207Da9016 Compensation (as referred to in this paragraph)

Yangyang 2 Saemaul Savings Depository

Attorney Hwang Sung-il, Counsel for the defendant-appellant

Defendant 1 and four others

[Judgment of the court below]

Daejeon High Court Decision 200545704 Decided December 27, 2006

May 31, 2007

All appeals are dismissed.

The costs of appeal are assessed against the Plaintiff.

We examine the grounds of appeal.

1. According to the reasoning of the judgment below, the court below acknowledged facts based on the adopted evidence. The part that Defendant 1 embezzled KRW 12,733,400 by executing an excessive amount than the actual amount paid in executing the budget of the Plaintiff’s treasury cannot be acknowledged as a duplicate claim against the same fact. As to the damages arising from embezzlement of KRW 1,550,00 in court refunds or lending KRW 70,098,00 to Nonparty 1, it cannot be deemed that Defendant 1 had intentional or gross negligence, and as to the loans to Nonparty 2 on February 4, 2003, it cannot be deemed that there was a risk of breach of trust or damage arising therefrom. The court below rejected all the Plaintiff’s assertion on this part on the ground that it is difficult to deem that there was a risk of breach of trust or damage arising therefrom.

According to the records, the fact-finding of the court below is just, and there is no illegality in violation of the rules of evidence or not exercising the right of explanation as otherwise alleged in the ground of appeal. 2. In the case of the validity of a contract for fidelity guarantee through interim settlement of retirement pay under the internal agreement between the employer and the employee, where the employee has paid the relevant retirement pay under the premise of continuous service and the disposal of new employee, the relevant retirement pay is a security of the guarantor's right to indemnity of the fidelity guarantee obligation due to the act of the employee. Therefore, in relation to the fidelity guarantor, the above employee does not change the validity of the company as to the fidelity guarantor, and the above contract for fidelity guarantee shall lose its validity due to the fact-finding of the employee's retirement (see Supreme Court Decision 85Meu2195, Feb. 11, 1986, etc.).

Examining the record in light of the above legal principles, a credit guarantee agreement entered into between the Plaintiff’s Treasury and Defendant 2, 3, and 4 with the period of credit guarantee from February 18, 1998 to February 17, 2003 is a credit guarantee agreement entered into between February 18, 199 to March 3, 199.

Defendant 1’s interim settlement amount of retirement pay up to that time shall be paid in KRW 93,841,361, and shall lose its validity. Even if the damage was incurred to the Plaintiff’s credit cooperative due to Defendant 1’s act, the above Defendants’ liability for fidelity guarantee shall not be recognized.

The fact-finding and judgment of the court below to the same purport is just, and there are errors in the misapprehension of facts against the rules of evidence or misapprehension of legal principles on the validity of the contract

There is no illegality in law.

3. As to the defendant 2 and 5's responsibility for the fidelity guarantee

A. According to Articles 4 subparag. 1 and 5 of the former Act on the Guarantee of Personal Identity (wholly amended by Act No. 6592 of Jan. 14, 2002), where an employee is in an irregular or unfaithful private life and thereby is likely to cause the fidelity guarantor's liability, the employer shall notify the fidelity guarantor without delay, and the fidelity guarantor shall terminate the contract when he receives such notification. Although the employer has a duty to notify under Article 4 of the former Act, the employer is not immediately exempted from the responsibility of the fidelity guarantor because the employer did not notify the fidelity guarantor. However, even though the fidelity guarantor's liability is not immediately exempted, the fidelity guarantor's liability is denied if the employee deprived of the opportunity to cancel the contract of the fidelity guarantor because the employee did not notify the fidelity guarantor, despite special circumstances that the relationship between the fidelity guarantor and the guarantor would have terminated the contract of the fidelity guarantor's liability (see, e.g., Supreme Court Decision 96Da43904, Feb. 14, 1997).

In light of the above legal principles, the defendant 1 voluntarily terminated the right to collateral security on July 31, 2001 as the chief director of the plaintiff's credit cooperative's non-performance of the right to collateral security on the non-party 3's share of the non-party 50 square meters (number omitted). In this case, the duty of notification to the defendant 2 and 5, which is the guarantor at the time of the time, should occur, and further, when considering the circumstances such as the fact that the above Defendants entered into a contract for collateral security without any consideration upon the request of the defendant 1, it is presumed that the above Defendants would have terminated the contract if they were notified from the plaintiff's credit cooperative of the possibility that they would cause the liability for the whole damages incurred after July 31, 201, which is the date of the above duty of notification, if the above Defendants were deprived of the opportunity to terminate the contract for fidelity guarantee. Therefore, the plaintiff's credit cooperative, as the plaintiff's credit cooperative, shall not be held liable for the whole damages caused by the above Defendants.

Although the judgment of the court below on this part is somewhat inappropriate, its conclusion is just, and there is no error of law such as misunderstanding of legal principles which affected the conclusion of the judgment or misunderstanding of facts against the rules of evidence.

B. In addition, according to the reasoning of the lower judgment, the lower court determined that Defendant 1 was exempted from the liability for the fidelity guarantee of the said Defendants as well as the damage incurred by Defendant 1’s arbitrary termination of the right to collateral security on July 31, 2001, based on the comprehensive consideration of the adopted evidence and based on the circumstances in its reasoning.

According to the records, although this part of the judgment of the court below is somewhat insufficient, its conclusion is just, and there is no error of law such as misunderstanding of legal principles affecting the conclusion of the judgment and misunderstanding of facts against the rules of evidence.

4. 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 on the bench.

Justices Ahn Dai-hee

Justices Kim Young-young

Justices Kim Hwang-sik

Justices Lee Hong-hoon