Defendant

Prosecutor

Shoho Lake

Law Firm Dun, Attorney Kang Ho-sung

Seoul Central District Court Decision 2006Gohap1255 Decided July 27, 2007

The judgment of the court below is reversed.

A defendant shall be punished by imprisonment for three years.

1. Summary of grounds for appeal;

The gist of the grounds for appeal by the prosecutor is that the act of endorsement of a promissory note issued by IMS Co., Ltd. (hereinafter “IMS”) is not normally issued and provided, but is provided as an additional security, because it is offered as an additional security, not as a security for all of the above loans of 6.8 billion won, and thus, the Defendant’s act of returning each of the above bills and of endorsement on the promissory note issued by KRS Co., Ltd. (hereinafter “KIKO”), which is provided to secure the obligation of 7 billion won loans, shall be deemed as a new debt guarantee rather than a mere replacement, and at the time of the Defendant’s endorsement, it was predicted that there was a risk of damage to IMS due to insufficient funds of KRS at the time of the Defendant’s endorsement, and thus, the lower court erred by misapprehending the facts of not guilty part of the facts charged, or by misapprehending the legal principles, which affected the conclusion of the judgment.

2. Determination

A. Summary of this part of the facts charged

The summary of this part of the facts charged is that the defendant, in collusion with the non-indicted 1 on January 12, 2004, in Stex Mutual Savings Bank located in Seocheon-si, Seocheon-si, in order to secure a blank promissory note (bill number: 18778264) issued by Ktex and to borrow 7 billion won from the above Kt Bank as collateral, he received a request from the non-indicted 1 for endorsement of the above promissory note in the name of EM. The defendant, the representative director of ES, is aware of the above loan's duty, and then thoroughly examined the ability to repay the debt, such as the financial situation of Stex, which is the issuer of the above loan, and after thoroughly examining the ability to repay the debt in Stex, it is highly probable that Stex will not be able to repay the debt, and thus, it is highly likely that e.g., the victim's debt will not incur damage to e., the above loan will not be paid.

B. The judgment of the court below

(4) The court below held that, in the event that the representative director of a company offered the assets of the company as collateral for third parties and replaces the existing collateral value with the existing collateral value, the company suffered property damage as much as the amount of the secured debt increased by the above method, barring any special circumstances, however, it cannot be deemed that the company suffered property damage if the value of the newly offered collateral is small or the same (see, e.g., Supreme Court Decision 2004Do7027, Nov. 9, 2006). The court below found the following facts as follows: (i) CF 200 U.S. credit transaction agreements were concluded on August 8, 201 with the new KM 200 won (hereinafter referred to as the “new KF bank”) and the new KM 200,0000 won (hereinafter referred to as the “new KM 2, which was offered to the new KM 2, 300,000 won of the new KM 2, which was offered as collateral.

Furthermore, the court below held that, in the case of the issuer of a promissory note, the Defendant’s act of offering the two copies of the blank Promissory note as collateral is separate from embezzlement or breach of trust, and it is difficult to view that the Defendant’s act of offering the two copies of the blank Promissory note as collateral constitutes an act of embezzlement or breach of trust, and therefore, it is difficult to view that the Defendant’s act of offering the two copies of the blank Promissory Notes as collateral was an act of offering the two copies of the Promissory Notes as collateral, and in the case of endorsers, there is no risk of property damage from the standpoint of the Criminal Procedure Act, since it was merely replacing the two copies of the blank Promissory Notes issued by the previous Defendant, and it is difficult to view that the Defendant’s act of offering the two copies of the Promissory Notes as collateral, as collateral cancellation for the blank Promissory Notes issued as collateral, and ultimately, there was no risk of property damage to the Defendant from the standpoint of the crime of breach of trust as collateral cancellation.

C. Judgment of the court below

However, the judgment of the court below is not easily acceptable.

(5) According to the court below's and the court below's evidence duly adopted and examined the following circumstances, i.e., e., e., e., e., e., e., e., e., e., e., e., e., e., e., e., e., e., e., e., e., e., e., e., e. g., e., e., e., e., e. g., e., e., e., e., e. g., e., e., e., e., e. g., e., e., e., e., e., e., e., e., e., e., e. 1008)., e.

In the case of a blank Promissory Notes, the issuer is not issued with the intent of the issuer to supplement the blank portion as the intent of the issuer or its holder to supplement the blank portion. In other words, it is not a blank bill, but an incomplete bill (see Supreme Court Decision 98Da37736 delivered on February 9, 199). However, since the blank Promissory Notes is very important, it is reasonable to view that the issuer is ordinarily limited to the scope of the supplementary right when the Promissory Notes is issued in blank (see Supreme Court Decision 77Da2020 delivered on March 14, 1978).

In full view of the circumstances acknowledged by the court below in accordance with the above legal principles and the above facts recognized by the court below, Part II of the blank Promissory Notes in Korea, which was provided 6.8 billion won as additional collateral for the debt of c e.g., e., e., e., e., e., e., e., e., e., e., e., e., e., e., e., e., e., e., e., e., e., e., e., e., e., e., e., e., e., e., e., e., e., e., e., e., e., e., e., e., e., e., e., e., e., e., e., e., e.)..

Furthermore, the defendant was well aware of such circumstances and the main purpose of collecting Chapter II of the blank Promissory Notes in this case is not to prevent damage to IMS, but to conceal the fact of providing security in Chapter II of the Promissory Notes in this case or to escape the responsibility therefrom. Thus, the intention of breach of trust can be sufficiently recognized.

Nevertheless, the court below held that this part of the facts charged is not a crime or a case where there is no proof of a crime. The court below erred by misunderstanding the facts or misunderstanding the legal principles of the crime of breach of trust, which affected the conclusion of the judgment, and thus

3. Conclusion

Therefore, the prosecutor's appeal against the acquittal portion of the judgment of the court below is justified, and the conviction portion of the judgment of the court below among the judgment of the court below should be determined again in relation to concurrent crimes under the former part of Article 37 of the Criminal Act. Thus, the judgment below is reversed in accordance with Article 364 (6) of the Criminal Procedure Act since all of the judgment of the court below cannot be dismissed,

The summary of the facts constituting the crime recognized by this court and the summary of the evidence are as follows: (a) embezzlement of the crime in paragraph (2) below; (b) embezzlement of the last part of Paragraph (2) of the crime in Paragraph (3) above; and (c) embezzlement of the crime in Paragraph (2) above; and (d) addition of the following summary of the evidence after the last action in the column of the evidence, all of the judgment below's corresponding columns are the same as that of each corresponding column of the Criminal Procedure Act; and (b)

* Additional criminal facts*

3. In collusion with Nonindicted 1

On January 12, 2004, in the new LAB bank located in Jungcheon-si, Seocheon-si, Inc., the Defendant, the representative director of IM, was asked by Non-Party 1 to ask for endorsement in the above Promissory Notes’s name. After thoroughly examining the ability to repay debts, such as the financial situation of the above loan, the issuer of the bills, and the KAB, which will be offered as security, provided an endorsement if the CCB bank is not able to repay the above debts, and thus, loans amounting to seven billion won from the above KAB bank as security. Despite its duties, the Defendant, the Defendant, as the representative director of IM, did not provide an endorsement if it is not able to repay the debts, thereby making it difficult to obtain damages to IMS due to his/her loan’s violation of his/her duties, despite the fact that there is a high possibility of damages to IMS’s debts.

* Summary of additional evidence*

1. Legal statement at the trial of Nonindicted 6’s witness

1. The statement of the witness Nonindicted 7 in the sixth trial record of the court below

1. Statement of the interrogation protocol prepared by the judicial police officer against Nonindicted 3

1. Each written statement prepared by the Defendant, Nonindicted 3, and 8

1. A certificate of Nonindicted 7’s preparation

1. Descriptions of a written request for return and the register of custody of sampled bills; and

1. Applicable provisions of Acts and select of punishments for criminal facts;

Article 3 (1) 1 of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Article 3 (1) 2 of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Article 3 (1) of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes is stated as subparagraph 2, but this seems to be a clerical error in light of the facts charged), Articles 356, 355 (1), and 30 (General Provisions of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes) (Article 1 of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes) and Articles 3 (1) 1 of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Article 3 (1) of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Article 356, Article 355 (2), Article 30 (2) of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes and Article 3

1. Aggravation of concurrent crimes;

Article 37 (former part of Article 37, Article 38 (1) 2, and Article 50 of the Criminal Act [Aggravation of concurrent crimes with the punishment prescribed in the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Embezzlement) in which the punishment and punishment are the largest]

1. Discretionary mitigation;

Articles 53 and 55(1)3 of the Criminal Act (The following circumstances are considered as the reasons for sentencing):

In addition to the records that the defendant was punished once by a fine, there is no particular criminal record, and in relation to the provision of IMS's security for the loan of IMS, the defendant was caused by the crime according to the instructions of Non-Indicted 1, which has been the actual owner of management rights, and thus, the defendant does not seem to have suffered personal benefits, and in relation to the provision of IMS's security for personal loans, the defendant paid a considerable amount of his embezzlement to IMS and recovered the damage.

However, the crime of this case is committed in collusion with the non-indicted 1, who is responsible for executing and managing the company's finance fairly and transparently as the representative director of the victim AS, in collusion with the non-indicted 1,50,000 won of IMS's assets at will as security for the loan of IMS's assets, and as a endorsement on the promissory note issued by KRS, and embezzled the loan of 7 billion won by providing the amount equivalent to 250,000,000 won of IM's assets as security for the defendant's personal loan. In light of the fact that the embezzlement and breach of trust amount are enormous but most of damages are not recovered, the crime of this case is very poor.

In addition, taking into account the various circumstances mentioned above and the overall sentencing conditions specified in Article 51 of the Criminal Act as seen in the argument of this case, the punishment shall be determined as per Disposition.

It is so decided as per Disposition for the above reasons.

For judges in the first instance and second instance (Presiding Judge)