In a case where an obligor receives repayment from a third obligor with the intent to use by himself/herself without notifying the third obligor of the assignment of a claim after transferring another monetary claim to secure an existing monetary obligation, whether the obligor is in the position of keeping the above repayment money for the obligee under a trust relationship with the obligee (negative), and whether embezzlement is established if the obligor arbitrarily consumes it (negative)

Where an obligor transfers other monetary claims to a creditor in order to secure an existing monetary obligation, “the obligation to maintain and preserve the security value of the secured claim” to be borne by the obligor against the obligee is merely a content of the obligation borne by the obligor under the contract for security of an obligation.

In addition, an ordinary assignment contract is the principal contract whose contents are the transfer of the status of a creditor. The essential relationship between the parties is that the transferee acquires the status of the creditor and effectively obtains repayment of the claim from the debtor. However, a contract for the transfer of security for claims is a subordinate contract for the creation of the secured claim (e.g., a monetary loan contract) and a contract for the creation of the secured claim, and the above obligation borne by the debtor under a contract for the transfer of security for claims is merely to achieve the secured purpose, and the intrinsic and principal relationship between the parties is the realization of the secured claim. As such, the purpose or essential substance of a contract for the transfer of security for claims cannot

Therefore, the obligor’s obligation to maintain and preserve the security value of the secured claim under a contract for security for claims is limited to one’s own obligation pursuant to the contract, and a fiduciary relationship between the obligee and the obligor cannot be deemed to exist that the obligee attains the purpose of security through the obligor’s business by managing the obligor’s business by maintaining and preserving the value of security for the obligee. Therefore, in cases where the obligor receives reimbursement from a third-party obligor with the intent to use without notifying the third obligor of the assignment of claims, this is merely a non-performance under civil law, and the obligor cannot be deemed to have a status of keeping the above repayment for the obligee due to the trust relationship with the obligee, and even if the obligor arbitrarily consumes

Article 355(1) of the Criminal Act

Defendant 1 and one other

Defendant 1 and Prosecutor

Law Firm Appellant et al.

Busan High Court Decision 2020No52 decided September 7, 2020

All appeals are dismissed.

The grounds of appeal are examined.

1. Judgment on the grounds of appeal by the prosecutor

A. The part on Defendant 1's violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Embezzlement)

1) Where a debtor transfers other monetary claims to a creditor in order to secure an existing monetary obligation, “the obligation to maintain and preserve the value of the secured claim to a creditor” to be borne by the debtor to the creditor is merely the content of the obligation to be borne by the debtor under a contract for security for an

In addition, an ordinary contract of assignment of claims is the principal contract whose contents are the transfer of creditor status, and the intrinsic relationship between the parties is the acquisition of the assignee’s status by securing the obligee’s effective repayment of claims from the obligor. However, a contract of transfer of claims is a subordinate contract for the creation of secured claims (e.g., a monetary loan contract, etc.) and a contract for the creation of secured claims, and the said obligation owed by the obligor under a contract for transfer of claims is merely to achieve the purpose of security, and the intrinsic and principal relationship between the parties is the realization of secured claims. As such, the purpose or essential substance of a contract for transfer of claims cannot be seen as the same as

Therefore, the obligor’s obligation to maintain and preserve the security value of the secured claim under a contract for security for claims is limited to one’s own obligation pursuant to the contract, and a fiduciary relationship between the obligee and the obligor cannot be deemed to exist that the obligee attains the purpose of security through the obligor’s business by managing the obligor’s business by maintaining and preserving the value of security for the obligee. Therefore, in cases where the obligor receives reimbursement from a third-party obligor with the intent to use without notifying the third obligor of the assignment of claims, this is merely a non-performance under civil law, and the obligor cannot be deemed to be in the status of keeping the above repayment money for the obligee due to the trust relationship with the obligee, and even if the obligor arbitrarily

2) Based on the evidence duly admitted, the court below reversed the judgment of the court of first instance convicting Defendant 1 on the ground that it does not constitute embezzlement even if Defendant 1 demanded repayment of KRW 1.1 billion out of the above monetary claims to Nonindicted 3 Co. 3 without notice of transfer, and used it arbitrarily after receiving payment in the name of Nonindicted Co. 2’s deposit account, on the ground that it does not constitute embezzlement, even if Defendant 1 borrowed KRW 1.75 million from Nonindicted Co. 1 for business purposes, and transferred the monetary claims equivalent to KRW 2.2 billion against Nonindicted Co. 3 to the victim Nonindicted Co. 1 for the purpose of securing the above loan obligation.

3) Examining the reasoning of the lower judgment in light of the aforementioned legal doctrine and the record, the lower court did not err in its judgment by exceeding the bounds of the principle of free evaluation of evidence against logical and empirical rules, or by misapprehending the legal doctrine on the establishment of embezzlement

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

B. Defendant 2's violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Misappropriation)

For the reasons indicated in its holding, the lower court upheld the first instance judgment that acquitted the Defendant on this part of the charges on the grounds that there was no proof of crime. Examining the reasoning of the lower judgment in light of the relevant legal principles and records, the lower court did not err by exceeding the bounds of the principle of free evaluation of evidence against logical and empirical rules

2. Judgment on Defendant 1’s grounds of appeal

For the reasons indicated in its holding, the lower court convicted Defendant 1 of the facts charged (excluding the part on acquittal). Examining the reasoning of the lower judgment in light of the relevant legal doctrine and evidence duly admitted, the lower court did not err by exceeding the bounds of the principle of free evaluation of evidence against logical and empirical rules, or by misapprehending the legal doctrine on property damage, attacking, and the establishment of a crime of violating the Punishment of Tax Evaders Act due to the receipt

The argument that the lower court erred by significantly deviating from the limit of sentencing discretion constitutes an allegation of unfair sentencing. However, according to Article 383 Subparag. 4 of the Criminal Procedure Act, an appeal on the ground of unfair sentencing is allowed only in cases where death penalty, life imprisonment, or imprisonment with or without labor for more than ten years is imposed. In this case where Defendant 1 rendered a more minor sentence against Defendant 1, the argument that the sentence is too unreasonable is not a legitimate ground for appeal.

3. Conclusion

Therefore, all appeals are dismissed. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Lee Ki-taik (Presiding Justice)