Effect of decision for contract transfer under the Act on the Structural Improvement of Financial Institutions

[1] Article 14 (2) of the former Act on the Structural Improvement of the Financial Industry (amended by Act No. 549 of September 14, 1990), Article 14-2 (1) of the Act on the Structural Improvement of the Financial Industry, Articles 17 and 25 of the Securities Investment Trust Business Act

New Bank Co., Ltd. (Attorneys Lee Jae-soo et al., Counsel for the plaintiff-appellant)

Korea Investment Trust Securities Co., Ltd. (formerly: Korea Investment Trust Co., Ltd.) (Law Firm Maho, Attorneys Yoon Ho-ho et al., Counsel for the plaintiff-appellant)

Seoul High Court Decision 2001Na34852 delivered on January 11, 2002

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

We examine the grounds of appeal.

1. On the first ground for appeal

Article 14(2) of the former Act on the Structural Improvement of the Financial Industry (amended by Act No. 5549 of September 14, 1998) provides that the nature of a decision to transfer a contract under Article 14(2) of the same Act is an administrative disposition that brings about the legal effect of the transfer of contractual status arising from a financial transaction by a unilateral decision of the Financial Supervisory Commission (see Supreme Court Decision 2001Da38807, Apr. 12, 2002); the purport of the system; and Article 14-2(1) of the same Act provides that a decision to transfer a contract takes effect at the time of the decision to transfer a contract under Article 14-2(1) of the same Act, even if there was an agreement between the insolvent financial institution that was the original creditor and

Although the judgment of the court below is not proper, it is just in its conclusion, and it is not erroneous in the misapprehension of legal principles that affected the conclusion of the judgment as otherwise alleged in the ground of appeal.

The grounds of appeal pointing out this issue are rejected.

2. On the second ground for appeal

The trust property kept by a trust company under the Securities Investment Trust Business Act after being entrusted with funds, etc. collected by investors from investors, shall be the owner of the trust company, and the right to offset claims belonging to the trust property shall also be exercised by the trustee company, barring any special circumstance. In this case, the passive claims shall be the obligation borne by the trustee company, and such offset shall be limited under the provisions of the Trust Act and the Securities Investment Trust Business Act. In accordance with the relevant provisions of the Securities Investment Trust Business Act, the truster company is responsible for managing and operating the trust property as a good manager. However, in accordance with the proviso of Article 25(1) of the same Act, the truster company is obliged to exercise its rights other than voting rights through the trustee company, so it may be allowed for the trustee company to exercise its right to offset with a specific content, but it may not exercise its right to offset against claims belonging to the trust property (see, e.g., Supreme Court Decision 2001Da49241, Nov. 22, 2002).

Therefore, the assertion based on the premise that the Defendant, a truster company, set-off in its name, cannot be permitted without examining any other requirements concerning set-off.

Therefore, the lower court, which deemed that the management company is entitled to exercise the right of set-off in its name, was erroneous in the misapprehension of such legal doctrine, but the conclusion of rejecting the Defendant’s counterclaim for set-off on the grounds as indicated in its reasoning is justifiable, and thus, did

The ground of appeal that criticizes the judgment of the court below on a different premise cannot be accepted without further review.

3. Conclusion

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 Yoon Jae-sik (Presiding Justice)