So it held (see Supreme Court en banc decision 91Da43848, rendered June 23, 1992).

The case law states: "Where a bill is forged, the person whose name was forged, except in special cases such as where the Civil Act provisions on apparent agency can be applied by analogy, in principle bears no liability on the bill; but where an employee took part in a tort through the forgery of a bill and it was committed through an unlawful act related to the employer's business, the employer may bear liability for damages under Article 756 of the Civil Act. In this case, the liability the employer bears is not liability on the bill but tort liability under the Civil Act, so its requirements and scope do not coincide with those on the bill. Therefore, in discussing employer liability under Article 756 of the Civil Act, there is no need to examine the existence of rights under the Bills of Exchange and Promissory Notes Act, such as whether the holder has a right of recourse under that Act; whether the holder actually presented the bill for payment and was refused cannot be said to be a necessary requirement for claiming liability for damages due to the forgery of an endorsement; and even if the holder did not present the bill for payment within the lawful presentment period and did not take steps to preserve the right of recourse, this cannot be said to be a ground that prevents the holder from pursuing the tort liability, already incurred, of the forger's employer." Supreme Court decision 93Da21514, rendered November 8, 1994.

So it held (see Supreme Court en banc decision 93Da21514, rendered November 8, 1994).

If Y, the managing director in charge of general affairs at Company A, forged and issued a promissory note in the name of Company A's representative director, named Y as payee, and then endorsed and transferred it to X, who did not know of these circumstances, this can be regarded, judging objectively by its outward form, as related to the performance of duties. Therefore, if Y forged the promissory note in the name of Company A's representative director, Company A, as Y's employer, can be regarded as bearing tort liability for damages to X, who acquired the note believing Y's endorsement to be genuine.

2. (A separate issue from 1 above) After payment is refused by Company A, X seeks to demand that Y perform the obligation of recourse. Is Y liable to X for recourse?

The liability of an unauthorized agent under Article 8 of the Bills of Exchange and Promissory Notes Act should be regarded as grounded not in liability based on the signature, but in a warranty liability for having represented that the named principal bears liability on the bill. Furthermore, in the case of forgery of a bill, using the named principal's name without authority to represent as if the named principal bears liability on the bill is no different from unauthorized agency. Therefore, the liability of the actor who signed the bill should not depend on whether agency was indicated, and Article 8 of that Act should be applied by analogy even to a forger who fabricated the principal's signature directly without indicating agency, imposing the same warranty liability on the bill as in unauthorized agency. In this way, the person who signed the forged signature on the bill can be held directly liable on the bill, and a bona fide holder can also be protected more thoroughly because the forger is added as a debtor bearing the original liability on the bill.

In practice, electronic bills have come into wide use because of the risks of forgery and loss of paper promissory notes and the problem of chain defaults, and issuing electronic bills is mandatory for corporations above a certain size. Policy discussions on phasing out the promissory note system and replacing it with other means of payment are also continuing. Still, the independence of bill transactions, the defense of forgery, apparent liability and employer liability, and the analogical application of Article 8 of the Bills of Exchange and Promissory Notes Act are regular issues on commercial law and bills law exams, so organizing them in a framework of statute, case law and conclusion, as this material does, lets you use them right away in writing answers.