In a case where a check has been issued for the purpose of collateral for another person's obligation, the requirements for recognizing that a contract of civil guarantee has been concluded between the issuer and creditor of the check.

Even if there was awareness of the purpose of a check to guarantee a certain person’s obligation to the drawer, or there was a circumstance that the check was issued and delivered at the obligee’s request, such fact may constitute a civil guarantee agreement between the drawer and the obligee, separate from the fact that it can be one of the active elements in finding that the drawer of the check had an intent to bear a civil guarantee liability. Furthermore, it cannot be concluded that a civil guarantee agreement between the drawer and the obligee is established between the drawer of the check and the obligee. Furthermore, even if the obligee had the intent to demand the drawer of the check even if the check bears a civil guarantee liability for the obligation arising out of the time when the check was issued from the obligee’s standpoint and the obligee’s awareness of the intent and the content of the obligation, the drawer of the check was issued with a check in the form of a civil guarantee, not merely a credit granted to the obligee in the form of a deposit under the Check Act, but also a credit granted to the drawer in the form of a civil guarantee between the obligee and the obligee, the motive leading in the issuance of the check and the obligee’s actual interest arising from the check.

Articles 105 and 428 of the Civil Act, Article 12 of the Check Act

Supreme Court Decision 87Da446 delivered on March 8, 1988 (Gong1988, 653) Supreme Court Decision 2000Da63950 Delivered on April 22, 2003

Plaintiff (Attorney Jeong Young-cheon, Counsel for plaintiff-appellant)

Defendant (Attorney Kim G-do et al., Counsel for defendant-appellant)

Busan High Court Decision 2005Na10746 decided Feb. 9, 2006

The appeal is dismissed. The costs of appeal are assessed against the plaintiff.

The grounds of appeal are examined.

In a case where a check is issued for the purpose of collateral for another person’s obligation, it may be problematic whether the issuer bears only the obligation under the provisions of the Check Act or further bears the civil guarantee obligation to the obligee. The civil guarantee agreement is a legal act that strictly separates the issuer’s act on rights and obligations. As such, the issue of whether the issuer’s consent exists is a matter of interpretation of the intent between the parties. In addition, the general legal doctrine on the method of determining the issuer’s intent of guarantee, i.e.,, the establishment of guarantee agreement, as a matter of course, requires the guarantor’s intent of guarantee, and the existence of such guarantee intention is determined by comprehensively considering the motive and background leading up to the transaction between the parties, the purpose to be achieved by the transaction, the practice of transaction, and the degree of recognition of the issuer’s intent to pay for the check, and the existence of the issuer’s intent to pay for the check should be recognized as having been limited to the obligee’s duty of guarantee prior to and after the issuance of the check (see, e.g., Supreme Court Decision 2000Da3939).

In light of the records, the court below's decision that the non-party company did not recognize a civil guarantee liability for the above debt on the ground that the defendant cannot be deemed to guarantee the non-party company's obligation to pay back the check to the plaintiff solely on the fact that the non-party company issued the check of this case for the purpose of using the check at discount from the plaintiff for the purpose of using the check of the non-party company. It is just in accordance with the above legal principles, and contrary to the allegations in the grounds of appeal, there is no error of law by misapprehending the legal principles as

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

Justices Kim Nung-hwan (Presiding Justice)