[1] In a case where an act of bearing an obligation under a corporate name is legally null and void, whether it constitutes a crime of breach of trust against a corporate entity (negative in principle)

[2] In a case where the defendant, a representative director of a corporation, issued and acquired a promissory note in the name of the company under the pretext of acquiring his/her own loan claim against the company, and was prosecuted for violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Misappropriation in trust), the case holding that the judgment below which found the defendant guilty on the ground that the defendant's act of issuing a promissory note constitutes abuse of power

[1] Articles 35(2) and 356 of the Criminal Act, Articles 35(1) and 756 of the Civil Act / [2] Articles 355(2) and 356 of the Criminal Act, Article 3(1)1 of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes

[1] Supreme Court Decision 2010Do6490 Decided September 30, 2010 (Gong2010Ha, 2044), Supreme Court Decision 2011Do3180 Decided July 14, 201 (Gong2011Ha, 1686), Supreme Court Decision 201Do810 Decided September 29, 201

Defendant

Defendant

Attorney Park Sang-hoon

Seoul High Court Decision 2008No2769 decided December 17, 2009

The conviction part of the judgment below is reversed, and that part of the case is remanded to the Seoul High Court.

We examine the grounds of appeal.

The grounds of appeal reveal that the Defendant’s issuance of the Promissory Notes does not constitute a crime of breach of trust.

Since breach of trust requires the risk of actual loss or actual loss of property due to an act in violation of duty, if such risk is not caused, breach of trust shall not be established. In addition, if a representative or employee of a corporation commits an act in violation of the relevant Acts and subordinate statutes and thus no legal effect exists, any loss shall be caused to the corporation. Thus, barring special circumstances, such as where a corporation assumes an employer’s liability or tort liability under the Civil Act, the act of its representative or employee does not constitute a breach of trust (see, e.g., Supreme Court Decisions 2010Do6490, Sept. 30, 201; 201Do8110, Sept. 29, 201). Meanwhile, even if the representative director of the company abused his/her authority for the purpose of pursuing the profit of the corporation or a third party’s profit regardless of the company’s representative director’s profit, the act of the representative director of the corporation is valid, but if the other party to the act knew or could have become aware of the company’s profit (see, 2010.

The summary of the facts charged as to the violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Misappropriation) which the court below found guilty is that the defendant, as the representative director of the victim non-indicted stock company (hereinafter "victim company"), issued a promissory note with the issuer's damage company, face value KRW 8 billion, and the payee's defendant as the defendant in violation of his/her duties, under the pretext of obtaining the security of his/her lending claim against the victimized company.

In light of the above legal principles, if the Defendant’s act of issuing a promissory note, as stated in the facts charged, abused the power of representation by violating the duty of representative director of the victimized company, the Defendant’s act of issuing a promissory note is the Defendant itself, and thus, the Defendant’s act of issuing a promissory note does not have any effect on the victimized company, and thereby, the victimized company may not be liable for damages arising from user liability or corporate tort. Therefore, it cannot be deemed that the Defendant’s act of issuing a promis

Nevertheless, the court below found the Defendant guilty of violating the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Misappropriation) among the facts charged in this case, which affected the conclusion of the judgment by misapprehending the legal principles as to property damage.

Therefore, the conviction part of the judgment below is reversed, and that part of the case is remanded to the court below for a new trial and determination. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Jeon Soo-ahn (Presiding Justice)