Whether a holder’s right of recourse against an endorser is also extinguished in cases where the claim against the issuer of a promissory note has expired by prescription (affirmative)

Article 50 of the Bills of Exchange and Promissory Notes Act provides that a person liable for payment of a promissory note shall be entitled to demand the return of the bill to a person who exercises his/her right of recourse. This provision provides that a person liable for payment of the bill shall be bound to perform his/her duty of recourse and shall be able to exercise his/her right against the drawer. In cases where payment of a promissory note is refused by the drawer, the right of recourse is recognized to protect the holder, and it can be deemed that the duty of recourse of the endorser has secondary and supplementary characteristics compared to the duty of the drawer. However, it is unreasonable to require an endorser to perform his/her right of recourse until a person liable for payment of the promissory note is unable to exercise his/her right against the drawer of the bill. Article 45 of the Bills of Exchange and Promissory Notes Act provides that a person liable for payment of the bill shall be bound by the bill of exchange and the drawer of the bill shall be bound by the bill of exchange and the holder of the bill of recourse to payment of the bill, and it shall be deemed reasonable to require the holder to exercise the right of the bill.

[1] Articles 45, 50, 70, and 79 of the Bills of Exchange and Promissory Notes Act

The same liquidator of Korea Heavy Industrial Co., Ltd. (Attorney Kang Jong-soo, Counsel for defendant-appellant)

Hanjin Industrial Co., Ltd. (Attorney Han-chul et al., Counsel for the defendant-appellant)

1. The plaintiff's claim is dismissed.

2. The costs of lawsuit shall be borne by the Plaintiff.

The defendant shall pay to the plaintiff 25 million won with 6% per annum from December 11, 1997 to the delivery date of a copy of the complaint of this case, and 25% per annum from the next day to the full payment date.

1. Basic facts

on September 8, 1997, Park Jin-jin issued and delivered one promissory note at the face value of 25,00,000,000 won at issue on December 10, 1997, and the due date on December 10, 1997, and one promissory note at the budget branch of Chungcheong Bank Co., Ltd., the place of payment, and the place of payment. The said promissory note was endorsed and transferred in order to the Plaintiff through Defendant, Dol-g-g-g-g-g-g-g-g-g-g-g-g-g-g-g-g-g-g-g-g-g-g-g-g-g-g-g-g-g-g-g-g-g-g-g-g-g-g-g-g-g-g-g-g-g-g-

2. Determination on the cause of claim and the defendant's assertion

A. According to the facts of the above recognition, the defendant is obligated to pay to the plaintiff the above Promissory Notes and interest after maturity.

B. On this ground, the defendant asserts that the right of recourse against the plaintiff against the defendant has expired, so it is apparent that the plaintiff filed the lawsuit in this case on February 22, 2001, which was one year after the maturity of the above Promissory Notes from December 10, 1997. However, on the other hand, on April 13, 1998, before the maturity of the above Promissory Notes, the plaintiff seized the claim under the above Promissory Notes against the defendant on April 13, 1998 (Evidence 2) as the right to be preserved, and the prescription of the above right of recourse against the plaintiff was interrupted on April 13, 1998. Ultimately, the defendant's above assertion that the prescription of the above right of recourse has expired (the defendant, as above, with the lapse of the prescription from April 13, 1998 which had been interrupted, and it has no reason to claim that the prescription of the above right has expired, but it has no reason to claim that the provisional seizure continues to exist.

C. The Defendant asserts that the Defendant, the endorser, could not respond to the Plaintiff’s lawsuit, as the obligation against Park Jae-jin, the issuer of the said Promissory Notes, has expired due to the completion of the extinctive prescription.

First of all, we examine whether the right of recourse against the drawer of a promissory note is extinguished when the right of recourse against the endorser is extinguished by prescription.

Article 50 of the Bills of Exchange and Promissory Notes Act provides that a person liable for payment of a promissory note shall be entitled to demand the return of the bill to a person who exercises his/her right of recourse. This provision provides that a person liable for payment of the bill shall be bound to perform his/her duty of recourse and shall be able to exercise his/her right against the drawer. In cases where payment of a promissory note is refused by the drawer, the right of recourse is recognized to protect the holder, and it can be deemed that the duty of recourse of the endorser has secondary and supplementary characteristics compared to the duty of the drawer. However, it is unreasonable to require an endorser to perform his/her right of recourse until a person liable for payment of the promissory note is unable to exercise his/her right against the drawer of the bill. Article 45 of the Bills of Exchange and Promissory Notes Act provides that a person liable for payment of the bill shall be bound by the bill of exchange and the drawer of the bill shall be bound by the bill of exchange and the holder of the bill of recourse to payment of the bill, and it shall be deemed reasonable to require the holder to exercise the right of the bill.

In the case of this case, since there is no dispute or is apparent that the claims of the Plaintiff and endorsers, including the Defendant, etc., against the issuer of the above promissory note, have passed three years from the maturity of December 10, 1997, without taking a measure of interrupting prescription, the above claims were extinguished by the expiration of the extinctive prescription period, and therefore, the Plaintiff’s right of recourse against the Defendant was also extinguished. Ultimately, the Defendant’s defense pointing this out has merit.

3. Conclusion

Thus, the plaintiff's claim of this case is without merit.

Judges old-time