In order to avoid the lending limit to the same person under the former Mutual Savings and Finance Act, the validity of a loan agreement entered into with a third party in the form under the understanding of the mutual Savings and Finance Company (Invalidity

In order to avoid the application of Article 12 of the former Mutual Savings and Finance Company Act (amended by Act No. 4867 of Jan. 5, 1995) which limits the amount of loans to the same person, the actual principal debtor pays a third party as the principal debtor in form with respect to the amount of loans that he/she intends to actually obtain in order to avoid the application of Article 12 of the former Mutual Savings and Finance Company Act (amended by Act No. 4867 of Jan. 5, 1995). In cases where a third party is prepared in the name of a third party under the intention not to be liable as the debtor with respect to the mutual savings and finance company, the third party is merely a person who lends only the name in form, and the real party to the loan contract is a mutual savings and finance company and a real principal debtor, and thus the third party

Article 108 of the Civil Act, Article 12 of the former Mutual Savings and Finance Company Act (amended by Act No. 4867 of January 5, 1995) (see current Article 12)

[Plaintiff-Appellant] Plaintiff 1 and 1 other (Law Firm Domin, Attorneys Park Jong-soo and 1 other, Counsel for plaintiff-appellant)

Plaintiff (Ynam Law Firm, Attorneys Shin Dong-young et al., Counsel for plaintiff-appellant)

Defendant 1 and two others (Attorneys Park Hun-sik et al., Counsel for the defendant-appellant)

Daegu High Court Decision 97Na6644 delivered on September 11, 1998

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

We examine the grounds of appeal.

In order to avoid the application of Article 12 of the former Mutual Savings and Finance Company (amended by Act No. 4867 of Jan. 5, 1995) which limits the amount of loans to the same person, the actual principal debtor pays a third party as the principal debtor in form with respect to the amount of loans that the actual principal debtor wishes to obtain in order to avoid the application of Article 12 of the former Mutual Savings and Finance Company Act (amended by Act No. 4867 of Jan. 5, 1995). In case where a third party is prepared in the name of a third party under the intention not to be liable as the debtor with respect to the mutual savings and finance company, the third party is merely a person who lends only the name in form, and the actual party to the loan contract is the mutual savings and finance company and the actual principal debtor, and thus, the loan agreement in the name of the third party is merely a juristic act that constitutes a false declaration of agreement and thus constitutes a nullification of conspiracy (see Supreme Court Decision 9

After recognizing the facts in its reasoning based on the evidence adopted by the court below, the decision that the act of assuming debt between the non-party 1 South Korea Credit Union and the defendants is null and void is justifiable in accordance with the above legal principles, and there is no error of law by misunderstanding the legal principles as to the validity of the legal act. The Supreme Court precedents cited in the ground of appeal are different from the case

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 on the bench.

Justices Cho Chang-hun (Presiding Justice)