The case affirming the judgment of the court below holding that, in case where it is reasonable to see that the agent of a securities company comprehensively delegated the authority with respect to the kind of stocks and futures trading to employees of a securities company, the securities company’s agent designated securities deposited in the spot substitute account as substitute securities and its substitute securities and includes the authority to substitute and sell them to meet the customer consignment guarantee money, and in this case, the employees of the securities company did not notify in advance of the shortage of customer consignment guarantee money to customers of the securities company in accordance with the futures and options business regulations, the effect of the substitute sale itself cannot be denied, on the contrary that the employees of the securities company are liable for damages incurred therefrom.

Article 105 of the Civil Act, Article 52-3 of the Securities and Exchange Act

Plaintiff (Law Firm Kim & Lee, Attorneys Lee Jong-soo et al., Counsel for the plaintiff-appellant)

Defendant (Law Firm Sejong, Attorneys Kim Yong-ho et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2005Na15545, 15552 decided September 14, 2005

The appeal is dismissed. The costs of appeal are assessed against the Defendant (Counterclaim Plaintiff).

1. The court below rejected the defendant's assertion that the non-party 2's transaction was a voluntary trade, on the ground that it is reasonable to view that the non-party 1, an agent of the defendant (the counter-party 1; hereinafter referred to as "the plaintiff") as the wife of the defendant (the plaintiff only) and the non-party 2, an employee of the plaintiff (the counter-party 2; hereinafter referred to as "the plaintiff"), comprehensively delegated his authority over the spot goods and futures trading through each of the accounts of this case. In light of the records, the court below's evidence preparation, fact-finding and judgment are justified, and there is no violation of the rules of evidence or misapprehension of the legal principles as to the discretionary trade, as otherwise

2. After compiling the adopted evidence and recognizing the facts as stated in its reasoning, the court below held that the non-party 2's authority, which was comprehensively delegated by the non-party 1, designated securities deposited in the spot substitute account as substitute securities and included the authority to cover the consignment guarantee money by selling them in substitute, and even if the plaintiff did not notify in advance the defendant of the shortage of the consignment guarantee money in accordance with the futures and options operating rules in selling substitute securities, it cannot be viewed as the grounds for denying the validity of the substitute sale itself. In light of the records, the court below's evidence preparation, fact-finding and judgment are just, and there is no violation of the rules of evidence or misapprehension of the legal principles as to the sale in substitute, as otherwise alleged in the grounds for appeal.

3. Therefore, the appeal is dismissed, and the costs of appeal are assessed against the losing defendant. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Son Ji-yol (Presiding Justice)