The meaning of “act of leasing fundamental property of a social welfare foundation” under Article 23(3)1 of the former Social Welfare Services Act, which is subject to permission of the Minister of Health and Welfare, and whether such act includes the act of allowing a social welfare foundation to use and profit from fundamental property without a rental agreement (negative)

Article 23(3)1 of the former Social Welfare Services Act (amended by Act No. 1097, Aug. 4, 201; hereinafter the same) provides that when a social welfare foundation intends to lease its fundamental property, it shall obtain permission from the Minister of Health and Welfare (Article 23(3)1) and criminal punishment for a violation of the above provision (Article 53 Subparag. 1). However, the former Social Welfare Services Act does not have any provision regarding the definition of “lease.” As such, the meaning of “lease” under Article 23(3)1 of the same Act is prescribed by the Civil Act, which is a general provision pertaining thereto. Meanwhile, lease under the Civil Act becomes effective when one of the parties agrees to allow the other party to use an object and take profits therefrom, and the other party agrees to pay the leased object (Article 618 of the Civil Act). Ultimately, the obligation to pay rent falls under the elements of lease. In short, Article 23(3)1 of the former Social Welfare Services Act provides that a social welfare foundation is subject to fundamental property without compensation.

Articles 23(3)1 and 53 subparag. 1 of the former Social Welfare Services Act (Amended by Act No. 10997, Aug. 4, 201); Article 618 of the Civil Act

Defendant

Defendant

Busan District Court Decision 2014No4011 Decided June 12, 2015

The judgment of the court below is reversed, and the case is remanded to Busan District Court Panel Division.

1. Determination on the Defendant’s occupational breach of trust among the grounds of appeal

Examining the reasoning of the lower judgment in light of the evidence duly admitted, the lower court is justifiable to have found the Defendant guilty of occupational breach of trust among the facts charged in the instant case. In so doing, contrary to what is alleged in the grounds of appeal, the lower court did not err by exceeding the bounds of the principle of free evaluation of evidence against logical and empirical rules,

2. Determination ex officio as to the violation of the Social Welfare Services Act among the facts charged in the instant case

A. The summary of this part of the facts charged is that “The defendant, as the representative director of the non-indicted 1 social welfare foundation, leased 3 square meters of 33 square meters among the 1st floor of the non-indicted 1’s basic property from around September 4, 2007 to May 17, 2010 (hereinafter “the part of the building in this case”) to the non-indicted 2 Co., Ltd. (hereinafter “non-indicted 2”) on which the defendant was the representative director without permission of the Minister of Health and Welfare.” The court below found the defendant guilty of this part of the facts charged by taking account of the adopted evidence.

B. However, we cannot accept the above judgment of the court below as it is.

The former Social Welfare Services Act (amended by Act No. 1097, Aug. 4, 201; hereinafter the same) provides that when a social welfare foundation intends to lease its fundamental property, it shall obtain permission from the Minister of Health and Welfare (Article 23(3)1); and that when it violates the above provision (Article 53 Subparag. 1). However, the former Social Welfare Services Act does not have any provision regarding the definition of the above “lease,” and thus, the meaning of the “lease” under Article 23(3)1(1) of the same Act should be deemed to be prescribed by the Civil Act, which is a general provision concerning it. Meanwhile, the Civil Act provides that one party agrees to use and take profits from the leased property and the other party agrees to pay the leased property to the other party (Article 618 of the Civil Act). Ultimately, the obligation to pay rent constitutes the elements of lease.

According to the records, on September 4, 2007, the Defendant entered into a contract with Nonindicted Co. 2 on behalf of Nonindicted Co. 1, 2007, on behalf of Nonindicted Co. 1, to allow Nonindicted Co. 2 to use and profit from the instant building, which is the fundamental property of Nonindicted Co. 1, without paying lease deposit and rent, and the Defendant from around that time to May 17, 2010 by allowing Nonindicted Co. 2 to use and benefit from the instant building without permission of the Minister of Health and Welfare pursuant to the above contract.

Examining these facts in light of the aforementioned legal principles, even if the Defendant had Nonindicted Co. 2 gain free use of and take profits from the instant building portion, which is the fundamental property of Nonindicted Co. 1, without permission of the Minister of Health and Welfare, it cannot be said that the Defendant violated the instant provision by leasing the fundamental property of a social welfare foundation without permission of the Minister of Health and Welfare.

Nevertheless, the lower court found the Defendant guilty of violating the Social Welfare Services Act on different premise. In so determining, the lower court erred by misapprehending the legal doctrine on the meaning of lease in breach of the Social Welfare Services Act due to the unauthorized lease of fundamental property, thereby adversely affecting the conclusion of the judgment.

3. Conclusion

For the above reasons, the part of the judgment of the court below on the violation of the Social Welfare Services Act against the defendant should be reversed, and since the reversed part and the remaining parts that the court below found guilty of the defendant were sentenced to a single sentence on the ground that they are in a commercial concurrent relationship, the

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

Justices Park Sang-ok (Presiding Justice)