Whether Article 16(2) of the Bills of Exchange and Promissory Notes Act shall apply to the holders of a Promissory Notes, if a Promissory Notes is issued under an agreement to exercise their rights only under certain conditions (negative)

A bill must be dealt with separately from the underlying relationship of the acceptance of a bill as an unmanned act, and since a bill is a certificate representing rights under a certain bill regardless of the underlying relationship, even if the bill was issued under an agreement to exercise rights only under certain conditions (e.g., wages payable to workers), such circumstance is merely a ground for human defense based on the underlying relationship of the bill, and the rights under the bill are established once more effectively. Thus, Article 16(2) of the Bills of Exchange and Promissory Notes Act cannot be applied.

Article 12(2), Article 16(2), and Article 17 of the Bills of Exchange and Promissory Notes Act

Supreme Court Decision 82Meu1405 Decided January 24, 1984

[Plaintiff-Appellee]

Defendant Law Firm Dong-dong Office, Attorney Lee Ba-hee

Seoul Civil District Court Decision 88Na13143 delivered on November 29, 1988

The appeal is dismissed.

The costs of appeal shall be borne by the defendant.

As to the Grounds of Appeal:

Based on the evidence adopted by the court below, the court below issued a promissory note with the maturity of 50 million won at the face value of 50 million won at the first endorsement column on August 21, 1984, each of which was issued by the defendant, the payee 1, the place of issuance and the place of payment, and the place of payment, with the maturity of 50 million won at the face value. The plaintiff cancelled the original endorsement column of the back of the above promissory note with the name of the non-party 2, and the above non-party 1's and the non-party 3's endorsement column of the above non-party 2's above 2's and the non-party 4's endorsement column of the above non-party 1's above 1's and the non-party 5's endorsement column of the above 1's face value to the defendant, and there is no evidence supporting the plaintiff's right to claim the payment of the bill of this case, regardless of the plaintiff's assertion of the right to claim the payment of the bill of this case.

The above determination process of the court below is correct, and there is no error in the misapprehension of legal principles as to the violation of the rules of evidence, the bona fide acquisition of promissory notes, the defense of bad faith, or the endorsement of pledge, or the mistake of facts as to the scope of the secured obligation.

In addition, the obligor cannot set up a defense against the person who acquired a bill without knowing that he had gross negligence on the part of the obligor. On the other hand, the act of a bill must be dealt with separately from the cause of the acceptance of a bill as an unmanned act, and the bill constitutes a security representing rights under a certain bill regardless of the cause of the acceptance of the bill (see Supreme Court Decision 82Meu1405, Jan. 24, 1984). Thus, even if the bill was issued under an agreement to exercise rights only when there was a delayed payment of wages to the employees of the mining center to Nonparty 2 as alleged by the Defendant, such circumstance is nothing more than the personal defense based on the cause of the bill, and the rights under the bill are no longer effective. Accordingly, Article 16(2) of the Bills of Exchange and Promissory Notes Act cannot be applied. All arguments are without merit.

Therefore, the appeal is dismissed. It is so decided as per Disposition by the assent of all participating judges.

Justices Kim Yong-ju (Presiding Justice)