Therefore, in a loan for consumption, in case where the lender was aware of the credit standing of the lender and the borrower, and the risk of delay in repayment or impossibility in repayment is anticipated or may be anticipated due to the continuous transaction relationship, etc., it cannot be readily concluded that the borrower, with the sole fact that he/she failed to repay the loan properly, knew that he/she had the capacity to repay the loan, or that he/she had the intent to commit fraud by deception, unless there are other circumstances, such as the borrower, who stated that he/she had made a false statement about important matters that could be determined as to the specific intent of repayment, ability to repay, and terms and conditions of loan, etc. at the time of borrowing.

1. Fraud is established by deceiving another person to make a mistake, causing the act of disposal, thereby receiving property or making pecuniary profits. It is necessary to establish causation between deception, mistake, and property disposal act (see, e.g., Supreme Court Decision 2000Do1155, Jun. 27, 2000). Whether a certain act constitutes deception that causes others to fall into a mistake, and whether there exists a causal relationship between such deception and property disposal act should be determined generally and objectively by taking into account the specific circumstances at the time of the act such as the transaction, the other party’s knowledge, character, experience, occupation, etc. (see, e.g., Supreme Court Decision 87Do1872, Mar. 8, 198). In addition, the criminal intent of deception as to such deception shall be determined by taking into account the objective circumstances such as the defendant’s refeasible power, environment, content of the crime, the process of transaction, and the relationship between the victim and the victim (see, e., Supreme Court Decision 2003Do36536.

In addition, the issue of whether fraud is established by satisfying the above requirements is determined at the time of the act. Thus, if the borrower had the intent and ability to repay money at the time of lending money in a loan for consumption, even if the borrower did not repay money thereafter, it is merely a default under the civil law, and a criminal fraud is not established.

Therefore, in a loan for consumption, in case where the lender was aware of the credit standing of the lender and the borrower, and the risk of delay in repayment or impossibility in repayment is anticipated or may be anticipated due to the continuous transaction relationship, etc., it cannot be readily concluded that the borrower, with the sole fact that he/she failed to repay the loan properly, knew that he/she had the capacity to repay the loan, or that he/she had the intent to commit fraud by deception, unless there are other circumstances, such as the borrower, who stated that he/she had made a false statement about important matters that could be determined as to the specific intent of repayment, ability to repay, and terms and conditions of loan, etc. at the time of borrowing.

On the other hand, the conviction in a criminal trial shall be based on evidence with probative value sufficient for a judge to have a reasonable doubt that the facts charged are true, and if there is no such proof, the conviction cannot be found even if there is suspicion of guilt against the defendant (see, e.g., Supreme Court Decisions 2001Do2823, Aug. 21, 2001; 2005Do8675, Mar. 9, 2006). In addition, in light of the fact that the criminal appeal court has the character as a follow-up trial but has the nature as a follow-up trial, and the spirit of substantial direct cross-examination as prescribed in the Criminal Procedure Act, etc., in a case where the first instance court acquitted the defendant of the facts charged on the grounds that there is insufficient evidence to exclude a reasonable doubt after undergoing the examination of evidence, such as a witness, even if there is a possibility or doubt about some opposing facts as a result of the appellate trial’s examination, if it is sufficiently possible to resolve the reasonable doubt that the first instance court has raised, it cannot be found guilty.

2. The summary of the facts charged as to the guilty portion of the judgment of the court below is that the defendant bears the obligation equivalent to about KRW 30 million to KRW 40 million on August 2002, while he did not have any special property and he did not have any intent or ability to repay even if he borrowed money from the victim, but on August 11, 2002, he received the victim's money from the victim as the borrowed money and acquired it through the victim's money as the borrowed money.

3. However, according to the reasoning of the lower judgment and the record, the following facts are revealed.

A. In around 1998, the Defendant became aware of the victim while working as an insurance solicitor, and became pro-friendly.

B. The Defendant commenced the instant clothing business in 200 as it was not well-known, but did not repay the entire amount of the card payment to the Defendant’s KB bank account from January 29, 2001 to July 26, 2002, while repeatedly trading money with the victim by receiving cash services using the credit card of the victim from around 2001 to paying the card payment to the victim.

C. The victim has repaid the pre-paid card price using other credit cards in the form of a so-called return prevention as the defendant was unable to pay the card price. In the process, the defendant, on August 11, 2002, agreed to borrow 20 million won from the victim to pay interest on the part of the victim every three installments of the month in order to use the overdue card price. At the time of borrowing, the defendant owned the apartment and the automobile on which the right to collateral security was established with the maximum debt amount of KRW 60 million, and discontinued the above business on or after January 2003 because the clothes business was not well performed, but the business as an insurance solicitor continued to continue to exist.

D. Meanwhile, the Defendant, from August 27, 2002 to March 5, 2004, remitted 61,063,965 won in total to 48 times in the account of the victim from August 27, 2002 to March 5, 2004. Of them, the Defendant appears to have remitted 690,000 won in September 27, 2002, and 60,000 won in November 11, 2002, and 60,000,000 won in interest on December 10, 2003, and 60,000 won in 60,60,000 won in interest on February 11, 2003, and 60,000 won in amount to 630,603,603,603,603,603,6,600,6203,63,6,600.

E. On February 3, 2004, the Defendant prepared a promissory note with the amount of KRW 35 million in return for a demand from the victim to prepare a promissory note in the sense that the Defendant promised to repay the outstanding card price and the above borrowed money. On February 3, 2004, the Defendant set up a second-class collateral security right with respect to the above apartment owned by the Defendant with the obligor, the mortgagee, the victim of the right to collateral security, and the maximum debt amount of KRW 35 million.

F. On August 10, 2006, the victim filed a complaint against the Defendant for fraud on the ground that the Defendant did not repay the above card payment and the above borrowed money. On May 13, 2007, the following day after the arrest warrant was arrested by the Defendant, the Defendant prepared a letter of commitment to pay KRW 47,94,570 to the victim under the joint and several surety between husband Nonindicted 1 and his father Nonindicted 2 and Nonindicted 2, and the victim was awarded a favorable judgment on October 11, 201 by filing a lawsuit against the Defendant, Nonindicted 1, and Nonindicted 2 based on the above payment note. The above judgment became final and conclusive at that time.

4. The above facts and records are determined as follows.

From January 29, 2001 to March 5, 2004, the Defendant paid KRW 81,938,958 up to four times the instant loan to the victim as payment of the card price, etc. In addition, in light of the fact that the Defendant had continuously earned income while running a business as an clothes business or an insurance solicitor, and that an agreement equivalent to KRW 600,000 per month has been paid in a relatively constant manner after the date of the instant loan, it is difficult to conclude that the Defendant had no intent or ability to pay KRW 20 million at the time of the loan even if the Defendant denies the loan itself at present.

In addition, while the victim continues to engage in several financial transactions with the defendant, it seems that the defendant was well aware of the fact of delinquency in the payment of the card price of the defendant, as well as the financial situation. Thus, it seems that the victim predicted or could have sufficiently predicted the risk that it may be difficult to repay due to the lack of financial ability of the defendant at the time of the loan in this case, and there is no evidence to prove that there was an active deception, such as the defendant's statement of false facts about the repayment ability

Examining the above circumstances in light of the legal principles as seen earlier, the first instance court’s determination to the effect that it is difficult to readily conclude that the Defendant had the intent to acquire money by means of false remarks with the victim even though the Defendant did not have the intent or ability to repay the borrowed money at the time of the instant loan is insufficient may be deemed to have been based on a reasonable doubt. Moreover, considering the circumstances that the Defendant was unable to obtain money at the time of the instant loan, such as the Defendant’s retirement of clothes business after the instant loan and the repayment of the debt by the so-called “defacing” method, as determined by the lower court, and the fact that the Defendant was unable to repay the borrowed money at the time of the instant loan, it

5. Nevertheless, the lower court concluded that there was a criminal intent to acquire by deception, mistake, causation, the criminal intent to commit fraud, and the degree of proof necessary to recognize the guilty, and that there was an appellate court’s deliberation and judgment as an ex post facto judgment, solely on the grounds stated in its reasoning that the first instance court’s judgment was insufficient to recognize this part of the facts charged as illegal. Therefore, the lower court erred by misapprehending the legal doctrine on deception, mistake, causation, the degree of proof necessary to acknowledge the guilty,

6. Therefore, the conviction part of the judgment below is reversed, and this part of the case is remanded to the court below for a new trial and determination. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Lee Ki-taik (Presiding Justice)