 is the witness testimony of the first instance trial; and there is no counter-proof.

A. The Korea Mutual Savings and Finance Company (hereinafter referred to as the “Korea Mutual Savings and Finance Company”) is a financial resolution institution established pursuant to Article 36-3 of the Depositor Protection Act for the purpose of acquiring the business or contract of the insolvent Mutual Savings and Finance Company to protect depositors and maintain the stability of the financial system, and arranging the insolvent Mutual Savings and Finance Company. The lawsuit in this case was pending on December 31, 2001.

B. From June 29, 1998, Chungcheong Bank Co., Ltd., Ltd., Ltd. (hereinafter referred to as the “Cheongju Bank”) was ordered to suspend its business and suspend the performance of its duties, and was appointed by the administrator on October 27, 1998 by the Daejeon District Court, which was declared bankrupt on the same day and appointed as the trustee in bankruptcy. On the same day, Kim Jong-J and Kim Byung-J was appointed as the trustee in bankruptcy. On March 30, 2001, in the proceeding of the lawsuit in this case, Kim Byung-J was resigned and appointed as the trustee in bankruptcy, and on April 25, 2003, Kim Jong-J resigned resigned and Kim-J was appointed as the trustee in bankruptcy.

C. On January 29, 1973, the non-party Chungcheong Mutual Savings and Finance Company (hereinafter referred to as the "non-party Chungcheong Mutual Savings and Finance Company") was established and engaged in deposit and loan business. On June 29, 1998, the Chungcheong Bank, an oligopolistic shareholder holding 1,686,400 shares (7.93%) out of the total number of shares issued by the non-party cooperative on June 29, 1998, was ordered to receive an order for business management under Article 24-3 of the Mutual Savings and Finance Company Act from the Credit Management Fund on the same day, and was dissolved as the business authorization of the Minister of Finance and Economy on November 10, 1998, and was declared bankrupt by the Daejeon District Court on June 15, 199.

D. On October 198, Korea Mutual Savings and Finance Company purchased deposit claims subject to insurance money under the Depositor Protection Act with the non-party mutual savings and paid them to the deposit account holders, and the non-party mutual savings and finance company entered into an agreement with the non-party mutual savings and finance company to pay the above payment amount and the interest rate of 15.86% per annum on it, and between October 26, 1998 and August 17, 1999, purchased KRW 105,923,875,237 from the non-party mutual savings and finance company's deposit claims to the non-party mutual savings and finance company and paid them to the deposit account holders.

E. On November 27, 1998, at the bankruptcy procedure of Daejeon District Court Decision 98Ha14, the Hansan Mutual Savings and Finance Company reported the above deposit claims purchased and paid by the Hanhan Mutual Savings and Finance Company as an oligopolistic stockholder of the Non-Party Mutual Savings and Finance Company, as bankruptcy claims, KRW 108,287,820,230 to the time of reporting the principal and interest up to the time of reporting it as bankruptcy claims, but the bankruptcy trustee of the Chungcheong Bank raised an objection to the whole amount of the above claims on December 22, 199.

F. After that, in bankruptcy proceedings against the non-party credit cooperative, the Korea Mutual Savings and Finance Company reported the principal and interest of 116,409,185,852 won ( principal and interest of 105,923,875,875, 237 won + interest of 10,485,310,615 won + interest of 10,485,615 won) as bankruptcy claims and received dividends of 56,372,974,08 won on January 16, 201 and 4,014,414,405 won on March 12, 2002; and the sum of 95,445,462 won on December 18, 2002, including the sum of 105,95,445,62 won on March 3, 205.

G. Accordingly, in the bankruptcy proceeding of the Daejeon District Court Decision 98Hah14 against the Chungcheong Bank, the Korea Mutual Savings and Finance Company corrected the amount of the bankruptcy claim reported to the Chungcheong Bank as KRW 55,06,352,177 (Bankruptcy Claim 116,409,185,852 - Amount of dividend 61,342,83,675) after deducting the amount of the above dividends from the amount of the above dividends. On May 27, 2003, the Plaintiff succeeding to the rights and obligations of the Korea Mutual Savings and Finance Company reported the amount of dividends as bankruptcy claim on the ground that the Plaintiff was excluded from the amount of the above dividends at the time of declaration of the claim, but the trustee in bankruptcy of the Chungcheong Bank also raised an objection to the total amount of the above additionally reported amount.

2. The allegations by the parties and their determination

A. Summary of the assertion

The plaintiff asserts that, as the plaintiff is an oligopolistic stockholder of the non-party credit cooperative, the Chungcheong bank is jointly and severally liable with the mutual savings and finance company for the debt related to the deposit of the mutual savings and finance company pursuant to Article 37-3 of the former Mutual Savings and Finance Company Act (amended by Act No. 6203 of Jan. 28, 200), the plaintiff who succeeded to the rights and obligations of the mutual savings and finance company shall have a bankruptcy claim of KRW 116,409,185,852 as the bankrupt bank. Accordingly, the defendant is not liable for the repayment of the debt incurred during the period in which the Chungcheong bank did not exercise its influence over the management of the non-party credit cooperative, and there is no proximate causal relation between the influence of the Chungcheong bank and the result of the non-party's insolvency.

B. Determination

(1) The purpose of Article 37-3 of the former Mutual Savings and Finance Company Act

Article 37-3 (1) of the former Mutual Savings and Finance Company Act (Joint Liability of Officers, etc.) which was enforced at the time of June 15, 1999 when the bankruptcy of the non-party mutual savings and finance company was declared bankrupt provides that "any officer of the mutual savings and finance company (excluding auditors) and any oligopolistic stockholder (referring to any oligopolistic stockholder as provided for in Article 39 (2) of the Framework Act on National Taxes) shall be jointly and severally liable with the mutual savings and finance company for the obligations related to the deposits, etc. of the mutual savings and finance company." Thus, the legislative intent of Article 37-3 (1) of the above Act, which provides for joint and several liability to oligopolistic stockholders, is not to impose liability on oligopolistic stockholders who are not related to the insolvency of the mutual savings and finance company, when they exercise influence over the management of the savings and finance company and are in violation of the Constitution within the scope of 200 - 20 - 3 - 20 - 20 - 20 - 20 - - 3 - - 200 - - - -

Therefore, this paper will examine whether the Chungcheong Bank has caused the bad faith in the Non-Party Treasury by exercising its influence on the management of the Non-Party Treasury.

(2) Facts of recognition

The following facts are not disputed between the parties, or they can be acknowledged by comprehensively taking into account the whole purport of pleadings as follows: Gap evidence 8, Gap evidence 9-1 through 4, Gap evidence 10-1, 2, Gap evidence 11-1 through 3, Gap evidence 12, 13-1, 2, Gap evidence 14-1 through 5, Gap evidence 15-1 through 7, Gap evidence 16-1 through 4, Gap evidence 17-1 through 10, Gap evidence 18, 19-1 through 3, Gap evidence 20-1 through 6, and Gap evidence 21-1 through 3, and there is no counter-proof evidence.

(A) On March 4, 1996, when acquiring the right of management of the non-party’s shares and the right of management, the Chungcheong Bank dispatched the non-party’s former and incumbent officers and employees as the non-party’s oligopolistic shareholders, such as the appointment of the non-party’s former and incumbent executives and employees as the non-party’s executive officers, at a special shareholders’ meeting on the same day, the non-party’s senior executives, who are the executive officers of the Chungcheong Bank, concurrently hold office of the non-party’s treasury, the non-party’s inducement group who is treated as the team leader of the Chungcheong Bank, and the non-party’s senior director who retired from the Chungcheong Bank due to the expiration of his/her term of office as the executive director and the standing auditor, as the representative of the non-party’

(B) On September 20, 1997, the Chungcheong Bank, the general meeting of the Nonparty’s treasury held on September 20, 1997, intended to exercise the right to appoint an auditor, and tried to appoint the Nonparty’s Lao as an auditor, and agreed with the wastewater treatment by extending the general meeting of shareholders over twice on the ground of the lack of review on the proposed agenda. On October 4, 1997, the Chungcheong Bank retired from the Nonparty’s Park South-Nam who was a standing auditor at the general meeting of shareholders, and elected the Lee-hee who was dispatched to the executive director as the standing auditor.

(C) On May 196, Chungcheong Bank requested the executives, etc. of the non-party credit cooperative, appointed as above, to provide loans to the non-party credit cooperative for the purpose of collecting their loans from the Daecheon Textiles Co., Ltd. (hereinafter referred to as the "Sho Textiles"), for loans to the non-party credit cooperative, "the non-party credit cooperative will make loans to the non-party credit cooperative upon face-to face-face loan by the Jho Lake Bank." The non-party credit cooperative, an executive officer of the non-party credit cooperative, and the inducement heat, without being provided any security from the Daecheon Textiles upon the above request, made a loan of more than 1,303,942,00 won which is a kind of credit loans, and a loan of more than 110 billion won on May 17, 1996, and a loan of more than 100 billion won on May 18, 1996, in the name of the non-party credit cooperative.

(D) On March 15, 1996, the Chungcheong Bank received a written consent on the management regulations of investment enterprises enacted by the Chungcheong Bank from the Nonparty’s Treasury, and took part in the management of the Nonparty’s Treasury by: (a) under the above management regulations, it shall require the Nonparty Treasury to convene a general meeting of shareholders and obtain prior consultation and approval from the Chungcheong Bank regarding the agenda items to be submitted to the meeting of shareholders; (b) to report the quarterly performance to the Chungcheong Bank four times each year; and (c) to instruct and notify the Nonparty’s Treasury of the improvement results based on the analysis results; (d) to report the enactment and amendment of the regulations of the Nonparty Treasury; and (d) to regularly conduct management evaluation and audit of the business performance and financial status of the Nonparty’s Treasury; and to report the results of audit of the Nonparty’s treasury to the Chungcheong Bank.

(E) As above, the Cheongju Bank’s appointment as an executive officer of the Non-Party Treasury was in violation of the laws and regulations during the period of service and carried out loans exceeding the credit limit of the same person as follows.

1) The credit limit for the same person of the non-party’s wastewater treatment is 100 million won. Before August 1, 1996, the non-party’s credit limit was extended to the non-party’s wastewater treatment amounting to KRW 2,607,00,000, which had already been extended to the same person’s credit limit, and was extended to KRW 1 billion on August 1, 1996 (unclaimed amounting to KRW 798,052,179).

2) On April 17, 1997, the credit limit of the same person was KRW 930,00,000 (unclaimed amount KRW 922,271,701) in the name of Non-party 2 New Construction Co., Ltd. on April 21, 1997; KRW 300,000 (unclaimed amount) in the name of Non-party 2 New Construction Co., Ltd. on April 25, 1997; KRW 615,000,000 (unclaimed amount) in the name of Non-party 2 Partnership Co., Ltd. on April 25, 1997; KRW 6170,00,000 (unclaimed amount); KRW 1,090,50,000 in the name of Non-party 2,000 (unclaimed amount); KRW 701,709,709,709,709,797,297,7000

3) The credit limit of the same person, which is KRW 1,303,942,00, is KRW 2,206,000 from the non-party credit cooperative before June 15, 1996 and has already exceeded the same credit limit. The credit limit of KRW 1,00,000 (unclaimed amount KRW 996,05,079), KRW 65,000,000 (prepaid amount) on October 5, 1996, KRW 65,00,00 (prepaid amount), KRW 90,000, KRW 840,00 in the non-party loans under the name of the non-party credit cooperative prior to May 16, 1997, KRW 80,00 (prepaid amount), KRW 1,000,000, KRW 7848,50,000 (prepaid amount), KRW 8084,5084,7584,0845,7,08454,5454,7.

(F) After the Nonparty’s imprisonment without prison labor was declared bankrupt, the sum total of KRW 106 billion was paid as the deposit insurance money under the Depositor Protection Act.

(3) According to the above facts, as an oligopolistic stockholder with 77.93% of the shares in the company, the Chungcheong Bank exercised its influence over the management of the company's company by giving orders or demanding the executives of the company in question through the approval of the business plan, business report, management evaluation, business audit, etc. as well as the exercise of shareholders' rights when making a decision on the appointment of executive officers or the handling of important issues at the general meeting of shareholders of the company in question, etc., and as a result, the foregoing credit company's failure to perform its duties was caused. The above credit against the non-party bank in Korea Mutual Savings and Finance Company was occurred during the period when the Chungcheong Bank exercised its influence on the management of the company in Korea. Therefore, the Chungcheong Bank is liable for the Plaintiff who succeeded to the rights and obligations of the company

The defendant asserts that a proximate causal relation should be established between the exercise of influence by the Chungcheong bank and the result of the insolvency of the non-party bank in order to hold the liability provided for in Article 37-3 (1) of the former Mutual Saving and Finance Company Act. Thus, in light of the purport of the above provision, the defendant cannot impose a joint repayment liability on an officer or oligopolistic shareholder who is not related to the poor management of the bank. However, in the background where a joint repayment liability is imposed on an oligopolistic shareholder, a credit cooperative can be established until the form of the credit cooperative is unified into a stock company. The credit cooperative can be established with the form of a partnership company, a limited partnership company, or a stock company, regardless of what form the credit cooperative takes is not separated from the ownership and management of the credit cooperative. The defendant's assertion that the oligopolistic shareholder of the credit cooperative has the same liability as that of an unlimited partnership company, a limited liability principle of shareholders under the Commercial Act, or the principle of negligence liability of an oligopolistic shareholder under the Commercial Act is not accepted to hold the defendant liable for an oligopolistic shareholder under Article 37 (1) of the former Mutual Saving and Finance Company Act.

3. Conclusion

Thus, the plaintiff has a bankruptcy claim of KRW 116,409,185,852 against the Chungcheong Bank. Thus, the plaintiff's claim of this case seeking the confirmation is justified, and all of them are accepted. Since the judgment of the court of first instance is partly different according to the expansion of the plaintiff's claim in the trial, the plaintiff's incidental appeal is accepted, and the judgment of the court of first instance is modified as above.

Judges Kim Young-ran (Presiding Judge)