[1] The meaning of "other person's business" in the crime of breach of trust

[2] In a case where the transferor, in a contract of transfer of shares before the issuance of share certificates, disposes of the above shares without providing notification or consent of transfer by a certificate with a fixed date so that the transferor may oppose the transferee to a third party other than the company, whether the crime of breach of trust is established (negative

[1] The crime of breach of trust is established when a person who administers another’s business obtains pecuniary benefits by an act in violation of his/her duty and causes damage to another person who is the subject of the business, so the subject of the crime must be in the position of administering another’s business. In order to deal with another’s business, the principal of the crime must be in the position of administering another’s business. In order to manage another’s business, the principal of the crime should go beyond a simple relationship of claims and obligations, and should be in the protection or management of another’s property based on a fiduciary relationship among the parties. If the business

[2] The transfer of shares before the issuance of share certificates becomes effective only by the declaration of intention of the transferor and transferee. The transferee of shares may, barring any special circumstance, solely prove that he/she acquired shares without the need of the transferor's cooperation, request the transfer of shares to the company.

Therefore, even if the transferor bears the obligation to provide the notification or consent based on the certificate with a fixed date so that the transferor may oppose the transferee to a third party, other than the company, it shall be deemed to be his/her own business, and it shall not be deemed that the transferor entrusts the transferee with the business based on the fiduciary relationship with the transferee.

Therefore, the offense of breach of trust is not established under the Criminal Act even if the transferor does not have the status of dealing with the transferor's business to the transferee, and the transferor did not meet the requisite to set up against the third party as above and disposed of it in another way.

[1] Article 355 (2) of the Criminal Code / [2] Article 355 (2) of the Criminal Code

[1] Supreme Court en banc Decision 2008Do10479 Decided January 20, 201 (Gong2011Sang, 482) Supreme Court en banc Decision 2014Do3363 Decided August 21, 2014 (Gong2014Ha, 1923), Supreme Court en banc Decision 2019Do9756 Decided February 20, 2020 (Gong20Sang, 723) / [2] Supreme Court Decision 2017Da21176 Decided April 25, 2019 (Gong2019Sang, 1170)

Defendant

Defendant

Law Firm Dongin (LLC, Attorneys Lee Min-soo et al., Counsel for the defendant-appellant)

Suwon District Court Decision 2014No3978 decided April 10, 2015

The judgment of the court below is reversed, and the case is remanded to Suwon District Court.

The grounds of appeal are examined.

1. The crime of breach of trust is established when a person who administers another’s business obtains pecuniary benefits by an act in violation of his/her duty and causes damage to another person who is the principal agent of the business, and the principal agent of the crime is required to be in a position to deal with another’s business. In order to deal with another’s business, the principal agent of the crime must be in a position to deal with another’s business. The principal agent of the crime is required to protect or manage another’s property based on a fiduciary relationship between the principal and the parties, beyond a simple relationship of claims and obligations. If the principal’s business is not a third party’s business but a person is obligated to deal with another’s business, the principal does not constitute a person who administers another’s business (see, e.g., Supreme Court en banc Decision 2008Do10479, Jan. 20, 201; Supreme Court en banc Decision 2014Do363, Aug. 21, 2014; Supreme Court en banc Decision 2019Do

The transfer of shares before the issuance of share certificates shall take effect only by the declaration of intention of the transferor and transferee. The transferee of shares may, except in extenuating circumstances, solely prove that he/she acquired shares without any need to obtain cooperation from the transferor, request the transfer of shares to the company (see Supreme Court Decision 2017Da21176, Apr. 25, 2019, etc.).

Therefore, even if the transferor bears the obligation to provide the notification or consent based on the certificate with a fixed date so that the transferor may oppose the transferee to a third party, other than the company, it shall be deemed his/her own business, and it shall not be deemed that the transferor entrusts the transferee with the business based on the fiduciary relationship with the transferee.

Therefore, the offense of breach of trust is not established under the Criminal Act even if the transferor does not have the status of dealing with the transferor's business to the transferee, and the transferor did not meet the requisite to set up against the third party as above and disposed of it in another way.

2. The lower court upheld the first instance judgment convicting the Defendant on the facts charged of the instant case that: (a) the Defendant transferred 30,000 shares to the victim, without satisfying the requirements for counterclaim against the third party, transferred the said shares to a third party without satisfying the requirements for counterclaim against the said third party; and (b) acquired financial benefits equivalent to 30,000 shares in the market price; and (c) incurred damage equivalent to the amount of the shares to the victim.

However, in light of the aforementioned legal principles, the obligation of the Defendant to satisfy the requisite for setting up against a third party with the victim pursuant to a share transfer contract with the victim is one’s civil obligation and cannot be deemed as another’s business, and thus, the Defendant cannot be deemed to be in the position of “a person who administers another’s business.” Nevertheless, the lower court convicted the Defendant of the facts charged in the instant case on the premise that the Defendant falls under this case. In so doing, the lower court erred by misapprehending the legal doctrine on the meaning of “a person who

3. Therefore, without examining the remaining grounds of appeal, the judgment of the court below is reversed, and the case is remanded to the court below for a new trial and determination. It is so decided as per Disposition.

Justices Park Jung-hwa (Presiding Justice)