Plaintiff 1 and one other (Law Firm A school, Attorneys Song Dong-sik et al., Counsel for the plaintiff-appellant)

Korea Start-up Association and one other (Attorneys Lee Jae-soo et al., Counsel for the plaintiff-appellant)

Defendant 3 (Law Firm Tae, Attorneys Kim Tae-tae, Counsel for the defendant-appellant)

February 27, 2013

Seoul Central District Court Decision 2010Gahap133570 Decided October 13, 2011

1. The part of the judgment of the court of first instance against the defendant Korea Association of Business Start-Up Co., Ltd. which exceeds the money ordered to be paid under the following among the parts against the defendant Association of Business Start-up Co., Ltd.,

Defendant Korea Start-up Association, Inc., Ltd., pays to the Plaintiffs 46,90,000 won and the amount calculated by each of the 5% per annum from July 6, 2010 to July 15, 2010 to March 15, 2013, and 20% per annum from the following day to the date of full payment.

2. The part against Defendant 3 (Defendant in the judgment of the Supreme Court) among the judgment of the first instance is revoked.

Defendant 3 pays to each of the plaintiffs 46,90,000 won and each of the plaintiffs to the Korea Business Start-up Association and each of the plaintiffs from July 6, 2010, and to the plaintiff 2 from July 15, 2010 to March 15, 2013, 5% per annum from July 15, 2010 to March 15, 2013 and 20% per annum from the next day to the date of full payment.

3. The plaintiffs' appeal against the defendant 2, the remaining appeals against the plaintiffs of the Korea Business Start-up Union, and the remaining claims against the defendant 3 are dismissed in entirety.

4. 30% of the total litigation costs incurred between the plaintiffs and the Korea Start-up Association, and Defendant 3 shall be borne by the plaintiffs, and 70% shall be borne by the Korea Start-up Association, Defendant 3, respectively, and the appeal cost incurred between the plaintiffs and Defendant 2 shall be borne by the plaintiffs, respectively.

5. The part concerning the payment of money under paragraph (2) may be provisionally executed.

1. Purport of claim

The Defendants shall pay to each of the Plaintiffs the amount of KRW 67,00,000 as well as the amount of KRW 67,000 per annum from July 6, 2010 to Plaintiff 1; from July 15, 2010 to the service date of a copy of each of the instant complaint, from July 15, 2010 to the service date of a copy of each of the instant complaint; and from the next day to the day of full payment, 20% per annum.

2. Purport of appeal

A. The plaintiffs

The part against Defendant 2 among the judgment of the first instance court shall be revoked. The same shall apply to the part against Defendant 2 among the purport of the claim.

B. Defendant Korea Business Start-up Association

In the judgment of the court of first instance, the part against the Korean Association of Business Start-up Co., Ltd. is revoked, and the plaintiffs' claims are dismissed.

C. Defendant 3

The part against Defendant 3 among the judgment of the first instance court is revoked, and the plaintiffs' claim against Defendant 3 is dismissed.

1. Determination as to the legitimacy of the judgment deeming confession against Defendant 3 by the court of first instance

(a) Facts of recognition;

In full view of the statement in Eul 1-1 and the purport of the whole pleadings, the court of first instance served a duplicate of the complaint with defendant 3's address "Seoul Gangnam-dong (hereinafter address 1 omitted)", which is the address of the defendant 3 as stated in the complaint, and ordered the plaintiffs to correct the address. The plaintiffs filed an application for re-service on the above address by inserting the "Korea Association of Business Start-up of Co., Ltd.", and served a duplicate of the complaint again. On March 10, 201, the non-party 1, who is the office of the defendant Korea Association of Business Start-up (hereinafter "the defendant company"), was received on March 10, 201. The above address was the location of the defendant company's office, and the defendant 3 was in office at the Seocho-dong (hereinafter address 2 omitted) business support center in Seocho-gu, Seoul with the defendant company, and the court of first instance, after which the defendant 3 was not served with the notice of the date of pleading, the notice of pleading, the date of pleading, and the notice of adjudication, etc.

B. Determination

According to the above facts, since the defendant 3 received the duplicate of the complaint by the non-party 1, who is the cause of the business of the defendant company, while the defendant company retired from office, the service of the defendant company to the defendant 3 should have been delegated to the above non-party 1 on behalf of the duplicate of the complaint, and there is no evidence to acknowledge this.

Therefore, it cannot be deemed that a duplicate of complaint against Defendant 3 was delivered lawfully, and furthermore, the court of first instance, premised on the fact that a duplicate of complaint was served on Defendant 3, is also unlawful to serve the notice of the date for pleading, a copy of preparatory documents, and a notice of the date for sentencing on the premise that the copy of complaint was served on Defendant 3. Accordingly, the court of first instance, upon the premise that it is unlawful to serve the notice of the date for pleading, a copy of preparatory documents, and a notice of the date for sentencing, etc., shall not be served lawfully, and the court of first instance, upon

Accordingly, this court's revocation of the part against Defendant 3 in the judgment of the court of first instance under Articles 416 and 417 of the Civil Procedure Act, and new proceedings for all pleadings, such as delivery of litigation documents, submission of evidence, etc., including the statement of the complaint, shall be determined again on the merits.

2. Basic facts

A. The defendant company is a corporation whose purpose is to start-up consulting business and whose representative director is defendant 2.

B. Defendant 3, while working as the head of the Defendant Company, was engaged in investment mediation against the customers of the Defendant Company in addition to the business start-up consulting business, agreed to attract investment from the co-defendant 1 of the first instance trial to make investment to the customers of the business start-up counseling by receiving a request for attracting investment from the co-defendant 1 of the first instance trial who is engaged in the business of ○○ Trade and △△△ Trade and the business of selling and distributing clothes.

C. On July 6, 2010, Defendant 3, a customer of the business start-up counseling of the Defendant Company, performed as if he had been well aware of the management conditions and financial status of ○○ Trade as a specialized investment broker, and opened and operated online shopping malls after meeting the total license for domestic monopoly supply of ○○-si cruise brands. The annual sales amounting to KRW 4 billion and two direct sales stores are planned to open a new sales store at the same dong-dong-dong-dong-dong-dong-dong-dong-dong-dong-dong-dong-dong-dong-dong-dong-dong-dong-dong-dong-dong-dong-dong-dong-dong-dong-dong-dong-dong-dong-dong-dong-si (i.e., termination from three months after the investment and refund of principal at any time, and (ii) investment in 250,000,000 won can be paid for two years, which is the final monthly revenue.

D. However, the ○○ Trade and △△△ Trade operated by Co-Defendant 1 of the first instance trial, which were operated by Co-Defendant 1, is a large amount of debt and taxes are in arrears, and the employees’ wages were in arrears, and their business performance was not good. In addition, Co-Defendant 1 of the first instance trial did not own the domestic total sales right of the “Olsan Port” and did not have any direct sales right, and the operation of the Internet shopping mall was suspended, and even if they were invested by the Plaintiffs, even if they were to receive investments from the Plaintiffs, they could not commence a new business, and even if they were to receive investments from the Plaintiffs, they did not have the ability or intent to pay monthly profits or to repay principal.

E. Defendant 3 knew that, as such, the management conditions of the business run by Co-Defendant 1 in the first instance trial were not good, and had not confirmed at all the financial status of ○○ Trade, but deceiving the Plaintiffs as above. Accordingly, the Plaintiffs decided to make an investment in the business funds to Co-Defendant 1 in the first instance trial, and the Defendant Company entered into each business start-up consulting service contract (hereinafter “each of the instant consulting agreements”) with Co-Defendant 1 in the first instance trial, and entered into each of the joint start-up agreements with Co-Defendant 1 in the first instance trial on the content that ○○ Trade and △△△△△ Trade jointly start-up with Co-Defendant 1 in the first instance trial (each of 60 million won business start-up fees).

F. In addition, on July 6, 2010 by embodying the contents of the above joint start-up agreement, the Plaintiffs, instead of investing KRW 60 million in Co-Defendant 1 of the first instance trial and the Plaintiffs’ Co-Defendant 1 of the first instance trial each with Co-Defendant 1 of the first instance trial, were paid a final amount of KRW 2.5 million each month from Co-Defendant 1 of the first instance trial. If the Plaintiffs request the termination of the agreement, each of the investment agreements (hereinafter “each of the instant investment agreements”) concluded with the Co-Defendant 1 of the first instance trial to the effect that the total amount of investment principal

G. Accordingly, to Co-Defendant 1 of the first instance trial, Plaintiff 1 paid KRW 60 million on July 6, 2010, Plaintiff 2 paid KRW 5 million on July 6, 2010, and KRW 55 million on July 15, 2010, respectively, as investment money, to Co-Defendant 1 of the first instance trial. Moreover, the Plaintiffs paid KRW 7 million to the Defendant Company each of the fees under each of the instant consulting agreements.

H. On August 29, 2011, Defendant 3 and Co-Defendant 1 of the first instance court were prosecuted by the aforementioned fraudulent acts, etc. against the Plaintiffs, and on January 16, 2013, Defendant 3 was sentenced to the suspension of execution in October, and Defendant 1 of the first instance court’s co-defendant 1 was sentenced to imprisonment with prison labor for two years, and one year and two months, respectively, at the above court (2013No163).

[Ground of recognition] Facts without dispute, Gap evidence 2 through 8, 11, Eul evidence 3, Eul evidence 4-1, Eul evidence 4-2, the purport of the whole pleadings

3. Determination as to claims against the defendant company and the defendant 3

(a) Occurrence of liability for damages;

According to the above facts, Defendant 3 conspired with co-defendant 1 of the first instance court in connection with the duties of customer counseling as employee of the defendant company, and deceiving the plaintiffs, thereby allowing the plaintiffs to make an investment in the co-defendant 1 of the first instance court and making them enter into each of the consulting agreements of this case. As such, Defendant 3 is an illegal act, and the defendant company is liable for the damages suffered by the plaintiffs as each of the employers of the defendant 3.

The defendant company asserted that the defendant company is an employee of the non-party 2, who is an employee of the defendant company, who is separate business operator from the defendant company, and is not an employee of the defendant company. However, in the first instance court, the defendant company led to the confession of the defendant company as an employee of the defendant company through a written response. Thus, the confession of the court is a statement unfavorable to himself/herself, consistent with the allegations by the other party on the date of pleading or the date of preparatory pleading, unless it is lawfully revoked. Thus, the court is bound by the evidence that the confession of the court is contrary to the facts that have not been disputed between the parties (see, e.g., Supreme Court Decision 87Meu804, Oct. 24, 198). Since the party revoking the confession of the court did not recognize the facts that the confession of the defendant company goes against the truth, and it is not presumed that the confession of the defendant company was made due to mistake and that it was contrary to the truth, and there is no other evidence that the confession of the defendant company is contrary to the above evidence No. 28429-1, etc.

In addition, the defendant company stated in each of the consulting contracts of this case that "the plaintiff entered into a business start-up contract after making a direct judgment, confirmation, and decision on the value of the joint start-up, and all issues arising after the contract is not liable to the defendant company. The scope of consulting business of the defendant company is terminated at the same time as the contract completion is performed, and the defendant company is not liable for civil and criminal liability as to the claims and obligations arising from the termination, cancellation, return, etc. between the parties that occurred thereafter, and the lawsuit is not brought to this issue is not brought to." Thus, the final judgment on each of the investment contracts of this case was made by the plaintiffs, and thus the plaintiffs cannot be held liable to the defendant company. However, the plaintiffs merely claim that the defendant company is not liable to the defendant company on the ground that the joint defendant 1 of the first instance court did not fulfill the obligation to pay the profits under each of the investment contracts, but are liable to the defendant company for tort on the ground that the defendant company, who is an employee of the defendant company of this case, deceivings the plaintiffs.

B. Scope of liability for damages

Furthermore, as to the scope of damages, the Plaintiffs paid KRW 60 million to Co-Defendant 1 of the first instance trial as investments, respectively, due to Defendant 3’s tort, and paid KRW 7 million to the Defendant Company each of the fees under each of the consulting agreements of this case. As such, the damages suffered by the Plaintiffs are KRW 67 million, respectively.

However, it is not allowed for a person who intentionally committed an illegal act by taking advantage of the victim's negligence to claim to reduce his liability on the ground of the victim's negligence immediately. This is because, if such intentional illegal act constitutes a zero-income act, the perpetrator ultimately possess profits from the illegal act and bring about a result contrary to the principles of equity or good faith. Thus, even in the case of intentional illegal act, if the above result is not caused, it shall be possible to limit liability based on the principle of comparative negligence or the principle of equity (see, e.g., Supreme Court Decision 2006Da16758, 1675, Oct. 25, 2007). According to the above facts and the purport of the whole arguments, each of the investment contracts of this case shall guarantee the repayment of principal invested, and shall pay 50% annual fixed profits to the company regardless of its profits. Thus, the plaintiffs can be seen to have been aware that the above contract was equivalent to the ordinary investment contract, and the reasons why the plaintiffs paid the defendant's joint investment profits and the value of the company of this case.

C. Determination as to the assertion of an illegal act due to the act of fund-raising and financial investment business

On the other hand, the plaintiffs asserted that the defendant company violated the Act on the Regulation of Conducting Fund-Raising Business without Permission since it was engaged in a fund-raising business without permission from many and unspecified persons, including the plaintiffs, and that the defendant company violated the Financial Investment Services and Capital Markets Act and thus, it also bears tort liability accordingly.

The defendant company as the employer of the defendant 3, apart from compensating for damages caused by illegal acts related to the employees' performance of duties, it is not sufficient to recognize that the defendant company engaged in an act of fund-raising or a financial investment business in its own and systematic manner at the corporate level, and there is no other evidence to acknowledge this differently. Thus, the plaintiffs' above assertion is without merit.

D. Sub-determination

Therefore, the defendant company and the defendant 3 are liable to pay the plaintiffs 1 and each of the plaintiffs 46.9 million won (i.e., 67 million won x 70%) and to pay damages for delay at each rate of 20% per annum under the Civil Act from July 6, 2010, which is the date of the tort in this case, to the plaintiff 2, and from July 15, 2010, which is the date of the final tort in this case to March 15, 2013, which is the date of the final judgment of the court of first instance, to dispute about the existence and scope of the above defendants' obligation to pay damages for delay at each rate of 5% per annum under the Civil Act and 20% per annum under the Act on Special Cases concerning the Promotion, etc. of Legal Proceedings from the following day to the date of full payment.

4. Determination as to the claim against Defendant 2

A. The Plaintiffs asserted that Defendant 2 is the representative director of the Defendant Company, and is liable for joint tort with Defendant 3 and Defendant Company. However, it is difficult to view that Defendant 2 was in the position of practically directing and supervising Defendant 3 solely on the ground that Defendant 2 is the representative director of the Defendant Company, and there is no other evidence to acknowledge this otherwise. Unless there is any assertion or proof as to whether Defendant 2 participated in the above illegal acts by Defendant 3, etc., the fact that Defendant 2 is the representative director of the Defendant Company cannot be said to be liable for joint tort with Defendant Company. Accordingly, this part

B. In addition, the plaintiffs asserted that defendant 2 is liable for damages on the premise that the defendant company engaged in the act of fund-raising and the financial investment business without permission as joint tortfeasor with the defendant company. However, there is no evidence to acknowledge the fact of the defendant company's act of fund-raising and the operation of financial investment business as joint tortfeasor with the defendant company. Thus,

5. Conclusion

Therefore, the plaintiffs' claims against the defendant company against the defendant company shall be accepted within the scope of the above recognition, and the remaining claims against the defendant company and the claims against the defendant 2 shall be dismissed in its entirety due to the lack of reasonable grounds. Since the part against the defendant company against the defendant company ordering payment in excess of the above recognition amount among the part against the defendant company of the judgment of the court of first instance which partially different conclusion is unfair, it shall be revoked and the plaintiff's claims shall be dismissed. The remaining appeals against the defendant company and the appeals against the defendant 2 are dismissed in its entirety due to the lack of reasonable grounds, and the part against the defendant 3 in the judgment of the court of first instance against the procedure is revoked in violation of the law, and the plaintiffs' claims against the defendant 3 shall be accepted within the scope of the above recognition, and all remaining claims against the defendant 3 shall

Judges Ansan-si (Presiding Judge)