Whether a trustee constitutes “a person who keeps another’s property” under Article 355(1) of the Criminal Act in cases where a title trust agreement is concluded with the owner who was unaware of the existence of such agreement and completed the registration of ownership transfer under his/her name after concluding the real estate sales agreement (negative)

Article 35(1) of the Criminal Act; Article 2 subparag. 1 and Article 4 of the Act on the Registration of Real Estate under Actual Titleholder’s Name;

Supreme Court Decision 98Do4347 delivered on March 24, 2000 (Gong2000Sang, 1101) Supreme Court Decision 2000Do3463 Delivered on November 27, 2001 (Gong2002Sang, 220) Supreme Court Decision 2005Do973 Delivered on September 8, 2006

Defendant

Defendant

Attorney Park Im-soo

Seoul Southern District Court Decision 2009No37 decided May 6, 2009

The judgment below is reversed, and the case is remanded to Seoul Southern District Court Panel Division.

We examine the grounds of appeal.

1. Examining the reasoning of the judgment below in light of the records, the court below is just in finding that the defendant was paid KRW 32 million as purchase price for two parcels of land (hereinafter “the forest land of this case”), such as forest land within 603-2 square meters (hereinafter “the forest land of this case”), which is located within 603-2 square meters of 495 square meters of e.g., the forest land of this case”), and there is no illegality in violation of the principle of free evaluation of evidence, contrary to what is alleged in the grounds of appeal.

2. The crime of embezzlement is established when a person who keeps another's property embezzled such property. According to Articles 2 subparagraph 1 and 4 of the Act on the Registration of Real Estate under Actual Titleholder's Name, where a truster and a trustee enter into a title trust agreement with the owner who was not aware of the fact that the title trust agreement was made by becoming a party to the agreement, and thereafter a trustee entered into a title trust agreement with the owner who was not aware of the fact that the title trust agreement was made, the change in real rights to the pertinent real estate by the registration of the title transfer is valid. Meanwhile, the title trust agreement between the truster and the trustee becomes null and void. Thus, the trustee shall be deemed to have acquired the ownership of the pertinent real estate effectively not only in relation to the seller who is the former owner, but also in relation to the truster. Therefore, the trustee cannot be deemed to be a person who keeps another's property (see Supreme Court Decision 98Do4347, Mar. 24,

The court below affirmed the judgment of the first instance court convicting the Defendant of the facts charged that “The Defendant, on January 9, 190, purchased the instant forest under the name of Non-Indicted 2 with the victim Non-Indicted 1, and the victim agreed to purchase approximately KRW 495 square meters ( approximately 150 square meters), a share in the instant forest, several times from around that time to April 29, 197, received KRW 32 million from the victim as the purchase price for shares in the instant forest, and completed the registration of transfer of ownership with respect to the instant forest with the victim’s consent on April 29, 197. The Defendant received KRW 276 million as compensation for losses for the instant forest on August 9, 200, and embezzled it for personal use, while being in custody for the victim.”

However, it is difficult to accept the above measures of the court below based on the premise that the defendant is in the position of a person who keeps the forest shares in this case for Nonindicted 1.

According to the records, with respect to the forest land of this case, which was registered as owned by Nonindicted 3 on August 1, 1991, the registration of ownership transfer was made for sale on July 30, 1991 under the name of Nonindicted 2, and thereafter, the registration of ownership transfer was made on April 29, 197 under the name of the Defendant on April 29, 197, and Nonindicted 1 and the Defendant agreed to purchase the forest land of this case and purchase the remaining forest land of this case. Nonindicted 1 and the Defendant agreed to purchase the forest land of this case from around January 1, 1990 to around April 1, 1990, and Nonindicted 2 paid KRW 32 million to the Defendant with the purchase price for the forest of this case, and Nonindicted 3 and Nonindicted 2 did not know that it was the actual purchaser of the forest of this case with Nonindicted 3 and the ownership transfer transfer registration was completely cancelled, and the Defendant and the Defendant did not know that it was the actual purchaser of the forest of this case.

In light of the above facts in light of the legal principles as seen earlier, since Nonindicted 3 or Nonindicted 2 was unaware of the fact that the actual purchaser of the forest land shares in this case was Nonindicted 1, the change in real rights in the name of the Defendant on the forest land shares in this case is valid, and the title trust agreement on the forest land shares in this case between Nonindicted 1 and the Defendant is null and void. Accordingly, the Defendant acquired the forest land shares in this case as effective in relation to Nonindicted 1, a trust administrator, and therefore, the Defendant cannot be said to be the person who keeps another’

Nevertheless, the court below found the defendant guilty on the ground that the defendant was in the status of a person who has custody for Nonindicted 1’s shares in the forest of this case. In so doing, the court below erred by misapprehending the legal principles on title trust as prescribed by the Act on the Registration of Real Estate under Actual Titleholder’s Name, or failing to properly examine the circumstances in which the title trust of this case was

Therefore, the judgment below is reversed, and 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 Jeon Soo-ahn (Presiding Justice)