A defendant shall be punished by imprisonment for not less than one year and six months.

However, the execution of the above punishment shall be suspended for two years from the date this judgment became final and conclusive.

In the crime of breach of trust, damages in the crime of breach of trust include not only actual damages but also property risks that can be deemed as reduction in value. Even if the act of breach of trust is null and void by law, the establishment of the crime of breach of trust does not affect the conclusion of the crime of breach of trust. Therefore, even if the act of the defendant is null and void against the victim non-indicted 1 corporation (hereinafter referred to as "non-indicted 1 corporation"), so long as the risk of incurring property damage to the non-indicted 1 corporation is caused, the crime of breach of trust shall

2. Summary of the facts charged

From around July 1, 2007, the Defendant served as an employee of Nonindicted Company 1, a mixed feed sales company, from around May 29, 2012, the Defendant sold the mixed feed to Nonindicted Company 2’s ○○ farm and △△ farm operated by Nonindicted Party 2. The Defendant had a duty to determine discount rates in accordance with the Business Management Manual and obtain internal approval, if necessary to maintain continuous transactions with his/her business partners, and to avoid causing damage to Nonindicted Company 1.

(a)on the pretext of a quantity incentive and a prior admission incentive;

On July 2013, the Defendant supplied Nonindicted Co. 2 with the mixed feed equivalent to KRW 58,887,045,00,000,000,000, out of the feed amount to be received from Nonindicted Co. 1 without reporting or obtaining approval, in violation of the above duties, and discounted the volume of KRW 1 (the unit price discount per kilogramme) from May 2015 to May 2015, the Defendant supplied Nonindicted Co. 2 with the mixed feed equivalent to KRW 5,216,582,621, as shown in the list of crimes in the attached Table of the lower judgment until May 2015.

(b) Discount under the pretext of shipment incentives;

On August 2014, the Defendant arbitrarily discounted KRW 12,50,000, out of the feed amount to be received from Nonindicted Company 1 without reporting or obtaining approval, in violation of the above duties, under the name of subsidies for shipment (payment in the case of shipping pigs through Nonindicted Company 1) that is not in the manual of Nonindicted Company 1.

Accordingly, the Defendant acquired property benefits equivalent to KRW 571,501,386 from Nonindicted Company 2 and suffered property damage equivalent to the same amount from Nonindicted Company 1.

3. Facts recognized.

According to the evidence duly admitted and examined by the court below, the following facts can be acknowledged:

A. Status of the parties

Nonindicted Co. 1 is a corporation for the purpose of manufacturing and selling feed, and the Defendant is a business employee in charge of the Gyeonggi-do area at Nonindicted Co. 1, and Nonindicted Co. 2 is a business employee in charge of the amount of money business for at least 40 years while engaging in the amount of money business, and Nonindicted Co. 3 and Nonindicted Co. 4 are operating ○ farm in the name of Nonindicted Co. 5 in the name of

B. Trading of feed between Nonindicted Company 1 and Nonindicted 2

1) As the Defendant’s business, Nonindicted Co. 1 began to supply feed to ○ farm from May 1, 2012, and Nonindicted Co. 1 entered into a feed supply contract (hereinafter “instant contract”) around May 25, 2012. Article 3(1) of the instant contract provides that “Nonindicted Co. 1 may pay a fixed rate or a fixed amount of sales discount and incentives, etc. according to the credit prior date agreed by both parties, as prescribed by the separate Addenda, depending on the transaction circumstances of the end user (Nonindicted Co. 2) or transaction performance.” As such, the supply price of feed may be changed by amending the Addenda.

In the event that the business members of Nonindicted Company 1 opened a new transaction with the customer or changed the transaction, they appear to have prepared and approved the “written transaction (reform)” and “written transaction (reform)”, and even in the process of opening the transaction between Nonindicted Company 1 and Nonindicted 2 and the subsequent change of the transaction, the above approval procedure was conducted.

Among the instant contracts, the terms and conditions of transactions pursuant to the Addenda of the end of May 29, 2012 are as follows. Therefore, it is not possible to add a discount on feed supplied at a unit price without the approval of Nonindicted Co. 1, 201, other than the prescribed quantity incentive, transport incentive, and revolving incentive.

(1) The head of Gun/Gu shall supply 95 percent of the factory price at the rate of 95 percent at the location of the Gun/Dong-gu feed.

② Other feed shall be entered into a contract on a unit price; 480 won (kg unit; hereinafter the same shall apply); 510 won; 485 won; 485 won; 460 won; 460 won; and 460 won;

(3) The 60,00 won per ton and the 80,000 won per ton shall be paid at the time of the Dolsan Feed.

(4) With a transport incentive, 10,000 won per ton for 10,00 won per ton for 500 won per ton (referring to the feed that is packaged in ton for inn and the ground refers to the feed that is packaged in a unit of ton for inn and the feed that is packaged in a unit of 20 to 25 km for a ground).

(5) The application of the revolving incentive (limited to the advance incentive) shall be made by calculating 2% interest at a rate of 1.5 times the monthly sales with respect to the amount paid in advance as of the last day of the relevant month.

2) Around May 2012, Nonindicted Party 2 had commenced the transaction of feed under the instant contract with Nonindicted Company 1 and the Defendant continuously demanded a discount on the amount of feed. Accordingly, the Defendant did not have the right to discount the amount of feed for continuing the transaction with Nonindicted Party 2 or to decide additional incentives, etc. other than the incentives prescribed under the instant contract, but did not have the right to make a decision on the amount of additional incentives, etc. other than the incentives prescribed under the instant contract, Nonindicted Party 2 paid the amount of incentives to be supplied at a certain price set from May 2012, and granted the amount of incentives to Nonindicted Party 2 every month by raising the advance payment.

3) The discount amount (the discount amount per kilogramme and the quantity incentive perme by feed type) recorded in the book delivered by the Defendant to Nonindicted 2 is tendencyed to increase the continuous change without specifying it.

4) Nonindicted Party 2 traded with Nonindicted Company 1 from May 2012 to June 2015, and around May 2013, Nonindicted Party 2 temporarily suspended the transaction with Nonindicted Company 1 and completed the settlement in accordance with the books prepared by Nonindicted Company 1, and resumed the transaction from July 2013.

5) Meanwhile, on May 28, 2014, Non-Indicted 2 and Non-Indicted 1 made partial changes in the terms and conditions of payment of incentives to pay the amount of KRW 10 per kilogramg to the mother’s money, milch money, and spawn feed, which are items subject to unit price contracts, in which the amount of incentives was KRW 70 per kilogramg, and KRW 90 per kilogramg; and also to the mother’s money, spawn money, and spawn feed. However, from May 2012, the books voluntarily prepared and delivered by the Defendant had already been calculated the amount of incentives of KRW 26 per kilogramme, spa, and spawn feed, each of six won per kilogramme. In addition, from March 2013, 2013, the amount of subsidies for the amount of the feed at Dol-si was already calculated as KRW 70 per kilogramme, KRW 90 per kilogramme, and KRW 80 per kilogram from January 20, 2013.

6) In the account books prepared by the Defendant, the “the details of monthly advance admission and grant” includes 12.5 million won at a discount on the name of the shipment price, which is an item that does not exist under the instant contract, in August 2014. In September 2014, the Defendant written to Nonindicted 2 at a discount on the name of the shipment price of KRW 13 million, which is personally borrowed from Nonindicted 2.

C. Notice of the details of Nonindicted Company 1’s transactions and Nonindicted Party 2’s attitude

1) From May 2012 to ○○ farm and △△ farm that began transactions with Nonindicted Party 2, Nonindicted Company 1 sent by mail a notice of transaction details, including sales volume of the relevant month, sales amount, incentives (amount-inwards, advance incentives), input amount, balance, etc. for each end of each month, “written confirmation of transaction details” stating the balance of the sales proceeds of feed every half year, and “written notification of payment of incentives” stating the amount of payment for the relevant year at the end of each year, respectively.

The above notice of transaction states that “The current feed balance shall be known as follows, and shall be notified by re-verification and re-verification as our customer support team immediately in the event of any abnormal situation,” and “I will confirm that there is no anything to be any more than seven days if the notification is not made within seven days after the receipt.”

2) Nonindicted Co. 2 received the above notice of transaction details and did not raise any objection to Nonindicted Co. 1. However, in 2014, Nonindicted Co. 2 confirmed it to the effect that the Defendant was fit for the data sent by him at the time of confirmation. In addition, Nonindicted Co. 2 filed a value-added tax return by stating the purchase amount (tax) in response to the issuance of electronic tax invoices by Nonindicted Co. 1 based on monthly sales in the above notice of transaction details.

D. Disputes between Nonindicted Company 1, Nonindicted Party 2, and Defendant

1) On June 11, 2015, Nonindicted 6, an employee of Nonindicted Company 1, was prepared with a notarial deed on behalf of Nonindicted Company 1 and Nonindicted Company 2 from Nonindicted 7 on behalf of the notary public on the part of Nonindicted Company 1 and Nonindicted 2 (hereinafter “instant notarial deed”). The content of the instant notarial deed that “ Nonindicted 2, on June 11, 2015, approved the Nonindicted Company 1 to assume an obligation of KRW 700 million with respect to Nonindicted Company 1, and that this would not be paid by June 18, 2015, Nonindicted 2 would provide Nonindicted Company 1 with a notarial deed on behalf of Nonindicted 1 and Nonindicted 2 with a notarial deed on the part of Nonindicted 1 and Nonindicted 2.”

2) Nonindicted Co. 1 found problems related to Nonindicted Co. 2 in the course of investigating a customer in charge of the Defendant’s embezzlement of the shipment price of another customer, and the Defendant, on June 19, 2015, prepared a written statement of performance stating that “the amount of liability receivable related to the ○ farm shall be repaid in full by July 17, 2015,” and delivered to Nonindicted Co. 1 a written statement of performance that “the Defendant shall be repaid in full by July 17, 2015.”

3) On July 21, 2015, Nonindicted Co. 1 sent a letter of demand for KRW 588,214,883 won to ○○ farm and KRW 26,823,605 won to the △△ farm. Accordingly, Nonindicted Co. 2 sent a letter of demand that Nonindicted Co. 1 receive KRW 19,57,857,857 from Nonindicted Co. 1 on August 11, 2015, according to the “the details of monthly advance payment and grants” received from the Defendant on August 11, 2015.

4) On September 17, 2015, Nonindicted 3, the representative of ○○ farm, filed a lawsuit of objection to a claim seeking the denial of compulsory execution based on the instant notarial deed, as Suwon District Court Decision 2015Gahap1835, Sept. 17, 2015. Nonindicted Company 1 filed a lawsuit against Nonindicted 3 claiming the payment of KRW 588,214,883 of the goods price as a counterclaim (2015Gahap945). Nonindicted 3 asserted that “The payment of the feed price according to the details of transactions notified by the Defendant, and according to this, Nonindicted Company 1 has a claim of KRW 20,000 against Nonindicted Company 1.”

5) On September 7, 2016, the above court rejected Nonindicted 3’s defense and sentenced a judgment citing Nonindicted Company 1’s counterclaim on the ground that it cannot be deemed that the instant notarial deed was drafted under Nonindicted 3’s lawful delegation, and that there was no power to modify the content of the instant contract to the Defendant, and that Nonindicted 3 did not have any justifiable reason to believe that the Defendant had such power, and that it is difficult to deem that Nonindicted 3 had any justifiable reason to believe that the instant notarial deed had such power, the said court rejected Nonindicted 3’s defense and rendered a judgment citing Nonindicted Company 1’s counterclaim (former Seoul High Court’s appeal is continuing to

4. Determination

A. The judgment of the court below

In full view of the following circumstances, based on the legal principles of Supreme Court Decision 2015Do6745 Decided September 10, 2015, the lower court found the Defendant not guilty on the ground that: (a) Nonindicted 2 was well aware of the fact that the Defendant had no right to discount the amount of feed or to pay additional incentives; and (b) therefore, even if the Defendant promised to pay a discount or additional incentives to Nonindicted 2, it is deemed null and void in relation to Nonindicted Company 1; and (c) it is difficult to deem that there was a risk of specific and practical damage to property of Nonindicted Company 1.

① Nonindicted 2 appears to have been aware of the scope of business authority of business employees as a person who has engaged in both money business for a long time and engaged in trading in feed.

② The account books that the Defendant voluntarily prepared to Nonindicted 2 include not only the amount of incentives, etc. but also the content of these books.

③ Nonindicted 2 did not raise any objection to Nonindicted Company 1 even after receiving the notification of transaction details, confirmation of balance, notification of payment of incentives, etc. different from the book received from the Defendant, on a monthly or semi-annual basis, and accordingly filed a value-added tax return.

④ When temporarily suspending the transaction with Nonindicted Company 1, Nonindicted Party 2 made a settlement in accordance with the trading account books of Nonindicted Company 1.

B. Judgment of the court below

1) Relevant legal principles

In the case of breach of trust, property damage includes not only a real damage but also a case where the risk of actual damage to property has been caused, and the judgment on the existence of property damage is not based on the legal judgment in relation to the property condition of the principal. Therefore, even if the act of breach of trust is null and void by the legal judgment, if the act of breach of trust is judged from the economic point of view and causes a real damage to the principal or a risk of actual damage to property, it constitutes a crime of breach of trust (see Supreme Court Decision 91Do2963 delivered on May 26, 192, etc.).

2) Determination

A) Examining the following circumstances revealed in light of the aforementioned facts in light of the legal principles as seen earlier, it is reasonable to view that the Defendant’s act constitutes a crime of breach of trust inasmuch as the Defendant’s act was invalid in relation to Nonindicted Company 1, as determined by the lower court’s order, on the ground that the Defendant’s act was in danger of actual injury to Nonindicted Company 1 due to the Defendant’s act from an economic perspective

① The Defendant, as an employee in charge of Nonindicted Company 1’s business, engaged in the business of supplying feed to Nonindicted Company 1’s ○○ farm and △△ farm that was actually operated by Nonindicted Company 2, and was able to continue the transaction by granting additional incentives to Nonindicted 2 who demanded a discount in the process or by raising advance incentives.

② Around May 2013, Nonindicted Party 2 temporarily suspended transactions, but began transactions again from July 2013. Nonindicted Party 2 confirmed that there was a difference between the documents sent by Nonindicted Company 1 and the books delivered by the Defendant around the summer in 2014, and the Defendant confirmed that the documents were suitable for the documents.

③ When Nonindicted Co. 1 became aware of the Defendant’s act, Nonindicted Co. 1 received a written statement of performance from the Defendant, prepared the instant notarial deed without providing a proper explanation to Nonindicted Co. 2 in the process, and eventually, the instant notarial deed was judged null and void in the said civil procedure.

④ Nonindicted Co. 2 sent a letter of demand for the payment of the feed by Nonindicted Co. 1, rather than sending an answer to the effect that he would have received money from Nonindicted Co. 1, thereby resulting in a dispute between Nonindicted Co. 1 and Nonindicted Co. 2. In fact, Nonindicted Co. 2 filed a civil lawsuit against Nonindicted Co. 1, and Nonindicted Co. 1 also filed a counterclaim against Nonindicted Co. 2. At the first instance trial, Nonindicted Co. 1 was accepted as the counterclaim claim by Nonindicted Co. 1, but the trial in the appellate trial is still pending.

⑤ In the first instance court of the instant case, it cannot be deemed that the Defendant had the authority to modify the content of the instant contract, and it is difficult to view that there was a justifiable reason to believe that Nonindicted Party 2 had such authority on the part of the Defendant, but it is related to the contractual liability under the instant contract, and the possibility that Nonindicted Party 1 would be responsible for the employer’s liability and other legal liability against Nonindicted Party 2 cannot be ruled out entirely (in addition, there seems to be room for the existence of gross negligence by Nonindicted Party

B) Nevertheless, solely on the grounds stated in its reasoning, the lower court determined that the Defendant’s act was difficult to deem that the risk of actual and actual damage to property was caused by Nonindicted Company 1’s act, and thus acquitted the Defendant. In so doing, the lower court erred by misapprehending the facts or misapprehending the legal doctrine, thereby adversely affecting the conclusion of the judgment (On the other hand, Supreme Court Decision 2015Do6745 Decided September 10, 2015, which is required by the lower court, issued by the head of a bank’s branch office in violation of his/her duties a letter of payment guarantee for goods, but it is inappropriate to apply in this case

5. Conclusion

Since the prosecutor's appeal is well-grounded, the judgment of the court below is reversed in accordance with Article 364 (6) of the Criminal Procedure Act, and it is again decided as follows.

1. Prosecutions and police suspect interrogation records of the accused;

1. Each police statement made against Nonindicted 8 and Nonindicted 2

1. The complaint (including Nos. 2 through 8 of the attached evidence list), the investigation report (including No. 14, No. 15, and No. 16), the investigation report (including No. 14, No. 15, and No. 16), the notification of the payment of incentives (No. 27), the notification of the details of transactions (No. 28 of the order).

Article 3(1)2 of the former Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Amended by Act No. 13719, Jan. 6, 2016); Articles 356 and 355(2)(general) of the Criminal Act

1. Discretionary mitigation;

Articles 53 and 55(1)3 of the Criminal Act (hereinafter referred to as “reasons for two-year punishment”)

1. Suspension of execution;

Article 62(1) of the Criminal Act (hereinafter “Reasons for both punishment”) (hereinafter “Reasons for both punishment”) shall be repeatedly considered as favorable circumstances.

On the other hand, there are no criminal records other than fines, and it appears that the defendant did not gain any economic benefits from the crime of this case, and the crime of this case seems to have arisen from the intent to maintain the customer as a business member, and the fact that the defendant agreed smoothly with the non-indicted 1 company is favorable to the defendant.

The punishment as ordered shall be determined by comprehensively taking into account the following circumstances, including such unfavorable circumstances, the age, character, intelligence, and environment of the defendant, motive, means, results, and circumstances after the crime, etc. of this case, and all the sentencing conditions specified in the records.

In light of the following: (a) as long as the risk of actual damage to property of Nonindicted Company 1 was caused by the Defendant’s act, it cannot be deemed that Nonindicted Company 1 did not incur any damage even if Nonindicted Company 2 accounts in accordance with Nonindicted Company 1’s account settlement; (b) the Defendant recognized the amount of damage incurred from the instant facts charged at an investigative agency; and (c) the Defendant prepared and delivered to Nonindicted Company 1 a letter of performance stating that “The Defendant would pay KRW 574,793,475,” the amount of damage incurred to Nonindicted Company 1 on June 19, 2015; (b) the prosecutor calculated the amount of damage by reflecting Nonindicted Company 1’s account books and the Defendant’s assertion based on the books of account prepared and delivered to Nonindicted Company 2; and (c) the Defendant arbitrarily discounted the amount of feed without any authority; and (c) in light of the fact that the account books sent to Nonindicted Company 1 and the account books prepared by him, it cannot be deemed that there was no intention for the Defendant’s breach of trust.

It is so decided as per Disposition for the above reasons.

Judges Lee Jong-hoon (Presiding Judge)