[1] The meaning and criteria for determining “property damage” in the crime of occupational breach of trust (=economic perspective) and the meaning of “risk of property damage” that can be assessed as having caused property damage

[2] In a case where the Defendant, the head of the bank branch of the bank Gap, issued a written guarantee of price payment for the goods in violation of his/her business duties, and transferred it to Byung corporation, which is a customer of the corporation Eul, thereby causing losses to Gap bank, and was prosecuted for violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Misappropriation of Trust), the case holding that Byung corporation did not have a specific risk to the same extent as the damage was incurred from the economic perspective, as long as the obligation to pay price for the goods

[1] The crime of occupational breach of trust is established when a person administering another's business commits an act in violation of his/her duties and obtains or causes a third party obtain pecuniary benefits from such act in violation of his/her duties, thereby causing property damage to the principal. Here, property damage includes not only a real damage but also a case where a risk of actual property damage is caused, and the judgment on whether or not property damage has occurred should be grasped from an economic point of view without legal judgment. However, the risk of actual property damage, which can be assessed as having caused property damage, means a case where the principal is not sufficient to have a clear risk of damage, and where there is a specific risk to the same extent as the principal has suffered property damage from an economic point of view. Therefore, the risk of actual property damage is sufficient to the extent that specific and practical danger has occurred, and it is insufficient to the extent that there is a vague possibility

[2] In a case where the defendant, the head of the bank branch of the bank Gap, issued a written guarantee of price payment for the goods in violation of his/her duties and caused damage to the bank Byung, thereby committing a violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Misappropriation of trust), the case holding that Byung erred by misapprehending the legal principles of the judgment below finding the defendant guilty on the premise that the defendant was guilty on the ground that, in light of the fact that the payment guarantee was not issued normally and that Eul did not supply the goods to the person who ordered the goods through Eul, and thus Eul did not bear any obligation to pay for the goods to Byung, even if the defendant paid the payment guarantee for the goods to be borne by Eul on behalf of the bank Byung, unless the defendant did not start a transaction with the company Eul, and the obligation to pay for the goods subject to the payment guarantee did not actually occur, so long as the payment guarantee obligation of the goods subject to the payment guarantee itself does not actually occur, it cannot be deemed that the bank Gap, the guarantor of the company Eul, suffered the same risk from an economic perspective.

[1] Articles 355(2) and 356 of the Criminal Act / [2] Articles 355(2) and 356 of the Criminal Act; Article 3(1)2 of the former Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Amended by Act No. 11304, Feb. 10, 2012); Article 325 of the Criminal Procedure Act

[1] Supreme Court Decision 94Do1375 Decided November 21, 1995 (Gong1996Sang, 127), Supreme Court en banc Decision 2006Do4876 Decided June 19, 2008 (Gong2008Ha, 1181), Supreme Court Decision 2012Do10139 Decided November 29, 2012

Defendant 1 and one other

Defendants

Law Firm Pyeongan et al.

Seoul High Court Decision 2014No729, 982, 2690 decided April 23, 2015

The part of the lower judgment against Defendant 1 is reversed, and that part of the case is remanded to the Seoul High Court. Defendant 2’s appeal is dismissed.

The grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed).

1. Determination ex officio as to Defendant 1’s violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Misappropriation)

A. The summary of this part of the facts charged is as follows: “Defendant 1 is the head of the △△△△△△△ branch of the ○ bank and is engaged in the overall management and administration of the above branch. In order to issue the goods payment guarantee in the ○○ bank, the applicant’s credit rating who wants to be issued by the head of the ○○ bank, entered it in the computer, and obtained approval from the head of the ○○ Bank after obtaining approval from the head of the △△△△△△△△△△△△△ branch of the △△△△△△△△△△△△△△ branch of the △△△△△△△ branch of the △△△△△△△△△ branch of the △△△△△△△ branch.” However, around October 20, 201, in violation of the above occupational duties, he prepared the ○○△△△△△△△ branch’s performance guarantee letter, thereby obtaining the 1 billion won security interest from Nonindicted 3 agents, who are the business partners of the 1 corporation.”

B. In full view of the circumstances stated in its reasoning, the lower court recognized that Defendant 1 caused property damage equivalent to KRW 1 billion to ○○ Bank by delivering a payment guarantee letter that Defendant 1 received from Co-Defendant 5 of the lower judgment to Nonindicted 3, and convicted Defendant 1 of this part of the charges, and based on the premise that Defendant 4, a benefiting person, acquired property profit equivalent to KRW 1 billion due to Defendant 1’s breach of trust, the lower court calculated this portion of the charges as a violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Misappropriation of Trust).

C. Examining the reasoning of the lower judgment in light of the evidence duly admitted, the lower court’s determination that recognized Defendant 1’s payment guarantee to Nonindicted 3 as stated in this part of the facts charged is justifiable. In so doing, contrary to what is alleged in the grounds of appeal, it did not err by exceeding the bounds of the principle of free evaluation of evidence against logical and empirical rules. However, the lower court’s determination that Defendant 1 caused property damage equivalent to KRW 1 billion to ○○ Bank on the following grounds is difficult to accept.

(1) The crime of occupational breach of trust is established when a person in charge of another's business commits an act in violation of one's duty and obtains or causes a third party obtain economic benefits from such an act in violation of one's duty, thereby causing property damage to the principal. Here, property damage includes not only a real damage but also a case where a risk of actual property damage is caused, and the determination of whether property damage has occurred should be based on legal judgment, but also on economic perspective (see, e.g., Supreme Court Decision 94Do1375, Nov. 21, 1995). However, the risk of actual property damage, which can be assessed as having occurred, means a case where there is a specific risk to the extent that the principal's damage has occurred from an economic perspective, as it is insufficient to say that there is a sufficient risk to cause property damage to the principal, and from an economic perspective (see, e.g., Supreme Court en banc Decision 2006Do4876, Jun. 19, 2008).

(2) According to the records, on October 20, 201, Nonindicted 3, an agent of Nonindicted Co. 2’s business division, delivered a written payment guarantee issued in the name of the head of ○○○ Bank’s △△△ branch office, which was the actual manager of Nonindicted Co. 1, at ○○ Bank’s △△△ branch office, with Defendant 1, at that place, and Defendant 1 did not have any obligation to supply petroleum to Nonindicted Co. 1, who had been issued a normal payment guarantee from Nonindicted Co. 1, 201. The management department of Nonindicted Co. 2 confirmed that Nonindicted Co. 3 had been issued a payment guarantee in the name of the head of △△△△ branch office, which was “from October 20, 201 to October 19, 201,” and that Nonindicted Co. 3 did not have any obligation to supply petroleum to Nonindicted Co. 15 through the order for petroleum payment.

(3) Examining the above facts in light of the legal principles as seen earlier, even if Defendant 1 guaranteed the payment of the price for the goods to be borne by Nonindicted Co. 1 on behalf of the victim ○○ Bank against Nonindicted Co. 2, as seen above, insofar as Nonindicted Co. 2 did not commence transactions with Nonindicted Co. 1, and accordingly, the obligation to pay the price for the goods subject to the payment guarantee did not occur, it cannot be deemed that the victim ○ Bank, which is the guarantor, caused a specific risk to the same extent as the damage was incurred from an economic perspective. Thus, the above Defendant cannot be punished as a violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Misappropriation).

Nevertheless, the lower court convicted Defendant 1 of violating the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Misappropriation) on the premise that there was a risk of specific damages worth KRW 1 billion in the victim ○○ Bank. In so doing, the lower court erred by misapprehending the legal doctrine on damages incurred in occupational breach of trust, thereby adversely affecting the conclusion of the judgment.

2. Judgment on Defendant 1’s grounds of appeal

Examining the reasoning of the judgment below in light of the evidence duly admitted, the court below is just in holding that the court below convicted Defendant 1 of all the charges except the facts charged in violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Misappropriation of trust) and the facts charged in violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Misappropriation of trust) and the facts charged in violation of the Act on Oct. 20, 201. Contrary to the allegations in the grounds of appeal, the court below did not err by exceeding the bounds of the principle of free evaluation of evidence in violation

3. Judgment on Defendant 2’s grounds of appeal

Examining the reasoning of the lower judgment in light of the evidence duly admitted, the lower court is justifiable to have determined that Defendant 2 was guilty of all the remaining charges except for the fraud of the victim Nonindicted 6 and Nonindicted 7, who was separated and finalized by the lower court, among the facts charged in the instant case against Defendant 2, based on its stated reasoning. 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 in violation of logical and empirical rules, or by misapprehending

4. Conclusion

As seen above, among the judgment below, the part on the violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Misappropriation) against Defendant 1 should be reversed, and since the above reversed part and the remaining part which the court below found Defendant guilty are concurrent crimes under the former part of Article 37 of the Criminal Act, the judgment of the court below against Defendant 1 should be reversed in its entirety.

Therefore, the part of the lower judgment against Defendant 1 is reversed, and that part of the case is remanded to the lower court for further proceedings consistent with this Opinion. Defendant 2’s appeal is dismissed. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Park Sang-ok (Presiding Justice)