[1] Whether a non-corporate association has the substance of an association in a case where “girs association” is not established as a subordinate organization or subsidiary organization of the council of occupants’ representatives based on relevant laws and regulations or the management rules of apartments, but is not established as a subordinate organization or subsidiary organization of the council of occupants’ representatives. In a case where only the main body of the apartment is autonomously formed by the main body of the apartment and only the main body of the apartment residing in the apartment is members, and is engaged in volunteer activities or profit-making activities for the occupants in the apartment complex, etc., and is engaged in activities with social substance (affirmative)

[2] The meaning of "miscellaneous income" as stipulated in the Enforcement Decree of the Housing Act and the Rules on the Management of Apartments, and whether it is included in the item of miscellaneous income only for the income attributable to all occupants among the income generated from the use and operation of facilities in multi-family housing complexes

[1] Article 35(1) of the Criminal Act, Article 275 of the Civil Act / [2] Article 355(1) of the Criminal Act, Article 55(2) of the former Enforcement Decree of the Housing Act (Amended by Presidential Decree No. 25320, Apr. 24, 2014) (see current Article 23(8) of the Enforcement Decree of the Multi-Family Housing Management Act), Article 55-4(1)1(b) of the former Enforcement Decree of the Housing Act (Amended by Presidential Decree No. 27444, Aug. 11, 2016) (see current Article 23(8) of the Enforcement Decree of the Multi-Family Housing Management Act)

[2] Constitutional Court en banc Order 2018Hun-Ma426 Decided April 23, 2020 (HunGong283, 694)

Defendant

Defendant

Law Firm Cheongn Law, Attorney Oh Jeong-hwa

Busan District Court Decision 2017No439 Decided August 11, 2017

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

The grounds of appeal are examined.

1. Summary of the facts charged in this case

The summary of the instant facts charged is as follows.

A. The Defendant was a person who had been in charge of the duties of the president of the instant apartment group in the Dong-gu, Busan from around 1997 to December 2, 2014.

According to the Housing Act, the Enforcement Decree of the Housing Act, and the management rules of the apartment in this case, apartment miscellaneous income shall be disposed of within 2/100 of the total budget of the management expenses for the relevant year as reserve funds, and the remaining balance shall be accumulated as long-term repair appropriations, and the head of the management office, etc. who is the management entity, shall be managed by the head of the management office, etc., and the Women's Association shall not participate in the execution of the budget, such as

Nevertheless, the Defendant, at the above apartment girls association, embezzled the apartment miscellaneous revenues, such as “expenses for disposal of recycled products, premium for rent, advertising revenue in bulletin boards, and profit from the home conference,” by using them for the purpose of operating expenses of the women’s association. From December 7, 2010 to December 29, 2014, the Defendant embezzled the apartment miscellaneous revenues, which were kept in custody for the victims of the above apartment 71,674,130 won (hereinafter “miscellaneous revenues in this case”) by arbitrarily consuming them for the total amount of 68 times from December 7, 2010 to December 29, 2014.

B. At the time when the Defendant was in office as the president of the Women’s Association, Nonindicted 1, a general secretary of the Women’s Association, was accused of a criminal trial in relation to the case in which he was accused of insult and defamation of himself. The chairman of the instant apartment management committee, on the ground that he concurrently held office as a female member and the representative of the apartment, went into the procedure of filing an application for provisional disposition against special election prohibition in order to lose the Defendant’s representative qualification and prevent any defect in conducting a special election. On January 2015, the Defendant conspired with Nonindicted 2, 3, and female members who were appointed to act as the president of the instant apartment management committee on behalf of the chairman of the Women’s Association, following the Defendant around January 2015.

On June 26, 2015, the Defendant: (a) transferred KRW 6,50,00 to the bank account in the name of the Defendant for the purpose of the attorney’s fees, etc. around July 27, 2015; and (b) then embezzled KRW 2,336,30,00 from among female members kept in custody by Nonindicted 2, 336, and the aforementioned apartment members for the victim’s apartment residents; and (c) around July 27, 2015, under the name of the attorney’s expenses related to the foregoing defamation case; and (d) transferred KRW 6,50,000 to the bank account in the name of the Defendant; and (d) thereafter, he arbitrarily consumed it for the purpose of the attorney’s fees.

Accordingly, the Defendant embezzled KRW 8,836,30 (hereinafter “instant female membership fee”) in collusion with Nonindicted 2, Nonindicted 3, and female members in custody for the victim.

2. The judgment of the court below

For the reasons indicated in its holding, the lower court found the Defendant guilty of all the charges of this case on the ground that ① the instant miscellaneous income constitutes miscellaneous income prescribed by the Enforcement Decree of the Housing Act and the Rules on the Management of Apartments of this case, and this constitutes the Defendant’s status as custodian for miscellaneous income as a whole owned by all of the occupants, and ② the instant boys’s membership fees are also deemed as the ownership of all of the occupants, and the status as custodian

3. Judgment of the Supreme Court

However, the lower court’s determination is difficult to accept for the following reasons.

A. Relevant legal principles

(1) Women’s association is not established as a subordinate organization or subsidiary organization of the council of occupants’ representatives based on relevant laws and regulations or management rules, but is not established as a subordinate organization or subsidiary organization of the council of occupants’ representatives. If a female association acts with a social substance as an organization, such as the association’s rules and officers, and volunteer activities or profit-making activities for the occupants in an apartment, etc., in which it is established, the association shall have the substance of an association which is not a juristic person. In this case, the female association is a self-employed local government with a legal status independent of the council of occupants’ representatives, and the council of occupants’ representatives supports its autonomous formation, it does not change merely

(2) Article 55(2) of the former Enforcement Decree of the Housing Act (amended by Presidential Decree No. 25320, Apr. 24, 2014; hereinafter the same) (amended by Presidential Decree No. 25320, Apr. 24, 2014; hereinafter the same) which was enforced at the time the Defendant’s act indicated in the facts charged in the instant case stated in the following: “Revenue arising from the management of multi-family housing, such as deposit interest, late payment revenue, and fees for use of ancillary facilities and welfare facilities, of a financial institution,” provides that “Revenue arising from the management of multi-family housing, such as revenues from the sale of recycled products, welfare facilities, etc., from among the matters that the management entity of multi-family housing selects and executes,” as miscellaneous revenue.

Such miscellaneous income is generated when the management entity manages multi-family housing, and such income should be attributed to all occupants. Thus, all incomes generated from the use and operation of facilities in a multi-family housing complex cannot be deemed to be included in miscellaneous income items prescribed by the Enforcement Decree of the Housing Act and the instant apartment management rules (see Constitutional Court en banc Order 2018Hun-Ma426, Apr. 23, 2020), and it should be deemed that it is included in miscellaneous income items only in miscellaneous income attributable to all occupants among the revenues generated from the use and operation of facilities in a multi-family housing complex.

B. Examining the reasoning and record of the lower judgment, the following facts are revealed.

(1) Around November 1, 1983, the apartment of this case was completed and occupied, and the council of occupants' representatives was also established around that time.

(2) The Women’s Association of the instant apartment was established around 1984 by the birth of some of the residents of the instant apartment group to engage in volunteer activities for the occupants. Around November 2005, 13 of the occupants were members of the apartment group, and it was enacted by the following provisions: one chairperson, two vice-chairpersons, one general secretary, and one auditor as executive officers.

(3) From around 1997 to December 2, 2014, the Defendant had been working as the president of the Women’s Association of the instant apartment complex from around 1997 to around 12, 2014. During the said period, the Women’s Association has continued to engage in the disposal and sale of recycled products, the selection and contract of the tenant in the instant apartment complex, the management thereof, the orders for advertising in the bulletin board in the apartment complex and the management thereof, and the activities of holding a boom or a bridge

(4) The instant female association has voluntarily disbursed the income acquired from the above collective housing management activities, such as the elderly care expenses for the occupants, the support expenses for the cyber universities, and scholarships. The council of occupants’ representatives has accepted such expenses without any objection as to the aforementioned activities and financial management of the female council.

(5) The management rules of the instant apartment (established on December 2004) did not stipulate the provisions on the establishment of and support for the Women’s Association, and only stipulated that “standards for the operation of the Women’s Association related to the management of multi-family housing” was the resolution of the council of occupants’ representatives (Article 23 subparag. 10 of the instant apartment management rules, enacted on December 2004).

(6) Article 60(2) of the Management Rules of the instant apartment (amended on November 30, 2010 and enforced at the time of the act indicated in paragraph (1) of the instant facts charged) provides that “The net income accrued from miscellaneous income under Article 55(2) of the former Enforcement Decree of the Housing Act shall be disposed of as reserve funds within the scope of 2/100 of the total amount of the management expenses in the relevant year in order to appropriate the insufficient budget for the expenditure of management expenses under Article 58(1) of the Decree, and the remaining balance shall be accumulated as reserves for long-term repair.”

C. Examining the above facts in accordance with the legal principles as seen earlier, the following is determined.

(1) From November 2005, when the instant female association was established at least and organized, and continued its social activities, the instant female association had the substance of an unincorporated association independent of the council of occupants’ representatives. Accordingly, the female association collected from female members, who are its members, is the collective property of female members.

(2) In addition, the instant management rules did not stipulate that the income derived from the management activities of female collective housing belongs to the revenue of the council of occupants' representatives, and there was no agreement between female council and the council of occupants' representatives on the reversion of the income to the council of occupants' representatives, barring special circumstances, the instant miscellaneous income arising from the management activities of female collective housing belongs to the collective ownership of female members, regardless of whether such management activities are legitimate, unless there are special circumstances. The instant miscellaneous income, which is the collective ownership property of female members, is deemed to belong to the council of occupants' representatives, as stipulated by the Enforcement Decree of the Housing Act.

D. Nevertheless, on the premise that the instant female membership fee and the instant miscellaneous income belong to the council of occupants' representatives or collectively owned by all the occupants, the lower court found the Defendant guilty of all the facts charged in the instant case on the ground that the Defendant spent the instant female membership fee and the instant miscellaneous income for any purpose other than that prescribed by law, which is owned by others, for the purpose other than that prescribed by law, erred by misapprehending the legal doctrine on the requirements for establishment of an association which is not a legal entity, the ownership of the income accrued from the management of the female membership fee and the income

4. Conclusion

Therefore, without further proceeding to decide on the remainder of the grounds of appeal, 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

Justices Min You-sook (Presiding Justice)