[1] Whether the principle of trust and good faith is applied to the legal relations between the applicant of the guaranteed letter of credit and the issuing bank (affirmative), and the case where the applicant can be seen as impliedly understand the issuing bank's defective payment of the letter of credit amount in advance or to restrict the applicant

[2] The case holding that it is not permissible in light of the principle of trust and good faith to consider the issue of payment after the expiration of the validity period of the guaranteed letter of credit, although the applicant of the guaranteed letter of credit made an implied understanding in advance on the payment to the beneficiary of the issuing bank

[1] The legal relationship between the applicant of the guaranteed letter of credit and the issuing bank is governed by the Uniform Customs and Practice for Documentary Credits incorporated into the contents of the contract between the parties, but the principle of trust and good faith, which is the major principle under the private law, should be applied more wide in light of the characteristics of the legal relationship between the issuing bank and the applicant based on the high level of trust relationship. Therefore, there may be cases where the applicant made a speech and behavior to the effect that the applicant would not raise any objection after the expiration of the term of validity of the guaranteed letter of credit, even if the beneficiary claims the payment of the guaranteed letter of credit and the issuing bank made payment after the expiration of the term of validity, or where the applicant is deemed to have clearly violated the duty of protection against the issuing bank which is required under the principle of trust and good faith.

[2] The case holding that it is not permissible in light of the principle of trust and good faith to consider the issue of payment after the expiration of the term of validity of the guaranteed letter of credit, although the applicant of the guaranteed letter of credit made an implied understanding in advance on the payment to the beneficiary of the issuing bank

[1] Article 2 of the Civil Act / [2] Article 2 of the Civil Act

New Bank of Korea (Law Firm Central, Attorney Hong Dong-ok, Counsel for defendant-appellant)

Defendant

Seoul District Court Decision 2000Na73345 delivered on September 20, 2001

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

The grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed).

1. According to the reasoning of the judgment of the court below, the defendant's new L/C applicant's new L/C applicant's new 10 U.S. dollars 1 and 00 U.S. dollars 1 and 10 U.S. dollars 1 and 10 U.S. dollars 9 U.S. dollars 1 and 10 U.S. dollars 9 U.S. dollars 1 and 9 U.S. dollars 9 U.S. dollars 1 and 9 U.S. dollars 9 U.S. dollars 1 and 9 U.S. dollars 9 U.S.C. 1 and 9 U.S. 9 U.S.C. 1 and 9 U.S.C. 1 and 9 U.S. 9 U.S.C. 1 and 4 U.S.C. 9 were issued to the non-party company's new L/C applicant's new L/C applicant's new L/C applicant's new 9.

2. (A) The legal relationship between the applicant of the guaranteed letter of credit and the issuing bank is governed by the Uniform Customs and Practice for Documentary Credits incorporated into the terms of the contract between the parties, but the principle of trust and good faith, which is a major principle under the private law due to the characteristics of the legal relationship between the issuing bank and the applicant based on the high level of trust relationship, shall be applied more broadly. Therefore, there may be cases where the applicant makes a speech and behavior to believe that the applicant would not raise any objection after the expiration of the term of validity of the guaranteed letter of credit, even if the beneficiary claims the payment of the guaranteed letter of credit, and the issuing bank pays it, or where the applicant is deemed to have remarkably violated the duty of protection against the issuing bank as required under the principle of trust and good faith, or where the applicant is deemed to have impliedly understood the issuing bank's defective payment of the letter of credit amount in advance

(B) In the instant case, the issue of this case’s letter of credit is that the Defendant’s issuance of the guaranteed letter of credit was intended to obtain a loan from the New York branch. The Samsung Dong branch and New York branch, the issuing bank of the guaranteed letter of credit, are legally one legal entity, and the Defendant, upon receiving a notice from the New York branch to extend the term of the loan or to repay the loan before maturity, requested the extension of the term of the guaranteed letter of credit at Samsung Dong branch, the issuing bank of the guaranteed letter of credit, and the extension of the term of the loan to the New York branch. The Defendant continued consultation between Samsung Dong branch and New York branch on the premise of the validity period of the guaranteed letter of credit and the extension of the term of the loan. The New York branch, under the premise of the agreement on the extension of the term of the credit and the extension of the term of the loan, continued to reach an agreement on the payment of the guaranteed letter of credit after the expiration of the term of validity. Furthermore, it is reasonable to view that the Defendant, upon the expiration of the term of validity of the guaranteed letter of credit, did not pass after the date.

Although the court below's decision alone is somewhat inappropriate in its reasoning that the defendant's implied guarantee liability is recognized, the conclusion that the defendant is responsible for the repayment of the non-party company's loan obligation to the non-party bank, i.e., the guaranteed letter of credit, is justifiable, and there is no error of law by misunderstanding the legal principles on foreign exchange transaction agreements or guaranteed letters of credit, which are disposal documents, which affected the conclusion of the judgment

In this case where the plaintiff bank sought monetary payment against the defendant, it is unreasonable to impose liability on the non-party 1, a joint guarantor of the defendant, etc., as the defendant's ground of appeal is not legitimate ground of appeal.

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

Justices Park Jae-chul (Presiding Justice)