[1] Trade relationship between the nominal lender and the nominal borrower's liability under Article 24 of the Commercial Act (=joint and several liability), and whether the grounds for interruption of extinctive prescription or waiver of the prescription benefit under the vicarious and several liability becomes effective for another debtor (negative)

[2] The case reversing the decision of the court below which rejected the above defense on the ground that the nominal lender committed a promise to pay a part of the claim prior to the expiration of the statute of limitations and the settlement of the balance, in case where the nominal lender, who had transacted with the nominal lender, was held liable for the nominal lender's claim for the price of goods by mistake of the nominal lender as the nominal lender, expired after the lapse of the statute of limitations

[1] The liability of a nominal lender and a nominal borrower under Article 24 of the Commercial Act is a debt with the same economic purpose, and where one of the overlapping portions becomes extinct due to repayment, etc., the other party’s obligation is also extinguished. In such a case of vicarious joint and several liability, the grounds for interruption of extinctive prescription or waiver of prescription benefits, such as a claim for performance against one of the obligors, approval of the obligation performed by one of the obligors, etc., do not extend to the other debtors.

[2] The case reversing the judgment below which rejected the aforementioned defense on the ground that, in case where the nominal lender, who had transacted with the nominal lender, was liable to the nominal lender for the claim for the amount of the goods sold by the nominal lender under Article 24 of the Commercial Act, had extinguished due to the lapse of the short-term extinctive prescription period of three years, although the effect of approval of the obligation granted by the nominal lender, who was only one of the vicarious debtors, or waiver of the prescription profit, did not extend to the other vicarious debtors, the nominal borrower committed the payment of part of the claim prior to the expiration of the statute of limitations, and thus, the nominal borrower committed the payment by settling the balance at the same time.

[1] Article 24 of the Commercial Act, Articles 168 and 184 of the Civil Act / [2] Article 24 of the Commercial Act, Articles 168 and 184 of the Civil Act

[1] Supreme Court Decision 95Da42027 delivered on September 12, 1997 (Gong1997Ha, 3070)

Plaintiff

Defendant (Law Firm Sejong, Attorneys Jeong Jin-ho et al., Counsel for the defendant-appellant)

Daegu District Court Decision 2010Na8806 Decided October 13, 2010

The judgment below is reversed, and the case is remanded to the Daegu District Court Panel Division.

The grounds of appeal are examined.

1. Regarding ground of appeal No. 2

The liability of the nominal lender under Article 24 of the Commercial Act is to protect a third party who trades by misunderstanding the nominal owner as a business owner. Thus, if the other party to the transaction knew of, or was grossly negligent in, the fact of the nominal name, it shall not be held liable. However, as to whether the other party to the transaction knew of, or was grossly negligent in, the fact of the nominal name, the nominal lender claiming exemption bears the burden of proof (see Supreme Court Decision 2000Da10512, Apr. 13, 2001, etc.

Upon examining the reasoning of the judgment below in light of the records, the court below acknowledged facts as stated in its reasoning after compiling the evidence of employment, and it is just to find that the defendant lent the name of the business operator to the non-party 1 and the plaintiff transacted with the non-party 1 because he misleads the defendant as the business owner, and there is no error of law such as misunderstanding of legal principles as to the liability of the

2. Regarding ground of appeal No. 1

A. The liability of the nominal lender and the nominal borrower under Article 24 of the Commercial Act is a debt with the same economic purpose, and where one of the overlapping portions becomes extinct due to repayment, etc., the other party’s obligation is also extinguished. In addition, in the case of vicarious joint and several liability, the grounds for interruption of extinctive prescription or waiver of prescription benefit, such as a claim for performance against one of the obligors, approval of the obligation performed by one of the obligors, etc., shall not extend to the other obligor (see Supreme Court Decision 95Da42027, Sept. 12, 1997, etc.).

B. According to the reasoning of the judgment below, the court below decided that the defendant allowed the non-party 1 to conduct business using the defendant's name as above, and since the plaintiff mispercing the defendant as the business owner and transacted with the non-party 1, the defendant is obligated to pay the goods price jointly with the non-party 1 pursuant to Article 24 of the Commercial Act. Furthermore, the judgment as to the defendant's defense that the three-year short-term extinctive prescription period has expired, and the transaction relation between the plaintiff and the non-party 1 was terminated on October 15, 2004, but the plaintiff was terminated on August 19, 2007, but the balance was 61,334,000 won (the "61,330,000 won" in the judgment of the court below is a clerical error) and the act of the non-party 1 or the defendant settled the remaining amount of the goods by settling it with the non-party 1 or the non-party 1, and rejected the remaining extinctive prescription period as to the defendant's claim 207.

C. However, the lower court’s determination is difficult to accept in light of the legal principles as seen earlier and the following circumstances.

First of all, even if based on the facts acknowledged by the court below, the plaintiff is not the defendant but the non-party 1. Therefore, in light of the legal principles as seen earlier, it cannot be deemed that the approval of the debt granted by the non-party 1, only one of the quasi-joint and several obligors, or the waiver of the statute of limitations interest,

Furthermore, even if the judgment of the court below is understood to the purport that the non-party 1 made the above payment in kind in consultation with the defendant, the non-party 2's testimony as a witness of the court of first instance can be supported by the evidence. However, the above witness is in a position that it is difficult to expect an objective statement as an employee of the plaintiff, and the plaintiff merely obtained the signature of the non-party 1 and his wife while making the above payment in kind and settlement (Evidence 3). Thus, it is difficult to see it as above.

In addition, even though the plaintiff demanded the defendant to perform his obligation by telephone on August 12, 2007, such peremptory notice does not have the effect of interrupting prescription unless the plaintiff takes judicial claims, intervention in bankruptcy proceedings, seizure or provisional seizure within six months from the above peremptory notice (Article 174 of the Civil Act). Thus, in this case where no evidence exists to acknowledge that the plaintiff was taking the above measures, it cannot be deemed that the prescription has been interrupted due to such demand.

D. Nevertheless, the court below acknowledged that the Defendant had suspended extinctive prescription against the Defendant or waived the statute of limitations benefits on the grounds stated in its holding. Thus, the court below erred by misapprehending the legal principles on the validity of the causes, etc. for the interruption of prescription that occurred to one quasi-joint and several obligors, or by failing to

3. Conclusion

Therefore, the judgment of the court below is reversed, and the case is remanded to the court below for a new trial and determination. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Shin Young-chul (Presiding Justice)