[1] Whether the effect of the repayment of the term repayment due due to the commencement of composition for the debtor extends to the guarantor (negative)

[2] Whether a special contract that limits the period for claiming the performance of guaranteed debt with respect to a corporate bond of the guaranteed debt is excluded or invalidated as bankruptcy (negative)

[3] The standard for determining the scope of assets, liabilities, etc. transferred according to the decision where a decision to transfer a contract is made under the former Act on the Structural Improvement of the Financial Industry

[1] Article 16 of the former Bankruptcy Act (repealed by Article 2 of the Addenda to the Debtor Rehabilitation and Bankruptcy Act, Act No. 7428 of March 31, 2005) which applies mutatis mutandis to the composition procedure pursuant to Article 49 of the former Composition Act (repealed by Article 2 of the Addenda to the Debtor Rehabilitation and Bankruptcy Act, Act No. 7428 of March 31, 2005) provides that "a term-paid claim shall be deemed to have come due when bankruptcy is declared." However, the effect of the maturity due to the commencement of composition shall not extend to the guarantor only between the composition creditor and the debtor.

[2] If a creditor fails to file a claim for the performance of a guaranteed obligation within three months from the date of repayment of principal and interest, a bond with a payment guarantee division under a special contract under which the guaranteed obligation ceases to exist, and the date of redemption arrives, and if the guaranteed obligation holder goes bankrupt, the creditor may file a claim for the performance of the guaranteed obligation by participating in the bankruptcy foundation after filing a claim with the bankruptcy court as to the guaranteed obligation. Thus, if the creditor fails to report such obligation within three months, the guaranteed obligation becomes extinguished pursuant to the above special contract. Although the former Bankruptcy Act (repealed by Article 2 of the Addenda to the Debtor Rehabilitation and Bankruptcy Act, Act No. 7428, Mar. 31, 2005) provides for the method of exercise and the other party to exercise the guaranteed obligation differently from the general bond, such circumstance alone cannot be deemed excluded or invalidated by the declaration of bankruptcy.

[3] In the case of a contract transfer under the former Act on the Structural Improvement of the Financial Industry (amended by Act No. 5549 of Sep. 14, 1998), the issue of whether assets, liabilities, etc. are transferred shall be determined as prescribed by the written decision for contract transfer. In a case where the provision is unclear and its scope is not clearly known, the determination should be made by comprehensively taking into account the purport and circumstance of the decision for contract transfer, and the equitable outcome between the parties involved in the transferred contract.

[1] Article 49 of the former Composition Act (repealed by Article 2 of the Addenda to the Debtor Rehabilitation and Bankruptcy Act, Act No. 7428 of March 31, 2005), Article 16 of the former Bankruptcy Act (repealed by Article 2 of the Addenda to the Debtor Rehabilitation and Bankruptcy Act, Act No. 7428 of March 31, 2005) (see Article 425 of the current Debtor Rehabilitation and Bankruptcy Act) / [2] Article 168 subparagraph 1 of the Civil Act, Articles 171 and 184 (2) of the Civil Act, Article 15 of the former Bankruptcy Act (repealed by Article 2 of the Addenda to the Debtor Rehabilitation and Bankruptcy Act, Act No. 7428 of March 31, 2005), Article 201 (1) (see Article 424 of the current Debtor Rehabilitation and Bankruptcy Act), and Article 425 of the former Debtor Rehabilitation and Bankruptcy Act (see Article 45 of the Act on the Structural Improvement of the Financial Industry)

[3] Supreme Court Decision 2002Da21066 Decided December 10, 2002 (Gong2003Sang, 336) Supreme Court Decision 2003Da66691 Decided October 27, 2005 (Gong2005Ha, 1835)

Han Bank Co., Ltd. (Law Firm Kim & Kim, Attorneys Kim Man-man et al., Counsel for the defendant-appellant)

Seoul High Court Decision 200Do1447 delivered on May 1, 200

Seoul High Court Decision 2004Na28568 delivered on November 12, 2004

The appeal is dismissed. The costs of appeal are assessed against the plaintiff.

We examine the grounds of appeal.

1. Regarding ground of appeal No. 1

According to the reasoning of the judgment of the court of first instance cited by the court below, the court below acknowledged the facts as stated in its reasoning, and determined that the redemption period of the principal of the corporate bonds of this case was September 29, 1998, which was the date when the commencement of composition was decided on September 29, 1998 for Mod Construction Co., Ltd. (hereinafter “Mod Construction”), and therefore, the plaintiff (Seoul Bank was merged with Mod Construction Co., Ltd. and became the plaintiff bank after its merger with Mod Construction Co., Ltd.) had already expired on July 31, 199, which was the time when it reported as bankruptcy claims.

Article 16 of the Composition Act (amended by the Debtor Rehabilitation and Bankruptcy Act, Act No. 7428), which applies mutatis mutandis to composition procedures, pursuant to Article 49 of the Composition Act (amended by the Debtor Rehabilitation and Bankruptcy Act, Act No. 7428), provides that "a term-paid claim shall be deemed due at the time bankruptcy is declared." However, the effect of maturity due to the commencement of composition shall be limited to composition creditors and debtors and the guarantor shall not reach the guarantor. Therefore, the lower court erred by misapprehending the legal principles as to the right to repayment of principal and interest of the Bank before bankruptcy (hereinafter referred to as "Dongsung Bank") as at September 29, 198. Accordingly, the lower court’s assertion in the grounds of appeal pointing this out is correct. In so doing, it is so decided as per Disposition by the assent of all participating creditors on October 16, 1998, which is the principal debtor, and thus, cannot be seen as having been declared bankrupt at the time the Plaintiff was declared bankrupt (Article 198 of the Bankruptcy Act).

2. Regarding ground of appeal No. 2

If a creditor fails to file a claim for the performance of a guaranteed obligation within three months from the due date of the repayment of principal and interest, a corporate bond with a special contract under which the guaranteed obligation ceases to exist, and the due date for the repayment thereof arrives, and if a guarantor goes bankrupt, the creditor may file a claim for the performance of the guaranteed obligation by participating in the bankruptcy court after filing a claim for the performance of the guaranteed obligation with the bankruptcy court. Therefore, if the creditor fails to file a report on such claim within three months, the guaranteed obligation shall be extinguished pursuant to the above special agreement. In addition, even though the Bankruptcy Act (as mentioned above) provides for the method of exercise and the other party to the exercise of the guaranteed obligation differently from the general bond, such circumstance alone cannot be deemed excluded or invalidated by the declaration of bankruptcy.

Examining the reasoning of the judgment of the court of first instance cited by the court below in light of the records, it is justifiable to reject the plaintiff's defense that the court below's effect cannot be maintained as the above special agreement on the limitation of the period for performance was declared bankrupt before the expiration of the period. The court below did not err by misapprehending the legal principles as to prohibition of individual bankruptcy claim execution and reporting of bankruptcy claim.

3. Regarding ground of appeal No. 3

In the case of a contract transfer under the former Act on the Structural Improvement of the Financial Industry (amended by Act No. 5549 of Sep. 14, 1998), whether assets, liabilities, etc. are transferred shall be determined as prescribed by the written decision for contract transfer. Where the provision alone is unclear and its scope is not clearly known, the determination shall be made by comprehensively taking into account the purpose and circumstance of the decision for contract transfer, and the equitable result between the parties related to the transferred contract (see, e.g., Supreme Court Decision 2002Da21066, Dec. 10, 2002). According to the reasoning and records of the first instance judgment as cited by the lower court, Article 1 of the “written decision for contract transfer” provides that “the date of contract transfer shall be 08 Do08, Jun. 29, 198,” and Article 3(1) provides that “where assets and liabilities of Party A as of the date of contract transfer are transferred and excluded from the status of debt guarantee obligations of Party A, etc. (hereinafter “this case’s debt transfer”).

Meanwhile, according to the reasoning of the judgment of the court of first instance as cited by the court below, as to the assets, liabilities, etc. to be transferred from a new bank and the Korea Assets Management Corporation pursuant to the contract transfer decision of this case, three-day accounting corporation entered into and sealed on September 30, 1998, the new bank, the Korea Assets Management Corporation, and the Eastern Bank entered into a written confirmation in order to determine the above specifications, etc. and confirm that there is no disagreement with them. However, it cannot be deemed that the above written confirmation of the contract transfer was merely an act of performing the duties under the public law, and it cannot be deemed that the said written confirmation of the assets, liabilities, etc. to be transferred within three months from the date of the contract transfer decision, and it cannot be deemed that the said written confirmation was a juristic act concerning debt acquisition, etc. separate from the said written confirmation.

Therefore, even if the guaranteed debt of this case, which is obvious that it was excluded from the object of contract transfer under the contract transfer decision, was erroneously included in the above specification, the plaintiff did not have any legal impediment in demanding the performance of the guaranteed debt of this case against the East Bank. The court below erred by misapprehending the legal principles as to the validity of the contract transfer, etc. as seen earlier, but it is just in its conclusion that the plaintiff did not have any legal obstacle to the claim for the performance of the guaranteed debt of this case against the East Bank until the court below decided on May 7, 199 that the guaranteed debt of this case was transferred to the new bank, and that until that time, the plaintiff would be sufficient to demand the performance of the guaranteed debt of this case against the new bank. However, the court below's decision that there was no legal error that affected the conclusion of the judgment, as argued in the Grounds for Appeal.

4. Conclusion

Therefore, the appeal is dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices.

Justices Park Jae-sik (Presiding Justice)