The case holding that the crime of occupational breach of trust is not established on the ground that the preparation and issuance of invalid loan certificates alone did not cause property damage to the company or the risk of actual damage to property, in case where the representative director abused his power of representation, and the other party knew or could have known such truth with respect to his personal debt, and the other party knew or could have known such truth.

Articles 355(2) and 356 of the Criminal Act

Defendant 1 and one other

Prosecutor

Law Firm EelviS, Attorneys Lee Jae-in et al.

Suwon District Court Decision 2009No3746 decided January 12, 2010

All appeals are dismissed.

The grounds of appeal are examined.

In order to establish a crime of breach of trust, the act of breach of trust should be recognized from an economic point of view to recognize that the principal has suffered a real loss or at least a risk of actual loss of property (see, e.g., Supreme Court Decisions 95Do531, May 30, 1997; 2004Do771, Apr. 9, 2004). Meanwhile, even if the representative director abused his authority for the purpose of pursuing the company's own or a third party's interest regardless of the company's profit, the act committed by the representative director within the scope of the representative director is valid as an act of the company, but if the other party to the act knew or could have known the representative director's intention, it shall be null and void against the company (see, e.g., Supreme Court Decisions 93Da1391, Jun. 25, 1993; 205Da3649, Jul. 28, 2005).

According to the reasoning of the judgment below, on October 9, 2002, Defendant 2 borrowed KRW 300 million from Nonindicted 1 and jointly and severally guaranteed by Defendant 1 (the name of creditor was Nonindicted 2 at the request of Nonindicted 1), and on April 29, 2005, Defendants, as shareholders of the instant company, transferred all rights to the instant company to another person; on the same day, Nonindicted 1 prepared the instant loan certificate to the effect that the instant company borrowed KRW 30 million on June 24, 2004 from Nonindicted 2; Nonindicted 1 and Nonindicted 2, based on the instant loan certificate, filed a lawsuit seeking payment of KRW 300 million against the instant company, and the withdrawal was made, and thus, the Defendants cannot be deemed to have known of the risk of borrowing the instant loan certificate and, in other words, the Defendants cannot be deemed to have known of the fact that there was no unlawful act of abusing the right of representation or causing losses to the Defendant 1, the representative director of the instant case, as an individual debtor.

On the other hand, the part of the grounds of appeal alleging the violation of the rules of evidence is ultimately criticisming the selection of evidence and the recognition of facts belonging to the exclusive jurisdiction of the court below, which is a fact-finding court,

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

Justices Ahn Dai-hee (Presiding Justice)