Deals & Cases

Finance Disputes

A depositor who suddenly went broke was helped.

A case in which a bank’s responsibility was acknowledged even when the identity of the password of the personal seal impression was confirmed.


An individual ("Depositor") holding deposits of about KRW 500 million with a local Nonghyup chapter found out one day that nearly the full amount of the balance of his deposits had been withdrawn when he tried to enter into a deposit transaction. The surprised Depositor requested that the police investigate the case, and the police discovered that a middle-aged woman who was a complete stranger to the Depositor (the "Criminal") had fabricated the passbook of the Depositor (The fabricated passbook only had the same heading as that of an authentic passbook while the records therein were false  and a magnetic tape with which no information could be retrieved was attached thereto) and then visited a branch of Nonghyup to re-record the magnetic tape, re-issue the passbook, and finally to withdraw most of the Depositor’s deposits at another branch. 


Shin & Kim represented the Depositor who went broke all of a sudden and proceeded with a suit combining (i) a claim for the return of deposits against the local Nonghyup chapter, (ii) a claim against the other party to the deposit agreement, and (iii) a claim for damages (user’s liability) for an illegal act against Nonghyup which re-recorded the magnetic tape, re-issued  the passbook, and authorized the withdrawal of deposits.


The defendant local Nonghyup chapter argued that the obligation for the return of deposits had been validly extinguished through the payment to the quasi-possessor of receivables given that the Criminal had presented a genuine personal impression seal and password.  They also argued that there had been no negligence as it had performed its duties concerning deposits in full compliance with its deposit policy.


Shin & Kim researched the legal principles and cases concerning deposit transactions, made a request by commission for the delivery of documents containing criminal records of the Criminal, performed fact-finding procedures for commercial banks, and sought clarification regarding the process of deposit transactions. Then, the court pronounced a ruling that there had been negligence in both 1) the trustee’s performance of duties without checking whether the customer was the principle or whether there was an agency relationship, and 2) a bank clerk’s performance of duties in which the fact that information in the passbook presented by the customer was starkly different from actual information on the deposit account appearing on the computer screen was overlooked even when there were very suspicious circumstances.  Therefore the defendant local Nonghyup chapter was ordered to return the full amount of the original deposits of the Depositor to the Depositor and the court rejected their arguments against repayment to the quasi-possessor when the sameness of the personal impression seal and the password were confirmed.  As a result, the claim against the defendant Nonghyup was dismissed as there was no damage to the Depositor because the Depositor held all the original deposit receivables even though the defendant Nonghyup’s negligence was recognized. 


In other words, the ruling above accepted practically all of the plaintiff Depositor’s claims, and Shin & Kim accomplished a brilliant feat of both relieving an individual of underserved hardship and winning a ruling of legal significance that confirms the obligations of due care and held by financial institutions when handling deposit processes.

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