[1] Requirements for the establishment of a crime of taking property in breach of trust under Article 357 (1) of the former Criminal Code / Where a person who administers another person's business obtains property or property gains from another person, not by himself/herself, in exchange for an illegal solicitation as to his/her duties, such crime

[2] In a case where the Defendant, who has overall control over the selection business of the department stores and the duty-free shops, received money from the shop occupants in return for the solicitation of requesting the convenience of the shop occupants, such as additional shop occupants or moving to the store, and was prosecuted as a violation of trust under the former Criminal Act, the case holding that the lower court erred by misapprehending the legal doctrine, even though the Defendant’s instruction should be deemed as having received money from the shop occupants, and the amount deposited into the Defendant’s account under the Defendant’s control, which was the same as that of the Defendant

[1] The crime of taking property in breach of trust under Article 357(1) of the former Criminal Act (amended by Act No. 14178, May 29, 2016) is established when a person who administers another’s business obtains property or pecuniary benefits in return for an unlawful solicitation in connection with his/her duties. Whether the principal agent of taking property or pecuniary benefits has acquired property or pecuniary benefits is a normative assessment of facts recognized by evidence. Where a person who administers another’s business has obtained property or pecuniary benefits from another person, not the principal, in exchange for an unlawful solicitation in connection with his/her duties, it may be evaluated as being socially accepted by social norms.

In addition, even if another person acquires property or property benefits, if such other person acquires property or property benefits as a private person or representative of the person who received an unlawful solicitation, or if such other person bears the living expenses, etc. of the other person, or bears the liability to the other person, if the other person is in a relationship that can be assessed as being directly received by the person who received the illegal solicitation, such as where the other person receives the property or property benefits and where he/she is exempted from the disbursement, etc., by social norms, such as where the other person is in a relationship that can be assessed as being directly received by the person who received the illegal solicitation.

[2] In a case where the Defendant, who has overall control over the business of selecting shop occupants at the department stores and duty-free shops, received money from the shop occupants in return for a solicitation to request the convenience of shop occupants, such as additional shop occupants or moving to stores, and was indicted for misappropriation under the former Criminal Act (amended by Act No. 14178, May 29, 2016), the case holding that the lower court erred by misapprehending the legal principles as to the meaning of “the person who acquired property or profits from property” in the crime of misappropriation, where the Defendant received an unjust solicitation from the shop occupants’ representative, and ordered her husband to give the proceeds he received in return, shall be deemed as having acquired the proceeds, and as long as the Defendant received an unjust solicitation from the representative director Byung Co., Ltd., Ltd., the shop occupants, and had the Defendant deposit the proceeds to her own account under his control, the lower court acquitted the Defendant of this part of the charges on the grounds that it did not err in the misapprehension of the legal doctrine as to “the person who acquired property or profits from property.”

[1] Article 357(1) of the former Criminal Act (Amended by Act No. 14178, May 29, 2016) / [2] Article 357(1) of the former Criminal Act (Amended by Act No. 14178, May 29, 2016)

[1] Supreme Court Decision 2004Do2581 Decided December 22, 2006 (Gong2007Sang, 245) Supreme Court Decision 2008Do1321 Decided March 12, 2009 (Gong2009Sang, 506)

Defendant

Defendant and Prosecutor

Law Firm Gyeong, Attorneys Kang Sung-soo et al.

Seoul High Court Decision 2017No437 decided July 19, 2017

The guilty part of the judgment of the court below and the part of the violation of trust against Nonindicted Co. 2 through Nonindicted Co. 1 is reversed, and this part of the case is remanded to the Seoul High Court. The prosecutor's remaining appeal is dismissed.

The grounds of appeal are examined.

1. As to the grounds of appeal on the crime of taking property in breach of trust relating to the salesroom occupants

A. Summary of the facts charged

While the Defendant, while working as the president and the vice president of Nonindicted Co. 3, while taking overall charge of the business of selecting the shop occupants of the ○○ department store, he was promised to pay the profits of the △△△△△△△△ store, in response to Nonindicted Co. 4’s solicitation for requesting the convenience related to the shop occupants, such as having the store store located in the ○ department store, which was the △△△△△△ branch, which was the ○ branch of the ○○ department store, added to the ○○ department store, and having the existing contract renewal of the contract on the △△△△△ branch store, and continued to receive the same solicitation from Nonindicted 4 on April 2008, and received the promise to pay the profits of the △△△△△△ branch and the △△ branch store located in the △△

Accordingly, from February 2007 to May 2016, the Defendant received KRW 62,30,010,000 in total from Nonindicted 4, KRW 53,660,00,00 in the manner of directly collecting the proceeds from the store in △△ branch once every month from February 2007 to May 201, either directly or through Nonindicted 5, as indicated in the list of crimes, and KRW 62,30,000 in total from April 2008 to May 2016, the Defendant received KRW 5,366,00 in the manner of directly collecting the proceeds from the store in △△ branch in Seoul Special Metropolitan City, from April 2008, to May 2016. Accordingly, the Defendant received KRW 1,15,670,00 in exchange for illegal solicitation as a person who is in charge of another’s business affairs.

B. The judgment of the court below

(1) Nos. 1 to 8 of the list of crimes and 2 of the list of crimes

The lower court found the Defendant guilty of this part of the facts charged directly by Nonindicted 4 as in the first instance judgment. The lower court determined that the Defendant received the △△△△△△△△ from Nonindicted 4 on February 207, 207. In addition, the lower court rejected the Defendant’s defense suit against Nonindicted 6, a general chairperson of the ○○ Group, that the Defendant obtained the ownership or operating right from the △△△△△△△△△△△△△△△△△△△△△△△△△△△, and Nonindicted 4 was merely an entrusted person, and that Nonindicted 4 was merely an entrusted person, and that the Defendant’s receipt of such a profit is not a crime of breach of trust. However, the lower court found the Defendant guilty on the grounds that the evidence submitted by the prosecutor alone is insufficient to acknowledge that the amount received from Nonindicted 4 is the same as that indicated in the facts charged.

(2) Part 1 Nos. 9 through 57 of the crime sight table

The lower court upheld the judgment of the first instance that acquitted the Defendant on this part of the facts charged as charged through Nonindicted 5, who is his wife. In light of the following circumstances, the lower court determined that it is difficult to recognize that the Defendant had received Nonindicted 5 as having received the same economic interest. In other words, ① Nonindicted 5 is married to make a family, and the Defendant is living independently from the Defendant. ② Nonindicted 5 and her husband are gaining considerable income through their economic activities; ② Nonindicted 5 and her husband have considerable property in addition to the property received by their respective acts related to this part of the facts charged. ③ There is no evidence that the aforementioned formation of property was entirely carried out by the Defendant without Nonindicted 5 and her husband’s efforts.

C. Judgment on the Defendant’s grounds of appeal related to the above B. (1)

The allegation in the grounds of appeal in this part is purporting to dispute the fact-finding that led to the lower court’s determination, and is merely an error of the lower court’s determination as to the choice of evidence and probative value, which belong to the full power of the fact-finding court. In light of the evidence duly admitted, the lower court did not err by misapprehending the legal doctrine regarding the principle of trial on evidence and the credibility of evidence statements, or exceeding the bounds of the principle of free evaluation of evidence

D. Judgment on the Prosecutor’s grounds of appeal related to B. (2)

(1) The crime of taking property in breach of trust under Article 357(1) of the former Criminal Act (amended by Act No. 14178, May 29, 2016) is established when a person who administers another’s business obtains property or pecuniary benefits in return for an unlawful solicitation in connection with his/her duties. Whether the principal agent of taking property or pecuniary benefits has acquired property or pecuniary benefits is a normative assessment of facts recognized by evidence. Where a person who administers another’s business obtains property or pecuniary benefits in return for an unlawful solicitation in relation to his/her duties, a person who administers another’s business may be deemed to have received property or pecuniary benefits in accordance with social norms,

In addition, even if another person acquires property or property benefits, if the other person acquires property or property benefits as the private person or representative of the person who received the illegal solicitation, or if the person who received the illegal solicitation bears the living expenses, etc. of the other person, or bears the obligation to the other person, the above crime may be established (see Supreme Court Decision 2004Do2581, Dec. 22, 2006, etc.).

(2) The reasoning of the lower judgment and the evidence duly admitted by the lower court reveal the following facts in light of the reasoning of the lower judgment. ① In order to make money to the Defendant easily, Nonindicted 4 changed the name of the store in the name of an individual (private) from the date of sale to January 2, 2007, which was operated in the name of the individual (private) and then transferred the proceeds directly to the Defendant in cash from February 2, 2007 to December 2007. ② Nonindicted 4 was demanded from the Defendant around early 2008, “Nonindicted 5 The Republic of Korea War Program is the same as that of Nonindicted 5’s daily living cost,” and, at this time, the Defendant changed the proceeds to Nonindicted 5 in cash from May 2016 until May 2016. ③ Nonindicted 10, which was established in the name of Nonindicted 8, which was practically controlled and operated by himself, and, thus, did not have been registered as the executive officer of Nonindicted 1 corporation (private Property 10) and paid the proceeds to the Defendant 15.

Examining the process and name of receiving earnings that can be known from the above facts in light of the legal principles as seen earlier, the Defendant, Nonindicted 4’s intention, and the Defendant and Nonindicted 5’s family relationship, etc., if the Defendant instructed Nonindicted 4, who was his wife, to give the earnings he received from Nonindicted 4, to Nonindicted 5, it is reasonable to evaluate that the Defendant’s acquisition of earnings would be the same as the Defendant’s acquisition. The circumstances cited by the lower judgment, namely, the circumstances cited by the lower court, namely, Nonindicted 5’s establishment of an independent family by marriage or possession of considerable assets in the name of his woman, other than the assets received from the instant facts charged, do not change such

(3) Nevertheless, the lower court rendered a not-guilty verdict on the facts charged above (b) (2) solely based on its stated reasoning. In so doing, the lower court erred by misapprehending the legal doctrine on the meaning of “a person who acquired property or pecuniary advantage” in the crime of taking property in breach of trust, thereby adversely affecting the conclusion of the judgment. The Prosecutor’s ground of appeal

2. As to the ground of appeal on the crime of taking property in breach of trust relating to ○○ duty-free shop occupants

A. Summary of the facts charged

(1) On October 2012, the Defendant requested Nonindicted Co. 2 Co., Ltd. (hereinafter “Nonindicted Co. 2”) (hereinafter “Nonindicted Co. 2”)’s representative director, Nonindicted Co. 11, who is the head office of the ○○ duty-free shop through Nonindicted Co. 10 (hereinafter “Nonindicted Co. 2”), to transfer the cosmetics store to the front place at the ○○ duty-free shop. Around that time, the Defendant instructed Nonindicted Co. 12 of the head office of the duty-free shop to direct the head office Nonindicted Co. 12, and changed the above store location to a place with good customer convenience and accessibility around November 30, 2012. Nonindicted Co. 10 received KRW 62,358,50 from around January 30, 2013 to July 2014 in return for changing the store location from Nonindicted Co. 2’s office.

(2) In 2014, the Defendant directed Nonindicted Company 1’s representative director of Nonindicted Company 1, who was receiving Nonindicted Company 10 from Nonindicted Company 9, to receive the payment directly from the said company in the future. Nonindicted Company 13 received Nonindicted Company 9’s order through Nonindicted Company 14, demanded that Nonindicted Company 11 “The Nonindicted Company 1 was the president of the Defendant, and the relationship between Nonindicted Company 10 and the chairperson of the Defendant was terminated.” From September 2014 to May 2016, the Defendant received money from Nonindicted Company 22 times in total by receiving KRW 847,672,232 from Nonindicted Company 1 through the account in the name of Nonindicted Company 1, and received KRW 847,672,232 in total, in collusion with Nonindicted Company 9 and received KRW 847,237,232 in return for an unlawful solicitation.

(3) The Defendant instructed Nonindicted 9 to receive the ○○ duty-free shop occupants even from other domestic cosmetics, etc., and Nonindicted 1’s head of Nonindicted Company 1 and the head of Nonindicted 15, etc., upon Nonindicted 1’s order, instructed Nonindicted 16 Co., Ltd. (hereinafter “Nonindicted 16”) who is a domestic cosmetics company to the effect that “to have the Defendant move to ○ duty-free shop occupants by the influence of the Defendant.” Accordingly, the Defendant received KRW 565,48,037 from Nonindicted Company 16 to May 2016 in return for the ○ duty-free shop occupants from May 2015 to May 2016, through the account in the name of Nonindicted Company 16, as indicated in the list of crimes, 14 times in total, as indicated in the list of crimes.

B. Judgment on the Prosecutor’s grounds of appeal related to paragraphs (1) and (3)

The lower court upheld the first instance judgment that acquitted the Defendant of this part of the facts charged. In order to find the Defendant guilty of this part of the facts charged, the lower court determined that: (a) the Defendant agreed with Nonindicted Company 2 to receive the fee from Nonindicted Company 10 in return for the change of the location at ○○ duty-free shop; (b) Nonindicted Company 1’s proof that the fee received from Nonindicted Company 16 was the price for illegal solicitation; and (c) the evidence submitted by the Prosecutor alone cannot be deemed to have been proven to the extent that there is no reasonable doubt as to this matter.

The allegation in the grounds of appeal is purporting to dispute the fact-finding that led to the lower court’s determination, and is merely an error of the lower court’s determination as to the choice of evidence and probative value, which belong to the full power of the fact-finding court. The lower court did not err by exceeding the bounds of the principle of free evaluation of evidence against logical

The Supreme Court precedents cited in the grounds of appeal are different from this case, and thus are inappropriate to be invoked in this case.

C. Judgment on the Prosecutor’s grounds of appeal related to the above 2. A. (2)

(1) In light of the following circumstances acknowledged by the evidence adopted and examined by the lower court, the lower court determined that the circumstance cited in the first instance judgment alone is insufficient to evaluate that Nonindicted Company 1 received money from Nonindicted Company 2 as the Defendant’s letter of intent or proxy, or that the Defendant was exempted from expenditure. Accordingly, the lower court reversed the first instance judgment convicting the Defendant of this part of the facts charged, and acquitted the part thereof.

① The shares of Nonindicted Company 1 are owned by both Nonindicted Company 8, the Defendant’s children, and the Defendant was not a shareholder or an executive officer of Nonindicted Company 1. The Defendant was paid the money received from Nonindicted Company 1. ② The money that Nonindicted Company 1 received from Nonindicted Company 2 was deposited into the Nonindicted Company 1’s account. It does not seem that the money deposited in the account was paid to the Defendant. ③ Nonindicted 8 was paid considerable wages and dividends as the shareholder of Nonindicted Company 1, and there is no circumstance that Nonindicted Company 8 was paid with considerable amount of wages and dividends from Nonindicted Company 1 to Nonindicted Company 1 after the money was deposited from Nonindicted Company 2, and there was an increase in the amount paid to Nonindicted Company 8. Therefore, it is difficult to view that the money deposited from Nonindicted Company 2 to Nonindicted Company 1 was paid to Nonindicted 8. Accordingly, it is difficult to deem that Nonindicted 8 was a payment of money deposited in the Nonindicted Company 1’s account. Nonindicted 8 has a considerable amount of property owned and received considerable benefits and dividends from Nonindicted Company 1, etc.

(2) However, according to the reasoning of the lower judgment, the first instance court, and the evidence duly admitted by the lower court, the following facts are revealed. ① The Defendant established Nonindicted Company 1 with the ASEAN as a director and a single shareholder; and the Defendant kept the passbook and seal of the account deposited with Nonindicted 8’s benefits and dividend in the depository of the said company’s office, and ordered the representative director to enter, withdraw, and use money in the said account to Nonindicted 9. ② The Defendant, through Nonindicted 9, etc., made a decision on important matters, such as all the financial matters, such as the payment of dividends and pay of Nonindicted Company 1, and other important business conditions. The employees of Nonindicted Company 1 externally publicized the Defendant as the Defendant, and, in the duty-free shop industry, recognized the Defendant as the actual operator of Nonindicted Company 1. ③ Nonindicted Company 1 was in charge of accounting of the money deposited by the Defendant at the Defendant’s order, or requested Nonindicted Company 1 to provide legal advice on the governance of the ○○ Group’s company.

Examining the above facts in light of the legal principles as seen earlier, Nonindicted Co. 1 may be aware that it is a de facto control of the Defendant established by the Defendant using the name of Nonindicted Co. 8, who is the child, so long as the Defendant received an unlawful solicitation and let the Defendant deposit money in the company’s account under his control in return, this ought to be the same as that of the Defendant’s own receipt by social norms. Considering the circumstances stated in the lower judgment in detail, this decision may not

(3) Nevertheless, the lower court rendered a not-guilty verdict on the aforementioned facts charged solely for the reasons indicated in its holding. In so determining, the lower court erred by misapprehending the legal doctrine on the meaning of “a person who acquires property or profits from property” in the crime of taking property in breach of trust, thereby adversely affecting the conclusion of the judgment. The Prosecutor’

3. Scope of reversal

Of the judgment of the court below, the part of the charge of taking property in breach of trust from Nonindicted Company 2 through Nonindicted Company 1 should be reversed for the reasons as seen earlier, among the charge of taking property in breach of trust related to ○○○ department store shop occupants, and the part of the charge of taking property in breach of trust from Nonindicted Company 2 through Nonindicted Company 1 should also be reversed for the same reason. Furthermore, the part of the judgment of the court below which found the guilty (including the part of the judgment of the not guilty in the grounds for appeal) should be reversed.

4. Conclusion

Therefore, without further proceeding to decide on the remainder of the grounds of appeal by the prosecutor, the guilty part of the judgment below and the part concerning the violation of trust by Nonindicted Company 2 through Nonindicted Company 1 are reversed, and this part of the case is remanded to the court below for further proceedings consistent with this Opinion. The prosecutor’s remainder of appeal is dismissed. It is so decided as per Disposition by the assent of all participating Justices

Justices Ko Young-han (Presiding Justice)