[1] Whether embezzlement is established in a case where a shareholder or representative director of a corporation disposes of the company's property for a private purpose (affirmative) and the meaning of the intent of unlawful acquisition in the crime of embezzlement

[2] The meaning of "an act in violation of one's duty" in the crime of breach of trust, its subjective requirement, and whether the intent of breach of trust can be recognized even if there was an intent to do so for one's own interest (affirmative)

[3] Whether the victim's property without permission may be deemed to have reached the conclusion of the crime of breach of trust if the risk of actual damage is caused by the removal of the victim's property without permission (affirmative), and the amount of such damage (=damage at the time of removal

[1] Articles 355(1) 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] Supreme Court Decision 82Do75 delivered on September 13, 1983 (Gong1983, 1521), Supreme Court Decision 2005Do3045 Delivered on August 19, 2005 (Gong2005Ha, 1536) / [2] Supreme Court Decision 2002Do1696 Delivered on July 222, 2002 (Gong2002Ha, 2100), Supreme Court Decision 2004Do520 Delivered on June 24, 2004 (Gong2004Ha, 1266), Supreme Court Decision 205Do4640 Delivered on May 29, 2008 (Gong2008Ha, 934) / [3] Supreme Court Decision 2003Do3838, March 28, 2003; Supreme Court Decision 2003Do38384, March 28, 2003

Defendant

Defendant and Prosecutor

Law Firm Rotex et al.

Seoul High Court Decision 2006No4 decided September 12, 2008

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 Defendant’s ground of appeal

A. Legal principles as to the establishment of embezzlement and violation of the rules of evidence

Since a stock company is an independent right holder separate from its shareholders, its understanding does not necessarily coincide with its understanding, if a shareholder or representative director arbitrarily disposes of the company's property for private purposes, such as offering it as collateral for a third party's financing, the crime of embezzlement may not be exempted regardless of whether the general meeting of shareholders or the board of directors passed a resolution regarding such disposal. In the crime of embezzlement, the intent of unlawful acquisition refers to the intent to dispose of another person's property in violation of his/her duties for the purpose of seeking the benefit of himself/herself or a third party, such an intention to return it later or compensate, and even if there is an intention to return it later or compensate, it does not interfere with the recognition of the intent of unlawful acquisition (see, e.g., Supreme Court Decisions 82Do75, Sep. 13, 1983; 2005Do3045, Aug. 19, 2005).

Examining the evidence legitimately admitted by the court below in light of the above legal principles and records, the court below is justified in finding the defendant guilty of occupational embezzlement as stated in its reasoning, and there is no violation of the law of misunderstanding legal principles or the rules of evidence as alleged in the grounds of appeal.

B. Legal principles as to the establishment of breach of trust and violation of the rules of evidence

The crime of breach of trust is established when a person who administers another's business commits an act in violation of one's duty and causes a third party to obtain pecuniary advantage or to obtain such benefit, thereby causing loss to the principal. In this case, "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 is naturally expected under the provisions of law, the content of the contract, or the good faith principle, or by performing an act that is expected not to perform an act that is naturally expected not to do so, in light of the specific circumstances, such as the content and nature of the business to be handled (see Supreme Court Decision 2002Do

In addition, in order to establish a crime of breach of trust as a subjective element, the perception and consequence of the breach of trust that the person himself or a third party acquires the benefit and thereby causes damage to the person himself, i.e., the intention of breach of trust, and these perceptions are satisfied with dolusent perception. The third party acquiring the benefit is an affiliated company of the same third party. Even if the result of the act was conducted for the purpose of rehabilitation of the entire affiliated company group and some of the result of the act was done for the principal, even if it is an incidental, the intention for his own benefit is only an incidental, and if it is proved that the intent for benefit or damage is the principal, the intention of breach of trust cannot be denied (see, e.g., Supreme Court Decisions 2004Do520, Jun. 24, 2004; 2005Do4640, May 29, 2008)

Comprehensively taking account of the adopted evidence, the lower court: (a) the Defendant, as a de facto major shareholder and manager of Nonindicted Co. 1 on or around January 200, decided to issue convertible bonds worth KRW 30 billion at a face value under the pretext of improving the financial structure of Nonindicted Co. 1; (b) when convertible bonds occur, Nonindicted Co. 2 and Nonindicted Co. 3 have acquired the convertible bonds and deposited the acquisition price into Nonindicted Co. 1; and (c) in fact, when Nonindicted Co. 1 has deposited the guaranteed money in advance to Nonindicted Co. 2 and Nonindicted Co. 3 and the Defendant has found the convertible bonds of Nonindicted Co. 1; (d) concluded a contract between Nonindicted Co. 2 and Nonindicted Co. 3’s comprehensive financial company to withdraw and appropriate the relevant convertible bonds from the guaranteed money of Nonindicted Co. 1; and (e) the Defendant acquired KRW 100 billion at a face value of Nonindicted Co. 1’s non-Indicted Co. 4’s borrowed bonds for the purpose of using the said bonds at a face value of KRW 1000 billion on May 15 and 364, respectively.

In addition, the court below rejected the defendant's assertion that the non-indicted 4 corporation had an existing claim amounting to 10 billion won of the above convertible bonds against the non-indicted 1 corporation, and that the non-indicted 4 corporation provided it as a legitimate owner of the above convertible bonds as a security for the borrowing of money, and thus there was no intention of causing damages or illegal gains in the course of the crime of breach of trust, and found the defendant guilty of occupational breach of trust in the judgment.

Examining the evidence legitimately admitted by the court below in light of the above legal principles and records, the fact-finding and judgment of the court below are justified, and there is no violation of the law of misunderstanding or the rules of evidence as otherwise alleged in the ground of appeal. The Supreme Court precedents that are contrary to the grounds of appeal are different cases and are not appropriate

C. Meritorious of legal principles as to the amount of damages of breach of trust

In the crime of breach of trust, the term "when a loss is inflicted on the principal" includes not only the case of property loss but also the case of causing the risk of actual damage. Thus, when the victim's property was removed without permission and causing the risk of actual damage, the victim's property would be subject to the crime of breach of trust (see Supreme Court Decisions 82Do2873, Mar. 8, 1983; 2003Do4382, Oct. 30, 2003; 2003Do4382, Oct. 30, 200). Such damage at the time of removal without permission

In light of the above legal principles and the records, the defendant's intent to use 10 billion won of the convertible bonds of the non-indicted 1 corporation in custody of the non-indicted 3 comprehensive financial company for securing the borrowed money against the interests of the non-indicted 1 corporation is already the number of crimes of occupational breach of trust at the time of collecting them twice. The amount of damages therefrom is equivalent to 10 billion won, the face value of the above convertible bonds.

The judgment of the court below to the same purport is just, and there is no error of law as alleged in the grounds of appeal.

D. Violation of the legal principles as to Article 39(1) of the Criminal Act

According to the records, on May 4, 200, the defendant was notified of a summary order of KRW 20 million as a violation of the Securities and Exchange Act by the Seoul District Court, and the order became final on June 3 of the same year. On February 17, 2003, the Seoul High Court rendered a separate sentence of imprisonment with prison labor for three years by applying the latter part of Article 37 and Article 39(1) of the former Criminal Act (amended by Act No. 707 of Jan. 20, 2004) to the defendant for the criminal facts before the above summary order became final and conclusive, and the part of the judgment becomes final and conclusive on June 24 of the same year. Meanwhile, the judgment subject to a retrial of this case, separate from the above final and conclusive judgment, is proceeding, and was tried only for the criminal facts after the above summary order became final and conclusive.

Therefore, the court below, upon the decision to commence the retrial of this case, re-examines only for the facts constituting the crime after the above summary order became final and conclusive, based on the above summary order as pointed out in the ground of appeal, and there is no room to apply the latter part of Article 37 and Article 39(1) of the current Criminal Act, and the ground of appeal, such as misapprehension of legal principles as to the judgment finalized on June 24, 2003, cannot be a legitimate ground of appeal as to this case

E. Point of unfair sentencing

In this case where the court below's sentence of imprisonment with prison labor of two years and three years and a fine of 2.5 million won is imposed, the reason that the sentence of the court below is too unreasonable is not a legitimate ground for appeal under Article 383 subparagraph 4 of the Criminal Procedure Act.

2. As to the Prosecutor’s Grounds of Appeal

In the crime of occupational embezzlement, the term "an intention of illegal acquisition" means an intention to dispose of the same property as that of another person's own possession in breach of his/her duties for the purpose of seeking the benefit of himself/herself or a third party (see Supreme Court Decisions 82Do75, Sep. 13, 1983; 2005Do3431, Jun. 2, 2006, etc.).

According to the records, the Defendant intended to acquire 20,441,652 shares of Nonindicted Co. 9 in order to enter into the financial business in the name of Nonindicted Co. 1 and Nonindicted Co. 7, but there was a shortage in the acquisition fund. The Defendant, at the expense of Nonindicted Co. 4 around October 2000, provided KRW 15.3 billion out of the acquisition fund at the expense of Nonindicted Co. 4; the remainder of KRW 15.3 billion of the acquisition fund was provided to Nonindicted Co. 1 Co. 9’s shares of Nonindicted Co. 1 and KRW 9 million of the shares of Nonindicted Co. 7 Co. 9’s Co. , Ltd. as collateral to Nonindicted Co. 10 credit safe; Nonindicted Co. 10, around January 2001, demanded some of the loans from Nonindicted Co. 1 and Nonindicted Co. 100 million won to be repaid from Nonindicted Co. 4’s credit trust and KRW 15.1 billion on the ground that there was an excess of the lending limit from Nonindicted Co. 1000 billion.

In addition, even if the evidence submitted by the prosecutor was examined in light of the record, there is no evidence to acknowledge the fact that the non-indicted 1 corporation had already paid the above debt regarding the acquisition fund of the non-indicted 9 corporation to the non-indicted 4 corporation from the end of October 2000 to the beginning of January 2001, and there is no need to provide a security, or that all the debt relationships between the two companies have been completely settled.

Examining these facts in light of the legal principles as seen earlier, it is reasonable to view that Nonindicted Co. 1’s offering of KRW 6 million of the shares of Nonindicted Co. 9 to each of the above credit cooperatives is de facto a transactional exchange for the repayment of its obligation. The mere fact that the lender of the acquisition fund of Nonindicted Co. 9 and the other party to the security of the security was changed from the existing credit safe to Nonindicted Co. 11 credit safe, it cannot be deemed that there was a new damage to Nonindicted Co. 1 or an intention of unlawful acquisition for the purpose of seeking the benefit of the Defendant or Nonindicted Co. 4.

In the same purport, the court below is just in finding that there is no proof of a crime, and there is no error in the misapprehension of legal principles or the rules of evidence as alleged in the grounds of 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 In-bok (Presiding Justice)