[1] The case holding that the previous lawsuit is different in the case where the Korea Deposit Insurance Corporation seeks a joint and several liability under Article 37-3 of the former Mutual Savings Banks Act for an executive officer of a mutual savings bank or an oligopolistic shareholder as a transferee of a right such as a depositor, etc. and the Korea Deposit Insurance Corporation seeks a joint and several liability under Article 37-3 of the former Mutual Savings Banks Act against an executive officer of a mutual savings bank or oligopolistic shareholder as a transferee of a right

[2] Executives and oligopolistic shareholders who are jointly and severally liable for debts related to deposits, etc. of a mutual savings bank under Article 37-3 of the former Mutual Savings Banks Act and the scope of their responsibilities

[3] The scope of officers' joint and several liability for repayment as stipulated in Article 37-3(1) of the former Mutual Savings and Finance Company Act, and in the case where a member responsible for the deposit repayment to a deposit account holder as stipulated in the above provision, whether the person liable for the deposit is exempted from liability for damages as stipulated in Articles 399(1) and 414(1) of the Commercial Act, which shall be borne to a credit cooperative due to the same act of neglect

[1] The case holding that the previous lawsuit is different in the case where the Korea Deposit Insurance Corporation claims a joint repayment liability under Article 37-3 of the former Mutual Savings Banks Act (amended by Act No. 6992 of Dec. 11, 2003) against an executive officer or oligopolistic shareholder of a mutual savings bank as a trustee in bankruptcy when it is against the executive officer or employee of the mutual savings bank in the position of trustee in bankruptcy or liability for damages arising from a director's breach of official duties or a director's duty of care under the Commercial Act, and the lawsuit is brought about by the Korea Deposit Insurance Corporation who subrogated to the depositors, etc. of the mutual savings bank in accordance with the Depositor Protection Act,

[2] Article 37-3 of the former Mutual Savings Banks Act (amended by Act No. 6992 of Dec. 11, 2003) imposing liability for joint repayment on an executive officer or oligopolistic shareholder with respect to the obligation related to a deposit, etc. of a mutual savings bank shall be reasonable to the effect that an oligopolistic shareholder who actually exercises shareholder's rights or exercises shareholder's rights with respect to an insolvent management liability, thereby causing the insolvency of a mutual savings bank, is jointly and severally liable with a mutual savings bank within the scope of damages suffered by the bank due to his or her act.

[3] Article 37-3(1) of the former Mutual Savings and Finance Company Act (amended by Act No. 6429, Mar. 28, 2001) provides that an officer of a mutual savings and finance company (excluding auditors) shall be jointly and severally liable with a credit cooperative for its obligations related to the deposit of a credit cooperative. This shall be jointly and severally liable with a credit cooperative within the scope of damages suffered by a credit cooperative due to an officer who has neglected his/her due care or duty of due care and duty of due care as a good manager, such as participating in illegal and non-performing loans, thereby causing property damage to a credit cooperative. The same shall apply where a director or auditor of a credit cooperative causes property damage to a credit cooperative due to his/her failure to perform his/her duty of due care as a good manager, and where the director or auditor of a credit cooperative causes property damage to a credit cooperative, he/she shall be jointly and severally liable with a credit cooperative. Therefore, Article 399(1) and Article 414(1) of the Commercial Act shall also apply to a credit cooperative.

[1] Articles 216 and 218 of the Civil Procedure Act, Article 39(1) of the Commercial Act, Article 37-3 of the former Mutual Savings Banks Act (amended by Act No. 6992 of Dec. 11, 2003) / [2] Article 37-3 of the former Mutual Savings Banks Act (amended by Act No. 6992 of Dec. 11, 2003) / [3] Article 37-3(1) of the former Mutual Savings Banks Act (amended by Act No. 6429 of Mar. 28, 2001) (see current Article 37-3(1) of the Mutual Savings Banks Act), Articles 399(1) and 414(1) of the Commercial Act

[1] Constitutional Court en banc Order 200Hun-Ga568 Decided August 29, 2002; 2001Hun-Ga26, 2000Hun-Ba34, 2002Hun-Ba3, 7, 9,12 (Hun-Ga72,710) / [2] Supreme Court Decision 2003Da65568 Decided September 29, 2005 / [3] Supreme Court Decision 2004Da48409 Decided November 25, 2005 / [3] Supreme Court Decision 2005Da38492 Decided February 24, 2006 (Gong2006Sang, 506)

Korea Deposit Insurance Corporation (Law Firm Dongin, Attorneys Ansan-sik et al., Counsel for the plaintiff-appellant)

Defendant (Law Firm Pohang, Attorney Lee Byung-hee, Counsel for defendant-appellant)

Daegu District Court Decision 2005Gahap575 Decided June 30, 2006

on March 30, 2007

1. The part against the defendant among the judgment of the court of first instance is revoked, and the plaintiff's claim corresponding to the revoked part is dismissed.

2. The plaintiff's appeal is dismissed.

3. All costs of the lawsuit shall be borne by the Plaintiff.

1. Purport of claim

The defendant shall pay to the plaintiff 1,00,000,000 won with interest rate of 20% per annum from the day after the delivery of the complaint of this case to the day of complete 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 shall pay to the plaintiff 130,000,000 won with interest of 20% per annum from the day following the delivery of the complaint of this case to the day of full payment.

Of the judgment of the first instance, the part against the defendant shall be revoked. The plaintiff's claim corresponding to the revocation shall be dismissed.

1. Basic facts

[Ground of recognition] A without dispute, Gap evidence Nos. 5, Eul evidence Nos. 1 through 1 to 7, 4-1, and 2-2 of the evidence Nos. 2, and the result of fact inquiry into the bankrupt Kimcheon Mutual Savings Bank of the first instance court, the purport of the whole pleadings

A. A. A bankrupt, Kimcheon Mutual Savings Bank (the trade name at the time of its incorporation was the Kimcheon Mutual Savings Bank, but changed to the "Co., Ltd. Kimcheon Mutual Savings Bank," on October 6, 1997, and the "Jincheon Mutual Savings Bank," on February 27, 2002; hereinafter the "Gincheon Mutual Savings Bank"), which was established on March 6, 1970 and operated as its main business, such as mutual credit fraternity, credit installment, credit loan, and bill discount, was subject to a disposition of business suspension from the Financial Supervisory Service on March 20, 203, and was declared bankrupt by the Daegu District Court on October 27, 2003, and the Plaintiff was appointed as a bankruptcy trustee.

B. The defendant served as the chief of division from July 1, 1993 to August 28, 1998, as the standing auditor from August 29, 198 to November 20, 199, and as the representative director from November 22, 199 to September 10, 202.

C. From November 19, 199, before the defendant was appointed as the representative director of Kimcheon Mutual Savings Bank, the defendant owned shares equivalent to the ratio of 50% (Defendant 46.89%, non-party 13.1%) out of the total number of shares issued by Kimcheon Mutual Savings Bank in his own name and in his own name, non-party 1's own name. On June 10, 2002, the non-party 2, a major shareholder of Kimcheon Mutual Savings Bank, did not participate in the increase of capital for the purpose of improving the financial structure, he owned shares equivalent to the ratio of 58.7% (Defendant 56.5%, non-party 12.2%) out of the total number of shares issued. From August 19, 2002, the defendant disposed of shares equivalent to 51.3% (Defendant 49.4%, non-party 1.9%) out of the total number of shares issued.

D. The Plaintiff is a special corporation established pursuant to the Depositor Protection Act with the aim of contributing to protecting depositors and maintaining the safety of the financial system by efficiently operating the deposit insurance system. The Plaintiff paid KRW 5,527,49,960, out of KRW 5,594,872,474, out of the amount of deposit, etc. of KRW 5,594,872,474, pursuant to Articles 31(1) and 2 subparag. 7 and 31(1) of the aforementioned Act to depositors, etc.

E. The Plaintiff, as a trustee in bankruptcy of the bankrupt Kimcheon Mutual Savings Bank, filed a lawsuit claiming damages (hereinafter “previous lawsuit”). On January 7, 2005, the Plaintiff, as the director of Kimcheon Mutual Savings Bank, filed a lawsuit claiming damages (hereinafter “previous lawsuit”) against the Defendant and nine others, the Plaintiff breached his duty of care in accordance with the loan-related Acts and subordinate statutes or regulations, and as the director of Kimcheon Mutual Savings Bank, incurred damages equivalent to KRW 713,000,000,000,000 to Kimcheon Mutual Savings Bank as a director, in breach of his duty of care in good faith. However, the Plaintiff limited the ratio of liability to KRW 28,520,000 to KRW 40,000,000,000 to KRW 28,520,000 to the trustee in bankruptcy of the bankrupt Mutual Savings Bank, and paid the amount to KRW 15,205,000 to the trustee in bankruptcy of the bankrupt by November 37, 2003.

Non-party 2, 1996. Nov. 22, 1996, 196, e.g., "non-party 3,5 million won and 7.7 billion won" on Apr. 17, 2001, the representative director "non-party 4, 6, 134,000 won and 7.7 billion won" on Sep. 4, 2001, 201, "non-party 2,700,000 won and 7.7 billion won and 7.7 billion won and 7.7 billion won and 7.7 billion won and 1.7 billion won and 200,000 won and 1.7 billion won and 1.7 billion won and 2.7 billion won and 2.7 billion won and 1.7 billion won and 2.7 billion won and 2.7 billion won and 1.7 billion won and 2.7.7 billion won and 2.7 billion won and 2.7.7.1.2 billion.

2. Judgment on the Defendant’s main defense

A. Summary of the assertion

The lawsuit of this case is to seek joint repayment liability from an executive officer or oligopolistic shareholder pursuant to Article 37-3 of the former Mutual Savings Banks Act against the defendant as the plaintiff subrogatedly repaid his/her obligations such as deposits of Kimcheon Mutual Savings Banks pursuant to the Depositor Protection Act, and takes over the claims of depositors, etc. pursuant to Article 35 of the Depositor Protection Act. The lawsuit of this case is to be dismissed since the plaintiff, who is the trustee in bankruptcy of Kimcheon Mutual Savings Banks, claims for damages from an executive officer, etc. pursuant to Article 37-3 of the former Mutual Savings Banks Act against the defendant. Since the lawsuit of this case and the previous lawsuit of this case are only different from the case name of the plaintiff, and the lawsuit

(b) Markets:

As seen earlier, the previous lawsuit is brought against the defendant, who is an executive officer or employee of Kimcheon Mutual Savings Bank, in the position of trustee in bankruptcy of Kimcheon Mutual Savings Bank, and is liable for damages due to a violation of official duties or a violation of the duty of care as a director under the Commercial Act, while the lawsuit in this case is brought against the plaintiff who subrogated to the depositors, etc. of Kimcheon Mutual Savings Bank pursuant to the Depositor Protection Act, who is the transferee of rights of depositors, etc. and is an executive officer of Kimcheon Mutual Savings Bank or oligopolistic shareholder under Article 37-3

Therefore, both lawsuits are different in the subject matter of lawsuit depending on different causes of the lawsuit between the parties, so the defendant's defense of safety is without merit.

3. Judgment on the plaintiff's assertion

A. Summary of the assertion

① The Defendant is jointly and severally liable with the Kimcheon Mutual Savings Bank pursuant to Article 37-3 of the former Mutual Savings Banks Act (amended by Act No. 6992 of Dec. 11, 2003; hereinafter “former Mutual Savings Banks”) to pay obligations related to deposits, etc. of Kimcheon Mutual Savings Banks, and the Plaintiff acquired rights of depositors, etc. pursuant to Article 35 of the Depositor Protection Act by paying obligations related to deposits, etc. of Kimcheon Mutual Savings Banks in lieu of KRW 5,527,49,960 on behalf of depositors, etc., and thus, the Defendant is obligated to pay to the Plaintiff part of the amount of payment on behalf of depositors, etc.

(b) Legal provisions and requirements for the responsibility of officers and oligopolistic shareholders of a mutual savings bank;

(1) Relevant legal provisions

Article 37-3 (1) of the former Mutual Savings and Finance Company Act (amended by Act No. 6429, Mar. 28, 2001; hereinafter referred to as the "former Mutual Savings and Finance Company Act") provides that the provisions of paragraph (2) of the same Article shall apply mutatis mutandis to an oligopolistic stockholder who transfers stocks, and an oligopolistic stockholder (referring to an oligopolistic stockholder as provided in Article 39 (2) of the Framework Act on National Taxes) shall be jointly and severally liable with a mutual savings and finance company for the obligations related to the deposit in a mutual savings and finance company. Article 37-3 (2) of the former Mutual Savings and Finance Company Act provides that the same provisions shall apply mutatis mutandis to an oligopolistic stockholder who owns the stocks, and Article 37-3 of the former Mutual Savings Banks Act (hereinafter referred to as the "former Mutual Savings and Finance Company Act") provides that the name of the mutual savings and finance company is changed to the "mutual savings bank" and Article 37-3 (1) of the former Mutual Savings and Finance Company Act provides that the total number of outstanding stocks or other oligopolistic stockholders shall be equal to Article 37 (1).

(2) Decision of limited unconstitutionality by the Constitutional Court

On August 29, 2002, the Constitutional Court decided that the legislative purport of Article 37-3 of the former Mutual Savings and Finance Company Act is to prevent the insolvency of the Mutual Savings and Finance Company due to the insolvency of the Mutual Savings and Finance Company and the private saving and finance company and thereby protect the deposit holders, and thus, it is reasonable to limit the scope of human resources to be applied as legislative means for realizing the same to “persons related to the insolvent management.” Thus, Article 37-3 (1) of the same Act is in violation of the Constitution to the extent that it is jointly and severally liable to pay to “executive who is not responsible for the insolvent management of the Mutual Savings and Finance Company.” The portion on oligopolistic shareholders is also in violation of the Constitution to the extent that it is jointly and severally liable to pay to “ oligopolistic shareholders other than those who caused the insolvency due to the exercise of influence over the management of the Mutual Savings and Finance Company” (see Constitutional Court en banc Decision 200Hun-Ga5,6, 2000Hun-Ba26, 2034, 2002HunBa37379, 19).

(3) Liability requirements

In light of the purport of the above-mentioned decision of unconstitutionality, it is reasonable to view that the provision on liability to executives and oligopolistic shareholders, “executive officers responsible for insolvent management” and “ oligopolistic shareholders who have caused the insolvency of a mutual savings bank by exercising shareholders’ rights or exercising their influence over a mutual savings bank,” to the effect that they are jointly and severally liable with a mutual savings bank, for obligations related to the deposit, etc. of a mutual savings bank within the scope of losses suffered by the mutual savings bank due to their own acts (see Supreme Court Decisions 2003Da6568, Sept. 29, 2005; 2004Da48409, Nov. 25, 2005).

C. Whether the person is jointly and severally liable as an oligopolistic stockholder

(1) An oligopolistic stockholder

As seen earlier, the Defendant owned shares equivalent to at least 51% of the total number of shares issued by Kimcheon Mutual Savings Bank from June 10, 2002 to September 10, 2002 in his own name and the name of Nonparty 1, who is one of his own name, and thus, it is recognized that he had been oligopolistic shareholders of Kimcheon Mutual Savings Bank under the Framework Act on National Taxes during the said period.

(2) Whether the oligopolistic stockholder causes insolvency of Kimcheon Mutual Savings Bank

(A) A’s evidence Nos. 2 and 5’s statement alone is insufficient to acknowledge it, and there is no other evidence to acknowledge it; and

(B) Rather, based on the evidence cited in the above facts, the following facts revealed: ① Kimcheon Mutual Savings Bank aggravated its financial structure due to economic depression and real estate economic depression caused by the depression of the foreign exchange crisis at the end of 1997; accordingly, the Defendant, who was the major shareholder of Kimcheon Mutual Savings Bank, made efforts to improve its financial structure by providing capital increase in an amount of KRW 3,580,000 won on four occasions from November 26, 1999 to August 19, 2002 and raising considerable amount of money to Kimcheon Mutual Savings Bank; ② However, after the Defendant’s disposal of all shares, Nonparty 12, etc., who was entrusted with the representative director of Kimcheon Mutual Savings Bank after the Defendant’s disposal of the shares, was fully deducted from Kimcheon Mutual Savings Bank under the pretext of business insolvency; and, in light of such circumstances, it can be acknowledged that the money was used as an executive or employee of Kimcheon Mutual Savings Bank due to the act of management trust of Kimcheon Mutual Savings Bank, etc.

(C) Therefore, the Plaintiff’s assertion of joint repayment liability as an oligopolistic shareholder on the premise that the Defendant caused insolvency of Kimcheon Mutual Savings Bank as an oligopolistic shareholder is without merit.

(d) Whether officers are jointly and severally liable; and

(1) Summary of each party's assertion

(A) The Plaintiff: the Defendant, as the representative director of Kimcheon Mutual Savings Bank, extended the loans under Articles 37-3 to 3 to 7 of the instant table and caused the insolvency of Kimcheon Mutual Savings Bank. As such, the Defendant is liable to pay to the Plaintiff the Plaintiff the sum of KRW 568 million (the amount cited in the first instance trial for the loans under Articles 4 to 7 + KRW 438 million + the amount claimed as damages due to the loans under Article 37-3). The previous lawsuit is liable to compensate the Defendant for damages under the Commercial Act which caused the Defendant’s failure to perform his duties as an executive officer of Kimcheon Mutual Savings Bank. The lawsuit of this case is liable for the legal liability of the executives of the deposit claims under Article 37-3 of the former Mutual Savings Bank Act against the Defendant, and even if such legal liability differs from the previous lawsuit and its scope are different from the previous lawsuit, the Defendant is not liable to the Plaintiff, and thus, the previous lawsuit is not jointly and severally liable to the Plaintiff.

(B) Defendant: Joint and several liability of the executives of the Plaintiff’s deposit claims under Article 37-3 of the former Mutual Savings Banks Act, which the Plaintiff seeks, is in line with the scope and contents of the liability for damages as directors of the previous lawsuit under the Commercial Act. The Defendant fully repaid the amount of KRW 348,001,642 cited in the judgment of the previous lawsuit to the Korea Deposit Insurance Corporation on September 29, 2006. As such, the joint and several liability portion of the executive officers of the former Mutual Savings Banks Act due to defective management of the instant case was extinguished.

(2) Determination:

(A) Article 37-3(1) of the former Mutual Savings and Finance Company Act provides that an executive officer (excluding auditors) of a mutual savings and finance company shall be jointly and severally liable with a credit cooperative for the obligation related to the deposit of a credit cooperative. This shall be jointly and severally liable for the obligation related to the deposit of a credit cooperative within the scope of damages suffered by a credit cooperative by an executive officer who is responsible for poor management of a credit cooperative due to his/her own act, such as participating in illegal and non-performing loans, and shall be jointly and severally liable with a credit cooperative within the scope of damages suffered by the credit cooperative due to his/her act. The same shall apply to the case where a director or auditor of a credit cooperative causes property damage to a credit cooperative due to his/her failure to perform his/her duty of care as a good manager. In addition, the liability for damages under Articles 399(1) and 414(1) of the Commercial Act, which are to be borne by the credit cooperative, as well as the cause and scope of liability, in view of the same act of poor management caused by the credit cooperative.

(B) In the instant case, the Defendant’s improper loan under Articles 3 through 7 of the instant Table 3 prevents Kimcheon Mutual Savings Bank from recovering total of KRW 568 million, thereby causing the defective management of Kimcheon Mutual Savings Bank, and thus, the Defendant is liable to make a deposit payment pursuant to Article 37-3(1) of the former Mutual Savings Bank Act to the Defendant. However, it is reasonable to apply the same to the determination of the Defendant’s liability to make a deposit payment in the instant case in light of the nature, cause and content of the liability, and the grounds for limitation.

Therefore, the Defendant’s liability for the repayment of deposits due to the unfair loans under Articles 3 through 7 of the instant table is limited to KRW 227,200,000 ( KRW 568,000 x 40%).

(C) Meanwhile, according to the evidence Nos. 5-1 of the evidence Nos. 5-1, the defendant, on September 29, 2006, can be found to have discharged to the bankruptcy trustee of the bankrupt Kimcheon Mutual Savings Bank the full amount of KRW 348,01,642, which is the quoted amount in the previous lawsuit judgment, including the amount of damages arising from the unfair loans under Articles 3 through 7 of the above Table.

(D) Therefore, in light of the above legal principles, the defendant's liability for the repayment of deposits under Article 37-3 (1) of the former Mutual Savings Banks Act due to the above unfair loans shall be deemed to have ceased to exist by performing the defendant's obligation to compensate for damages against the trustee in bankruptcy of Kimcheon Mutual Savings Banks under Article 399 (1) of the Commercial Act.

(3) Sub-determination

Therefore, the plaintiff's assertion of joint repayment liability as its officer is without merit.

4. Conclusion

Therefore, the plaintiff's claim of this case shall be dismissed due to the reasons. Since the judgment of the court of first instance is unfair with different conclusions, the defendant's appeal is accepted, and the part against the defendant in the judgment of first instance against the defendant is revoked, and the plaintiff's appeal corresponding to that part is dismissed, and

Judges Kim Chang-sung (Presiding Judge)