Seoul High Court Decision 201Na14414 decided May 1, 201

Korea General Construction Co., Ltd. (Law Firm ice, Attorney Gyeong-soo, Counsel for the plaintiff-appellant)

October 26, 2005

Seoul Central District Court Decision 2004Da360176 Delivered on March 29, 2005

1. Revocation of a judgment of the first instance;

2. The plaintiff's claim is dismissed.

3. The total costs of the lawsuit shall be borne by the plaintiff.

1. Purport of claim

The defendant shall pay to the plaintiff 690,680,554 won with 232,686,234 won with 24% interest per annum from April 15, 2004 to the date of full payment.

2. Purport of appeal

The part against the defendant in the judgment of the first instance is revoked, and the plaintiff's claim as to that part is dismissed.

1. Determination as to the cause of claim

Comprehensively taking account of the overall purport of arguments as to Gap 1, 2, 4, and 6-1 and 2, Daeyang Mutual Savings and Finance Company (hereinafter referred to as the "Mayang Mutual Savings and Finance Company") concluded a loan agreement with the defendant company around June 8, 199; the defendant company paid 642,00,000 won to the defendant company; the rate of 13% per annum as determined and announced by the Daeyang Mutual Savings and Finance Company; the interest rate of 27% per annum; the repayment method was 40.4% per annum as determined and announced by the Daeyang Mutual Savings and Finance Company; the principal amount was repaid at the expiration of the lending period; the interest rate of 2.4% per annum as 5% per annum; the interest rate was 3.4% per annum as determined and announced by the Daeyang Mutual Savings and Finance Company; the interest rate was 40.3% per annum 25% per annum 24.6% per annum; and the interest rate was 5.4% per annum 206.4,5% per annum;

According to the above facts, the defendant company is obligated to pay to the plaintiff 690,680,554 won ( principal 232,686,234 won + interest 457,94,320 won) plus 232,686,234 won with an interest rate of 24% per annum from April 15, 2004 to the date of full payment (hereinafter "the plaintiff's claim of this case"), unless there are special circumstances, to pay to the plaintiff 232,686,234 won with an interest rate of 24% per annum from April 15, 2004 to the date of full payment (hereinafter "the claim of this case").

2. Judgment on the argument of the defendant company

A. The defendant company's assertion

(1) A decision of the commencement of composition was made on March 31, 1999 with respect to the defendant company, and the decision of the approval of composition was made on May 28 of the same year, and it became final and conclusive on June 18 of the same year.

(2) Although the loan contract of this case was concluded after the commencement of composition was decided, the defendant company entered into a loan contract of 1 billion won from the Hanyang Credit on December 2, 1996, prior to the decision to commence the composition, and the loan contract of this case is merely a substitute for the extension of the repayment period of the loan contract of this case as of December 2, 1996, and eventually, the loan contract of this case and the loan contract of this case of this case of December 2, 1996 are the same. Thus, the claim of this case constitutes composition claim arising from the cause prior to the commencement of composition. Accordingly, the defendant company has a duty to repay the claim of this case only under the conditions of composition claim against the creditor of the financial institution without security interest among the terms of composition authorized and authorized.

(3) Even if the foregoing substitution constitutes a novation agreement that causes the extinction of the former obligation and the establishment of the new obligation, such novation agreement constitutes an act of granting special benefits under Article 53 of the Composition Act, Article 277 of the Bankruptcy Act, or an act of anti-social action, and thus, the Plaintiff’s claim is without merit.

(b) Fact of recognition;

The following facts may be acknowledged when there is no dispute between the parties, or when considering the whole purport of the pleadings in each entry of Gap evidence Nos. 5, 6-1, 2, and 7-1 through 6, 8-1, 2, 9-2, Eul evidence Nos. 1, 2, 3, 6, and 7-1 through 6.

(1) Around December 2, 1996, the Daeyang Mutual Savings and Finance Company lent a loan of KRW 1 billion to the Defendant Company at the maturity rate of December 2, 200, interest rate of KRW 16.5% per annum, and overdue interest rate of KRW 21% per annum. On the same day, in order to secure the above loan claims, the company concluded a loan of KRW 1 billion to the Defendant Company at the maturity of December 2, 2000, with the interest rate of KRW 16.5% per annum. In order to secure the above loan claims, the company held the Defendant Company at the time of Kimpo-si, Kimpo-dong, Kimpo-dong, Kimpo-dong, 676, which is the ownership of the Defendant Company, the third floor above the 3rd floor above the 1st floor above the 1st underground aggregate building (hereinafter “real estate in this case”), the debtor company, the mortgagee company, the mortgagee company, the collateral secured creditor, the credit lending company and other credit transactions at the time when the Defendant Company bears the guaranteed obligation, interest obligation, interest obligation or obligation on bills, and other obligations.

(2) On the other hand, the defendant company entered into a joint and several guarantee contract for each loan obligation of the amount of KRW 500 million on December 2, 1996 and KRW 500 million on December 2, 1997 with the Daeyang Mutual Savings and Finance Company, which is an affiliated company of the defendant company, to the Daeyang Mutual Savings and Finance Company.

(3) On March 31, 199, the defendant company received the decision of commencement of composition from the Incheon District Court, and around May 28, 1999, the same court received the decision of approval of composition under the conditions of composition, including the conditions of repayment of composition claims to the creditors of financial institutions that do not have any security interest, and the above decision of approval was finalized on June 18 of the same year.

(4) On June 8, 1999, the loan contract of this case was concluded by the Daeyang Mutual Savings and Finance Company and the Defendant Company, which was deposited into the Defendant Company’s account on the same day under the loan contract of this case. The Defendant Company, on December 2, 1996, handled the repayment of KRW 608,729,869 (such as interest, etc., KRW 158,979,311, principal amount, KRW 449,750,558).

(5) Meanwhile, on June 8, 1999, the Daeyang Mutual Savings and Finance Company loaned 1,056,000,000 won to the Korea Distribution Company, and at the same time repaid 1,00,820,725 won (33,39,117 won of the remaining principal of the loan obligation as of December 2, 1996, including 94,579,501 won, interest, overdue interest, etc., and 458,647,264 won of the remaining principal of the loan obligation as of December 2, 1997, and 114,254,84,843 won such as interest, overdue interest, etc.) to the Korea Distribution Company. On the same day, the Defendant Company handled the repayment to the Korea Distribution Company as of June 6, 1998, 196, 0050,000 won of the loans to the Korea Distribution Company.

(6) On May 31, 2001, Incheon District Court Decision 2001Mo8894, which decided to commence auction of the instant real estate upon the voluntary auction application of the Daeyang Mutual Savings and Finance Company with respect to the instant real estate, was in progress on March 7, 2002 as a successful bid by means of a voluntary auction around March 7, 2002, and the registration of the establishment of the neighboring mortgage of the Daeyang Mutual Savings and Finance Company with respect to the instant real estate was entirely or partly cancelled (the dividends received by the Daeyang Mutual Savings and Finance Company around that time, are all or part of the dividends received, and

C. Determination

(1) Whether the instant claim constitutes composition bonds

(A) Composition claims are claims with general preferential rights, claims with right to separation, and non-Composition claims among property claims arising from the cause before the commencement of composition procedures against the debtor. Since the loan contract of this case was concluded after March 31, 1999 upon the commencement of composition procedures, it is recognized as above, the loan contract of this case is merely an extension of the maturity period of the loan contract of this case as of December 2, 1996 by the defendant company, and thus the identity between the two is recognized.

(B) The so-called substitution, which provides a new loan only formally without actually receiving a loan, is a separate loan, but its legal nature is merely an extension of the time limit for payment of the existing loan, and it shall be deemed as a quasi-loan continuing to exist without maintaining the identity of the existing loan. However, in the event that the existing loan and the new loan are different in terms of its original purpose, loan principal, interest rate, and delay damages rate, and where some of the interest obligations of the existing loan are changed into the new principal of the existing loan, etc., even if the new loan were made for the purpose of extending the time limit for payment of the existing loan and establishing the new loan, the substitution in such case shall be deemed as a contract which finally extinguishs the existing debt and establishes the new debt, and it shall be deemed as a combination without the identity between both obligations (see Supreme Court Decision 2001Da7445, Oct. 11, 202).

(C) According to the above facts, most of the loans under the loan contract of this case were treated as repayment of loans under the loan contract of this case as of December 2, 1996, but on the other hand, it was changed not only to the remaining principal under the loan contract of this case as of December 2, 1996, but also to 158,979,311 won such as interest. The above loan contract interest rate and interest rate are different, respectively. Thus, even if there was an intention to extend the repayment period of the loan contract of this case between the Daeyang Mutual Savings and Finance Company and the defendant company as of December 2, 1996, the above repayment is finally extinguished the loan obligation of this case as of December 2, 196, and it constitutes a contract establishing the loan obligation of this case as of December 2, 199, and thus, it is no longer necessary to consider the above loan obligation of this case as the above loan obligation of this case between the above parties.

(2) Whether the instant exchange is null and void as an act granting special benefits or an anti-social act

(A) An act of providing special benefits to a certain composition creditor by a debtor or a third party, who is the provider of composition under composition procedures, without observing the composition conditions, shall be prohibited, and an act corresponding thereto shall be deemed null and void (see Supreme Court Decision 88Meu2671, supra).

(B) According to the above facts, the defendant company at the time of the exchange with the Daeyang Mutual Savings and Finance Company held that the maximum debt amount of the real estate of KRW 608,729,869 under the loan contract of December 2, 1996 and the loan debt of KRW 1,60,820,725 against the Taeyang Mutual Savings and Finance Company of Korea on December 2, 1996, and the loan debt of KRW 1,609,550,594, which is the aggregate of the joint and several surety debt of KRW 1,609,820,725 against the loan debt of this case on December 2, 1997 and the loan of KRW 20,000,000,000,000,000,000 won was 1,360,000,0000 won prior to the repayment of the loan of this case as of KRW 36,006,00,000.

(C) Therefore, a series of acts of the Defendant Company to repay the debts under the existing loan contract with the Daeyang Mutual Savings and Finance Company, which had been holding the status as a composition creditor as above, and to newly conclude the loan contract of this case which is not bound by the terms of composition, at least the above amount of 232,686,234 won, at least the above amount of 232,68,234 won, shall be deemed as an act of giving economic benefits to the Daeyang Mutual Savings and Finance Company, a composition creditor, without observing the terms of composition.

Ultimately, as long as the repayment of the above part and the novation contract are null and void as an act of granting special benefits, the above part of the loan contract of December 2, 1996, which is the old debt, does not extinguish the above debt, and since the loan contract of this case, which is the new debt, also did not establish the debt under the loan contract of this case. Thus, the plaintiff's claim of this case seeking the above money as principal bond under the loan contract of this case which is null and void, is without merit, even if the plaintiff seeks the performance of the debt under the loan contract of this case as of December 2, 1996.

3. Conclusion

Therefore, the plaintiff's claim of this case shall be dismissed as it is without merit, and since the judgment of the court of first instance is unfair with different conclusions, the judgment of the court of first instance shall be revoked and the plaintiff's claim shall be dismissed as per Disposition.

[Attachment]

Judges Yoon Jae-ap (Presiding Judge)