In a case where the representative of the association knew that he did not borrow money for the association, he shall apply mutatis mutandis the proviso of Article 107 of the Civil Act to the person who lends money.

In case where the representative director of a union is for his own interest and the borrower would have been able to know if he had exercised due care that he was not borrowed for his own interest, the lending contract can not take effect against the union, by analogy of the proviso of Article 107 of the Civil Act

Industrial Bank of Korea (Attorney Kim Jae- Training, Counsel for defendant-appellant)

Kim Youngg and 12 others, Counsel for the defendant-appellant

Seoul High Court Decision 72Na1474 delivered on June 28, 1974

The appeal is dismissed.

The costs of appeal are assessed against the plaintiff.

The grounds of appeal by the plaintiff's attorney are examined comprehensively.

According to the reasoning of the judgment below, the court below acknowledged the following facts, based on the timely evidence, that the non-party 1 was the representative of the Korea Development Bank of Korea-U.S. and the non-party 1 borrowed 7.9 million won and 7 million won as the representative of the above union on the surface of the plaintiff bank, but the non-party 1 borrowed the above loan to use it and the non-party 1 borrowed the above 2 loans over the above two occasions between the plaintiff bank and the above non-party 1, the party in charge of the loan of the plaintiff bank, and the non-party 2, the non-party 1, who was the party in charge of the loan of the plaintiff bank, did not submit documents, etc. necessary for the loan, and the employees supervising the above loan acts such as the head of the plaintiff bank, did not examine the appropriateness of the above loan acts, and it can be seen that the above recognition was a legitimate fact-finding in light of related evidence.

Thus, the above non-party 1 could have known that it is not borrowed on behalf of the above non-party association if the plaintiff bank had exercised due care, and in such a case, the proviso of Article 107 of the Civil Code can not be inferred, and the loan agreement of this case cannot be effective.

Thus, it is clear that the defendants, who jointly and severally guaranteed the obligations of the above union against the plaintiff bank, have no obligation to repay the loan.

Therefore, the non-party 1 has the authority to perform the duties of the chief executive officer, and it is not possible to use this case's debt for power months or abuse, and even if the non-party 1 forged a promissory note, the promissory note was received from the Plaintiff bank as collateral, and the claim for this case is a loan claim. Therefore, the appeal to the effect that this case's loan is valid regardless of the forgery of the above promissory note is without merit. It is so decided as per Disposition by the assent of all participating judges.

Justices Ahn Byung-soo (Presiding Justice)