[1] In a case where, in recognition of the Defendant’s financial standing, the victim predicted or could have predicted the risk of future delay of repayment or impossibility of repayment, whether it can be readily concluded that the Defendant deceivings the victim about his ability to repayment or had the intent of fraud solely on the basis of the fact that the Defendant failed to fully repay (negative in principle)

[2] In a case where a corporate manager was able to recognize the possibility of nonperformance under the Bankruptcy Act but was believed to have a possibility of avoiding such a situation, and there was an intent to endeavor to perform a contract, whether it can be readily determined that there was an intention to commit a crime of fraud (negative)

[1] Article 347 of the Criminal Code / [2] Article 347 of the Criminal Code

[1] Supreme Court Decision 2012Do14516 Decided April 28, 2016 (Gong2016Sang, 714) / [2] Supreme Court Decision 2001Do202 Decided March 27, 2001

Defendant

Defendant

Law Firm Geon Law Firm, Attorneys Cho Han-chul et al.

Suwon District Court Decision 2015No3967 decided November 6, 2015

The judgment of the court below is reversed, and the case is remanded to Suwon District Court.

The grounds of appeal are examined.

1. The judgment of the court below

A. The summary of the facts charged in this case is as follows.

The defendant is the representative director of Samyang Construction Industry Co., Ltd. (hereinafter "the defendant company"), and the above company did not have an intent or ability to normally pay the price even if it receives steel products due to a shortage of operating funds. On November 27, 2011, the defendant falsely stated that, through Non-Indicted 1, the victim Non-Indicted 3 Co. 3, operated by Non-Indicted 2, "on the basis of the supply of steel products necessary for the construction of the outdoor parking lot at ○○ church, he would pay the material price after the completion of construction." Accordingly, the defendant was supplied with steel materials from around February 27, 201 to around February 27, 2012 from the victim, and acquired the same amount of financial profit by failing to pay 100,73,979 won out of the price.

B. The lower court found the Defendant guilty of the instant facts charged on the ground that Nonindicted 2 was unaware of the financial status of the Defendant Company at the time of the instant case, and that the Defendant Company anticipated to pay the material price to the victim company due to the construction cost received from the ○○ Association, and that it is difficult to obtain the payment of the material price ordinarily because it was anticipated that the material price would not be paid but that it would not be paid.

2. Judgment of the Supreme Court

A. If the victim, in recognition of the Defendant’s financial standing, anticipated or could have anticipated risks to delay repayment or impossibility of repayment, barring special circumstances, it is true that the Defendant made a false statement about important matters, such as the Defendant’s intent of repayment, ability to perform obligations, terms of transaction, etc., and thus, it cannot be readily concluded that there was an intent to commit fraud (see Supreme Court Decision 2012Do14516, Apr. 28, 2016). In addition, in the event of a transaction conducted in the course of carrying out the business, the risk of fraud against the relevant corporate manager is an predicted outcome of nonperformance, and thus, it is difficult to conclude that there was an intentional intent to commit a crime according to the outcome of the transaction that the corporate body was in a management status, and thus, it was foreseeable that the corporate manager might have been able to be able to be able to be able to be able to be able to be able to be able to be able to be able to be able to be able to be able to be able to be 201).

B. At the time of the instant case, the Defendant Company failed to receive the payment of the construction cost, and its management was not smooth. On May 31, 2012 after the instant case, the Defendant was subject to the disposition of suspending payment for lack of deposits in the statement of the par value of KRW 100 million issued by the Defendant Company. On July 13, 2012, a petition for bankruptcy was filed and the fact of having been declared bankrupt can be acknowledged. However, even if it is deemed that the possibility of bankruptcy could have been predicted at the time of the instant transaction, taking into account the following factors: (i) transaction relation with the Defendant and the victim; (ii) transaction relation with the Defendant at the time of the instant transaction; (iii) business execution status of the Defendant Company; (iv) conclusion and process of the contract; (iv) the victim’s occupation and experience; and (v) details of the crime, it is difficult to conclude

1) The victim supplied materials worth KRW 200 million to the Defendant Company prior to the instant case. The Defendant Company received a discount on the number of shares and bills issued or endorsed by the Defendant Company and received a normal repayment, as well as Nonindicted Party 1 leased a commencement of works to the Defendant Company through Nonindicted Party 1.

2) The Defendant Company entered into a construction contract with 2.2 billion won in capital established in around 1994, and 8 construction contracts with 2.2 billion won in the year of 2011. At the time of the instant case, 10 construction projects had been initiated and 201 won in total. The total amount of the sales tax invoice in 201 was KRW 980,000 in total.

3) Until February 27, 2012, Defendant Company received a supply of approximately KRW 150 million from the victim of steel and paid KRW 50 million out of the price to the victim in cash on March 14, 2012.

4) It does not seem that the defendant or non-indicted 1 made a false statement about the fact that the defendant or non-indicted 1 can decide whether to conduct a transaction, such as specific payment capacity and terms of transaction of the defendant company

C. Nevertheless, the judgment of the court below convicting the Defendant of the instant charges on the ground that the Defendant deceivings the victim and the Defendant had an intention in fraud, thereby adversely affecting the conclusion of the judgment by misapprehending the legal principles on deception and intention in fraud.

3. Conclusion

Therefore, 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 Park Poe-dae (Presiding Justice)