[1] The legal relationship in a case where a bill issued by a third party is delivered for the performance of existing obligations

[2] In a case where a creditor receives a bill issued by a third party for the performance of an existing obligation, whether the creditor is obligated to take the procedure to preserve the right of recourse against the bill (affirmative)

[3] In a case where an obligee neglected the obligation to preserve the right of recourse against a bill issued by the obligee for the performance of an existing obligation, the requirements for offsetting the obligor’s damage claim against the existing obligation

[1] When a debtor delivers a bill to a creditor with respect to the performance of an existing obligation, the intention of the party is divided into "in lieu of payment of an existing cause obligation," i.e., "a case where the debtor only seeks to extinguish an existing cause obligation and continue to exist a new cause obligation," "a case where the debtor delivers the existing cause obligation for payment" for the purpose of securing the payment of an existing obligation, or "the case where the bill is delivered for the purpose of securing the existing obligation" for the purpose of securing the payment of an existing obligation, unless there is a special declaration of intention between the parties, it shall be presumed that the existing cause obligation still exists and is delivered only for the payment, or for the security of the existing obligation. Therefore, unless there are special circumstances, the existing cause obligation shall not be extinguished and it shall be presumed that it exists concurrently with the obligation on the bill. In this case, if the principal debtor in the bill is not identical with the debtor in the relationship with the debtor in the relationship with the cause, it shall be presumed that the payment is scheduled by

[2] In a case where a bill is issued for payment, the obligee is expected to obtain satisfaction from the exercise of the bill’s claim first among the bill’s and the underlying claim. Thus, the obligee is entitled to exercise the bill’s claim first, and the obligee can exercise the existing underlying claim against the obligor only when it is impossible to obtain satisfaction. Furthermore, barring any special circumstance, the obligee who received the bill by endorsement shall return the bill to the obligor in order to exercise the underlying claim against the obligor. Thus, the obligee is obliged to take the procedure for preserving the right of recourse by presenting the bill lawfully at the due date under the premise that the obligee exercises his/her underlying claim against the obligor.

[3] In the case of Paragraph (2) above, even if the obligee did not make a lawful presentation of payment at the due date due to the contravention of the duty to preserve the right of recourse, the obligor, who is the principal obligor of a promissory note, can exercise the obligee’s right of recourse and obtain satisfaction of the obligee’s obligation, so long as the obligee, who is the principal obligor of the promissory note, is able to obtain satisfaction by exercising the obligee’s right of recourse and the underlying claim against the issuer. In addition, even if the obligor, who is liable to perform his obligation after the due date, becomes insolvent, is unable to obtain satisfaction of the obligee’s right of recourse and the underlying claim against the issuer, even if the obligor, who is liable to perform the obligee’s obligation due to the aggravation of the obligee’s financial ability after the due date, becomes unable to obtain satisfaction of the obligee’s obligation. Such damage is a special damage due to the aggravation of the issuer’s financial ability, which is a principal obligor, and can be offset against the obligee’s obligation only if he knew

[1] Article 460 of the Civil Code, Article 9(1) of the Bills of Exchange and Promissory Notes Act / [2] Articles 390, 475, and 536 of the Civil Code / [3] Articles 393(2) and 763 of the Civil Code, Articles 38 and 43 of the Bills of Exchange and Promissory Notes Act

[1] [2] [3] Supreme Court Decision 93Da12213 delivered on October 13, 1995 (Gong1995Ha, 3746) / [1] Supreme Court Decision 70Da517 delivered on June 30, 1970 (No. 18-2, 99), Supreme Court Decision 89Da1410 delivered on March 27, 1990 (Gong190, 1225), Supreme Court Decision 93Da11203, 11210 delivered on November 9, 193 (Gong194Sang, 65), Supreme Court Decision 96Da41588 delivered on December 20, 196 (Gong197, 371) / [378 delivered on December 16, 199)] Supreme Court Decision 95Da28198 delivered on December 36, 195

Musan Construction Co., Ltd. (Attorneys Jeong Jong-chul et al., Counsel for the defendant-appellant)

Jung-gu Hot Spring Development Co., Ltd. and one other (Defendant-Appellant Kim Young-gu et al., Counsel for the defendant-appellant)

Seoul High Court Decision 94Na25492 delivered on April 11, 1995

All appeals are dismissed. The costs of appeal are assessed against the Defendants.

1. Summary of the reasoning of the judgment below

The court below rejected Defendant 2’s payment of 0.0 billion won to Defendant 2. The company’s payment of 9.0 billion won to Defendant 2. The company’s payment of 9.0 billion won to Defendant 2, which was 10.0 billion won or less, was 10.6 billion won to the Plaintiff Company’s payment of the construction price. The court below rejected Defendant 2’s payment of 9.0 billion won to the Plaintiff Company’s payment of 9.0 billion won to the Plaintiff Company’s payment of 9.0 billion won to the Plaintiff Company’s payment of 9.0 billion won to the Plaintiff Company’s payment of 10.6 billion won to the Plaintiff Company’s payment of 9.6 billion won to the Plaintiff Company’s payment of 9.6 billion won to the Defendant Company’s payment of 10.6 billion won to the Plaintiff Company’s payment of 9.6 billion won to the Plaintiff Company’s payment of 9.6 billion won to the Defendant Company’s payment of 10.6 billion won to the Plaintiff Company’s payment of this case’s payment of 1.

2. Determination on the grounds of appeal (the grounds of appeal are to the extent of supplement)

A. On the first ground for appeal

A party's intent at the time of delivering a bill to a creditor is divided into "in lieu of payment of an existing cause obligation," i.e., "an existing cause obligation is extinguished and will continue to exist only for a new cause obligation," "an existing method of payment is delivered for the purpose of the security for the payment of an existing obligation," and "an existing cause obligation still exists," or "an existing security" is delivered for the purpose of the security for the payment of an existing obligation, unless there is an express expression of intent between the parties. Therefore, unless there are special circumstances, it shall be presumed that the existing cause obligation still exists, and unless there are special circumstances, it shall be deemed that the existing cause obligation is extinguished and it is jointly with the obligation on the bill. In this case, if the principal debtor on the bill is not identical with the debtor on the ground of the cause obligation, it shall be presumed that the payment by the third party is expected to exist for the payment (see Supreme Court Decision 93Da12130, Oct. 13, 195; 193Da131930, Dec. 193. 193.

In the same purport, the court below rejected the defendants' assertion that eight promissory notes were delivered to the plaintiff company in lieu of the payment of the construction price to the plaintiff company, and there is no error in the misapprehension of legal principles as to the mistake of facts and the nature of the bill due to the violation of the rules of evidence or incomplete deliberation, such as the theory of lawsuit, and there is no reason to discuss.

B. On the second ground for appeal

The court below did not err in the misapprehension of the legal principles as to mistake of facts and assumption of obligation due to violation of the rules of evidence or incomplete hearing, such as theory, in rejecting the Defendants' assertion that the Defendants' obligation to pay the construction price to the Plaintiff Company was extinguished by the discharge of the Defendants' obligation to pay the construction price to the Plaintiff Company. There is no reason for the conclusion of the opinion.

C. On the third ground for appeal

The court below held that, at the time of entering into the instant hot spring site contract and the instant complex construction contract between the plaintiff company and the defendants, the construction cost shall be paid within the scope of sales revenue, but on October 29, 191, the defendants agreed to pay the construction price to the plaintiff company by the due date of the instant promissory note regardless of the above sale, and thus rejected the defendants' assertion that the payment of the construction price in this case has not yet arrived at the due date, and there is no error in the misapprehension of legal principles as to mistake of facts or interpretation of legal acts due to the violation of the rules of evidence, such as the theory of lawsuit, and there is no reason to support the conclusion.

D. On the fifth ground for appeal

The court below held that, with regard to the defendants' assertion that an exchange of promissory notes as stated in the separate sheet Nos. 5 through 8 of the judgment of the court below is a kind of repurchase agreement and the rights under the old bill are extinguished and thus the claim for the construction payment under the underlying relationship is also extinguished, the plaintiff company shall re-issued each promissory note as stated in the above Nos. 5 through 8 issued by the plaintiff company for the payment of the existing obligation, and it shall be re-issued with the non-indicted 5 to the non-indicted 8 as the first endorser and the non-indicted 1 shall exchange with the three promissory notes endorsed which are endorsed by the non-indicted 5 to the second endorser, since it is for the extension of the due date for the extension of the payment, and it shall not be deemed a new competitive contract with the alteration of the essential part of the existing obligation itself. The above re-issued promissory notes also are for the plaintiff company to pay the construction payment to the above defendant company, and therefore, it shall not be justified in the misapprehension of the legal principles as to the obligation of the plaintiff company's claims against the defendants.

E. On Nos. 4, 6, and 7

(1) The court below held that, even if each promissory note stated in the separate sheet Nos. 5 through 8 of the court below's decision was issued to the plaintiff company for the payment of the construction price, since the plaintiff company lost its rights without exercising its rights under the bill, the claim for the construction price against the defendants of the plaintiff company is extinguished, or the plaintiff company's exercise of its rights under the cause-based relationship constitutes abuse of rights, and thus, the claim for the construction price against the defendants of the plaintiff company is extinguished. (2) Since the plaintiff company cannot return each of the above promissory note to the defendants, since the above promissory note cannot be seen as being paid at the due date for the payment of each of the above promissory note, the defendant's right has lost its rights. (3) Since the plaintiff company's right to purchase and sell the above promissory note was not presented at the due date for the payment of the above promissory note, it is clear that the defendant's right to purchase and sell the above bonds against the plaintiff company and the defendant company's right to purchase and sell the above bonds against the plaintiff company.

(2) However, barring any special circumstance, a person who committed an act of a bill is solely liable for the bill under the language and text of the bill (see, e.g., Supreme Court Decisions 86Meu2630, Apr. 28, 1987; 94Da5397, Aug. 26, 1994). Thus, barring any special circumstance, barring any special circumstance, the person who committed an act of a bill issued each of the instant promissory notes to pay the purchase and sale price of the shares in the Park Young-chul, which is the representative director, shall be deemed to have taken over or guaranteed the obligation to pay the purchase and sale price of the shares to the Defendant’s rights in the Park Young-chul-chul-gu, barring special circumstances.

Nevertheless, it is wrong that the court below, without any particular circumstance, found that the house and the Jung-gu Hot Spring Condo Co., Ltd. used to take over or guaranteed the stock purchase and sale obligation for the defendant's right to purchase and purchase in the Park housing and Jung-gu Hot Spring Condo.

(3) In addition, in cases where a bill is issued for the purpose of payment as in this case, the obligee is expected to obtain satisfaction by first exercising the right of the bill and the underlying claim. Thus, the obligee is entitled to exercise the right of the bill first, and the obligee can exercise the existing underlying claim against the obligor only when it is impossible to obtain satisfaction by virtue of the obligee’s preferential exercise of the right of the bill, and for this purpose, the obligee to whom the bill is transferred shall return the bill to the obligor to exercise the underlying claim against the obligor unless there are special circumstances. Thus, it is reasonable to view that the obligee is liable to take the procedure for the preservation of the right of the bill, presenting the bill lawfully at the date of payment under the premise that the obligee shall exercise his underlying claim against the obligor. However, even if the obligee fails to make a lawful presentation at the date of payment in violation of the above duty of payment, it is reasonable to view that the obligee would have become aware of the obligee’s obligation to obtain compensation for damages arising from the obligee’s non-performance of the bill at the time of payment in 198.

(4) However, in this case, the Plaintiff Company returned each of the above promissory notes to the Plaintiff Company, which is the issuer, and neglected its duty to preserve the right of recourse to the above returned promissory notes by receiving three copies of the new promissory notes. After that, the Plaintiff Company, a corporation which was the issuer of the promissory notes, was insolvent, and the Plaintiff Company, who was the endorser of the above returned promissory notes, was unable to obtain satisfaction of the Plaintiff Company’s claim against the Plaintiff Company, even if it performed its underlying obligation against the Plaintiff Company, the Defendant Company, as the above Defendant Company, was employed by the Plaintiff Company. However, even if the Plaintiff Company was unable to exercise its claim against the Plaintiff Company for the purchase and sale of the shares in the box, which is the underlying claim, the Defendant Company, was able to exercise its claim against the Plaintiff Company for the purchase and sale of the shares in the box (no evidence exists to deem that it was insolvent in the record), and the record was examined, the Plaintiff Company did not have known or should have known that the Plaintiff Company was liable for damages by making the new promissory notes returned to the Plaintiff Company.

(5) Therefore, even though there are some inappropriate parts in the lower court’s reasoning, the conclusion that the Defendant’s claim for damages against the Plaintiff Company by Defendant Jae-ho was rejected in its entirety is right and wrong, and the lower court’s error pointed out earlier does not affect the conclusion of the judgment, and thus, all arguments are without merit.

3. All appeals are dismissed, and all costs of appeal are assessed against the losing Defendants. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Kim Jong-sik (Presiding Justice)