Seoul High Court Decision 200Na14146 decided May 1, 200

Dolphone Co., Ltd. and one other (Attorney Lee Dong-sik, Counsel for the defendant-appellant)

September 10, 2009

Seoul Central District Court Decision 2008Gahap49740 Decided March 26, 2009

1. All appeals by the Defendants are dismissed.

2. The costs of appeal are assessed against the Defendants.

1. Purport of claim

The Defendants jointly and severally pay to the Plaintiff 1,679,417,847 won and 23% interest per annum from October 1, 2006 to the date of full payment.

2. Purport of appeal

The judgment of the first instance is revoked. The plaintiff's claim against the defendants is dismissed in entirety.

1. The reasoning for the court’s explanation concerning this case is as follows, and the corresponding part of the judgment of the court of first instance is the same as that of the judgment of the court of first instance, except for the dismissal of the part of Article 3-b (b) of the reasoning of the judgment of the court of first instance as follows. Thus, the court’

2.3.-2. Termination or change of the joint and several liability following the expiration of the repayment period;

(1) Defendant 2’s assertion

Defendant 2 asserts that the credit transaction agreement of this case provides that the guarantor shall bear the guarantee liability only when the repayment date has been extended with his consent, and that the guarantor does not consent to the extension of the repayment date of the credit transaction agreement of this case. Thus, Defendant 2’s joint and several liability is extinguished after the lapse of June 30, 2006, which is the repayment date stipulated in the credit transaction agreement of this case.

(2) Determination

(A) In principle, a joint and several surety guaranteed for a fixed debt with which the obligation is specified shall bear the obligation of the joint and several surety regardless of whether the obligation has been extended without the consent of the principal (see, e.g., Supreme Court Decisions 2002Da14853, Jun. 14, 2002; 2002Da14853, Jun. 14, 2002). However, in cases where the term of the guaranteed obligation has been extended without the consent of the joint and several surety, if any special agreement is made on the extinction of the guaranteed obligation and its scope, such agreement shall be complied with. The contents of the standardized contract shall be objectively and uniformly interpreted on the basis of the average customer's understanding potential without considering the intent or specific circumstances of the individual contractor. When it is unclear or doubtful in terms of customer protection, the terms of the standardized contract shall be interpreted disadvantageous to the customer (see, e.g., Supreme Court Decision 2006Da72093, Oct. 28, 2005).

(B) According to the evidence evidence No. 1, Article 9(1) provides that "joint guarantor shall be jointly and severally liable for the repayment of all obligations under this agreement to the debtor's mutual savings bank," and Article 9(6) provides that "if the due date for the repayment of obligations under this agreement is extended with the consent of the guarantor, the guarantor shall continue to comply with the agreement under Article 1(1)". The joint guarantor who guarantees the fixed debt shall bear the joint and several liability, regardless of whether the due date for the repayment of the guaranteed obligation has been extended without the consent of the guarantor, the creditor shall bear the obligation of the guaranteed obligation, in principle, regardless of whether the due date for the repayment of the guaranteed obligation has been extended without the consent of the guarantor, (2) interpretation of Article 9 of the terms and conditions of this case in accordance with the principle of restrictive interpretation of the terms and conditions as seen above, if the principal obligation has been extended without the consent of the guarantor, the extension of the due date for the repayment of the guaranteed obligation can be understood as the extension of the guaranteed obligation without the consent of Article 9 of this case.

(C) However, since the terms and conditions of this case are ordinarily defined as a joint guarantor of the household funds and are aware that they will not bear any risk until the date of repayment of the principal debt, it seems to be prescribed in order to avoid excessive increase in the repayment of the principal debt. On the other hand, if a corporation receives a loan from a financial institution, it would be accompanied by the representative director's joint and several liability. In this case, as recognized above, at the time of the agreement to extend the payment period to August 30, 2006, Defendant 2 did not know that the above payment period was extended to the representative director of the defendant company and the defendant company did not enter the above provision as a joint and several surety of this case, and it still did not have any reason to acknowledge that the plaintiff did not perform the legal act as a joint and several surety of the defendant company's loan obligation of this case, and thus, the defendant 2, as a joint and several surety of the defendant company's loan obligation of this case, did not have any effect on the extension of the payment period of the loan term of this case.

3. Conclusion

Therefore, the judgment of the court of first instance is justified, and all appeals by the defendants are dismissed as it is without merit. It is so decided as per Disposition by the assent of all participating Justices.

Judges Kim Chang-chul (Presiding Judge)