[1] In a case where the guarantor provided a new fund to the respondent who has no ability to repay the debt or provided a security for a new loan and used it for the repayment of the debt already guaranteed, whether the risk of new loss may be caused (negative)

[2] Whether a crime of breach of trust is established where a director, etc. of a company fails to take reasonable and reasonable measures to recover claims while lending company funds to an affiliate company (affirmative)

[3] In a case where an executive officer, etc. of a company inflicted damage on the company due to a violation of his/her duty, whether the company can be exempted from the liability for the crime of breach of trust solely on the ground that he/she actually obtained a major shareholder’s understanding about an act of breach

[1] Articles 355(2) and 356 of the Criminal Act / [2] Articles 355(2) and 356 of the Criminal Act / [3] Articles 355(2) and 356 of the Criminal Act

[1] [2] Supreme Court Decision 2007Do541 Decided July 23, 2009 (Gong2009Ha, 1454), Supreme Court Decision 2009Do1149 Decided October 28, 2010 (Gong2010Ha, 2207), Supreme Court Decision 2013Do5214 Decided September 26, 2013 (Gong2013Ha, 2021) / [3] Supreme Court Decision 99Do2781 Decided May 26, 200 (Gong200Ha, 1575) (Gong201, 201Sang, 202)

Defendant

Defendant and Prosecutor

Attorneys Jeon Dong-dong et al.

Busan High Court Decision 2013No128 decided August 14, 2013

All appeals are dismissed.

The grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed).

1. As to the violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Misappropriation) and occupational breach of trust

A. Judgment on the grounds of appeal by the prosecutor

In the event that a guarantor has already guaranteed another person's obligation, as the principal is not sufficient to pay his/her obligation, which is likely to cause the guarantor to pay his/her guaranteed obligation, and the guarantor has provided new funds to the principal debtor or collateral for the principal debtor to borrow new funds, and the new funds have already been used for the repayment of the guaranteed obligation, the guarantor cannot be deemed to have incurred a risk of causing a new loss separate from the guaranteed obligation (see Supreme Court Decision 2007Do541, Jul. 23, 2009).

In light of the fact that KRW 443,578,901 out of KRW 1.1 billion lent by Nonindicted Co. 1 (hereinafter “Nonindicted Co. 1”) to Nonindicted Co. 2 (hereinafter “Nonindicted Co. 2”) was used in the settlement of promissory notes issued by Nonindicted Co. 2 and endorsed by Nonindicted Co. 1, the lower court determined that the crime of breach of trust cannot be established within the scope of KRW 443,578,901 on the ground that the said promissory notes were issued by Nonindicted Co. 2 for Nonindicted Co. 1 and the said promissory notes were de facto principal debtor, and Nonindicted Co. 1 was used in the repayment of the amount of the promissory notes already borne by Nonindicted Co. 1 as an endorser, and thus, it cannot be deemed that there was a risk of causing new damage, separate from the amount of the promissory notes.

Examining the reasoning of the judgment below in light of the aforementioned legal principles and records, the above determination by the court below is just and acceptable. Contrary to the allegations in the grounds of appeal, there were no errors by misapprehending the legal principles on the responsibility of endorsers, etc.

B. Judgment on the Defendant’s ground of appeal

In light of specific circumstances, such as the content and nature of the business affairs to be handled, “an act in violation of the duty” in the crime of breach of trust includes any act in violation of a fiduciary relationship with the principal by failing to perform an act that is naturally expected to not perform, or by performing an act that is expected not to perform as a matter of course under the provisions of law, the terms of a contract, or the good faith principle, and “when an act in violation of a fiduciary relationship with the principal” includes not only a real loss but also a case where an act in violation of a fiduciary relationship occurs, and as long as the risk of actual loss in property has occurred, it does not affect the establishment of the crime of breach of trust even if an ex post facto loss has been recovered (see Supreme Court Decision 9Do338 delivered on December 8, 200, 200). If a director, etc. of a company knew that another person had already lost the ability to perform his/her duty to repay his/her company fund to him/her, it does not affect the company’s establishment of the crime of breach of trust (see Supreme Court Decision 2000Do700.

Examining the reasoning of the judgment below in light of the aforementioned legal principles and the evidence duly admitted and investigated by the court below, the court below found the defendant guilty of violating the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Misappropriation) on the ground that even if the victim non-indicted 1 was returned to the non-indicted 2 by the non-indicted 2, the non-indicted 2, and the non-indicted 3 (hereinafter "non-indicted 3") actually engaged in the act of occupational breach of trust while operating the victim non-indicted 1 and the non-indicted 2, and at the same time, the non-indicted 2 and the non-indicted 3 did not take reasonable and reasonable measures such as receiving adequate collateral from the above company even though they were unable to repay debts, they did not affect the conclusion of the judgment, and there is no error in the misapprehension of legal principles as to the burden of proof or in violation of the principle of free evaluation of evidence, contrary to what is alleged in the grounds of appeal.

2. Determination on the Defendant’s ground of appeal on the violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Embezzlement)

Examining the reasoning of the judgment below in light of the relevant legal principles and the evidence duly adopted and investigated by the court below, the court below is justified in holding that the agreed amount of KRW 1.5 billion received from the non-indicted 4 corporation in relation to the new urban apartment construction in the articles of incorporation from the non-indicted 5 corporation (hereinafter "non-indicted 5 corporation") is attributed to the victim non-indicted 5 corporation (hereinafter "non-indicted 2") and the non-indicted 2 did not have any right to the agreed amount and therefore, the defendant embezzled the above KRW 1 billion out of KRW 1.5 billion out of the agreed amount received by the victim non-indicted 5 corporation's non-indicted 5 corporation and embezzled the above KRW 1 billion out of its loans to its financial institution, and contrary to what is alleged in the grounds of appeal, there is no error of misapprehending the legal principles on

3. As to the evasion of compulsory execution

A. Determination on the grounds of appeal by the prosecutor on the part of KRW 3,452,681,80 among the grounds of appeal on the evasion of compulsory execution due to the charge of false debt against Nonindicted Co. 6 of Nonindicted Co. 1

According to the reasoning of the judgment below, the court below found that the non-indicted 6 corporation (hereinafter referred to as "non-indicted 6 corporation") was guilty on the ground that the non-indicted 6 corporation bears a true obligation in advance of payment due to the intention of payment prior to the due date in preparation for the case where the non-indicted 1 corporation's financial situation has disappeared, and that the non-indicted 6 corporation bears a false obligation pursuant to Article 327 of the Criminal Act, and thus, it cannot be viewed as "the non-indicted 6 corporation bears a false obligation" as referred to in Article 327 of the Criminal Act, on the ground that the non-indicted 1 corporation's charges concerning evasion of compulsory execution due to the non-indicted 6 corporation's financial obligation with respect to the non-indicted 3,452,681,80 won, excluding the direct payment amount of the subcontracted construction work directly paid by the captain of Busan Metropolitan City and the non-indicted 6 corporation.

Examining the reasoning of the judgment below in light of the relevant legal principles and records, the judgment below is just and acceptable. Contrary to the allegations in the grounds of appeal, there were no errors by misapprehending the legal principles regarding the crime of evading compulsory execution, or by exceeding the bounds of the principle of free evaluation of evidence against logical

B. Judgment on the Defendant’s ground of appeal

Criminal facts have to be proved to the extent that there is no reasonable doubt (Article 307(2) of the Criminal Procedure Act). However, the selection of evidence and probative value of evidence conducted on the premise of fact finding belong to the free judgment of the fact-finding court (Article 308 of the Criminal Procedure Act).

The Defendant’s assertion in this part of the grounds of appeal is merely an error of the lower court’s determination on the selection of evidence and probative value, which belongs to the free judgment of the fact-finding court, and even in light of the evidence duly adopted and examined by the lower court, the lower court, on the grounds as indicated in its reasoning, did not hold a claim against Nonindicted 7 or Defendant against Nonindicted Company 5, and was involved in each crime of evading compulsory execution, under the direction of the Defendant, and there was an intention to evade compulsory execution against the Defendant. In so doing, contrary to what is alleged in the grounds of appeal, the lower court did not err by exceeding the bounds of the principle

4. Conclusion

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

Justices Kim Yong-deok (Presiding Justice)