[1] Whether a securities company needs a separate consignment agreement between a customer and a customer in handling consignment business for over-the-counter trading of listed stocks other than a single stock owner (affirmative)

[2] Whether the fact-finding or the determination of the ratio of negligence by the parties involved in a tort constitutes the exclusive authority of a fact-finding court (affirmative)

[3] The meaning of "as to the execution of affairs", which is an element for establishing employer's liability, and the standard for its determination

[4] In a case where a victim's bad faith or gross negligence is recognized as a tort committed by an employee, whether an employer's liability is established (negative), and the meaning of gross negligence of the victim who is exempted from

[5] The case holding that a securities company's employer liability is recognized in case where a securities company's unfair solicitation and delivery of share certificates to a securities company's employees causes loss to a customer

[6] The basis for calculating the amount of damages for a claim for damages, which infringes on ownership of a specific object and is caused not to exist

[1] Since the over-the-counter trading of listed stocks other than a single share is not prohibited under the Securities and Exchange Act, a securities company engaged in the securities business under the Securities and Exchange Act may commission, act as an agent, or mediate for over-the-counter trading of listed stocks. However, in exceptional cases where a securities company is involved in over-the-counter trading of listed stocks other than a single share, it can be known that the securities company does not ordinarily deal with it as a business. Thus, in order for a securities company to carry out the over-the-counter trading business other than a single share, a trading consignment agreement is needed separately in addition to the trading account contract concluded for the purpose of a securities

[2] The fact-finding and the ratio of the fault of the parties involved in tort are the exclusive authority of the fact-finding court unless it is deemed that it is considerably unreasonable in light of the principle of equity.

[3] The phrase "in relation to the execution of an employee's business, which is the requirement for an employer's liability under Article 756 of the Civil Code," means that when an employee's unlawful act appears objectively to be an employee's business activity, an act of performing an employee's business, or an act related thereto, such an act shall be deemed to be performed without considering subjective circumstances. Here, whether it is objectively related to the employee's performance of an employee's business should be determined by considering the degree related to the employee's original duty and tort, and the degree of the employee's responsibility

[4] Even if an employee's illegal act appears to fall within the scope of duty of care in appearance, if the victim himself/herself knew, or was unable to know, due to gross negligence, that the employee's act does not fall within the scope of duty of care in lieu of the employer or employer, the employer shall not be held liable against the employee. In this case, gross negligence refers to the situation where it is acknowledged that the employee's act was not legitimate within his/her authority, even though he/she knew, even though he/she could have known, that the other party to the transaction did not have been committed lawfully within his/her authority, and therefore, it lacks due care to the extent close to the intention of the general public and there is no need to protect the other party from the perspective of fairness.

[5] The case holding that a securities company is liable for employer to a securities company in case where a securities company's employees' unfair solicitation and issuance of share certificates to the broker cause losses to customers

[6] In principle, the amount of damages shall be calculated based on the exchange price at the time of tort in case of a claim for damages on the ground that ownership of a specific object is infringed and that the object is not existing.

[1] Article 194 of the former Securities and Exchange Act (amended by Act No. 5041 of Dec. 29, 1995); Article 84-27 of the Enforcement Decree of the Securities and Exchange Act (amended by Presidential Decree No. 14910 of Feb. 12, 1996) / [2] Articles 396 and 763 of the Civil Act / [3] Article 756 of the Civil Act / [4] Article 756 of the Civil Act / [5] Article 756 of the Civil Act / [6] Articles 393 and 763 of the Civil Act

[2] Supreme Court Decision 97Da24382 delivered on February 27, 1998 (Gong198Sang, 867), Supreme Court Decision 96Da6240 delivered on September 4, 1998 (Gong198Ha, 2373), Supreme Court Decision 96Da1140 delivered on September 4, 1998 (Gong1998Ha, 2380) 3/4979 delivered on October 27, 1997 (Gong1998Ha, 2799, 2747) 97Da97999 delivered on December 197, 209, Supreme Court Decision 2001Da5843 delivered on December 10, 202 (Gong97, 397, 97Da19649 delivered on September 16, 195)

Plaintiff 1 and one other (Attorneys Choi Jin-si et al., Counsel for the plaintiff-appellant)

Daewoo Securities Co., Ltd. (Attorney Seo Jae-sik et al., Counsel for the defendant-appellant)

Seoul High Court Decision 99Na30369 delivered on June 9, 2000

Each appeal shall be dismissed. The costs of appeal shall be assessed against each party.

The grounds of appeal are examined.

1. Judgment on the plaintiffs' grounds of appeal

A. As to the first ground for appeal

However, as the over-the-counter trading of listed stocks other than the owner is not prohibited under the Securities and Exchange Act, a securities company engaged in the securities business under the Securities and Exchange Act may act as an agent or intermediary for the over-the-counter trading of listed stocks. However, according to the records, a securities company's participation in the over-the-counter trading of listed stocks other than the owner is not ordinarily engaged in the business. Thus, in order for a securities company to conduct the over-the-counter trading of listed stocks other than the owner as a general business, a transaction consignment agreement is necessary in addition to the transaction account contract entered into for the over-the-counter trading with the customer. However, it cannot be deemed that the plaintiff 1 entered into a sales consignment agreement with the defendant company on over-the-counter trading after receiving a proposal from the employees of the defendant company for the over-the-counter trading of listed stocks and delivery of stock certificates after accepting the proposal, and there is no data to recognize that there was a transaction consignment agreement on over-the-counter trading between the plaintiffs and the defendant company, as otherwise alleged in the grounds for appeal by the plaintiffs.

B. Regarding ground of appeal No. 2

According to the records, the non-party 1, who was the head of the distribution branch of the defendant company, was responsible for the damages of the plaintiffs due to the over-the-counter trading in this case and affixed the name and the name of the branch office of the defendant company. However, in light of the following circumstances after and after the preparation of the letter, the non-party 1's above agreement of compensation for damages cannot be deemed as an act related to the business of the defendant company, and thus, it cannot be held liable to the defendant company. Thus, the court below's rejection of the plaintiffs' claim that held the defendant company liable for the damages due to the non-party 1's damage compensation agreement is just and there is no violation of the rules of evidence

C. Regarding ground of appeal No. 3

In light of all the circumstances indicated in the records, it is the established precedent of the Supreme Court that the fact-finding or the ratio of the negligence of the parties involved in a tort is subject to the exclusive authority of the fact-finding court unless it is deemed that it is considerably unreasonable in light of the principle of equity (see, e.g., Supreme Court Decisions 96Da11440, Sept. 4, 1998; 96Da6240, Sept. 4, 1998; 97Da24382, Feb. 27, 1998) and the fact-finding that the court below recognized the plaintiffs' negligence as 50% is not deemed considerably unreasonable in light of the principle of equity, and there is no illegality in the misapprehension of legal principles as alleged in the grounds for appeal.

2. Judgment on the Defendant’s grounds of appeal

A. As to the establishment of employer liability

Article 756 of the Civil Act provides that "in relation to the performance of an employee's business, which is an element for an employer's liability," means that an employee's unlawful act is objectively deemed to be an act concerning the performance of an employee's business, an act, without considering any subjective circumstances. In this case, whether an employee's unlawful act is objectively related to the performance of an employee's business shall be determined by considering the degree of the employee's original duty and tort and the degree of the employee's occurrence of damage and the degree of the employee's failure to take preventive measures. Even in cases where an employee's unlawful act falls within the scope of the external performance of an employee's business, if the victim knew that the employee's act does not fall within the scope of the employee's business, or he did not know of it due to the employee's or gross negligence, the employer's liability may not be imposed on the employee's supervisor on behalf of the employer or the employer. In such cases, gross negligence refers to the situation where the other party to the transaction could not have been lawfully performed within the employee's authority, but it does not require considerable attention to the general public.

According to the records, as the head of the branch office of the defendant company's distribution branch, the non-party 1 solicited the plaintiff 1 to open an account for securities trading and to purchase investment funds based on personal information, and caused the plaintiffs to suffer losses due to the price increase as expected, the non-party 1's act of trading the over-the-counter trading of this case was unfairly recommended without proper explanation as to how the defendant company did not intervene in the over-the-counter trading of this case, or how the over-the-counter trading of the listed stocks was carried out by any method, and the risk of the transaction was caused. The non-party 2, the vice head of the defendant company's distribution branch, without confirmation of identity as to the over-the-counter trading of this case, did not cause losses to the plaintiffs by issuing the share certificates to the non-party 1 and the non-party 2, and it is hard to see that the non-party 1 and the non-party 2's above acts were objectively related to the execution of affairs of the defendant company, and it cannot be viewed that the non-party 1 and the non-party 2's employer.

B. As to the computation of damages

In principle, the amount of damages shall be calculated based on the exchange price at the time of the tort in case of a claim for damages caused by the infringement of ownership of a specific object and the failure of the object to exist. The court below is just in calculating the amount of damages according to the market price of the shares on October 23, 1995, where the plaintiff 1 and the non-party 2 were unfairly withdrawn the share certificates from the plaintiff 1 and delivered them to the pre-user, and there is no error in the misapprehension of legal principles as otherwise alleged in the ground of appeal.

3. Conclusion

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

Justices Cho Cho-Un (Presiding Justice)