Whether, when an endorsement of a promissory note is forged, the endorsee who has received it in good faith is entitled to exercise the rights of the promissory note.

Even if an endorsement of a promissory note is forged, it cannot be deemed that the series of endorsementss is defective, so the endorsee is presumed to be a lawful holder of a promissory note with continuous series of endorsementss regardless of whether the endorsement is forged or not. However, the drawer can only exempt the issuer from the obligation of the promissory note by proving that the holder has acquired it in bad faith or by gross negligence.

Articles 77 and 16(1) of the Bills of Exchange and Promissory Notes Act

[Defendant-Appellee] Choi Jong-jin et al., Counsel for defendant-appellee

Attorney Kang Shin-ok, Counsel for the defendant-appellant

Seoul Civil District Court Decision 74Na67 delivered on May 2, 1974

The original judgment is reversed, and the case is remanded to Seoul Civil Procedure District Court Panel Division.

Judgment on the grounds of appeal by the Plaintiff’s Attorney;

According to the reasoning of the judgment below, the court below found that the defendant issued the Promissory Notes in this case to the non-party 1 corporation, and the non-party 1 corporation, its addressee, as its sales agent, kept the Promissory Notes in the original company of the non-party 1 corporation, which used such office. However, the non-party, who was the representative director of the non-party 1 corporation, stolen the said Promissory Notes, thereby forging the name plate and the representative director's seal with forged the above Promissory Notes's name and the seal of the representative director's representative director's travel, and transferred it to the plaintiff, thereby causing the plaintiff to possess the Promissory Notes in this case. The above Promissory Notes in form is deemed to have been endorsed and transferred from the above Korea Ba corporation, its addressee, but its endorsement is null and void by a third party without authority, and therefore, the plaintiff cannot exercise its rights under the Promissory Notes.

However, according to Article 77 (1) and Article 16 (1) of the Bills of Exchange and Promissory Notes Act, the possessor of a promissory note shall be presumed to be a lawful holder if the possessor of the promissory note proves his right by the series of endorsementss. Since the series of endorsementss under the above Article is sufficient if the endorsement is conducted in the form of continuous series of endorsementss, and it does not require that the series of endorsementss of endorsementss is valid. Thus, even in a case where the endorsement is forged, it cannot be deemed that the series of endorsements is defective even if the endorsement is forged, the endorsement of the Promissory Notes in this case is in the form of continuous series of endorsementss, and the plaintiff is in possession of the Promissory Notes in this case by the transfer of endorsement. Thus, the plaintiff, the endorsee, regardless of whether the endorsement is forged or falsified, shall be presumed to be a lawful holder of the Promissory Notes in this case's series of endorsementss, the issuer bears the obligation of the drawer as a result of its bad faith or gross negligence, and thus, the court below's judgment cannot dismiss the plaintiff's claim for the bill of this case without a legitimate reason.

Therefore, the original judgment is reversed, and the case is remanded to the Panel Division of the Seoul Civil Procedure District Court. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Lee Byung-ho (Presiding Justice)