A licensed real estate agent argued that the five-year statute of limitations had run out because the debt was a commercial claim, even though the agent had not repaid money borrowed from NongHyup. The Supreme Court rejected that argument, finding the loan could not be considered a commercial claim because it was issued as "household funds," not business capital.
The Supreme Court's Second Division (presiding Justice Oh Kyung-mi) said on the 22nd that on the 5th it affirmed a lower court ruling in a final appeal in a claim-for-assignment-of-credit suit filed by NongHyup Asset Management against a licensed real estate agent surnamed Lee, ordering Lee to pay 200 million won and interest to NongHyup Asset Management.
In February 2012, Lee took out a loan of 350 million won from a local NongHyup with a three-year maturity. When the loan went unpaid, NongHyup transferred the claim to NongHyup Asset Management. As of Nov. 25, 2024, when NongHyup Asset Management filed suit, the claim totaled 630.14 million won, consisting of 259.9 million won in principal and 370.24 million won in interest. NongHyup Asset Management sought 200 million won of the principal and the interest on that amount.
The issue at trial was the applicable statute of limitations on the loan claim. If a merchant borrows money for business, the resulting claim can be deemed a commercial claim under the Commercial Act, and the statute of limitations is five years. If it is a general civil claim, a 10-year statute of limitations under the Civil Act applies.
The first trial dismissed NongHyup Asset Management's claim. The first-instance court said, "At the time of the loan, Lee was a merchant operating a licensed real estate office, so the loan is a commercial claim," and ruled, "When the suit was filed on Nov. 26, 2024, five years—the statute of limitations—had passed since the loan's maturity date of Feb. 13, 2015, so the claim is extinguished."
The second trial reversed. It found that because NongHyup is not an institution operated for profit, a claim cannot be regarded as a commercial claim even if NongHyup extended a loan to a member who is a merchant. Accordingly, a 10-year statute of limitations under the Civil Act applies, and the statute had not run when the suit was filed.
The Supreme Court also kept the conclusion that Lee must repay the money. However, its reasoning differed from the second-instance court. The Supreme Court focused on the fact that Lee borrowed as a NongHyup member and designated the purpose as "household funds." Even if Lee qualifies as a merchant as a licensed real estate agent, if the loan cannot be viewed as for business, it is not a commercial claim.
The Supreme Court rejected Lee's appeal, saying that although parts of the lower court's reasoning were inappropriate, its conclusion was proper.