Whether a guarantee contract can be terminated on the ground of change in circumstances if a director withdraws after guaranteeing his/her fixed liability for the company during his/her service (negative)

It is limited to a guarantee that can terminate a guarantee contract on the grounds of change of circumstances, such as a comprehensive collateral guarantee or limited collateral guarantee, for obligations arising from an uncertain and continuous transaction. Even if a director of a company, while holding office as a director of the company, has given a guarantee for the obligations of the company whose amount and maturity are specified at the time of guarantee, and then resigned from office, the guarantee contract cannot be terminated on the grounds of change of circumstances.

Article 543 of the Civil Act

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

Korea Guarantee Insurance Co., Ltd. (Attorney Cho Dong-jin et al., Counsel for the defendant-appellant)

Defendant 1 and one other

Seoul District Court Decision 95Na7719 delivered on May 19, 1995

All appeals are dismissed. The costs of appeal are assessed against the Defendants.

The defendants' grounds of appeal are also examined.

According to its reasoning, the court below determined that the defendants were jointly and severally guaranteed by the defendant in the first instance trial when the non-party company paid the principal amount of KRW 73,606,660 of the long-term loan extended by the non-party company to Korea Technology Finance Co., Ltd. (hereinafter referred to as the "non-party company") as a director of the non-party company, and accordingly, the plaintiff paid the principal amount of KRW 73,60,660. Accordingly, the plaintiff's claim for indemnity against the non-party company was established with the non-party in the first instance trial. The defendants' assertion that the plaintiff paid the above debt and acquired the right to indemnity as stated in the judgment of the non-party company, while holding the non-party company as a director of the non-party company, and it was inevitable for the defendants to pay the indemnity to the plaintiff of the non-party company at the request of the above non-party company, but it is not reasonable to reverse the above guarantee's obligation under the premise that the above defendant's obligation was not terminated due to changes in circumstances.

Therefore, all appeals are 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.

Justices Park Jong-ho (Presiding Justice)