Defendant 1 and one other

Defendant 1 and Prosecutor

Kim Jong-chul

Law Firm Pww, Attorney Park Jae-hee

Suwon District Court Decision 2009Gohap193 Decided December 3, 2009

All appeals by Defendant 1 and prosecutor against the Defendants are dismissed.

1. Determination on Defendant 1’s grounds of appeal

A. Summary of grounds for appeal

Defendant 1 asserts that on April 7, 2008, at his own office, the amount of damages for the destruction of the business license acquisition agreement concluded with Nonindicted Co. 11 and 10 million won or with Nonindicted Co. 2 Co. 2, the Defendant paid up to the time, namely, the down payment 10 million won paid to Nonindicted Co. 2 Co. 2, the cost of attorney appointment necessary to claim damages for Nonindicted Co. 13, the cost of provisional disposition for the business site, the cost of KRW 10 million for the office of Nonindicted Co. 2, and KRW 50 million for the design cost, KRW 30 million for office collection cost, KRW 260 million for office collection cost, KRW 260 million for office collection cost, and KRW 15 million for the charge of forging Nonindicted Co. 14, 11, 100, and 1500,000 won for the forgery and use of the original notarial deed, and that the lower court convicted the Defendant of the forgery and use of the original notarial deed and the right of attorney.

B. Determination

(1) However, according to the evidence duly adopted and examined by the court below and the court below, the following circumstances are revealed. Taking into account these circumstances, Defendant 1 can be acknowledged as the forgery of the Promissory Notes and the power of attorney, and Nonindicted 16’s statement in the court below’s non-indicted 16’s legal statement contrary thereto is not trustable.

① In light of the agreement on acquisition of the right to construct a new ○ Terminal Building, which was concluded on July 5, 2007 between Nonindicted Co. 1 and Nonindicted Co. 2, which was jointly operated by Nonindicted Co. 11 and 10 at the time, there was no specific provision on how to determine the amount of compensation when the contract is terminated due to the cause attributable to Nonindicted Co. 2, the seller. However, it is not acceptable that Nonindicted Co. 11 and 10, etc., who filed a complaint against Defendant 1 on April 7, 2008, prior to the issuance date of the Promissory Notes, filed an application for provisional disposition of suspension of execution of audit duties, and around January 2008, he filed an application for provisional disposition of suspension of execution against Defendant 1 on December 7, 2007.

② In addition, except for provisional disposition expenses and down payment of KRW 100 million paid to Nonindicted Co. 2, Defendant 1’s place of use of the money that Defendant 1 paid in relation to the instant business right acquisition agreement and the necessity of its disbursement are insufficient, and Defendant 1’s statement against the place of use is also inconsistent. In light of such circumstances, it is also difficult to accept that Nonindicted Co. 11 and 10 agreed to recognize it and pay the money equivalent to KRW 500 million.

③ Nonindicted 14 stated that Nonindicted 11 and 10, etc. stated that the promissory note in this case and the power of attorney affixed the seal thereto, stated that the promissory note in this case had been written, and that there was no knowledge of the fact that there was a notarial deed for compulsory execution. However, it is doubtful whether Nonindicted 14 had been properly aware of the issuance of the Promissory note in this case, since the person who issued the promissory note in par value of 500 million is unaware of whether or not the date for payment falls under the due date, and that there was no knowledge of the fact as to whether or not the power of attorney was written, and that there was no knowledge of whether Nonindicted

④ At the time of the preparation of the Promissory Notes, Defendant 1 appears to have indicated the contents including the issuer’s name and address, and the power of attorney. If Nonindicted 11 and 10, etc. were to affix their seals on the same page, it would be an example that Defendant 1 did not directly state his name and address, but written the name and address by Defendant 1.

(2) If so, the court below did not err by misapprehending the legal principles as to the finding of guilty of each of the facts charged under the premise that the Promissory Notes and the power of attorney were forged, and thus, Defendant 1’s assertion is

2. Judgment on the prosecutor's grounds for appeal

A. As to the violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Misappropriation) against the Defendants

(1) Summary of the facts charged

Defendant 1 was the representative director of Nonindicted Co. 1 and the auditor of Nonindicted Co. 2 from July 5, 2007 to April 7, 2008. Defendant 2 was the auditor of Nonindicted Co. 3 from July 19, 2007 to the auditor of Nonindicted Co. 3 from September 5, 2007.

Around July 5, 2007, Defendant 1 entered into the instant contract for acquisition of business rights with the content of accepting a new construction project of ○○ Terminal under the name of Nonindicted Co. 2 Co. 1. Defendant 1: (a) paid 100 million won on the day of the acquisition price of the above business rights; (b) paid 2.9 billion won in total the intermediate payments and remainder; and (c) was obligated to pay a loan to a financial institution based on the above business rights; and (d) Nonindicted Co. 2 was obligated not to participate in the above business, such as giving up acceptance of a bus terminal business license for Nonindicted Co. 3 Co. 3, a passenger transport business license under the Passenger Transport Service Act necessary for the above business; (b) Defendant 1 agreed to invalidate the above contract; (c) Defendant 1 was the auditor of Nonindicted Co. 2 on the same day; and (d) Defendant 1 was the representative director designated by Defendant 1 as of July 19, 2007; (c) Defendant 1 was exempt from the above business obligation to receive the above loan and intermediate payments from Defendant 25.

On the other hand, around September 10, 2005, Nonindicted Co. 2 concluded a contract to purchase the purchase price of KRW 1.85 million, including the down payment, the intermediate payment and the balance of KRW 1.355 million, as the above business site, the purchase price of Nonindicted Co. 2 was paid 400 million until October 14, 2005. Defendant 1, as the purchaser of the instant land at the Seocheon Branch of Daejeon District Court around October 2007, as the right to claim ownership transfer registration against the seller such as Nonindicted Co. 6, applied for a provisional disposition prohibiting all of the disposal of the instant land as a right to receive ownership transfer registration, and around November 31, 2007, Nonindicted Co. 2 was in the position of managing Nonindicted Co. 2’s business in preparation for disposal of the instant land at the place of sale and purchase of the instant land. Accordingly, on or around the same month, Nonindicted Co. 2 was in fact in the position of managing the instant provisional disposition.

On the other hand, Nonindicted Co. 5 promoted the above business in the name of Nonindicted Co. 3, but Defendant 2, as the representative director of Nonindicted Co. 3, needed to purchase the instant land, requested Defendant 1 to withdraw the above provisional disposition application on the instant land, and granted KRW 440 million in return for such request.

Defendant 1, around November 30, 2007, at the above Daejeon District Court Branch, violated the above occupational duties, and withdrawn the above provisional disposition application for the land of this case upon the above request from Defendant 2, thereby cancelling the above provisional disposition registration. On the same day, the above provisional disposition registration was revoked, and the ownership transfer registration was made to Nonindicted Co. 3 on the same day.

As a result, the Defendants conspired to the non-indicted 2 corporation to inflict damages on the loss of the right to claim ownership transfer registration of the land in this case at the market price, and let the non-indicted 3 corporation acquire the profit of owning the land in this case at the market price of 2.4 billion won

(2) Summary of the Prosecutor’s grounds for appeal

Defendant 1’s withdrawal of the application for provisional disposition on the instant land at the time of the withdrawal of the application for provisional disposition, Nonindicted Co. 2 was in the process of restoring the business right and trying to carry out the instant business again, and thus, Defendant 1’s withdrawal of the application for provisional disposition by receiving money from Defendant 2 constitutes a breach of trust and also Defendant 2 knew of and conspired to do so. However, the lower court’s finding the Defendant not guilty of this part of the charges

(3) Determination

(A) In full view of the evidence duly admitted and examined by the lower court, the following facts are recognized.

① Although Nonindicted Co. 2, the purchaser of the instant land, was required to pay the intermediate payment and the balance within three months from September 10, 2005, the date of the sales contract, Nonindicted Co. 7, etc., but did not pay the intermediate payment and the balance (100 million won out of the contract amount 500 million won). From around 2006, Nonindicted Co. 2, etc. urged Nonindicted Co. 2 to pay the intermediate payment and the balance on several occasions, and notified Nonindicted Co. 2 of the rescission of the sales contract on June 9, 2006.

② Around March 2, 2007, Nonindicted Co. 2 prepared an agreement with Nonindicted Co. 7, etc. to waive all the buyer’s rights under the sales contract in the event that the payment of the purchase price was not completed by March 31, 2007, and Nonindicted Co. 2 did not pay all the remainder of the purchase price until March 31, 2007.

③ Defendant 1 who entered into the instant business license acquisition agreement with Nonindicted Co. 2 on July 5, 2007, concluded the instant business license acquisition agreement with Nonindicted Co. 2, in accordance with Article 6 of the instant business license acquisition agreement (i.e., immediately transfer the representative director to a person designated by Nonindicted Co. 1; and (ii) from the date of receipt of the down payment, Nonindicted Co. 1 Company paid the down payment to Nonindicted Co. 2 and exercised a substantial right to the business license of Nonindicted Co. 4).

④ Defendant 1, without gathering the aforementioned detailed contents on the instant land sales contract concluded between Nonindicted Co. 2 and Nonindicted Co. 7, filed an application for provisional injunction against disposal of the instant land against Nonindicted Co. 7, etc. at his own expense. On October 31, 2007, the provisional injunction registration was completed on November 2, 2007 pursuant to the decision of acceptance on October 31, 2007, and the execution was completed. After which Nonindicted Co. 7, etc., the debtor of the instant provisional injunction, discovered the detailed contents on the instant land sales contract, and revoked the execution of the said provisional injunction on November 30, 207.

(B) In the crime of occupational breach of trust, “an act in violation of one’s duty” includes any act in violation of a fiduciary relationship with the principal by failing to perform an act that ought to be naturally expected under the provisions of law, the terms of a contract, or the good faith principle, or by performing an act that is anticipated not to be naturally performed, in light of specific circumstances, such as the content and nature of the business, etc. Furthermore, in order to constitute the crime of occupational breach of trust, the perception of occupational breach of trust as a subjective element and the perception that the act causes damage to the principal by obtaining the benefit of himself or a third party, i.e., the intent to commit occupational breach of trust (see Supreme Court Decision 2005Do4640, May

In light of the above legal principles, as to whether Defendant 1’s withdrawal of the above provisional disposition was in violation of his duty, and whether Defendant 1 had intent to commit breach of trust at the time, Defendant 1 paid all the down payment to Nonindicted Co. 2 under the business right transfer agreement of this case and acquired the right to operate the above land, and accordingly, Defendant 1 applied for provisional disposition on the land of this case where Nonindicted Co. 2 purchased at his own judgment and cost. After the seller became aware of the situation before and after the provisional disposition of this case was received by the seller, the buyer’s right as to the land of this case was extinguished and thus the provisional disposition cannot be revoked. (In fact, it is difficult to view that Nonindicted Co. 2’s failure was finalized on the ground that the sales contract of this case’s land sales contract was rescinded for the reason that the contract was revoked for the reason that Defendant 1’s act was in violation of the duty against the Plaintiff, etc., and it is difficult to view that it was in violation of the principle of good faith or the content of the contract’s withdrawal.

(C) Sub-determination

Therefore, the judgment of the court below that acquitted the Defendants of this part of the charges is just and there is no error of law that affected the conclusion of the judgment by misunderstanding the facts. The prosecutor's allegation in this part is without merit.

B. As to the receipt of property in breach of trust against Defendant 1 and the receipt of property in breach of trust against Defendant 2

(1) Summary of the facts charged

On November 30, 2007, Defendant 1 received an illegal solicitation from Defendant 2 who intends to purchase the instant land in the name of Nonindicted Co. 3 in order to request withdrawal of the above provisional disposition on the instant land in the name of Nonindicted Co. 3. On the same day, Defendant 1 received KRW 200,000,000,000,000 won, including the account in the name of Nonindicted Co. 1, Dec. 5, 2007; and KRW 440,000,000,000,000 won on December 4, 2007.

Defendant 2 provided Defendant 1 with a total of KRW 440 million in return for illegal solicitation at the same time and place as above.

(2) Summary of the Prosecutor’s grounds for appeal

Defendant 1’s withdrawal of provisional disposition constitutes occupational breach of trust, which constitutes Defendant 2’s act of giving KRW 440 million to Defendant 1, which constitutes an illegal solicitation, and thus, this constitutes an illegal solicitation. However, the lower court’s finding Defendant 1 not guilty of each of the facts charged solely for the reasons indicated in its reasoning is unlawful.

(3) Determination

The crime of taking property in breach of trust under Article 357(1) of the Criminal Act is established when a person who administers another person's business obtains property or profits from property in exchange for an unlawful solicitation in connection with his/her duties. In this context, the term "illegal solicitation" does not necessarily require that it constitutes the substance of occupational breach of trust, and is sufficient if it does not necessarily require that it is contrary to social rules or the principle of good faith (see Supreme Court Decision 2008Do6987, Dec. 11, 2008).

In light of these legal principles, we examine whether there was an illegal solicitation between Defendant 2 and Defendant 1.

① As seen earlier, Defendant 1 appears to have withdrawn an application for provisional disposition based on the circumstance that the buyer’s right as to the instant land of Nonindicted Co. 2 was extinguished and thus the provisional disposition would have no choice but to be revoked. As a result, Defendant 1 appears to have withdrawn the application for provisional disposition on the ground that the instant land sales contract was terminated, and the judgment became final that the right as to the instant land of Nonindicted Co. 2 was extinguished. ② Defendant 1 appears to have no practical benefit without withdrawal of the application for provisional disposition at the time, and argued that the application for provisional disposition was withdrawn due to the risk of receiving damages from the seller. ③ Defendant 2 was aware that the instant land sales contract concluded between Nonindicted Co. 2 and Nonindicted Co. 7, etc. was cancelled due to the cause attributable to Nonindicted Co. 2, etc., and attempted to register the ownership transfer after purchasing the instant land from Nonindicted Co. 7, etc. around October 26, 2007, it is difficult to view that Defendant 1’s request for provisional disposition was an unlawful request for withdrawal of provisional disposition to Defendant 200 billion won.

Therefore, the judgment of the court below that acquitted each of the facts charged is just and there is no error of law that affected the conclusion of the judgment by misunderstanding the facts. This part of the prosecutor's assertion is without merit.

3. Conclusion

Therefore, in accordance with Article 364(4) of the Criminal Procedure Act, all appeals filed by Defendant 1 and the prosecutor against the Defendants are dismissed. It is so decided as per Disposition.

Judges Cho Jae-sung (Presiding Judge)