Whether a company’s borrowing of funds for its operation constitutes a debt arising from a commercial activity (affirmative in principle), and where the principal obligation is a debt arising from a commercial activity, whether one of the joint guarantors has separate profits pursuant to Articles 439 and 408 of the Civil Act (negative)

Articles 47 and 57(2) of the Commercial Act; Articles 408 and 439 of the Civil Act

Plaintiff (Counter-Defendant) (Law Firm Bad Co., Ltd., Attorney Hu Sung-sung, Counsel for plaintiff-appellant)

S&C Co., Ltd.

Seoul Southern District Court Decision 2018Na58644, 2019Na53615 decided January 30, 2020

The part of the lower judgment against the Plaintiff regarding the claim for advance reimbursement is reversed, and that part of the case is remanded to the Seoul Southern District Court. The remaining appeals are dismissed.

The grounds of appeal are examined.

1. Part concerning the claim for advance reimbursement under the main claim

For the reasons indicated in its holding, the lower court determined that the scope of the Plaintiff’s guarantee is limited to the amount equivalent to 1/2 of the loan debt of this case, which is the principal debt, and the scope of the Plaintiff’s prior right to indemnity is limited to the amount equivalent to 1/2 of the principal debt of this case, which is the principal debt of this case, remaining principal debtor pursuant to Article 442(1)4 of the Civil Act, on the grounds that the Plaintiff (Counterclaim Plaintiff; hereinafter “Plaintiff”) was the guarantor of the loan of this case upon request of the Nonparty, who is the representative director of the Defendant (Counterclaim Plaintiff; hereinafter “Defendant”). However, the lower court determined that the scope of the Plaintiff’s guarantee is limited to the amount equivalent to 1/2 of the principal and interest (35,686,000 won) remaining for the Defendant.

However, Article 47 of the Commercial Act provides that a merchant's act for business purposes shall be deemed a commercial activity (Article 47(1)), and that a merchant's act shall be presumed to be an act for business purposes (Article 2). Thus, the loan obligation of this case, in which the Defendant, who is the merchant, promised to borrow funds for the company's operation, constitutes a obligation arising out of a commercial activity, barring any special circumstances. In cases where the principal obligation is arising out of a commercial activity, the principal obligor and the guarantor are jointly and severally liable for payment (Article 57(2) of the Commercial Act). Therefore, in such cases, regardless of whether one of the joint guarantors has a joint and several agreement with other guarantors, the obligee must pay the entire amount of the debt guaranteed without having any benefit of each kind under Articles 439 and 408 of

Nevertheless, solely for the reasons indicated in its holding, the lower court deemed that the Plaintiff still has a separate interest in the instant loan obligations, which are commercial obligations, and limited the scope of the Plaintiff’s exercise of the right to prior reimbursement to the extent of liability where there exists a separate interest. In so determining, the lower court erred by misapprehending the legal doctrine on Article 57(2) of the Commercial Act, which is a special provision on joint and several liability, thereby adversely affecting the conclusion of the judgment.

2. The loan claims in the principal lawsuit

For the reasons indicated in its holding, the lower court dismissed the Plaintiff’s principal claim against the Defendant seeking loans and payment of damages for delay.

Examining the reasoning of the lower judgment in light of the relevant legal principles and records, the lower court did not err in its judgment by failing to exhaust all necessary deliberations, thereby exceeding the bounds of the principle of free evaluation of evidence against logical and empirical rules, or by misapprehending the legal doctrine on confession and revocation in civil litigation.

3. The part against the remaining plaintiff (the part of the counterclaim claim cited in the original trial)

The Plaintiff appealed the entire part of the judgment of the court below against the Plaintiff, but this part does not include specific grounds for objection in the petition of appeal and the appellate brief.

4. Conclusion

Therefore, the part of the lower judgment against the Plaintiff regarding the claim for advance reimbursement is reversed, and that part of the case is remanded to the lower court for further proceedings consistent with this Opinion. The remaining appeals are dismissed. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Kim Jae-hyung (Presiding Justice)