[1] The meaning and criteria for determining “when property damage is inflicted” among the elements of the crime of breach of trust, and whether the same legal principle applies in cases where the act of first breach of trust becomes null and void from a legal point of view, and subsequently continuously engages in the act of breach of trust, thereby causing actual loss to

[2] In a case where Defendant A acquired Company C through Defendant B’s funding, and had Company C jointly and severally guaranteed the Defendant B’s obligation without any particular consideration upon Defendant B’s request, and Defendant A entered into an agreement with Defendant B to not raise any objection when executing compulsory execution based on the above joint and several sureties, and Defendant A suffered damages to Defendant C, the case affirming the judgment below holding that the Defendants are liable for a crime of breach of trust regardless of the invalidity of breach of trust

[1] The crime of breach of trust is established when a person administering another's business obtains pecuniary advantage or has a third party obtain it by doing so, thereby causing loss to the principal. Here, "when causing property loss" includes not only cases where a real loss is inflicted, but also cases where a risk of actual loss of property has been inflicted on the principal. The determination as to the existence of property loss should be based on legal judgment in relation to the property status of the principal, rather than on the legal judgment. Thus, even if the act of breach of trust is null and void by legal judgment, where a person causing a real loss to the principal or a risk of actual loss of property due to the act of breach of trust, it constitutes a crime of breach of trust as it constitutes an act of breach of trust, even if the act of first breach of trust is null and void from a legal point of view, where a person administering another's business continuously has suffered a real loss to the principal

[2] In a case where Defendant A acquired Company C through Defendant B’s funding support, and caused Company C to stand joint and several surety with Defendant B without any specific consideration upon Defendant B’s active demand. Defendant A subsequently concluded an agreement that Defendant B would not raise any objection when executing compulsory execution on the basis of the above joint and several surety (hereinafter “Objection Agreement”) with Defendant C to collect a promissory note payment from Defendant C, thereby causing damage to the Company C, the case affirming the judgment below that Defendant A’s act of collecting the said obligation constitutes a series of joint and several surety and several surety acts, regardless of whether Defendant B’s actual act of collecting the obligation to act of breach of trust, and as long as Defendant B actively took part in the process of performing the duty of managing and preserving Company C’s property as the representative director of the Company C without any specific consideration, Defendant B’s act of collecting damages to the Company C, which constitutes a series of joint and several surety acts, and thus, Defendant C’s act of collecting damages to the Company C, a joint and several surety’s act of collecting the obligation of breach of trust, as well as an act of trust.

[1] Article 355(2) of the Criminal Act / [2] Articles 30, 355(2), and 356 of the Criminal Act; Article 3(1)1 of the former Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Amended by Act No. 11304, Feb. 10, 2012)

[1] Supreme Court Decision 2012Do10822 Decided December 27, 2012 (Gong2013Sang, 285) Supreme Court Decision 2011Do10302 Decided February 14, 2013 (Gong2013Sang, 519)

Defendant 1 and one other

Defendants

Attorney Han Man-hwan et al.

Seoul High Court Decision 2012No1232 decided November 29, 2012

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 Defendant 1’s ground of appeal

According to the records, Defendant 1 appealed against the judgment of the court of first instance and asserted only unfair sentencing as the grounds for appeal. In such a case, the argument that the judgment of the court below erred by violating the rules of evidence, mistake of facts, incomplete deliberation, or misunderstanding of legal principles cannot be a legitimate ground for appeal.

2. As to Defendant 2’s ground of appeal

A. The crime of breach of trust is established when a person administering another’s business obtains pecuniary advantage or has a third party obtain it by doing so, thereby causing loss to the principal. Here, “when causing property loss” includes not only cases where a real loss is inflicted, but also cases where a risk of actual damage to property has been incurred. The existence of property loss should be understood from an economic point of view without legal judgment in relation to the former’s property condition. Thus, even if the act of breach of trust is null and void by legal judgment, where a person causing a real loss to the principal or a risk of actual damage to property is discovered from an economic point of view, it constitutes a crime of breach of trust (see, e.g., Supreme Court Decision 2012Do10822, Dec. 27, 2012). This legal doctrine applies where a person administering another’s business continuously engages in the act of breach of trust even if the initial act of breach of trust is null and void from a legal point of view, thereby causing a real loss to the principal.

In addition, where a beneficiary who benefits from the crime of occupational breach of trust or a third party closely related thereto has instigated an act of occupational breach of trust without taking advantage of the act of occupational actor’s breach of trust, or actively participated in the act of occupational breach of trust by participating in the whole process of the act of occupational breach of trust, etc., he/she is a joint principal offender of the crime of occupational breach of trust (see, e.g., Supreme Court Decisions 2006Do483, Feb. 8, 2007; 2012Do2142, May 24, 2012).

B. In light of the evidence stated in the judgment below, the court below acknowledged that Defendant 2 had Defendant 1 take over Nonindicted Co. 1 (hereinafter “Nonindicted Co. 1”) from Nonindicted Co. 5 (hereinafter “Nonindicted Co. 5”) on September 22, 2008, and had the head of the accounting division of Nonindicted Co. 3 (hereinafter “Nonindicted Co. 3”) receive reports from time to time on the financial status of Nonindicted Co. 1’s company, and used a large influence on Defendant 1’s acceptance through its own fund assistance, as stated in the facts charged, such as having Nonindicted Co. 1 take custody of the acquisition fund to Defendant 1, Nonindicted Co. 1’s lender and registered himself as a registration director, and had the head of the accounting division of Nonindicted Co. 3 Co. 1 (hereinafter “Nonindicted Co. 3”) receive from Nonindicted Co. 5’s financial obligation from Nonindicted Co. 3, 297,600, which he did not receive any monetary obligation from Nonindicted Co. 15, a joint and several surety’s money order from Defendant 1500 million.

Furthermore, the court below rejected the claim that Defendant 1’s joint and several surety of this case cannot be an act of breach of trust as a normal transaction conducted for the purpose of profit or business necessity of the non-indicted 1 itself, and that Defendant 1’s joint and several surety of this case and the objection of this case did not refuse the demand of Defendant 2, the creditor, without any specific consideration, thereby obtaining property benefits equivalent to KRW 6.3 billion from the non-indicted 5, and thereby making the non-indicted 1 incur damages equivalent to KRW 6.3 billion, constitutes an act of breach of trust. Defendant 2 also actively participated in the whole process of the defendant 1’s act of breach of trust, and rejected the claim that the joint and several surety of this case cannot be an act of breach of trust as a normal transaction conducted for the purpose or business necessity of the non-indicted 1’s own company. (2) Furthermore, inasmuch as the non-indicted 5.3 billion won was directly disputed by the conclusion of the objection agreement of this case based on the joint and several surety of this case and thereby, it directly disputed the above act of breach of trust.

C. Examining the reasoning of the lower judgment in light of the aforementioned legal doctrine and the evidence duly admitted, the lower court did not err by exceeding the bounds of the principle of logic and experience and by exceeding the bounds of the principle of free evaluation of evidence, contrary to what is alleged in the grounds of appeal, by misapprehending the legal doctrine on the business manager, joint principal offender, act of breach of duty, intentional act, occurrence of damages, etc.

The Supreme Court's decision cited in the grounds of appeal differs from this case, and thus is inappropriate to be invoked in this case.

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 Shin Young-chul (Presiding Justice)