[1] Whether the requisite for setting up against the assignment of nominative claim under the Civil Act is necessary after the due date of a promissory note (negative)

[2] The case holding that the judgment of the court below which held otherwise erred in the misapprehension of legal principles since Gap is presumed to be a lawful holder of a promissory note and thus, Gap can seek payment of a promissory note against the issuer, in case where the promissory note, the series of endorsement of which was delivered by Gap after the expiration of the time limit for

[1] Articles 13(2), 16(1), 20(1), and 77(1)1 of the Bills of Exchange and Promissory Notes Act; Article 450(1) of the Civil Act / [2] Articles 13(2), 16(1), 20(1), and 77(1)1 of the Bills of Exchange and Promissory Notes Act; Article 450(1) of the Civil Act

[1] Supreme Court Decision 97Da38145 delivered on November 14, 1997 (Gong1997Ha, 3854)

Plaintiff (Law Firm Sejong, Attorneys Yellow-sik et al., Counsel for the plaintiff-appellant)

Defendant (Law Firm Cruss, Attorneys Park Jong-chul et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2010Na42176, 42183, 42190 decided November 19, 2010

The part of the lower judgment against the Plaintiff is reversed, and that part of the case is remanded to the Seoul High Court. The Defendant’s supplementary appeal is dismissed.

1. First, we examine the Plaintiff’s ground of appeal.

A. As to the grounds of appeal on the Promissory Notes of this case

According to the reasoning of the judgment below, the court below rejected the Plaintiff’s assertion that, based on its adopted evidence, the Defendant issued the Promissory Notes in this case, including ① “40 million won” at par value, “the due date of June 30, 2008”, “Seoul”, “five branches of National Bank”, “the due date of payment,” and “Seoul”, and “the promissory Notes in this case,” which are blanks of the place of payment, ② the endorser of the Promissory Notes in this case, “non-party 2”, “sexual fiber Textiles Co., Ltd.,” and “non-party 1”, ③ the presentation for the payment of the Promissory Notes in this case on June 30, 2008, and ④ the Plaintiff was refused to pay the Promissory Notes in this case as “non-party 2”, “the date of issuance to May 30, 2008,” and the Plaintiff’s refusal to pay the Promissory Notes in this case’s form of a bearer of the Promissory Notes in this case.

However, it is difficult to accept the above measures of the court below for the following reasons.

Article 13(2) of the Bills of Exchange and Promissory Notes Act, which is applicable mutatis mutandis to a promissory note pursuant to Article 77(1)1 of the Bills of Exchange and Promissory Notes Act, provides that “an endorsement may be made without designating the person to whom it is given or only with the name and seal or signature of the endorser (endorse in blank). An endorsement in blank solely with the name and seal or signature of an endorser shall be null and void unless it is made on the back of the bill of exchange or on the supplement.” Article 16(1) of the Bills of Exchange and Promissory Notes Act provides that “The possessor of the bill of exchange establishes his right by continuous endorsement, it shall be presumed to be a lawful holder. This shall also apply to cases where the last endorsement is in blank. In short, an endorsement shall be deemed not to have been made with respect to the series of endorsements. Where an endorsement is followed by another endorsement in blank, the endorsement shall be deemed to have been acquired by an endorsement in blank, and Article 20(1) of the Bills of Exchange and Promissory Notes Act shall be deemed to have the effect of assignment of a nominative claim after the expiration of obligation.

In light of the above provisions, legal principles, and records, even if the Plaintiff received the Promissory Notes in blank after the period for refusing to pay the Promissory Notes, the Plaintiff is still presumed to be a lawful holder of the Promissory Notes. Therefore, barring any special circumstance, the Plaintiff may seek payment of the Promissory Notes to the Defendant, the issuer, barring any special circumstance. Nevertheless, the lower court’s measures that the Plaintiff did not recognize that the Promissory Notes were lawfully transferred are erroneous by misapprehending the legal principles on endorsement after the due date of the Promissory Notes and the endorsement in blank, thereby adversely affecting the conclusion of the judgment. The

B. As to the ground of appeal on the second check of this case

According to the records, the Plaintiff alleged that the Defendant, as a legitimate holder of the second check of this case, sought payment of the amount of the amount of the check, and that the transferee of the second check of this case seeks payment of the amount of the check against the Defendant. However, the lower court rejected the Plaintiff’s claim for the amount of the second check of this case on the ground that the evidence alone is insufficient to deem that the Plaintiff was transferred the second check by the method of assignment of nominative claim, without making any determination on the first claim of the Plaintiff.

However, since the drawer of a check guarantees payment (the main sentence of Article 12 of the Check Act) and the lawful holder of a check can demand payment of the check amount to the drawer, the court below erred by omitting judgment on the first argument of the plaintiff, which affected the conclusion of the judgment. Therefore, the ground of appeal pointing this out is with merit.

2. Next, we examine the Defendant’s grounds of incidental appeal.

The court below rejected the defendant's assertion that the plaintiff did not acquire the right of recourse or right of recourse on the grounds of its stated reasoning, since the plaintiff received the Promissory Notes and each of the instant Promissory Notes from the non-party 3 for the litigation only, it constitutes a litigation trust, and thus, it is null and void. The court below issued the Promissory Notes and each of the instant Promissory Notes to the non-party 3 and received four Promissory Notes as security. The plaintiff, who was aware that all of the Promissory Notes were refused to pay, sold the Promissory Notes and each of the instant Promissory Notes in collusion with the non-party 3 for the purpose of avoiding the defense of the Promissory Notes and the instant Promissory Notes in collusion with the non-party 3.

In light of the relevant legal principles and records, the above determination by the court below is just and acceptable, and there is no error in the misapprehension of legal principles as to litigation trust, melting parties or financing bills defenses, and bearer meal check, as alleged in the grounds of incidental appeal.

3. Conclusion

Therefore, without further proceeding to decide on the remaining grounds of appeal, the part against the plaintiff among the judgment below is reversed, and that part of the case is remanded to the court below for further proceedings consistent with this Opinion. The defendant's supplementary appeal is dismissed. It is so decided as per Disposition by the assent of all participating Justices.

Justices Jeon Soo-ahn (Presiding Justice)