“Loan of money” as its conceptual element under Article 2 subparag. 1 of the Act on Registration of Credit Business, etc. and Protection of Finance Users is whether the act of providing credit by granting money under the premise that a certain amount of money should be returned at least for a certain period of time, regardless of the means or method of transaction (affirmative)

Articles 1, 2 subparag. 1, 3, and 19(1)1 of the Act on Registration of Credit Business, etc. and Protection of Finance Users

Defendant 1 and four others

Defendant 3, Defendant 4, Defendant 5, and Prosecutor

Attorney Noh Jeong-soo

Busan District Court Decision 2018No3362 Decided March 21, 2019

All appeals are dismissed.

1. Prosecutor's grounds of appeal are examined.

Article 19(1)1 of the Act on Registration of Credit Business, etc. and Protection of Finance Users (hereinafter “Credit Business Act”) provides that a person who engages in credit business, etc. without making a registration with the Mayor/Do Governor as prescribed by Article 3 of the same Act shall be punished by imprisonment for not more than five years, or by a fine not exceeding 50 million won. The Credit Business Act provides that “a person who engages in credit business, etc. shall be punished by imprisonment for not more than five years, or by a fine not exceeding 50 million won.” Article 19(1)1 of the same Act provides that “a person engaged in a business of lending money (including granting money by discounting notes, transferring for security, or any other similar means)” (Article 2 Subparag. 1).

Meanwhile, the purpose of the Credit Business Act is to provide for matters necessary for the registration and supervision of credit business and loan brokerage business and regulate illegal debt collection and interest rates of credit business entities and credit financial institutions, thereby ensuring the sound development of credit business, protecting financial users, and contributing to the stability of the economic life of the people (Article 1).

In light of the relevant provisions and legislative purpose of the Credit Business Act, the prior meaning of the “loan of money,” and the nature and effect of the bill discount and the transfer of security as stipulated by Article 2 subparag. 1 of the Credit Business Act, it is reasonable to view that the “loan of money” under Article 2 subparag. 1 of the Credit Business Act, as its conceptual element, must necessarily include the act of providing credit by providing money under the premise that a certain amount of money should be returned at least for a certain period of time in the future, regardless of the means or method of transaction.

For the following reasons, the lower court upheld the first instance judgment that acquitted the Defendants on the charge of violating the Credit Business Act on the grounds that there was no proof of crime regarding the Defendants’ violation of the Act among the facts charged against the Defendants. ① Contracts between the Defendants and the clients, such as not pretending to purchase the mobile phone devices from the clients, but actually purchasing the mobile phone devices, constitutes a sales contract, and the Defendants are merely the profits accrued from distribution. ② Defendants and the clients did not have determined the terms and conditions of the loan, such as interest and the due date for payment, and they cannot be deemed to have borrowed money on the grounds that they were not subject to the refund of money later. ③ The borrower did not directly related to the Defendants’ act, and the amount paid by the Defendants to the clients is irrelevant to the credit or interest rate of the clients.

Examining the reasoning of the lower judgment in light of the aforementioned legal principles and records, the lower court did not err by exceeding the bounds of the principle of free evaluation of evidence against logical and empirical rules, or by misapprehending the legal doctrine on “loan” under Article 2 subparag. 1 of the Credit Business Act, on the same purport.

On the other hand, the prosecutor appealed against the guilty portion of the judgment of the court below, but does not state the grounds for objection to this part in the petition of appeal and appellate brief.

2. Defendant 3, Defendant 4, and Defendant 5 did not file a statement of the grounds of appeal within the submission period, and they did not indicate the grounds for objection in the petition of appeal.

3. Therefore, all appeals are dismissed. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Kwon Soon-il (Presiding Justice)