The case holding that the Korea Technology Credit Guarantee Fund may seek guarantee liability under a credit guarantee agreement if the loan bank handling the loan for corporate purchasing funds complies with both the settlement of purchasing funds and normal business handling regulations and procedures, and fulfilled its ordinary duty of care, such as confirming the authenticity of documents as a good manager, where it has concluded a credit guarantee agreement for corporate purchasing funds.

Article 105 of the Civil Act, Article 36 of the Korea Technology Credit Guarantee Fund Act

Supreme Court Decision 2005Da24349 Delivered on March 10, 2006

Plaintiff (Law Firm Won, Attorneys Kim Jin-jin et al., Counsel for the plaintiff-appellant)

Korea Technology Finance Corporation (Law Firm Rotex, Attorneys Han Han-tae, Counsel for defendant-appellant)

Seoul High Court Decision 2006Na104527 decided August 22, 2007

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

According to the facts established by the court below, the special contract for credit guarantee in this case provides that "if the Bank of Korea provides for a guarantee liability only for a loan for corporate purchase under Article 2 of the Regulations on Handling of Enterprise Purchase Funds (hereinafter "the Handling Rules")," and Article 2 (1) of the Handling Rules provides that "any loan for corporate purchase means a loan handled by a financial institution for an enterprise that purchases goods and services through its ordinary business activities consistent with its business objectives in connection with a transaction between enterprises to which its business registration certificate has been issued under the conditions as prescribed by these Rules." In addition, Article 2 of the Handling Rules provides that "a financial institution shall comply with the procedures for handling Bank of Korea's total amount limit loan-related corporate purchase funds (hereinafter "handling procedures"), it shall be deemed that a financial institution complies with the above 0-year regulations for financing for corporate purchase and sales at the time of handling corporate purchase funds, and it shall also be deemed that a financial institution is liable for payment for its own loan and sales proceeds (including a bill of exchange) as a manager of exchange under the Value-Added Tax Act."

In this regard, the court below held that the contents of the loan in this case were transactions through business activities consistent with the loan company's business purpose. The Industrial Bank of Korea received all required documents, such as the business registration certificate and tax invoice, during the loan in this case, and confirmed that the loan related to the settlement of purchase price was loans, and there were no other circumstances to suspect that the contents of the required documents are false, and thus, the Industrial Bank of Korea has fulfilled its ordinary duty of care. Furthermore, it cannot be viewed that the Industrial Bank of Korea has a duty of due care to inquire about the closure of the loan company's business through the National Tax Service's website. Thus, it is just in light of the above legal principles as seen above, and it did not err in the misapprehension of legal principles as to the duty of care of the financial institution dealing with the loan for corporate purchase funds

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 Shin Young-chul (Presiding Justice)