[1] Whether the Plaintiff can expand the claim in a case where only the Defendant appealed (affirmative)

[2] The scope of the extinguished claim where a conversion of shares into equity would substitute for the repayment of the claim by the method of issuing new shares

[1] In a case where only the defendants appealed, the plaintiff can expand the purport of the claim in the appellate court, and in this case, it is deemed that the plaintiff filed an incidental appeal.

[2] In a case where a conversion of shares into equity is to substitute for repayment of existing bonds through a conversion of shares, if there is no agreement or agreement between the creditor and the debtor as to the value of existing bonds extinguished by a conversion of shares into equity, the value of new shares shall be assessed as of the effective date of issuance of new shares and the amount of existing bonds equivalent to the appraised

[1] Articles 262, 403, and 415 of the Civil Procedure Act / [2] Article 466 of the Civil Act

[1] Supreme Court Decision 91Da43015 delivered on December 8, 1992 (Gong1993Sang, 413)

Seoul Guarantee Insurance Co., Ltd. and one other (Attorney Han-dae, Counsel for the plaintiff-appellant)

Defendant 1 and three others (Attorneys Political Young-young et al., Counsel for the defendant-appellee)

Seoul High Court Decision 2007Na18753 decided January 23, 2008

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

We examine the grounds of appeal.

1. Determination on the assertion of violation of the principle of prohibition of disadvantageous alteration (the defendant's common grounds of appeal)

The Defendants asserted that the judgment of the court below, compared to the judgment of the court of first instance, partially excluded the Defendants from the joint and several liability relationship between the Defendants and rendered a judgment to expand the scope of their sole liability, and that the judgment of the court below was modified more unfavorable to the Defendants compared to the judgment of the court of

According to the records, while filing a lawsuit against the Defendants, the Plaintiffs did not specify the amount of the claim by each damage claim (i.e., each damage claim arising from each guarantee insurance contract of the Plaintiff Seoul Guarantee Insurance Co., Ltd., and each damage claim arising from each of the instant loan contracts of the Plaintiff Bank), as stated in the column of the first instance judgment (i.e., each damage claim arising from each of the instant guarantee insurance contracts of the Plaintiff Seoul Guarantee Insurance Co., Ltd., and each of the respective damage claims arising from each of the instant loan contracts of the Plaintiff Co., Ltd.), and filed a damages claim against the Defendants, including all joint and several liability relationship between the Defendants, without distinguishing each of the damage claims. The judgment of the court of first instance rendered a judgment as stated in its reasoning based on the above purport of the claim. However, at the next time of the judgment of the court below, the Plaintiffs specified the amount of the claim by each damage claim and the joint and several liability relationship between the Defendants are classified by each damage claim, as stated in the column of the first instance judgment’s claim. The judgment below modified its contents based on the modified claim.

In addition, even if the above amendment of the purport of the claim was extended, the plaintiff can expand the purport of the claim in the appellate court in the case where only the defendants appealed, and it is deemed that the plaintiff filed an incidental appeal (see, e.g., Supreme Court Decision 91Da43015, Dec. 8, 1992). Thus, the above amendment of the purport of the claim is permitted.

Therefore, the decision of the court below is based on the above amendment of the plaintiff's purport and there is no room for the application of the principle of prohibition of disadvantageous alteration in this case. Thus, the decision of the court below is justified and acceptable. On different premise, the decision of the court below is erroneous in the violation of the principle of pleading, the principle of prohibition of disadvantageous alteration, the violation of the principle of prohibition of disadvantageous alteration, and the incomplete hearing, etc., and the ground of appeal of this part of the court below

In addition, the Supreme Court decision cited in the ground of appeal in this part is different from this case, and it is not appropriate to be invoked in this case, and there is no violation of the law in the judgment below.

2. Determination as to the misapprehension of legal principles as to the proximate causal relation between each of the window dressings in this case and the plaintiffs' damages, or as to the assertion in violation of the rules of evidence (the grounds of appeal Nos. 2, 3

The company's financial statements and audit report stating the results of the company's audit are the most objective data revealing the company's accurate financial status through the Korea Stock Exchange, etc. The most objective data, which is the company's credit rating and repayment ability, and the company's credit rating evaluation of corporate bonds and corporate bills issued by the company and decision on whether to provide a financial institution. Therefore, in a case where an executive officer or employee of the company, etc. participated in large-scale window dressing accounting or an auditor's negligence in failing or neglecting to conduct important audit procedures concerning the company's audit of financial statements, it is reasonable to deem that the company's corporate bonds, etc. issued by the company has obtained appropriate credit rating from the credit assessment institution and accordingly the financial institution has provided a credit guarantee or purchase of the company's corporate bonds, etc., and it cannot be deemed that there is no causation between the window dressing accounting of the company in inevitable circumstances and the financial institution's payment guarantee or loan (see, e.g., Supreme Court Decisions 2006Da5259, Jun. 28, 2007>

On the other hand, property damage caused by an illegal act is a disadvantage in property caused by an illegal act, i.e., the property condition that existed without the illegal act and the current property condition that became the illegal act. If an enterprise which is not able to repay old company bonds issued in the past due to financial difficulties is re-guaranteed for new company bonds at the time of issuing new company bonds of the same scale in order to raise the repayment fund, and if the old company bonds are extinguished due to funds raised by the issuance of new company bonds, the financial institution was placed in the situation where the payment guarantee liability for the old company bonds is realized due to the lack of the company's ability to redeem old company bonds and the obligation to pay for new company bonds is actually performed, and it can be deemed that the payment guarantee liability for new company bonds was extinguished by the repayment fund established by the issuance of new company bonds and the liability for payment guarantee for new company bonds was borne by 200,000,0000 after the issuance of new company bonds (see Supreme Court Decision 200,820,000,000).

In light of the above legal principles and records, the court below recognized the facts as stated in its judgment after compiling the adopted evidence, and in light of such facts, since both the first through the fifth guarantee insurance contract (excluding the sixth guarantee insurance contract) and the first through the fifth loan contract in the judgment of the court below were concluded with the trust of financial statements prepared in falsity through the division accounting of this case and thereby there was a new damage to the plaintiffs, the judgment that there was a proximate causal relation between the defendants' act of neglect of duties related to each of the window dressing accounting of this case and the plaintiffs' conclusion of each of the above guarantee insurance contracts or each of the loans contract related to each of the window dressing accounting of this case and the damages caused thereby, it is just to have judged that there was a proximate causal relation between each of the window dressing accounting of this case and the plaintiffs' damages. There is no error in the misapprehension of legal principles as to

3. Judgment on the misapprehension of legal principles as to the criteria for calculating the amount of damages to be compensated by conversion into investment (the ground of appeal common to Defendant 2 and 3)

In the event that a conversion of new shares into equity is to substitute for repayment of existing bonds through a conversion of shares and there is no agreement or agreement on the value of existing bonds to be extinguished by a conversion of shares into equity, it is reasonable to deem that existing bonds equivalent to the appraised value of new shares have been repaid as of the effective date of issuance of new shares, barring any special

After compiling the adopted evidence, the court below acknowledged the facts as stated in its holding, and judged that in the case of the plaintiff Seoul Guarantee Insurance Co., Ltd, the value of new shares should be assessed as of the effective date of the new shares issued through debt-equity swap and the claim equivalent to the appraised value should be deducted from the amount of damages. In light of the above legal principles and records, although the court below's reasoning on this part is somewhat insufficient, the above judgment of the court below is just and acceptable, and there is no error in the misapprehension of legal principles as to the calculation standard of damages to be compensated by debt-equity swap, as otherwise

4. Determination as to the assertion of violation of the principle of equity in the calculation of damages (Defendant 2’s grounds of appeal)

If the victim was negligent in causing or expanding damages in a tort compensation case, it should be taken into account as a matter of course in determining the scope of liability for damages. However, fact finding or determining the ratio of comparative negligence is within the exclusive authority of a fact-finding court unless it is deemed that it is considerably unreasonable in light of the principle of equity (see Supreme Court Decision 2002Da43165, Nov. 26, 2002, etc.).

Examining the reasoning of the judgment below in light of the above legal principles and records, even if considering all the circumstances alleged by Defendant 2, the court below's finding of facts as to the grounds for limiting the Defendants' liability for damages or its limitation of liability for damages, including Defendant 2, are all acceptable and it is not clearly unreasonable in light of the principle of equity. Thus, the judgment below did not err in violation of the principle of equity in calculating the amount of damages as alleged in the ground of appeal.

5. Judgment on the misapprehension of legal principles or incomplete hearing on the auditor's responsibility and gross negligence (Defendant 4's ground of appeal)

If an auditor of a stock company lends his/her name to a director by means of lending his/her seal to a director without any interference or supervision even though there is no actual intent to perform his/her duties as an auditor, and then enters false facts in the financial statements, etc., and if the auditor impliedly or neglected to cause damage to a third party who is a trading partner using the window dressing financial statements, etc., he/she falls under the case where he/she neglects his/her duties due to bad faith or gross negligence, and thus, he/she is liable to compensate for the damage suffered by a third party (see Supreme Court Decision 2006Da82601, Feb. 14, 2008, etc.).

In light of the above legal principles and records, the court below is justified in holding that Defendant 4 neglected to perform his duties due to gross negligence in performing duties as an auditor in relation to the division accounting of this case after compiling the adopted evidence and recognizing the facts as stated in its reasoning. In light of such facts, it is not erroneous in the misapprehension of legal principles as to the auditor's responsibility and gross negligence or incomplete deliberation as otherwise alleged in the ground of appeal.

6. Therefore, all appeals are dismissed, and the costs of appeal are assessed against the losing Defendants. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Yang Sung-tae (Presiding Justice)