In a case where a trust business entity is deemed to have, in effect, solicited a customer to conclude a contract with a specific money trust in advance, with the specific management method of the trust property, whether it bears the duty of care to reasonably investigate profit structure and risk factors arising from the management method of trust property and provide and explain the correct information to the customer (affirmative), and whether it is liable for damages arising from tort in a case where a customer suffered damage due to a violation of the duty of care (affirmative)

A specified money trust is a money trust for which the trustor designates the management method of trust property, which is a money trust, and the trust business entity manages the trust property in accordance with the management method designated by the trustor, and in the process, if the trust business entity fulfilled the fiduciary duty in good faith with respect to the trust property, profits and losses arising from the management of the trust property are entirely attributed to the beneficiary in principle of self-responsibility. However, if the trust business entity is deemed to have, in advance, recommended investment by setting the specific management method of the trust property, such as soliciting the customer to conclude a contract, the trust business entity has a duty to protect the customer by rationally investigating the profit structure and risk factors arising from the management method of the trust property and clearly explaining the customer so that the customer can make reasonable investment decisions based on such information. The trust business entity

Article 102(1) of the Financial Investment Services and Capital Markets Act; Article 103 subparag. 1 of the Enforcement Decree of the Financial Investment Services and Capital Markets Act; Article 750 of the Civil Act

[Plaintiff-Appellant] Plaintiff 2005Da64552 decided Nov. 29, 2007 (Gong2007Ha, 2001)

Plaintiff 1 and three others (Law Firm Dongbuk Asia, Attorneys Kim Jung-sik, Counsel for the plaintiff-appellant)

Daegu Bank (LLC, Kim & Lee LLC, Attorneys Jeon Byung-hee et al., Counsel for the defendant-appellant)

Daegu High Court Decision 2014Na22346 decided July 8, 2015

All appeals are dismissed. The costs of appeal are assessed against each party.

The grounds of appeal are examined.

1. As to the cancellation of a specified money trust contract based on the plaintiffs' fraud and motive mistake in the grounds of appeal

The Plaintiffs’ ground of appeal purporting to revoke the instant specified money trust agreement on the ground of fraud and motive mistake is a new argument in the final appeal in the final appeal as the grounds that the Plaintiffs did not assert the specific money trust agreement until the closing of argument in the lower court.

2. As to the defendant's grounds of appeal Nos. 1 and 2

A specified money trust is a money trust for which the trustor designates the management method of the trust property, which is a money trust, and the trust business entity manages the trust property in accordance with the management method designated by the trustor, and in the process, if the trust business entity fulfilled the fiduciary duty in good faith with respect to the trust property, profits and losses accrued from the management of the trust property are entirely attributed to the beneficiary (see Supreme Court Decision 2005Da64552, Nov. 29, 2007). However, in cases where the trust business entity is deemed to have recommended investment, such as inducing the customer to conclude the contract by determining the specific management method of the trust property, the trust business entity has a duty to reasonably investigate the profit structure and risk factors arising from the management method of the trust property and clearly explain them to the customer so that the customer can make a reasonable investment decision based on the information. The trust business entity has a duty to protect the customer by doing so, and is liable for damages arising from

According to the reasoning of the judgment below, the court below found facts based on its adopted evidence, and determined that, in light of the profit structure, transaction process and transaction method of the specified money trust product of this case, the plaintiffs' investment situation and investment purpose, risk of transaction, and the degree of explanation thereof, the defendant did not properly verify the safety of the specified money trust product of this case. The non-party 1, an employee of the defendant, did not properly explain the safety of the specified money trust product of this case to the non-party 2, the representative of the plaintiffs at the time of entering into the specified money trust contract of this case, and therefore, the defendant is liable to compensate for damages suffered by the plaintiffs due to the employer liability

In light of the above legal principles and records, the above determination by the court below is just, and contrary to the allegations in the grounds of appeal, there were no errors by failing to exhaust all necessary deliberations or by exceeding the bounds of the principle of free evaluation of evidence in violation of logical and empirical rules, or by misapprehending the legal principles on the trustee’s duty to verify and

3. Of the plaintiffs' grounds of appeal, the comparative negligence set-off and the defendant's ground of appeal No. 3

Examining the reasoning of the judgment below in light of the records, the court below is just to limit the defendant's liability to 70% of the damages suffered by the plaintiffs, and there is no error of law by misapprehending the legal principles as to comparative negligence

4. Conclusion

All appeals are dismissed, and the costs of appeal are assessed against each party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Lee In-bok (Presiding Justice)