[1] Meaning of “illegal acquisition intent” in the crime of embezzlement, and in a case where a person who keeps another’s property disposes of the property for the benefit of the owner, whether the intent of unlawful acquisition can be recognized (negative in principle)

[2] In a case where the defendant who was employed as the head of the apartment management office Gap's apartment, was prosecuted for embezzlement by arbitrarily consuming miscellaneous income for the purpose of using some of miscellaneous income in collusion with the president of the council of occupants' representatives and the president of the female council, etc. as the activity expenses, and instead using such miscellaneous income for the purpose of business, the case holding that the court below erred in the misapprehension of legal principles, etc. which recognized that the defendant had an intention to illegally obtain miscellaneous income solely on the ground that

[1] Article 35 (1) of the Criminal Code, Articles 307 and 308 of the Criminal Procedure Act / [2] Article 355 (1) of the Criminal Code, Articles 307 and 308 of the Criminal Procedure Act

[1] Supreme Court Decision 81Do3009 delivered on March 9, 1982 (Gong1982, 451) Supreme Court Decision 94Do98 delivered on September 9, 1994 (Gong1994Ha, 2679)

Defendant

Defendant

Incheon District Court Decision 2015No3239 Decided November 20, 2015

The judgment below is reversed, and the case is remanded to the Incheon District Court.

The grounds of appeal are examined.

1. As to fraud

Examining the reasoning of the lower judgment in light of the evidence duly admitted by the first instance court, the lower court was justifiable to have determined that this part of the facts charged was guilty on the grounds indicated in its reasoning. In so doing, it did not err by exceeding the bounds of the principle of free evaluation of evidence in violation of logical and empirical rules

2. As to occupational embezzlement

A. In the crime of embezzlement, the intent of unlawful acquisition refers to the intent of the custodian of another’s property to dispose of the property as if it were in fact or by law without authority for one’s own or a third party’s own interest, contrary to the purport of the commission. Thus, in a case where the custodian disposes of it for the benefit of the owner, not for his own or a third party’s interest, barring any special circumstance, the custodian cannot be recognized (see Supreme Court Decision 81Do3009, Mar. 9, 1982, etc.).

In a case where the above intent of unlawful acquisition is denied by the Defendant’s internal deliberation intent, the facts constituting such subjective elements have to be proved by means of proving indirect facts or circumstantial facts that have considerable relevance to the intent of acquisition in light of the nature of things (see, e.g., Supreme Court Decision 2007Do5899, Jun. 24, 2010). The prosecutor bears the burden of proving the existence of embezzlement as an act of realizing the intent of unlawful acquisition. The proof ought to be based on strict evidence with probative value that leads to a judge’s conviction to the extent that there is no reasonable doubt. If there is no such evidence, even if there is suspicion of guilt against the Defendant, it is inevitable to determine the benefit of the Defendant (see, e.g., Supreme Court Decision 94Do998, Sept. 9, 1994).

B. The summary of the facts charged in this case is that the Defendant, who was working as the head of △△△△△ apartment located in Gyeyang-gu, Incheon (hereinafter “instant apartment”) in collusion with the president and the female president, etc. of the council of occupants’ representatives, used the total of KRW 64,476,510 in the apartment miscellaneous income stored in business as the activity expenses of women’s association, and embezzled the miscellaneous income, the use of which was determined for the purpose of which was arbitrarily consumed and embezzled without following the procedures stipulated in the management rules.

C. As to this, the lower court found the Defendant guilty of the charge on the ground that the Defendant’s act of cooperating in using the remaining balance after disposing of miscellaneous income as the reserve fund in accordance with the management rules, etc. as the long-term repair appropriations, in violation of the procedures prescribed by the management rules, other than the prescribed purposes, was realizing the intent of unlawful acquisition.

D. However, examining the following circumstances in light of the legal principles as seen earlier, it is difficult to accept the lower court’s determination that the Defendant had an intent to obtain unlawful acquisition solely on the ground that the Defendant cooperationed in spending miscellaneous income for the aforementioned purposes.

1) Article 43(7)2 and 3 of the former Housing Act (amended by Act No. 12115, Dec. 24, 2013) which was in force at the time of the instant case stipulated that “the matters necessary for the formation, operation, and matters to be resolved by the council of occupants’ representatives and the affairs of the management entity shall be prescribed by Presidential Decree.” Articles 51(1)2, 2-4, and 8-2 of the former Enforcement Decree of the Housing Act (amended by Presidential Decree No. 24307, Jan. 9, 2013), which was in force at the time of the instant case, provide that “The council of occupants’ representatives may pass a resolution on matters concerning the approval of budget and settlement of accounts with the consent of a majority of its members, activation of community life, and maintenance of order.” Article 5(2)5(2) of the Enforcement Decree of the same Act (amended by Presidential Decree No. 25320, Apr. 24, 2014) provides that “the monthly revenues and welfare facilities shall be managed and kept account books.”

2) Article 59(2) of the instant Management Rules amended on November 6, 2010 (hereinafter “the instant Management Rules”) provides that “The net income accrued from miscellaneous income under Article 55(2) of the Enforcement Decree of the instant apartment shall be disposed of as reserve funds within the scope of 2/100 of the total budget for the pertinent year’s management expenses in order to appropriate for the expenditure of insufficient management expenses, and the balance shall be accumulated as reserve funds.” In order to revitalize the community, Article 3 subparag. 7 of the instant Management Rules provides that “In accordance with the resolution of the council of occupants’ representatives, a self-employed organization may subsidize expenses incurred in its business, etc. under Article 3 subparag. 7 of the instant Management Rules, and such expenses shall be disclosed on the Internet homepage or bulletin board of the instant apartment.” Article 59(3) provides that “When the management body intends to spend reserve funds, it shall prepare the items, reasons for and amount of the management expenses, and obtain a resolution of the council of occupants

3) The council of occupants' representatives of the apartment of this case decided to the effect that all the matters concerning the management and disbursement of revenues from the operation of dailyter, sales of recycled products, advertising fees, etc. (hereinafter "the instant miscellaneous revenues") to the instant female council at the beginning of each year or at the end of each year (hereinafter "the instant female council"), and deliberated on and decided on the draft settlement of accounts at the end of each year.

4) The instant council of occupants’ representatives opened a passbook in the name of the council of occupants’ representatives to manage the instant miscellaneous income, used the official seal of the president of the council of occupants’ representatives and the president of the women’s association with transaction seal, and kept the passbook in custody to the accounting staff of the management office. The instant female council, through the above accounting staff, prepared a written resolution of disbursement, received the interim resolution of the president of the female council and the final resolution of the president of the council of occupants’ representatives, and withdrawn the instant miscellaneous income. The Defendant was excluded from the above written approval, and the miscellaneous income was executed without the resolution of the council of occupants

5) The Women’s Association of this case executed the instant miscellaneous income classified into fixed expenditure (collection expenses of expense costs, support for the elderly association, etc.), other expenses (purchase futures purchase expenses for the instant council of occupants’ representatives and women’s associations, senior citizens’ associations, heads of Tongs’ associations, security guards, etc.), and the items of reserve fund (as for the instant association of occupants’ representatives and women’s associations, women’s association of senior citizens’ associations, heads of Tongs’ associations, and security guards, etc.), and the organization belonging to apartment.

6) In accordance with the former Enforcement Decree of the Housing Act amended on July 6, 2010, the Defendant continuously asserted that the execution subject of reserve funds should not be a female association but be the Defendant, the managing body, and that the official seal of the female president should be changed to the official seal of the managing body, among the transaction seal of the head of the instant miscellaneous revenue management passbook. Of the transaction seal of the head of the instant miscellaneous revenue management passbook, the official seal of the head of the female president was changed to the official seal of the managing office around January 2013.

7) In principle, the balance remaining after treating the instant miscellaneous income as the reserve fund is to be accumulated as the long-term repair appropriations, but it could have been used for supporting the business of a self-employed organization for community activation. The instant boys appears to be a self-employed organization stipulated in the instant management rules, and there is room to deem that the instant miscellaneous income was used for the purpose belonging to the scope of business or was paid for the overall interests of the occupants of the instant apartment as permitted by the instant management rules. Furthermore, prior to the annual and annual disbursement of the instant miscellaneous income, the instant boys’s association obtained a resolution to comprehensively approve the expenditure from the council of occupants’ representatives at the end of the year, and obtained the annual settlement approval, and opened the details at the end of each month after the execution of the miscellaneous income, and thus, it cannot be concluded that the Defendant has agreed to the execution of the instant miscellaneous income with the belief of the resolution of the council of occupants’ representatives and the execution of the instant miscellaneous income.

E. Therefore, the lower court should have deliberated on whether the instant miscellaneous income was used against its intended purpose, if used for any other purpose, and whether the Defendant intended to acquire unlawful profits. Nevertheless, the lower court erred by misapprehending the legal doctrine on the intent of unlawful acquisition of occupational embezzlement, or failing to exhaust all necessary deliberations, thereby adversely affecting the conclusion of the judgment, in mind, in view of the aforementioned various circumstances. The allegation in the grounds of appeal assigning this error is with merit (i.e., whether the instant miscellaneous income falls under a self-employed organization prescribed in the instant management rules, and whether the place of using the miscellaneous income falls under the scope of the instant miscellaneous business, and (ii) the lower court should examine the entire management rules of the instant case and the rules of the instant boys, etc.

3. Scope of reversal

Of the facts charged in this case, there are grounds for reversal as seen earlier, and since the remaining convictions and the remaining convictions are concurrent crimes under the former part of Article 37 of the Criminal Act, the judgment of the court below shall be reversed in its entirety.

4. Conclusion

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 on the bench.

Justices Kwon Soon-il (Presiding Justice)