The meaning of “a person who administers another’s business,” who is the subject of the crime of breach of trust / Whether an obligor or a person who establishes a security by means of transfer, who provides stocks to a creditor as a security for the purpose of securing one’s own or another’s pecuniary obligation, constitutes “a person who administers another’s business,” who is the subject of the crime of breach of trust (negative)

Article 355(2) of the Criminal Act

Supreme Court en banc Decision 2019Do9756 Decided February 20, 2020 (Gong2020Sang, 723) Supreme Court en banc Decision 2013Do13138 Decided April 9, 2020

Defendant 1 and six others

Prosecutor

Attorney Nam-han

Seoul High Court Decision 2013No3401 decided June 19, 2014

All appeals are dismissed.

The grounds of appeal are examined.

1. The violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Misappropriation)

A. The crime of breach of trust is established when a person who administers another’s business obtains pecuniary benefits or causes a third party to obtain such benefits by acting in violation of his/her duty, thereby causing damage to another person who is the subject of the business. Thus, the subject of the crime must be in the position of administering another’s business. Here, to be “a person who administers another’s business,” the subject of the crime must be in the position of administering another’s business. In order to be “a person who administers another’s business,” the subject of the crime must be in the position of administering another’s business, such as where all or part of the business pertaining to the management of another’s property is performed on behalf of another person, and the typical and essential substance of the relationship between the parties goes beyond the relationship of conflict of interest in ordinary contracts, and should be in protecting or managing another’s property based on the relationship of trust between them. The party is in a relationship with the satisfaction of contractual rights or the realization of claims through a faithful performance of an obligor’s duty to protect or take care of the other party

In order to secure his/her own or other person's pecuniary obligation, a debtor who has offered shares as a security for transfer to a creditor or a person who has created a security for transfer (hereinafter referred to as "debtor, etc.") is only his/her obligation to provide shares as a security, i.e., the obligation to maintain and preserve the security value of shares, or not to reduce or destroy shares, etc., according to the contract for transfer to another person. Thus, the debtor, etc. cannot be deemed as a "person who administers another's business" who is the subject of breach of trust, and even if the debtor reduces or loses the security value by disposing of the security to a third person, thereby causing danger to the creditor's exercise of security right or realizing a claim through this, the crime of breach of trust cannot be established (see, e.g., Supreme Court en banc Decision 2019Do9756, Feb. 20, 200).

B. The summary of this part of the facts charged is that Defendant 1, Defendant 2, Defendant 3, and Defendant 4 received money from the victim bank in the name of Nonindicted Co. 1 (hereinafter “Nonindicted Co. 1”) and concluded the instant transfer security contract providing non-indicted 1’s stocks (hereinafter “the instant stocks”) owned by Nonindicted Co. 2 (hereinafter “Nonindicted Co. 2”) as security, which was held by Nonindicted Co. 2 (hereinafter “Nonindicted Co. 2”) and incurred damage to the victim bank by offering the instant stocks to be held by Nonindicted Co. 2 as security at the time of issuance of stock certificates, even though they had assumed the duty to offer the instant stocks held by Nonindicted Co. 2 as security to the victim bank.

C. However, according to the legal principles as seen earlier, even if the victim bank is a mortgagee of the instant shares, and the above Defendants are obliged to offer the instant shares to the victim bank as collateral pursuant to the instant security agreement, it cannot be deemed as constituting “a person who administers another’s business” in the crime of breach of trust in relation to the victim bank. Therefore, regardless of whether the said agreement should be deemed null and void due to the lack of a special resolution at the general meeting of shareholders of Nonindicted Company 2 at the time of the conclusion of the instant security agreement, the lower court’s conclusion that denied the status of the person who administers another’s business to the

Therefore, the lower court did not err by misapprehending the legal doctrine on the act of breach of trust or the person who administers another’s business, thereby adversely affecting the conclusion of the judgment.

2. The remaining portion not guilty

The Prosecutor appealed the entire judgment of the court below, but the remaining parts are not indicated in the petition of appeal or the appellate brief.

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 Park Sang-ok (Presiding Justice)