Korea Deposit Insurance Corporation (Attorney Yoon Gyeong-chul et al., Counsel for the bankruptcy)

Defendant 1

Defendant 2 and two others (Attorney transferred-type et al., Counsel for the defendant-appellant)

April 7, 2005

Daejeon District Court Decision 2001Gahap6873 Delivered on August 14, 2002

1.The judgment of the first instance shall be modified as follows:

A. Defendant 1, 3, and 4 jointly and severally paid to the Plaintiff the amount of KRW 100,000,000, Defendant 2, 3, and 4 jointly and severally, as well as the amount of KRW 350,000,000 per annum from October 10 to June 2, 2005, and the amount of KRW 20% per annum from the next day to the date of full payment.

B. The plaintiff's remaining claims against the defendants are all dismissed.

2. The costs of the lawsuit are assessed against both the plaintiff and the defendant 1, and the part arising between the plaintiff and the defendant 1 is assessed against the plaintiff 1, the remaining part is assessed against the plaintiff 1, and the part arising between the plaintiff and the defendant 2 is assessed against the defendant 2, the remaining part is assessed against the plaintiff 3, the plaintiff 2, and the part arising between the plaintiff 3 and the defendant 4 is assessed against the plaintiff 5, and the remaining part is assessed against the plaintiff 3, 4, and the plaintiff 2 are assessed against the plaintiff 3, and

3. Among the parts ordering the payment of the amount under paragraph (1), the portion for which no provisional execution is declared by the first instance court may be provisionally executed.

1. Purport of claim

Defendant 1, 3, and 4 shall jointly and severally pay to the Plaintiff KRW 600,00,000, and Defendant 2, 3, and 4 shall jointly and severally pay to the Plaintiff KRW 600,000,000 and each of them shall be paid at the rate of 25% per annum from the day following the last delivery of the copy of the complaint of this case to the day of full payment.

2. Purport of appeal

Of the judgment of the court of first instance, the part against the plaintiff seeking payment is revoked. The defendant 1, 3, and 4 jointly and severally paid to the plaintiff 600,000,000, and the defendant 2, 3, and 4 jointly and severally paid to the plaintiff 450,000,000 won and each of them is 25% interest per annum from the day after the last copy of the complaint of this case is served to the day after the completion of payment.

3. Purport of incidental appeal;

The part against Defendant 2, 3, and 4 in the judgment of the first instance shall be revoked, and the plaintiff's claim corresponding to the revoked part shall be dismissed.

1. Basic facts

The following facts are not disputed between the parties, or may be acknowledged in Gap evidence 1 by integrating the whole purport of the pleadings.

A. The bankrupt mutual savings and finance companies (hereinafter the bankrupt mutual savings and finance companies) established in April 1970 and operated its business with mutual credit fraternity, credit installment savings, savings and installment savings receiving business, loans, and bill discount business as its main business. However, in the course of managing surplus funds as securities, large-scale losses were suffered due to the decline in the stock price after the management system of the International Monetary Fund. Due to the deterioration of the domestic and overseas economic environment, the insolvency of loans was accelerated, and customer deposit withdrawal has increased rapidly, and the liquidity has become more difficult to create profits due to excessive non-profit assets, and the same financial institutions also become subject to the management of the Credit Management Fund without overcoming liquidity shortage.

B. A bankrupt credit cooperative was dissolved upon the revocation of its business by the Minister of Finance and Economy as of April 27, 197, and was declared bankrupt by the Daejeon District Court on October 29, 199, and the Plaintiff was appointed as a bankruptcy trustee on March 26, 2001. Meanwhile, from April 30, 1992 to September 8, 197, Defendant 1 was the representative director of the bankrupt credit cooperative; Defendant 2 was the representative director from September 9, 197 to December 2, 1998, from April 30, 1992 to April 29, 198; and Defendant 3 was the director from June 15, 198 to April 29, 198 to the vice president from June 29, 198 to the above date.

2. The part concerning the claim for damages due to loans to disqualified persons

(a) Facts of recognition;

The following facts do not conflict between the parties, or can be acknowledged by taking into account the whole purport of the pleadings in the descriptions of Gap evidence 4-1 to 7, Gap evidence 5-1 to 5-7, Gap evidence 11-1, 2, 3, Gap evidence 22-1, Gap evidence 25-1, 2, 3, Eul evidence 26, and Eul evidence 1.

(1) According to the loan regulations of the bankrupt bank, the debtor and the guarantor shall investigate the actual conditions of property, credit and business (Article 27), and shall not be extended to a person who has a overdue loan or unsound loan, or a person who has suffered damage to the debtor or the depository. However, this provision does not apply where the representative director has obtained approval due to an unavoidable circumstance (Article 4), and credit loans shall be extended only to a person who is deemed not to interfere with the collection of claims by comprehensively examining the debtor's business feasibility, profitability, assets, credit standing, etc. (Article 8).

(2) According to Article 12 of the Regulations on Credit Information Exchange and Management established by the Financial Supervisory Commission in accordance with Article 7 of the Regulations on Credit Information Business, a credit cooperative shall be prohibited from providing credit to bad traders by inquiring, in advance, of the bad credit standing information when handling new credit (including exchange), and shall without delay, take measures to preserve the existing credit and take strong measures to recover such as exercising the security right.

(3) On November 28, 1994, Nonparty 1: (a) at the Japanese Bank, KRW 15 million; (b) at the Enterprise Bank on November 30, 1994, KRW 25,871,00; and (c) at the Credit Guarantee Fund on July 12, 1995, KRW 45,235,00; and (d) at the Convergence Fund on November 9, 1995, KRW 12,00,000; and (c) at the U-Namnam Treasury on January 12, 1996, at the time of entry as credit in good credit; (d) on April 20, 1996, the bankrupt bank provided comprehensive passbook with loans to Nonparty 1; and (e) did not obtain approval from Nonparty 1 on May 29, 1998; and (e) did not obtain the approval of the repayment period on May 29, 198.

(4) On July 6, 1998, the bankrupt credit cooperative obtained approval from Defendant 2 and 3, and upon confirmation from Defendant 4, 30 million won interest rate of 25% per annum and on July 6, 200, the credit loan was not collected until now. Meanwhile, at the time of the loan, Nonparty 3 was detained on the business failure, and Nonparty 5 applied for the loan of this case in the name of Nonparty 3, whose mother was to build a new wholesale market, and to build a new wholesale market. Nonparty 3, a borrower, at the time of the loan, was a yellow trading office. Nonparty 4, a joint guarantor, was the sum between September 10, 1994 to March 31, 197, and the total amount of loans of 169,207 won, and the joint guarantor was not a joint guarantor.

B. Determination

According to the above facts, Defendant 2 was obligated at the time of the above loan, as the representative director of the dialogue bank, and Defendant 3, as the director of the above credit cooperative, to not grant a loan to the disqualified person. Defendant 4, as the auditor of the above credit cooperative, has a duty to point out and demand correction of the illegal or unjust performance of duties by Defendant 2, 3, etc., and despite the duty to do so, Defendant 4, as the auditor of the above credit cooperative, violated this duty to take measures to preserve the claim against the existing loan of Nonparty 1 on April 20, 1996, the non-party 1, who was disqualified for the loan, without taking such measures as the execution of the security right, and the repayment period of the loan was extended without taking such measures, and the repayment period was also carried out by the substitute loan of this case, and the non-party 3, the non-party 1, who is also disqualified, suffered damages equivalent to the amount of the loan collected by the bankrupt in violation of each of the above provisions. Thus, the above Defendants are jointly obligated to compensate the above damages to the Plaintiff.

3. Claim for damages due to excess loans on credit to the same person

(a) Facts of recognition;

The following facts are not disputed between the parties, or there is no dispute between the parties, Gap evidence 6-1 through 12, Gap evidence 7-1 through 12, Gap evidence 8-1 through 8, Gap evidence 9-1 through 8, Gap evidence 10-1 through 10, Gap evidence 14-2, Gap evidence 15-1 through 5, Gap evidence 16-1 through 3, Gap evidence 17-1 through 17, Gap evidence 18-1, 2, 19-1 through 6, Gap evidence 20-1 through 13, Gap evidence 23, Gap evidence 24-1 through 5, Gap evidence 27-1, 27-2, non-party 6's testimony as a whole.

(1) On July 31, 1997, the bankrupt bank entered into a bill transaction agreement with the non-party 8 on a joint and several guarantee of the non-party 7 to make all transactions relating to the discount of notes subject to the basic terms and conditions for credit transaction and other bills, with the limit of the borrowed amount as KRW 715 million. The bankrupt bank issued by the non-party 8 with the non-party 8 and received a letter of promissory note 715 million in face value, which is issued by the non-party 7 and endorsed by the non-party 7, and paid to the non-party 8 KRW 715 million in the discount of notes.

(2) On September 27, 1997, the bankrupt bank entered into a bill transaction agreement with the non-party 60 million won to which the limit of the borrowed amount is KRW 760 million, to which the basic terms and conditions for credit transaction by mutual savings and finance companies apply, and to all other transactions on the bills. The bankrupt bank, from the non-party 6, paid KRW 760 million with the loan amount of KRW 250 million with the face value of KRW 250 million issued by the non-party 10 corporation and KRW 260 million with the face value of KRW 260,000 with the face value of KRW 60,000.

(3) On September 27, 1997, the bankrupt bank entered into a bill transaction agreement with the non-party 11 on the limit of the borrowed amount at KRW 763 million, which is subject to the basic terms and conditions of credit transaction by mutual saving and finance companies, and to all other transactions on the bills. The bankrupt bank issued by the non-party 11 and paid KRW 763 million with the face value of the non-party 13 corporation and one promissory note with the face value of KRW 376 million, which is equivalent to KRW 387,600,000,000 for face value of the non-party 13 corporation and one promissory note with the face value of KRW 387,700,000,000 with the discount of the bill to the non-party 11.

(4) On September 29, 1997, the bankrupt bank entered into a bill transaction agreement with the non-party 14 on September 29, 1997, under which the limit of the borrowed amount is KRW 763 million, to which the basic terms and conditions for credit transaction of mutual savings and finance companies apply, and to all other transactions on the bills. The bankrupt bank issued by the non-party 15 corporation and paid KRW 763 million with the loan under the discount method of the bill to the non-party 14, while the non-party 15 corporation issued and endorsed the face value of KRW 398 million with the non-party 12 corporation and a promissory note with the face value of KRW 365 million with the face value of KRW 365 million.

(5) On September 29, 1997, the bankrupt bank entered into a bill transaction agreement with Nonparty 16,00,000 won for the limit of the borrowed amount to KRW 761 million, to which the basic terms and conditions for credit transaction of mutual savings and finance companies apply, and to all other transactions on the bills. Nonparty 16 received from Nonparty 16 a promissory note with a face value of KRW 3772,50,000,000 for face value and KRW 388,50,000 for face value, and paid KRW 761,00,000 for loans with a bill discount to Nonparty 16.

(6) The loans made by the above non-party 8 with the approval of the defendant 1 who is the representative director at the time and the defendant 3 who is the director at the time, after obtaining the approval of the auditor, and the remaining non-party 6, 11, 14, and 16 with the approval of the defendant 2 who is the representative director at the time and the defendant 3 who is the director at the time, were carried out after obtaining the approval of the auditor at the time, and all the five loans have not been fully recovered until now.

(7) The above five loan holders lent the name of the business owner to the non-party 7, and each of the above five loan holders borrowed the above loan to the non-party 7 and the non-party 7,000,000 won of the check issued by the bankrupt to the non-party 11 with the loan of the above non-party 11, and with the loan of the non-party 16, 267,000 won of the check issued by the bankrupt bank to the non-party 11, and the loan of the above non-party 16, 7,000 won of the check issued by the bankrupt bank to the non-party 16. The above five loan holders borrowed the above loan to the non-party 7 and the person receiving each of the above loan was the non-party 6 and the non-party 7 was the non-party 18 by taking the name of the above non-party 6, etc. from the non-party 18 with a discount of the bill issued by the bankrupt and the non-party 10, etc.

(8) According to the evidence No. 6-1, 4, 5, 6, 7, and 10, which are documents related to the above loan under the name of Nonparty 8, the non-party 7 entered as joint and several sureties, and the fact that the letter of credit guarantee was prepared and attached to the certificate of personal seal impression of the non-party 7. However, according to the court's order to submit documents in the first instance court, the non-party 22's loan documents (referring to the documents related to loans under the same item as the above No. 1) submitted by the non-party 8 are not written, and the bankrupt bank did not have any personal and material security on each of the above loans under the name of the non-party 4, and the credit investigation report (individual) was prepared in the form of each of the above five loans. However, the part that is naturally recorded in the credit investigation report is stated only in the name of the lender and the number presumed to be the telephone number of the vehicle, and there is no other debtor's obligation, revenue month, opinion, etc.

(9) According to Article 12 of the former Mutual Savings and Finance Company Act (amended by Act No. 5501 of Jan. 13, 1998), Article 8(1)1 and 8(1)2 of the Enforcement Decree of the same Act (amended by Presidential Decree No. 15604 of Dec. 31, 1997), the limit of loans that a mutual savings and finance company may grant to a same person a payment, loan, or discount of bills shall be 10/100 of its equity capital for a small-scale enterprise and a small-medium enterprise as prescribed in Article 2 of the Framework Act on Small and Medium Enterprises, and 3 billion won shall not exceed 5/100 of its equity capital for any other person, and 1.5 billion won (in the case of household funds, 100 million won) shall not exceed its equity capital at the time of the execution of each of the above five loans under the name of the bankrupt.

B. Determination

The purpose of the Mutual Savings and Finance Company Act is to prevent the difficulty in collecting loans due to the concentration of loans to the same person, as well as to provide more opportunities to extend loans to individuals and small-scale enterprises by regulating excessive credit volume to a specific person. Therefore, in determining the excess amount of loans to the same person, as well as in the case where the loan holder is in the same name as the loan holder, and only the name of another person is borrowed when the loan holder is actually the same, the loan holder should be regarded as the same person.

On the other hand, where an executive officer of a financial institution causes damages to a financial institution due to neglecting his/her duties, such as failing to secure sufficient security while lending money in excess of the lending limit to the same person, etc., he/she shall be liable to compensate for damages equivalent to the amount exceeding the lending limit to the same person from among loans which a financial institution has not recovered (see Supreme Court Decision 2001Da76854, Feb. 26, 2002, etc.).

With respect to this case, as seen earlier, Nonparty 7 participated in the loan of Nonparty 8 (the foregoing is extremely doubtful point as to whether Nonparty 7 stand joint and several sureties), and the loan of Nonparty 8 was made on September 27, 1997 for a total of KRW 3 billion on the 29th day of the same month, which is about two months after the loan of Nonparty 7. Nonparty 7 used a portion of the check paid out for the loan of KRW 3.762 million, and there was no doubt as to whether Nonparty 7 was a genuine joint and several sureties’s loan of KRW 70,000,000,000. Nonparty 7 did not secure any personal and physical security as well as the above 70,000,000,000 won x 77,000,000,000 won x 77,000,000 won of the above loan of the above loan to Nonparty 7 under the name of each of the above parties.

Therefore, Defendant 1, 3, and 4, who carried out the loan extended by Nonparty 8, neglected to perform the duties of a financial institution as an executive officer by exceeding the lending limit of 326,495,095 won (=715,00,000 won - 388,504,905 won), and Defendant 2, 3, and 4, who carried out each loan extended by Nonparty 6, 11, 14, and 16, neglected to perform the duties of a financial institution as an executive officer by exceeding the lending limit of 2,658,495,095 won (=3,047,000,000 - 38,504,905 won - 905 won) and as a result, the bankrupt was unable to recover all of the above loans, and thus, he is liable to compensate for damages exceeding the above amount of lending limit of each one.

4. Whether liability for damages is extinguished due to loans extended to Nonparty 3

A. Defendant 2, 3, and 4’s assertion

The above Defendants were sentenced to the judgment that Defendant 2 and 3 jointly and severally pay the amount of KRW 150 million and the amount for delay damages incurred from the unfair loan against Nonparty 3 in the case of claim for acquisition amount brought against Defendant 1, 2, and 3 by the Korea Finance Corporation against Defendant 1, 3 (Seoul District Court Decision 2001Da61307, Seoul High Court Decision 2003Na51691, Supreme Court Decision 2004Da45417). The above Defendants paid the amount of the judgment. Since the part of the Plaintiff’s damage claim for the unfair loan to Nonparty 3 among the damages claim in this case against the Plaintiff, since the damage claim for the unfair loan to Nonparty 3 is in the relationship between the deposit refund claim and the non-joint and several claims, the above judgment payment asserts that the damages liability portion against Nonparty 3 was extinguished.

B. The plaintiff's assertion

On the other hand, the plaintiff is liable for damages of this case due to the defendants' illegal or unjust act and the joint and several liability of deposit creditors under Article 37-3 of the former Mutual Saving and Finance Company Act at all different contents, character, and scope of liability. As of December 1, 1998, the deposit obligation borne by the bankrupt depository is 15.676 billion won, and as of December 1, 1998, the defendants are jointly and severally liable with the bankrupt depository to pay 1.66 billion won to deposit creditors. The above transfer money claim is accepted by the reorganization Financial Corporation, but the above transfer money claim is decided to pay 1.5 billion won, which is part of the claim, taking into account the costs of lawsuit, and it is decided to pay 1.5 billion won among them. Thus, even if the above defendants paid the above judgment to the Reorganization Financial Corporation, the defendants' liability for damages against the non-party 3 is not extinguished.

(c) Fact of recognition;

In full view of the overall purport of the arguments in Eul evidence Nos. 3, 5, 6, and 7, the Seoul High Court rendered a judgment on July 14, 2004 that the defendant 2 and 3 are jointly and severally liable with the bankrupt bank under Article 37-3 of the former Mutual Saving and Finance Act for the reason that the defendant 2 and 3, as an executive officer of the bankrupt bank, suffered losses equivalent to KRW 300 million, which is the amount of loan unpaid to the bankrupt bank due to the illegal loan to the non-party 3 as an executive officer of the bankrupt bank, due to the non-party 3's improper loan to the non-party 3, the non-party 3, the non-party 4,50 million won, and the scope of liability was limited to KRW 150,00,000,000, which became final and conclusive by the Supreme Court's dismissal of the appeal on November 26, 2004, and the defendant 3 can be recognized as the fact that the above judgment was paid to the liquidation corporation

D. Determination

Article 37-3 (1) of the former Mutual Savings and Finance Company Act provides that the officers of the mutual Savings and Finance Company 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. Paragraph (2) provides that the retired officers shall be jointly and severally liable for the obligations related to the deposits, etc. of the mutual Savings and Finance Company incurred before the retirement, within three years after the retirement. The officers of the mutual Savings and Finance Company, which are jointly and severally liable pursuant to each of the above provisions, shall be limited to the "executive responsible for the insolvent management of the mutual Savings and Finance Company" (see Constitutional Court Order 200Hun-Ga56, 2000, 200Hun-Ba26, 200Hun-Ba34, 200Hun-Ba34, 2002Hun-Ga3, 7, 9, and 12, even if they are jointly and severally liable for the insolvency management, they shall be jointly and severally liable with the mutual Savings and Finance Company to the extent of deposit claims.

Therefore, the officers responsible for insolvency management are liable for damages under the Commercial Act for the mutual savings and finance companies within the scope of liability for insolvency management by the directors, and there is the obligation to return the deposits under Article 37-3 of the former Mutual Savings and Finance Company Act for the deposit holders.

However, the liability for damages under the above Commercial Code and the liability for return of deposits under Article 37-3 of the former Mutual Savings and Finance Company Act are to enforce all the liability for the same act that is insolvent management, and the legislative purpose of the liability for return of deposits under Article 37-3 of the former Mutual Savings and Finance Company Act is to realize the responsible management and prevent the poor management by taking the responsibility for the insolvent management in the form of joint and several payment, and to protect the creditors of the depository such as deposit holders. The legislative purpose of Article 399 of the Commercial Code is to recognize the liability for damages to the company if the director commits an act in violation of the Acts and subordinate statutes or the articles of incorporation or neglects the duty of due care as a good manager, thereby maintaining the proper performance of the director's duties and company assets by recognizing the liability for damages to the company. Article 37-2 of the former Mutual Savings and Finance Company Act provides that "a person who has deposited deposits, etc. shall have the right to be paid in preference to other creditors within the limit of the deposit amount.

Therefore, Defendant 3 paid the above judgment money to the reorganization financial corporation which acquired the claims of the deposit account holders, as the responsibility for the insolvent management of the loan to Nonparty 3, who is disqualified for the loan, and fulfilled the obligation to return the deposit money under Article 37-3 of the former Mutual Savings and Finance Company Act. Therefore, the above Defendants were exempted from liability for damages under the Commercial Act due to the insolvent management related to the loan to Nonparty 3 (the officers of the mutual savings and finance company who fulfilled the obligation to return deposit money under Article 37-3 of the former Mutual Savings and Finance Company Act are entitled to exercise the right to indemnity against the mutual savings and finance company, which is the principal debtor of the deposit obligation, even in light of the fact that the officer of the mutual savings and finance company, who has fulfilled the obligation to return deposit money, can exercise the right to indemnity against the mutual savings and finance company, which is the principal debtor of the deposit obligation

We cannot accept the Plaintiff’s assertion that the liability for compensation under the Commercial Act is not extinguished even if the Plaintiff fulfilled the obligation to return deposits under the Mutual Savings and Finance Company Act. The Plaintiff’s assertion that the liability for compensation under the Commercial Act is not extinguished cannot be accepted, and that there is no proof as to the Defendants, other than the liability for insolvent management as revealed in the instant case and the above claim for transfer money, and that the Defendants still have the obligation to return deposits worth KRW 13.676 billion, as alleged by the Plaintiff, under

5. Limitation on liability for damages;

A. As seen earlier, Defendant 1, 3, and 4 are jointly and severally liable for damages of KRW 326,495,095 due to the execution of loans exceeding the lending limit for the same person as above in the name of Nonparty 8, and Defendant 2, 3, and 4 jointly and severally liable for damages of KRW 180,000,000 due to the loan extended to Nonparty 1 and damages of KRW 2,658,495,095 in total due to the execution of loans exceeding the lending limit for the same person in the name of Nonparty 6, 11, 14, and 16.

B. However, in general, in cases where a direct damage is incurred due to an act committed by an employee in connection with the performance of duties by an employee, the employer may seek damages against an employee only to the extent deemed reasonable in accordance with the principle of good faith in light of the nature and scale of the business, the duties of the employee, and all other circumstances. This also applies to cases where an officer of a financial institution is liable for damages against a financial institution. Thus, as seen earlier, it is attributable to the inappropriate performance of duties of the Defendants, who are an officer of the bankrupt’s credit cooperative. However, a claim against Defendant 2, 3, and 40 million won against the above non-party 3, a claim against the defendant 2, 3, and 50 million won against the defendant 2,300 won includes damages caused by loans to the above non-party 3, and there is no other evidence to deem that the defendants approved the above loans for personal interest or other unlawful purposes, and the scope of liability against the defendant 140 billion won in consideration of the status of the bankrupt’s credit cooperative, the period of non-party 16.

6. Conclusion

Therefore, Defendant 1, 3, and 4 are jointly and severally liable for 100 million won, Defendant 2, 3, and 4 jointly and severally liable for 350 million won, jointly and severally, and each of them shall be subject to dispute as to the existence and scope of the obligation to perform, from October 10, 201, which is the date of final delivery of the copy of the complaint of this case, until June 2, 2005, 5% per annum under the Civil Act and 20% per annum under the Act on Special Cases concerning the Promotion, etc. of Legal Proceedings from the next day until the full payment date. Thus, the plaintiff's claim of this case of this case is justified within the scope of the above recognition, and the remaining claim shall be dismissed, and the judgment of the first instance court which has partially concluded this shall be accepted by the plaintiff, and it is so decided as per Disposition by the assent of the first instance court.

Judges Jo Nam-nam (Presiding Judge)