[1] Whether the act of a forwarding agent of issuing a prior bill of lading before the shipment of cargo is illegal (affirmative)

[2] The case holding that the negotiating bank of the bill of exchange set off 40% of its negligence on the ground that it neglected its duty of care in purchasing false shipping documents

[1] Even if there is a practice in the shipping industry to issue the so-called prior to the shipping company's shipment of the cargo, the issuance of the so-called prior bill of lading indicating the "ship bill" cannot be viewed as a normal act on this basis or as a relation to its purpose and means, and thus, the issue of such bill of lading is recognized as illegality.

[2] The case holding that the error of the purchasing bank of the bill of exchange which purchased false shipping documents without any credit investigation or additional security against the exporting company is set off by recognizing 40% of the negligence of the purchasing bank of the bill of exchange, although there is sufficient doubt that the payee's indication of the bill of exchange is different from the issuing company of the letter of credit, the method of packing was omitted in the commercial invoice, the original

[1] Article 813 of the Commercial Code / [2] Article 396 of the Civil Code

[1] Supreme Court Decision 83Do2575 delivered on August 20, 1985 (Gong1985, 1279) Supreme Court Decision 95Do803 delivered on September 29, 1995 (Gong1995Ha, 3654)

National Bank of Korea (Attorney Kim Chang-soo et al., Counsel for the defendant-appellant)

Defendant 1 Co., Ltd and two others (Attorney Park Jong-soo, Counsel for the defendant-appellant)

Seoul District Court Decision 94Gahap67291 delivered on February 29, 1996

Supreme Court Order 95Da5103 Delivered on January 28, 1997

1. All appeals by the Defendants are dismissed.

2. The costs of appeal shall be borne by the Defendants.

The defendants held that the amount of US$950,318 shall be calculated by converting the amount of US$950,318 to the publicly notified rate of customer replacement of Korea Exchange Bank at the time of the closing of the argument in this case and the amount shall be paid at the rate of five percent per annum from December 23, 1993 to the delivery date of a copy of the complaint in this case and at the rate of twenty-five percent per annum from the next day to the full payment date.

The part of the lower judgment against the Defendants is revoked. The Plaintiffs’ claims are dismissed.

1. Facts of recognition;

The following facts are either disputed between the parties, or acknowledged by adding the whole purport of the pleading to each of the statements in Gap evidence 1 through 9-2, Eul evidence 1-1 to 38, and there is no objection otherwise.

A. Status of the Defendants

Defendant 1 Co., Ltd. (hereinafter referred to as the “Defendant Co., Ltd.”) is a company that has completed the registration of the maritime cargo transport arrangement business under the Marine Transport Act and arranges the transportation of cargo under its name. Defendant 2 is a director of the above Defendant Co., Ltd., and Defendant 3 is a business leader of the Defendant Co., Ltd., as a partner of the said company.

(b) Issuance of a credit;

(1) Nonparty 1, the representative director of Nonparty 1, in fact, intended to export goods to China. However, Nonparty 1, located in China, entered into an export agreement between Non-Party 1, the non-party 1, the representative director of the non-party K.C (K.C) and the non-party 1, the non-party 200,000 US dollars (hereinafter referred to as “Non-party 1, the non-party 1, the non-party 1, but, at the same time, the non-party 1, the non-party 1, the representative director of the non-party 1, the non-party 1, in fact, intended to export goods to China. However, the non-party 1, the non-party 1, the non-party 1, who entered into the export agreement with the non-party 1, the non-party 2, and the non-party 1, the non-party 1, who entered into the export agreement with the 90,000 US dollars.

(2) On November 29, 1993, at the request of Salking, Nonparty 1 opened an irrevocable Credit (hereinafter referred to as “instant First Credit”) with the content as set forth below (a) and Nonparty 1 opened an irrevocable Credit (hereinafter referred to as “instant Second Credit”) with the content as set forth below (b) on December 4, 1993 at the request of Salking, and all of the said Credit transactions agreed to comply with the Uniform Customs and Practice for Documentary Credits promulgated by the International Chamber of Commerce and Industry in 1983.

(A) The First Credit of this case

Credit Number: LC82AY205/93

Amount: US gold 200,000 dollars, applicant: Spunyle Junyi Packing Lald. Sheyle Shena, beneficiary: Japanese trade, the effective period: January 5, 1994.

Items: 6 microdials on Aluminium 6 microns, printing paper 120t, 12 passenger trucks, 12 passenger buses 12: Packer (hereinafter referred to as "the first cargo of this case").

Port of loading: Incheon and the date of loading: Not to permit divided shipment until December 31, 1993.

Attachment Documents and Terms and Conditions of Purchase: 5 copies of commercial invoice, 5 copies of non-regular ocean bill of lading prior to shipment, 2 copies of insurance securities/certificates, 4 copies of packing statement/weight met, 3 copies of quality certificate issued by the manufacturer of the port of shipment, 3 copies of quality certificate issued by the public inspector, 3 copies of quality certificate issued by the manufacturer of the port of shipment, 24 hours after shipment, the name and date, quantity, weight, weight, and price of the shipment to the shipper within 24 hours after shipment, and 24 hours after shipment, and the name and date of shipment, 3 copies of the certificate issued by the beneficiary.

(B) The second letter of credit of this case

Credit Number: LC82AW029/93

Amount: US gold 999,936 dollars, applicant: Liaoning 1mp. Anad Exp. Co. Ltd. Shegana, beneficiary: Japanese trade, valid period: January 15, 1994

Product : Maximum Gohap 1,860M3, Packaging: Standard export package (hereinafter referred to as "the second cargo of this case").

Port of Loading and Loading: The date of loading: the non-permission of dividing shipment by December 15, 1993 (the date of loading shall be extended by the 16th of the same month as of December 16 of the same month).

(5) Attached Documents and Terms and Conditions of Purchase: Part V of commercial invoice, 2/3 charters of free on board ocean bill of lading, 5 copies of insurance policy/certificates, five copies of package/weight package, five copies of package/weight package, the name and date, quantity, weight, and price of the shipper sent to the applicant within 24 hours after shipment, facsimile/certificate of the beneficiary notifying the applicant of the cost, and the beneficiary certificate proving that the document has been sent by the applicant, three originals of the beneficiary certificate issued by the buyer in accordance with the standard inspection certificate issued by the Chinese goods inspection country, and quality/Quantities certificate issued by the buyer in accordance with the standard inspection certificate issued by the Chinese goods inspection country shall be sent to the seller within seven days from the date of receipt of the goods. A beneficiary certificate proving 1/3 of a bill of lading shall be sent to the applicant by air within 24 hours after shipment and shall be presented to the applicant for postal service within the next month.

(c) Conclusion of an export transaction agreement;

(1) On December 2, 1993, the above non-party 1 entered into an export transaction agreement with the Plaintiff bank on December 16, 1993 (hereinafter "the export transaction agreement of this case") with respect to the first cargo of this case, and with the approval of each export of the second cargo of this case on December 16, 193, between the Plaintiff bank's Dordong Branch and the Plaintiff bank's Dordong Branch, whereby the first trade would purchase the bill of exchange or shipping documents issued by the L/C method.

(2) According to Article 4 of the export transaction agreement agreed upon at the time of the export transaction agreement of this case, first-day trade as security for the obligation that first-day trade will be borne by the Plaintiff bank due to the purchase of bills of exchange or shipment documents shall provide the Plaintiff bank with export cargoes and shipment documents, and in cases where export cargoes are destroyed, damaged, lost, or deemed to be in danger, or where there are reasonable grounds deemed necessary for the preservation of claims, first-day trade shall provide additional security upon the Plaintiff bank’s request.

(d) Issuance of false bills of lading;

(1) On December 193, 1993, the above non-party 1 entered into a freight forwarding contract with the defendant company for the cargo Nos. 1 and 2 of this case (hereinafter referred to as the "each of the cargo of this case") and requested the defendant 3 to issue a prior bill of lading (which means a bill of lading issued by indicating that the cargo was loaded prior to the loading of the cargo) to the above defendant 3 to issue the cargo of this case. If the above defendant 3 only brings about the export pages, the above defendant 1 asked the defendant 3 to issue the cargo of this case.

(2) On the 18th of the same month, the above non-party 1 presented an export pages of each of the instant cargo to Defendant 3 at the Defendant Company’s office, and requested that the bill of lading (hereinafter referred to as “the bill of lading of this case”) and the bill of lading (hereinafter referred to as “the bill of lading of this case”) containing the shipment of the instant No. 1 cargo of this case at No. 31 N of the Myanmar No. 287W from the Incheon port of Korea to the Chinese Republic of Korea, each of which was issued with a bill of lading of this case (hereinafter referred to as “the second bill of lading of this case”).

(3) Defendant 3 prepared each of the above contents of the bill of lading (hereinafter referred to as “each of the bill of lading of this case”) at the request of Nonparty 1, using the bill of lading form of the shipping company, which was in custody with confirmation only of each of the above export pages without reservation or securing of the volume of each of the cargo of this case to accept, confirm, or load each of the cargo of this case. Defendant 3 signed by Defendant 2 who is well aware of such circumstances and delivered it to the above Nonparty 1.

(4) The second bill of lading of this case was then drawn up by Nonparty 5, the president of the Defendant Company, at the time of purchase at the Plaintiff Bank, and then signed by Defendant 2 instead of Defendant 1, who was absent at the time of purchase at the Plaintiff Bank.

(5) Each of the instant bills of lading was issued in the form of a signature signed by the Defendant Company on behalf of the carrier, stating the details specified in the bill of lading form indicating the name of the carrier.

(e) Purchasing shipping documents, such as bills of exchange;

(1) On December 20, 1993, the above non-party 1, along with the defendant 3, requested the non-party 2 and the non-party 3 representative, who is the head of a branch office and the export exchange business of the plaintiff bank, to purchase one bill of exchange issued in advance in the amount of 200,000 U.S. dollars at a face value (hereinafter "the first bill of exchange of this case") with the bill of exchange issued in advance in the first bill of lading and other shipping documents required in the first letter of credit of this case, accompanied by the bill of lading of this case and other shipping documents required in the second bill of lading of this case and the second letter of credit of this case. The above non-party 1 requested the purchase of each bill of exchange issued in advance in the amount of 99,936 U.S. dollars at face value (hereinafter "the second bill of exchange of this case").

(2) As stated in each of the instant bills of lading, Nonparty 2 and Nonparty 3 believed that each of the instant bills of lading satisfies the requirements as a maritime bill of lading required under each of the instant bills of lading, and they deposited KRW 161,480,000 and KRW 807,748,300 converted each of the instant bills of exchange into won at KRW 161,480 and KRW 807,748,300 converted each of the instant bills of exchange into the face value of each of the instant bills of exchange without any other security on the date of the request for purchase, and paid each of the instant bills of exchange into the daily ordinary account (Account number 062-01-01 to 0262-134) opened in the Plaintiff bank.

F. Refusal of payment on the letter of credit

The Plaintiff bank presented a documentary draft of credit purchased from Nonparty 1 and sought payment from the Chinese bank, the issuing bank, but refused to pay all for reasons of inconsistency with the language and text of the letter of credit and presented documents. Accordingly, on March 25, 1994, the Plaintiff bank withdrawn KRW 202,889,510 in total of the balance remaining in the Plaintiff bank's deposit account and the above non-party 1's deposit account, and appropriated for losses arising from the purchase of each of the bills of credit of this case.

2. Judgment on the plaintiff's claim

(a) Occurrence of liability for damages;

The term "bill of lading" is recognized as having the same effect as the receipt of the cargo by the holder of a bill of lading as the marine carrier who certifies the receipt or shipment of the cargo and represents the right to claim delivery. If the L/C requires a marine bill of lading, in particular, as the L/C requires a marine bill of lading, banks that purchase the shipping document shall accept only the bill of lading with the name of the marine carrier, the marine carrier, or its designated agent, with the signature of the carrier or its designated agent. On the other hand, banks that purchase the export bill of lading attached to the L/C requested by the L/C bank, even if the issuing bank refuses to pay for the export bill of this case after purchasing the bill of this case, have been finally required by the bill of this case to dispose of the export bill of this case representing its existence by the statement of the bill of this case, and each of the above L/C holders purchased the bill of this case with the signature of each of the parties to the bill of this case as the shipping agent of this case, and each of the parties to the L/C of this case has purchased the bill of this case as the bill of this case.

The defendants asserted that the issuance of so-called prior to the loading of cargo by the forwarding agent cannot be deemed to be illegal as the practice of the shipping industry. However, even if there is such a practice as argued by the Defendants, it cannot be deemed to be a normal act to turn on it, or there is social reasonableness in view of its purpose and means, and thus, the issuance of each of the instant bills of lading by the defendant company should be deemed to be illegal (see Supreme Court Decision 83Do2575, Aug. 20, 1985). Thus, such act constitutes a tort in that it was delivered to the consignor by signing on the bill of lading containing false contents intentionally or negligently.

The defendants, although the above non-party 1 had not loaded each of the cargo of this case, they had been issued each of the bill of this case by deceiving the defendant 3 as if they had loaded the cargo of this case. Since each of the bill of this case constitutes "relic" under the Criminal Act, the plaintiff bank Soldong branch, which received it from the above non-party 1, committed the crime of acquiring stolen goods or acquiring stolen stolen goods. Thus, the defendant's assertion of any right based on the criminal act is against the social rules and therefore it is not possible to respond to the plaintiff's request. However, the defendant 3 was well aware that each of the cargo of this case was not yet loaded at the time of the issuance of each of the bill of this case. Thus, the above defense is without merit.

In addition, since the above defendants, the head of the non-party 2 and the non-party 3, who is the person in charge of the export exchange business, knew of the management status of Li-day trade, as well as extended a loan of approximately KRW 30,000,000 with the corporate operating funds, it is difficult to think that the prior trade would have the ability to export each of the cargo of this case to a large amount of KRW 1,00,000,000. Further, in light of the fact that the purchase of each of the bill of this case was made preferential treatment without disregarding the general procedure at the time of purchase of each of the bill of this case, and the purchase price was paid as a part of the law, the plaintiff bank did not know that each of the bill of this case was false or was not aware by gross negligence at the time of purchase of each bill of this case, the defendants asserted that the bill of this case should be exempted, but there was no evidence to support that the bank of this case knew that each of the bill of this case was false or by gross negligence.

Thus, the plaintiff bank is deemed to have suffered losses from purchasing a letter of credit with belief that the above bill of credit was true due to the above illegal acts committed by the defendant 2 and 3, so the defendant 2 and 3 as the above illegal acts, and the defendant company is liable for damages to the plaintiff as the employer of the defendant 3 and 2.

B. The Defendants’ limitation of liability

Meanwhile, according to the evidence mentioned above, since the bill of exchange No. 1 of this case is different from the issuer of the letter of credit (which was omitted in the bill of exchange) and the commercial invoice No. 1 of this case 3 of this case was purchased by the Plaintiff bank for 00 months after the issuance of the letter of credit. According to the above 1 of this case's bill of exchange No. 2 of this case's bill of exchange and the bill of exchange No. 2 of this case's bill of exchange No. 9 of this case's bill of exchange, the bank's 2 of this case's bill of exchange No. 9 of this case's non-party 2 of this case's bill of exchange cannot be viewed as being 9's non-party 1's non-party 1's non-party 1's non-party 2's non-party 9's non-party 2's non-party 9's non-party 1's non-party 1's non-party 2's non-party 9's purchase of the letter of credit.

B. Scope of damages

The damages suffered by the Plaintiff bank due to the purchase of each of the bills of exchange in this case shall be the total amount of KRW 969,228,300 (gold KRW 161,480,748,300 + KRW 807,748,300) which is equivalent to the actual purchase price of each of the bills of exchange in this case (referring to the amount paid after converting the amount below its face value at the time of purchase of each of the bills of exchange in this case). The amount of KRW 581,536,980 (gold KRW 969,228,300 x 60/100) which is the proportion of the Plaintiff’s negligence shall be deducted from the above amount to KRW 581,536,980 (gold KRW 969,228,300 x 60/100) which is then appropriated for compensating the damages suffered by the Plaintiff.

Defendant 2 and Defendant 3 asserted that the amount of damages in this case should be reduced because the damages in this case would have a significant impact on livelihood if they make excessive compensation in light of their living standards. However, there is a lack of evidence to find that the above Defendants would have a significant impact on livelihood due to the damages in this case. Therefore, the defense is without merit without any need to examine other issues.

3. Conclusion

Therefore, the defendants are obligated to pay to each of the above defendants the amount of 378,647,470 won and damages for delay at the rate of 5% per annum under the Civil Act from December 23, 1993, which is the date of the final purchase of the letter of credit of this case, to February 29, 1996, which is the date of the decision of the court below that it is reasonable for the defendants to dispute about the existence and scope of liability. Thus, the plaintiff's claims against the above defendants are justified within the extent of the above recognition, and the remaining claims against the above defendants are dismissed as there is no reason, and the judgment of the court below is just, and it is so decided as per Disposition by dismissing the defendants' appeal.

Judges Kim Yong-dam (Presiding Judge)