[1] In a case where the holder of a bill exercises his/her right under a bill, whether he/she must prove his/her real benefit (negative), and the burden of proof as to the fact that there is no relationship between the issue of the bill and the obligation is extinguished due to repayment, etc. (=the person

[2] In a case where the issuer and the payee in collusion pretended to issue a promissory note only formally in order to avoid the collection of claims or compulsory execution without the intent of bearing the genuine debt of the issuer, whether the act of issuing the promissory note is invalid as a prior agreement (affirmative), and the burden of proof as to the facts constituting the grounds for invalidation (=a person who asserts a false representation

[1] Articles 17 and 77(1)1 of the Bills of Exchange and Promissory Notes Act, Article 288 of the Civil Procedure Act / [2] Articles 17 and 77(1)1 of the Bills of Exchange and Promissory Notes Act, Article 108 of the Civil Act, Article 288 of the Civil Procedure Act

[1] Supreme Court Decision 96Da52649 Decided July 25, 1997 (Gong1997Ha, 2676), Supreme Court Decision 96Da52205 Decided May 22, 1998 (Gong1998Ha, 1704), Supreme Court Decision 2007Da36407 Decided September 20, 2007 / [2] Supreme Court Decision 2004Da70024 Decided April 15, 2005 (Gong2005Sang, 743), Supreme Court Decision 2010Da12852 Decided June 24, 2010 (Gong2010Ha, 140)

Plaintiff (Law Firm Barun et al., Counsel for the plaintiff-appellant)

Defendant (Law Firm LLC et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2013Na72444 decided November 7, 2014

The appeal is dismissed. The costs of appeal are assessed against the plaintiff.

The grounds of appeal are examined.

1. Ground of appeal Nos. 1 and 2

A. An act of a bill must be dealt with separately from the underlying relationship of the receipt of a bill as an unmanned (act) and a bill is an instrument representing rights to a bill regardless of the underlying relationship. The holder of a bill can exercise rights to the bill solely on the fact that he/she is a holder and does not need to prove that he/she has any real interests (see, e.g., Supreme Court Decisions 96Da52649, Jul. 25, 1997; 96Da52205, May 22, 1998). The circumstance that there is no underlying relationship between the issuance of a bill and a bill, or that his/her obligation is extinguished due to repayment, etc. shall be proved by the claimant (see, e.g., Supreme Court Decision 2007Da36407, Sept. 20, 2007).

Meanwhile, in a case where the issuer and the payee in collusion and thereby pretended to issue promissory notes only formally in order to avoid debt collection or compulsory execution with the issuer’s creditors without any intent to bear the authentic debt of the bills or obtain the bonds, such issuance of promissory notes is null and void as a false declaration of agreement (see, e.g., Supreme Court Decision 2004Da70024, Apr. 15, 2005). In this case, the issuer is liable to prove the fact that any expression of intent, such as the issuance of promissory notes, is invalid as a false declaration of agreement (see, e.g., Supreme Court Decision 2010Da12852, Jun. 24, 2

B. On August 26, 2002, the lower court: (a) concluded that on the basis of the fact that on August 26, 2002, the KIB Co., Ltd. Co., Ltd. (hereinafter “Korea IF Co., Ltd”) issued a promissory note with a face value of 15 billion won at sight in the future of the Defendant; and (b) concluded that the KIF Co., Ltd. shall pay 15 billion won at face value to the Defendant with respect to the said promissory note; and (c)

① The Plaintiff asserted that the Defendant’s obligation to pay KRW 390,472,952, which was the remainder of KRW 8,390,472,952, or the amount of subrogated payment, deducted the maximum debt amount of KRW 8,00,000,00, which was transferred as collateral by the Defendant from the amount of mortgaged payment of KRW 8,390,472,952, was the cause of the promissorysory note,

In addition, the Plaintiff asserted that the issuance of the Promissory Notes Nos. 1 and 2 in this case was null and void as a conspiracy with false indication, but the lower court rejected this assertion by taking into account the following: (a) Han-Co-ownership of the Promissory Notes No. 1 issued as of September 6, 2010 is related to the obligations of the Promissory Notes No. 2 in August 26, 2002; and (b) the Promissory Notes No. 2 issued as of December 20, 2010 and issued as of December 20, is related to the obligations of the balance of land shares sold to

C. Examining the reasoning of the lower judgment in light of the aforementioned legal doctrine and the record, the lower court is justifiable to have rejected the Plaintiff’s assertion that the obligation to pay for the bill Nos. 1 and 2 of this case was nonexistent or extinguished, or that the issuance of the said Promissory Notes constitutes false declaration of conspiracy. In so determining, the lower court did not err by exceeding the bounds of the principle of free evaluation of evidence against logical and empirical rules, or by misapprehending

2. Ground of appeal No. 3

The lower court rejected the Plaintiff’s assertion that the issuance of the Promissory Notes Nos. 1 and 2 in this case constitutes an abuse of power of representation on the ground that it is difficult to acknowledge the Plaintiff’s assertion that the Plaintiff’s submission of the instant agreement did not constitute an abuse of power of representation, and that Nonparty 2, the representative director for the public use of Korea-Japan, issued promissory Notes by

The ground of appeal disputing the lower court’s fact-finding regarding the percentage of agreement cannot be deemed a legitimate ground of appeal. Examining the reasoning of the lower judgment in light of the record, the lower court’s determination that rejected the Plaintiff’s assertion regarding abuse of power of representation is justifiable. In so doing, the lower court did not err by exceeding the bounds of the principle of free evaluation of evidence

3. Ground of appeal No. 4

The lower court determined that, since February 7, 2012, the Plaintiff filed a lawsuit seeking revocation of a conjunctive claimant’s fraudulent act with the lapse of the exclusion period of one year as stipulated in Article 406 of the Civil Act, the Plaintiff filed a lawsuit claiming revocation of a fraudulent act with the Defendant, Nonparty 2, etc. on the ground that the said lawsuit was unlawful.

Examining the reasoning of the lower judgment in light of the relevant legal doctrine, the lower judgment is justifiable. In so determining, the lower court did not err by exceeding the bounds of the principle of free evaluation of evidence against logical and empirical rules, or by misapprehending the legal doctrine on the exclusion

4. Conclusion

The Plaintiff’s appeal is dismissed as it is without merit. 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 Kim Chang-suk (Presiding Justice)