(a) Where it is possible to oppose the defenses of the financing bill;

(b) Whether the holder can set up against the holder of a bill by reason of which he/she was unable to set up against the former;

(a) In the case where the melting party delivers a promissory note of the amount equal to its face value to the financing bill as security to the financing party, if the third party who acquired the financing bill knew that the said bill was issued as the financing bill and that the secured bill issued in exchange was rejected, the issuer of the financing bill may set up against the third party a defense against the financing bill;

B. Although a bill does not appear as an endorser on the bill but it was bona fide by the transferor to the present holder at the time of acquisition of the bill, it cannot be set up against the present holder on the ground that the present holder was aware of the reason at the time of acquisition of the bill, and thus, it cannot be set up against the present holder. This is also true even if the present holder was transferred the bill after preparation of the protest for refusal of payment or after the lapse of the time of preparation of the protest for refusal of payment.

(a) Article 17 of the Bills of Exchange and Promissory Notes Act;

(a) Supreme Court Decision 89Meu20740 Decided April 25, 1990 (Gong1990, 1144). Supreme Court Decision 79Da479 Decided October 30, 1979 (Gong1979, 12305)

Plaintiff

Defendant

Seoul Civil District Court Decision 93Na27184 delivered on November 5, 1993

The part of the judgment of the court below against the plaintiff shall be reversed and that part of the case shall be remanded to the Panel Division of the Seoul Civil Court.

We examine the grounds of appeal.

(1) A person who has issued a promissory note for financial or debt security of another person is not liable for the promissory note against the beneficiary, but cannot set up against the beneficiary a defense that the beneficiary was bona fide or malicious to the third party, or that the beneficiary was a financing bill issued without compensation even after the acquisition was made by endorsement after the due date (see, e.g., Supreme Court Decision 79Da479, Oct. 30, 1979). However, in a case where the beneficiary exchanged with the financing bill and delivered a promissory note in exchange for the financing bill to the lender of the amount equal to its face value, if the third party who acquired the financing bill knew that the payment was refused, the issuer of the financing bill may set up against the third party a defense against the financing bill (see, e.g., Supreme Court Decision 89Da20740, Apr. 25, 190).

On the other hand, in case where a transferee of a bill by endorsement in blank transfers the bill by delivery without filling in blank, or where the bill is transferred by way of endorsement before transferring it, it shall not be deemed to bear the responsibility of recourse as an endorser, but it shall be deemed to have been the holder on the bill who has transferred rights as an electronic holder of the present holder, even though it does not appear as an endorser on the bill, since the transferor had acted in good faith at the time of the acquisition of the bill, it shall not be asserted against the present holder, even though the present holder was aware of the reason at the time of the acquisition of the bill, and the same shall apply even if the present holder was assigned by the bill after the completion of the time of the protest or the time of the protest for non-payment (see the above 89∑ 20740, supra).

(2) According to the legal determination by the court below, the non-party received the bill of this case from the plaintiff for the self-financing and issued and delivered the bill of this case to the plaintiff as security, and the non-party who was the previous holder of the bill of this case can not be found to have known that the non-party's previous holder of the bill of this case was the loan of this case and the bill of this case was refused to be exchanged for the non-party mutual savings and finance company (hereinafter referred to as the "non-party mutual savings and finance company"), and the non-party mutual savings and finance company got a discount of endorsement (the record shows that it was a blank endorsement). Meanwhile, the non-party mutual savings and finance company issued the bill of this case at the time of the payment of the bill of this case but when the payment was refused, the non-party mutual savings and finance company cancelled its own endorsement portion and transferred the bill of this case to the plaintiff. Accordingly, even if the non-party mutual savings and finance company did not know that it was the non-party mutual savings and finance company's refusal to pay the bill of this case.

(3) Ultimately, the court below, contrary to its opinion, cannot be deemed to have acquired the bill of this case from the non-party, and since the non-party credit cooperative waived its own endorsement and renounced its claim against the defendant, it is judged that the plaintiff could not be transferred its claim against the non-party credit cooperative already extinguished. As a result, accepting the defendant's defense against the plaintiff cannot be deemed to have committed an unlawful act which affected the conclusion of the judgment by misapprehending the legal principles as to financing bills, personnel defense cutting off, and the previous holder of the bill. The grounds for appeal pointing this out are with merit.

(4) Therefore, the part of the judgment below against the plaintiff is reversed, and this part of the case is remanded to the court below. It is so decided as per Disposition by the assent of all participating Justices.

Justices Song Man-man (Presiding Justice)