Whether a trustee in bankruptcy is a third party under Article 108(2) of the Civil Act (affirmative), and the standard for determining whether the trustee in bankruptcy is bona fide (=total bankruptcy creditors)

Article 108(2) of the Civil Act, Article 7 (see current Article 384 of the Debtor Rehabilitation and Bankruptcy Act) and Article 154(1) of the former Bankruptcy Act (see current Article 361(1) of the Debtor Rehabilitation and Bankruptcy Act)

Supreme Court Decision 2002Da48214 Delivered on June 24, 2003 (Gong2003Ha, 1581) Supreme Court Decision 2004Da10299 Delivered on November 10, 2006 (Gong2006Ha, 20666)

A bankrupt, a bankrupt, a bankruptcy trustee, and one other (Attorney Shin-deok, Counsel for the plaintiff-appellant)

Defendant (Law Firm Lee & Lee, Attorneys Gyeong-do et al., Counsel for the defendant-appellant)

Seoul Central District Court Decision 2005Na15771 Decided December 29, 2005

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

The grounds of appeal are examined.

1. On the first ground for appeal

Since all property held by the bankrupt at the time that the bankrupt is declared bankrupt belongs to the bankruptcy trustee, the right to manage and dispose of the bankrupt estate belongs to the bankruptcy trustee. The bankruptcy trustee is entitled to the same status as the general successor of the bankrupt. However, if the bankruptcy is declared, the bankruptcy creditor cannot exercise the bankruptcy claim without resorting to the bankruptcy procedure, and the bankruptcy trustee performs his duties with the care of a good manager for the common interest of the whole bankruptcy creditors. Thus, the bankruptcy trustee becomes a third party who has an interest in the property independently from the bankrupt according to the declaration of bankruptcy. Therefore, if the bankruptcy is declared bankrupt by a false declaration of intention made by the bankrupt in collusion with the other party, the most claim belongs to the bankruptcy estate, and the bankruptcy trustee who performs duties for the common interest of the whole bankruptcy creditors as independent of the bankrupt under the declaration of bankruptcy, falls under the third party of Article 108 (2) of the Civil Act (see Supreme Court Decision 200Da14284 decided Jun. 24, 2003).

In this case, the court below is just in holding that the defendant, who received a loan from the Dong Asia Mutual Savings and Finance Company (hereinafter "Dong Asia Mutual Savings and Finance Company"), under each of the loan agreements in this case, cannot oppose the plaintiffs, who are bankruptcy trustees of Dong Asia Mutual Aid and Finance Company, as being the false declaration of intent under each of the above loan agreements, and there is no error of law such as misunderstanding of legal principles as to the third party in the false declaration of agreement as

2. On the second ground for appeal

Pursuant to Article 24-3 of the former Mutual Savings and Finance Company Act (amended by the Mutual Savings Banks Act, Act No. 6429 of March 28, 2001), the administrator of the East Asia’s Fund appointed by the Financial Supervisory Commission on December 9, 200 for business management shall not be deemed to bear the duty of Nonparty 1 to change the name of the borrower of each of the loans of this case from the defendant to Nonparty 2 who is a substantial borrower from the defendant. The judgment of the court below to this purport is just and there is no error in the misapprehension of legal principles as to the status of the administrator and the establishment of tort, as otherwise alleged in the grounds of appeal.

3. On the third ground for appeal

As discussed in the arguments, even if Nonparty 1 and the bankruptcy trustee of the East Asia’s Fund appointed on June 15, 2001 did not urge or take measures for the repayment of each of the loans of this case prior to the filing of the lawsuit of this case, it cannot be deemed that the Defendant trusted that he would not demand the repayment of each of the loans of this case to the Defendant.

In addition, even if the trust relationship was formed between the defendant and the Dongdong Treasury to not demand the repayment of each of the loans of this case, the demand of the trustee in bankruptcy who has a status as a third party who has an interest in the property independently from the bankrupt cannot be deemed to violate the good faith principle or the good faith principle.

The judgment of the court below to the above purport is just and it is not erroneous in the misapprehension of legal principles as to the status of bankruptcy trustee or violation of the good faith principle.

4. 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.

Justices Kim Young-ran (Presiding Justice)