A. Defendant

(i)misunderstanding of facts and misapprehension of legal principles

As to the receipt of loans from ○○ Mutual Savings Bank (hereinafter “○ Mutual Savings Bank”) to raise funds for the projects on North Korea, Nonindicted Co. 1 (hereinafter “Nonindicted Co. 1”) issued the instant promissory note in the name of Nonindicted Co. 2 (hereinafter “Nonindicted Co. 2”) whose representative director was the Defendant, as the Defendant demanded the issuance of joint and several bonds and promissory notes from other companies whose representative director is the Defendant, and thus, the instant promissory note was issued in the name of Nonindicted Co. 2 (hereinafter “Nonindicted Co. 2”), and there was sufficient physical security, such as the establishment of a collateral on the financial resources and other real estate of Nonindicted Co. 1, the primary debtor, and the issuance of the instant promissory note was merely incidental to the joint and several liability of Nonindicted Co. 1’s loans. In light of the fact that the instant promissory note was not distributed as the “SUB” and it was not distributed actually, the lower court determined that there was no risk of damage to Nonindicted Co. 2, a joint and several liability for the Defendant’s loans to ○○ Mutual Savings Bank.

【Unjustifiable sentencing

The punishment sentenced by the court below against the defendant (two years of imprisonment, three years of suspended execution) is too unreasonable.

(b) An inspection;

The sentence imposed by the court below against the defendant is too uneasible and unfair.

2. Determination

A. Judgment on the mistake of facts and misapprehension of legal principles by the defendant

(1) Even if the act of breach of trust is null and void by legal judgment, the act of breach of trust constitutes a crime of breach of trust, as it causes property loss to the principal or property loss. In addition, issuing a promissory note in the name of the representative director of the company is an abuse of the representative authority. If the other party was aware of such fact or was unable to know such fact by gross negligence, the issuing of a promissory note in the name of the company is null and void against the other party. Thus, the company is not liable to compensate the other party for the damages under Article 35(1) of the Civil Act or the employer’s liability under Article 756(1) of the Civil Act is not liable to compensate the other party. However, a promissory note may, in principle, be transferred by endorsement (Articles 11(1) and 77(1) of the Bills of Exchange and Promissory Notes, and even if the bearer was aware of the fact that the other party was aware of the fact that the promissory note in the name of the representative director or the previous bearer, it cannot be asserted against the other party.

The Defendant also asserted that this part of the judgment below is the same as otherwise alleged in the ground of appeal, and the lower court determined that the Defendant’s act of issuing a promissory note 00 million won was not likely to cause property damage in the name of Nonindicted Co. 2 by issuing the instant promissory note under the name of Nonindicted Co. 1, 200,000 won, taking into account the following circumstances, namely, the market price of the real estate offered as collateral for loans to ○○ Mutual Savings Bank, the face value of the instant promissory note 1, the Defendant’s business promoted at the time, and the process of discharging the above loans to Nonindicted Co. 2, 300,000 won out of the joint and several liability as 0,000 won. In so doing, the lower court did not err by misapprehending the legal doctrine and the evidence duly adopted and examined by the lower court on the ground that the Defendant’s act of issuing the promissory note 20,000 won was not incidental to the act of offering loans to Nonindicted Co. 1, 2006.

B. Determination of unfair sentencing by the Defendant and prosecutor

The lower court rendered a comprehensive judgment on the following circumstances: (a) there is no actual risk of damage caused by the instant crime; and (b) the Defendant appears to have been prevented from committing the instant crime in the course of implementing the business through multiple companies rather than withdrawing personal benefits due to the instant crime; (c) in 1996, the Defendant committed the instant crime even though he had been already subject to several criminal punishment prior to the instant crime, such as imprisonment for one year due to the crime of violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Fraud) in 1996; and (d) a fine of two million won due to embezzlement in 1999; and (e) there was a history of having been sentenced to several criminal punishment prior to the instant crime; and (e) there is no significant amount of damage caused by the instant crime to Nonindicted Company 2; and (e) other unfavorable circumstances against the Defendant, such as the Defendant’s age, character and conduct, environment, and consequence of the instant crime; (e) the circumstances after the instant crime; and (e) the case where a suspended sentence and a judgment of fraud became final in two years.

In full view of both the above sentencing factors and sentencing factors considering the court below, the sentence of the court below is deemed to be an appropriate level, and it is not recognized that the sentence is too heavy or unreasonable. Therefore, the defendant and the prosecutor’s above assertion are without merit.

3. Conclusion

Therefore, since the appeal by the defendant and the prosecutor is without merit, it is dismissed in accordance with Article 364 (4) of the Criminal Procedure Act. It is so decided as per Disposition.

Judges fixed-type (Presiding Judge) Kim Jong-sung

1) However, at the time of April 2, 2012, ○○ Mutual Savings Bank was in bankruptcy and was appointed by the Korea Deposit Insurance Corporation as a trustee in bankruptcy of ○○ Mutual Savings Bank (see, e.g., Disposition 575 of Investigation Records).