(a) Requirements to assume the responsibility of the endorser to guarantee the underlying obligation;

B. Whether an endorsement of a promissory note in order to facilitate discount in the bond market may be deemed as an endorsement in a sense that guarantees civil cause obligations (negative)

In principle, in cases where an endorsement has been made on a promissory note issued by another person to the effect of a guarantee, the endorser is liable only for the obligation arising out of the endorsement. However, the endorser is liable for the guarantee of the obligation arising out of a cause obligation, provided that the bill is issued in lieu of the instrument of borrowing, and it is endorsed by the endorser in the sense that it

B. An endorsement made on a promissory note in order to facilitate discount in the bond market is merely an endorser’s intent to grant credit by bearing an obligation under the bill of exchange. It cannot be deemed that the said promissory note has been endorsed in a manner that guarantees an obligation under the civil law, knowing that it was issued in lieu of the instrument of borrowing.

Article 428 of the Civil Act, Article 15 of the Bills of Exchange and Promissory Notes Act (Article 77(1)1)

A. Supreme Court Decision 81Meu979 decided Feb. 14, 1984 (Gong1984,438) (Gong1984,438) 86Meu783 decided Jul. 22, 1986 (Gong1986,1106) (Gong105 decided Dec. 8, 1987)

[Defendant-Appellee] Defendant 1 and 3 others

Kukdong Industrial Co., Ltd., Counsel for the defendant-appellant

Seoul High Court Decision 91Na42823 delivered on April 9, 1992

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

The defendant's attorney's grounds of appeal are examined.

1. According to the reasoning of the judgment below, the court below held that the non-party 1, who was working for the non-party 1 at the time of the issuance of each of the Promissory Notes in this case, had the duty to obtain discount from the non-party 1 company in the bond market, and requested endorsement by the non-party 2, who is the representative director of the defendant company with a kind of credit in order to obtain endorsement from the non-party 2's name. The above non-party 2 accepted each of the above facts and asked the non-party 1 to do so in the first endorsement column on the face of each of the above bills. The above non-party 1 had an obligation to obtain a discount from the non-party 4 company's lender, and the above non-party 3 had an obligation to obtain a loan from the non-party 1 to the above non-party 2's lender, and the above non-party 3 had an obligation to obtain a discount from the non-party 2 company's lender, the above non-party 4's total amount of the above bill and the remaining amount of the bill.

2. However, in a case where a promissory note issued by another person is endorsed for the purpose of guarantee, the endorser shall, in principle, assume only the obligation arising from the act of endorsement. However, the endorser shall be liable to guarantee the obligation arising from the act of endorsement only if it is endorsed in the manner that the promissory note was issued in lieu of the borrowed instrument and it is endorsed in the manner that the endorser guarantees the obligation arising under the civil law with the knowledge of such circumstances (see, e.g., Supreme Court Decision 81Meu979, Feb. 14, 1984; Supreme Court Decision 86Meu783, Jul. 22, 1986; Supreme Court Decision 87Meu105, Dec. 8, 197; etc.). As recognized by the court below, even if the Defendant endorsed the promissory note in this manner so that it can be easily discounted on the bonds market, it is merely the fact that the promissory note gives credit by means of endorsement as an endorser, and it cannot be found to mean any civil obligation to guarantee the obligation arising from the foregoing.

After all, the judgment of the court below is justified in the misapprehension of legal principles as to the responsibility of the endorser of promissory notes and the judgment of evidence in violation of the rules of evidence, which affected the conclusion of the judgment.

3. Therefore, without further proceeding to decide on the remainder of the grounds of appeal, all participating Justices decide to reverse and remand the part of the Defendant’s plaque. It is so decided as per Disposition by the assent of all participating