2020Do6258 A. Violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Fraud)

(b)Fraud;

(c)Forgery of private documents;

(d)the display of a falsified document;

(e) Violation of Road Traffic Act;

(f) Embezzlement;

(g) Occupational breach of trust;

(h) Breach of trust;

(i) Violation of Labor Standards Act;

(j) Violation of the Guarantee of Workers' Retirement Benefits Act;

(k)Obstruction

(l) Violation of the Punishment of Tax Evaders

Defendant

Defendant

Attorney Park Dong-dong (Korean)

Gwangju High Court ( Jeonju), Decision 2019No7, 2019No75 (Merger), May 6, 2020;

2019No208 (Consolidation) Judgment

October 22, 2020

The conviction part of the judgment below is reversed, and that part of the case is remanded to the Gwangju High Court.

The grounds of appeal are examined (However, the part concerning the violation of trust against the victim non-indicted 1 is examined ex officio).

1. Each part of the crime of breach of trust against the victim non-indicted 2 corporation

A. (1) The crime of breach of trust is established when a person who administers another’s business obtains pecuniary benefits or causes damage to another person who is the principal agent of the business by having another person acquire such benefits through an act in violation of one’s duty, and thus, the principal agent of the crime must be in a position to deal with another’s business. Here, to be a “person who administers another’s business”, the principal agent of the crime must be in a position to deal with another’s business. In order to be a “person who administers another’s business,” the principal’s typical and intrinsic substance should be in a position to protect or manage another’s property based on a fiduciary relationship, such as a case where the principal acts for another person in whole or in part of the business concerning the management of another’s property, beyond the conflict of interest in an ordinary contract. Under an ordinary contractual relationship in a relationship of separation of interests, the principal obtains pecuniary advantage of the other party’s satisfaction of rights or the realization of claims through the performance of a contractual obligation to protect or take account of the other party’s property (see, e.g., Supreme Court en banc Decision 2007Do969Do.

2) In relation to monetary claims, even though a creditor lends money on the basis of the debtor's trust in performance of his/her performance and obtains a benefit from the satisfaction of his/her claim through the debtor's faithful performance of performance, the creditor cannot be deemed to have given his/her duty to protect or manage his/her property on the basis of the debtor's trust. The performance of his/her monetary obligation is performed by the debtor as the performance of his/her performance of his/her obligation, and thus, it cannot be deemed that the creditor administers the creditor's affairs. Therefore, in relation to the creditor, the debtor

The same shall also apply where a debtor has agreed to, or created a mortgage on, a movable owned by a creditor in accordance with the Act on Mortgage on Motor Vehicles and other Specific Movables to secure a pecuniary obligation. A debtor’s obligation to provide a movable as a collateral, namely, a duty to maintain, preserve, or not to damage, reduce, or destroy a collateral, or a duty to cooperate in the exercise of a security right by a creditor, such as a duty to deliver a security to a creditor or his/her designated person at the time of the execution of a security right, is the debtor’s own payment obligation. Furthermore, a mortgage contract is a subordinate contract for the occurrence of a secured obligation, and the obligation to cooperate in the exercise of a security right by a creditor is extinguished if the secured obligation is extinguished. The obligation to be borne by a debtor under a mortgage contract is aimed at the realization of a claim through the exercise of a security right, i.e., the realization of a security right at the time of default, and regardless of whether it was concluded or established before or after the conclusion of a mortgage contract (see, e.g., Supreme Court en banc Decision 200Do17179).

Therefore, the obligor’s performance of the above obligation is merely an obligor’s own business, and the obligor cannot be deemed to perform the obligee’s business on the basis of a fiduciary relationship with the obligee beyond the conflict of interest under an ordinary contract. Therefore, the obligor cannot be deemed to fall under “a person who administers another’s business” as the subject of breach of trust in relation to the obligee. Therefore, even if the obligor reduces or loses security value by disposing of a security to a third party and causes danger to the obligee’s exercise of security right or the realization

subsection (b) of this section.

3) The foregoing legal doctrine likewise applies to cases where an obligor disposes of at will a third party a movable on which a mortgage has been established under the Factory and Mining Foundation Mortgage Act to secure a pecuniary obligation.

4) On the premise that an obligor who has created a mortgage or factory mortgage on movable property for debt security falls under a person who administers another’s business, Supreme Court Decisions 2003Do67 Decided July 11, 2003 and 2010Do1165 Decided September 13, 2012, which held that a crime of breach of trust is established if the obligor disposes of collateral, shall be modified to the extent that they are inconsistent with the opinion of this judgment.

B. We examine the judgment of the court below on the part of the above breach of trust in light of these legal principles.

1) The summary of this part of the facts charged is as follows: (a) the Defendant received each loan from the victim non-indicted 2 Co., Ltd. to purchase ○○ bus and △△△ bus, and each mortgage was established on each of the above buses; (b) although the Defendant had the duty to keep each of the above buses for the purpose of securing security, it would have acquired financial benefits and suffered financial losses and sustained financial losses to the victim by disposing of them. The lower court maintained the first trial judgment that convicted the

2) However, in light of the legal principles as seen earlier, even if each of the above buses was established for the purpose of securing the victim’s obligation, insofar as the Defendant cannot be deemed to have been in charge of the victim’s business based on the trust relationship with the victim, it cannot be said that the Defendant constitutes “a person who administers another’s business” as referred to in the crime of breach of trust against the victim.

In addition, even if the Defendant disposed of each of the above buses as stated in the facts charged, the crime of breach of trust is not established. Nevertheless, the lower court found the Defendant guilty of this part of the facts charged on the premise that the Defendant was in the position of a person who administers another’s business by bearing the duty to preserve each of the above buses until the time the Defendant repaid the Defendant’s obligation to the victim for the purpose of securing another’s business. In so doing

2. The part on breach of trust against the victim non-indicted 1

A. As for the sale and purchase, where one of the parties agrees to transfer a property right to the other party and the other party agrees to pay the price (Article 563 of the Civil Act). In principle, the obligation that both parties have to perform in good faith constitutes “one’s own business” barring special circumstances. The seller in a movable property sale and purchase contract is not in a position to handle his/her business against the buyer, and thus, the seller disposed of the subject matter in another place even if the seller disposes of it (see, e.g., Supreme Court en banc Decision 2008Do10479, Jan. 20, 201).

Since the foregoing legal doctrine equally applies to a sales contract for movable property that requires registration and recording in the transfer of rights, a seller of a motor vehicle, etc. is not in a position to handle his/her business against a buyer, and thus, even if the seller disposes of it to another person without the transfer of ownership, the crime of breach of trust

B. We examine the judgment of the court below on the part of the above breach of trust in light of these legal principles.

1) The summary of this part of the facts charged is that even though the Defendant intended to sell the victim Nonindicted 1 for KRW 36 million of the △△△△△ bus to the victim Nonindicted 1, the Defendant received payment of KRW 20 million as the down payment and intermediate payment, Nonindicted 3’s joint collateral security was created with respect to the said bus, and thereby, Nonindicted 3’s joint collateral security was provided, thereby having the said bank obtain pecuniary benefits and causing loss to the victim. The lower court upheld the first instance judgment convicting the Defendant of the above facts charged.

2) However, in light of the legal principles as seen earlier, even if the Defendant is liable to register the transfer of ownership of the above bus against the victim, such obligation is only the Defendant’s own business under the above sales contract, and cannot be deemed to have been carried out by the Defendant based on the fiduciary relationship with the victim, the Defendant does not constitute “a person who administers another’s business” as referred to in the crime of breach of trust in relation to the victim. Therefore, even if the Defendant created a joint collateral security on the bus as indicated in the facts charged, the crime of breach of trust is not established. Nevertheless, the lower court convicted the Defendant of this part of the facts charged on the premise that the Defendant falls under the case. In so determining, the lower court erred by misapprehending

3. The part concerning the victim non-indicted 4's violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Fraud), fraud, fabrication and uttering of private documents, the part concerning the victim non-indicted 5 and the victim non-indicted 6's fraud, and the part concerning the victim non-indicted 7'

For the reasons indicated in its holding, the lower court convicted each of the facts charged. Examining the reasoning of the lower judgment in light of the relevant legal doctrine and evidence duly admitted, the lower court did not err by exceeding the bounds of the principle of free evaluation of evidence inconsistent with logical and empirical rules, or by misapprehending the legal doctrine on the intent of deception and deception in fraud, and the intent to commit

4. Scope of reversal

For the foregoing reason, the part of the lower judgment regarding the crime of breach of trust against the victim Nonindicted Co. 2 and the victim Nonindicted Co. 1 should be reversed. Since the lower court rendered a single sentence on the grounds that this part and the remaining guilty part are concurrent crimes under the former part of Article 37 of the Criminal Act, the part of the lower judgment’s judgment

5. Conclusion

Therefore, without further proceeding to decide on the remaining grounds of appeal, the guilty part of the judgment below is reversed, and that part of the case is remanded to the court below for further proceedings consistent with this Opinion. It is so decided as per Disposition by the assent of all participating Justices.

The Chief Justice of the Supreme Court

Justices Park Sang-ok

Justices Lee Dong-won

Justices Kim Jae-in

Justices Park Il-san

Justices Noh Jeong-chul

Justices Min Min-young