The legal nature of an act by a bank to purchase a bill of exchange in the form of a non-credit form with a special agreement for repurchase (=trade) and remedies for infringement of rights in the case of non-payment of the bill

In a case where a bank enters into an export transaction agreement with an exporter to the effect that the exporter is liable for redemption and the exporter is liable for redemption in accordance with the relevant regulations of the bank, it shall be deemed that the bank agreed to the effect that the legal nature of the purchase of the currency is the sale and purchase of the bill and that the bank shall be entitled to remedy its rights in accordance with the repurchase regulations in a case where certain reasons arise in connection with the payment of the bill of exchange. Thus, the bank cannot obtain a separate loan from the purchase of the bill of exchange with the right of recourse under the Bills of Exchange and Promissory Notes Act or the right of redemption in addition to the above repurchase claim.

Article 43 of the Bills of Exchange and Promissory Notes Act, Article 563 of the Civil Act

[Plaintiff-Appellant-Appellee] Plaintiff 1 and 1 other (Law Firm Han, Attorneys Park Jae-soo et al., Counsel for plaintiff-appellant-appellant-appellee)

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

Defendant

Seoul District Court Decision 95Na7726 delivered on November 17, 1995

The judgment of the court below is reversed and the case is remanded to the Seoul District Court Panel Division.

The grounds of appeal are examined.

1. The court below found on June 10, 192 that the defendant purchased the bill of exchange with the non-party corporation Scoco Co., Ltd. (hereinafter the non-party corporation) and paid the non-party corporation the remainder of the amount obtained by deducting interest from the above face value to maturity from the non-party corporation by purchasing the bill of exchange with the non-party corporation on June 4, 1993 pursuant to the above credit transaction limit agreement, and the plaintiff was liable to pay damages for delay to the non-party corporation 32,188.80 U.S. loan from the non-party corporation on June 4, 1993, since the non-party corporation, the issuer, and the payer made loans to the non-party corporation 32,18.80 U.S. loan with the non-party corporation on June 4, 1993.

2. However, it is difficult to accept the judgment of the court below that the plaintiff purchased the bill of exchange from the non-party company to lend the equivalent amount of the bill to the non-party company for the following reasons.

A. According to the records, when purchasing a bill of exchange with a documentary credit form from an exporter, the plaintiff prepares an export transaction agreement (which seems to be uniform between the domestic banks) between the exporter and the exporter. Article 13 of the export transaction agreement provides that the reason under each subparagraph of paragraph (1) occurs, if the reason under each subparagraph of paragraph (2) occurs, the exporter will be liable for redemption to the plaintiff, and the exporter shall pay the above repurchase obligation to the plaintiff, as prescribed by the plaintiff's relevant regulations. Thus, the plaintiff shall be deemed to have agreed by adopting the above export transaction agreement that the legal nature of the purchase of the bill of exchange is the sale of the bill of exchange and that if a certain reason arises with respect to the payment of the bill of exchange, the plaintiff shall be entitled to remedy the plaintiff's rights pursuant to the above repurchase agreement. Thus, the plaintiff cannot acquire a separate loan claim other than the right of recourse or the right of redemption under the Bills of Exchange and Promissory Notes Act by purchasing the bill of exchange.

B. However, the court below, based on the basic terms and conditions of bank credit transactions or the credit limit transaction agreement, seems to have the legal nature of the purchase of the bill of exchange in this case as a loan for consumption, and examined the above terms and conditions, etc.

(1) The first head of the above export transaction agreement provides that "the exporter confirms that the basic terms and conditions for bank credit transaction apply in making transactions as stipulated in any subparagraph of Article 1," and Article 2 of the basic terms and conditions for bank credit transaction provides that "if the debtor obtains credit by means of a bill issued, endorsed, accepted, or guaranteed by the debtor, the bank may claim against either a bill bond or a credit bond." However, the basic terms and conditions for bank credit transaction stipulate the general principles applicable to various transactions classified as a bank as a credit. However, Article 2 of the basic terms and conditions for bank credit transaction provide that the bank can exercise a credit claim, other than a bill bond, in addition to a bill bond, it is nothing more than the general principles that the bank is able to exercise a credit claim which constitutes its underlying relationship. Thus, the purchase nature of a bill of exchange in accordance with Article 2 above cannot be said to be a loan for consumption, or the bank is able to claim a return. Rather, the basic terms and conditions for bank credit transaction are not a bill for discount but a bill for sale.

(2) The Plaintiff’s credit-limit trading agreement that was concluded by Nonparty Company for the continuous purchase of bills of exchange is merely a separate agreement to revise and apply the provisions on various credit transactions classified as the Plaintiff’s credit to a continuous transaction. In this case, where the credit-limit trading agreement is a “purchase of bills of exchange with no letter of credit,” the legal nature of the purchase of bills of exchange can only be determined by the export transaction agreement.

(3) Examining the above export transaction agreement, the basic terms and conditions of bank credit transaction, and the provisions of credit limit transaction agreement, no provision can be found to deem that the Plaintiff acquires any right different from the scope of redemption claims stipulated in the export transaction agreement against the non-party company when the Plaintiff purchased bills issued by the non-party company and then refused payment.

Thus, the plaintiff can only acquire redemption bonds as stipulated in the bill of exchange or export transaction agreement with respect to the purchase of export bills of this case. Thus, the plaintiff's claim of this case seeking the fulfillment of the loan bonds cannot be accepted on the ground that the non-party company has a loan claim equivalent to the face value of the bill of exchange.

C. Nevertheless, the court below accepted the plaintiff's primary claim of this case seeking the fulfillment of the claim for loans by recognizing that the plaintiff loaned the amount equivalent to the above amount of the bill of exchange. Thus, the court below erred in the misapprehension of legal principles as to the purchase of a bill of exchange, and such illegality was affected by the judgment. Thus, there is a reason to point this out.

3. Therefore, without examining the defendant's remaining grounds of appeal, we reverse the judgment below and the case is remanded to the court below. It is so decided as per Disposition by the assent of all participating Justices.

Justices Jeong Jong-ho (Presiding Justice)