[1] The meaning of "property damage" in the crime of occupational breach of trust and the standard for determining whether property damage occurred (=economic point of view) and the meaning and degree of "risk of property damage" that can be assessed as having caused property damage (=the degree of specific and practical risk)

[2] Where a person who administers another person's business in the crime of occupational breach of trust is likely to be invalidated as a juristic act in a civil trial in violation of the legal order, matters to be considered in determining whether a property damage has occurred to the principal

[3] In a case where the Defendant, an employee of the mixed feed selling company Gap, was indicted on charges of violating the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Misappropriation) on the ground that he had obtained property benefits to Eul by arbitrarily adjusting the unit price or granting a discount on the price without obtaining the internal approval of Gap company, while supplying mixed feed to Eul, the case holding that the lower court erred by misapprehending the legal doctrine on the property damage requirements for breach of trust in the judgment of conviction, thereby failing to exhaust all necessary deliberation

[1] The crime of occupational breach of trust is established when a person administering another's business commits an act in violation of his/her duties and obtains or causes a third party obtain pecuniary benefits from such act in violation of his/her duties, thereby causing property damage to the principal. Here, property damage includes not only a real damage but also a case where a risk of actual property damage is caused, and the judgment on whether or not property damage has occurred should be grasped from an economic point of view without legal judgment. However, the risk of actual property damage, which can be assessed as having caused property damage, means a case where the principal is not sufficient to have a clear risk of damage, and where there is a specific risk to the same extent as the principal has suffered property damage from an economic point of view. Therefore, the risk of actual property damage is sufficient to the extent that specific and practical danger has occurred, and it is insufficient to the extent that there is a vague possibility

[2] In the crime of occupational breach of trust, a person who administers another’s business is not likely to be deemed null and void as a juristic act contrary to the legal order in a civil trial, and there are many cases where the result does not cause any damage to the principal. In such a case, a thorough examination and determination shall be conducted as to whether there are circumstances such as whether the performance of the obligation was actually performed due to the act of imposing the obligation or whether the principal bears the responsibility for the employer under the Civil Act, etc., or whether there is a risk of actual damage or loss.

[3] In a case where the Defendant, an employee of the mixed feed selling company Gap, supplied mixed feed to Eul without obtaining internal approval from Eul and arbitrarily adjusted the unit price or discounted the price under the pretext of incentives, etc., thereby causing damage to Eul company, the case held that the lower court erred by failing to exhaust all necessary deliberations by misapprehending the legal principles on property damage and failing to exhaust all necessary deliberations on the facts charged, where the first instance court ruled that, although the first instance court decided against Eul company, it is difficult to completely exclude the possibility of causing damage to Gap company's property, as long as the possibility of causing damage to Gap company's property occurred, even if the risk of actual damage was not specific and realistic, although the Defendant's act specifically affected the property condition of Gap company's company's property, despite the first instance court's judgment on the purchase price of goods, Gap company's actual damage was caused or the risk was caused by the loss of Gap company's property.

[1] Articles 355(2) and 356 of the Criminal Act / [2] Articles 355(2) and 356 of the Criminal Act / [3] Articles 355(2) and 356 of the Criminal Act; Article 3(1)2 of the former Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Amended by Act No. 13719, Jan. 6, 2016)

[1] Supreme Court en banc Decision 94Do1375 Decided November 21, 1995 (Gong1996Sang, 127), Supreme Court en banc Decision 2006Do4876 Decided June 19, 2008 (Gong2008Ha, 1181), Supreme Court Decision 2015Do6745 Decided September 10, 2015 (Gong2015Ha, 1573) / [2] Supreme Court en banc Decision 2014Do104 Decided July 20, 2017 (Gong2017Ha, 1760), Supreme Court Decision 2014Do960 Decided September 21, 2017 (Gong2017Ha, 2023)

Defendant

Defendant

Law Firm Lee Hun-han, Attorney Mada-young

Seoul High Court Decision 2017No312 decided April 27, 2017

The judgment below is reversed and the case is remanded to Seoul High Court.

The grounds of appeal are examined.

1. Facts charged;

The Defendant served as an employee of Nonindicted Company 1 (hereinafter “victim”). From May 2012, from around 2012, Nonindicted Company 2 sold the mixed feed on ○ farm operated by Nonindicted Company 2 from around May 2012. The Defendant had occupational duties to determine discount rates in accordance with the Business Management Manual and to obtain internal approval so as not to cause damage to the victim’s company. Nevertheless, on July 2013, the Defendant violated the above duties, supplied Nonindicted Company 2 with the mixed feed equivalent to KRW 58,87,045 and without reporting or obtaining approval from Nonindicted Company 2, 4 million from around 200 to around 200, 100 won from around 200, 2000 won from around 20, 2000 won from around 50, 2000 won from around 20, 300 won from KRW 5,216,582,616, and 300,000 from around 25, 2015.

2. Judgment of the first instance court

In full view of the following circumstances revealed through the facts acknowledged by the record, namely, Nonindicted 2, a person engaged in both money and engaged in feed transactions for a long time, appears to have been aware of the scope of business rights of operating members; Defendant’s arbitrarily prepared books to Nonindicted 2 include not only the amount of incentives but also the content; Nonindicted 2, upon receipt of the notice of transaction details, balance confirmation, and notice of payment of incentives, etc. different from the books received from the Defendant, did not raise any objection to the victim company every month or every half year; Nonindicted 2, a temporary suspension of transactions with the victim company, and Nonindicted 2, a temporary suspension of transactions with the victim company, was well aware that it was well aware that there was no right to discount or additional payment of incentives to the Defendant; therefore, even if the Defendant promised to pay discounts or additional incentives to Nonindicted 2, this is deemed null and void in relation to the victim company, and thus, it is difficult to deem that the Defendant was not guilty on the ground that there was a concrete and real risk of property damage.

3. Lower judgment

The lower court, as in the judgment of the first instance court, determined that the Defendant’s act constitutes a crime of breach of trust, in light of the following circumstances acknowledged by the evidence duly adopted and investigated by the first instance court, even if the Defendant’s act of promising the payment of the Defendant’s feed discounts or additional incentives is invalid in relation to the victim company, and thus, the Defendant’s act constitutes a crime of breach of trust.

(1) In the process of providing feed to the ○ farm operated by Nonindicted Party 2 as an employee in charge of the business of the victim company, the Defendant continued the transaction by either paying additional incentives or issuing books prepared by raising advance incentives to Nonindicted Party 2.

(2) After temporarily suspending transactions on May 2013, Nonindicted 2013, Nonindicted 2 commenced a transaction again from July 2013. Nonindicted 2 confirmed the difference between the documents sent by the victim company in 2014 and the account books delivered by the Defendant, and the Defendant said that the data was suitable for the Defendant.

(3) When the victim company came to know of the above acts by the Defendant, it was prepared and issued by Nonindicted 2 a notarial deed under a loan for consumption by means of transfer for security (hereinafter “instant notarial deed”). Nonindicted 3, the representative of ○○ farm, filed a lawsuit of demurrer against a claim for non-performance of compulsory execution based on the instant notarial deed at Suwon District Court KRW 2015Gahap1835, Sept. 17, 2015. The victim company filed a lawsuit of demurrer against Nonindicted 3 as a counterclaim (2015Gahap945) to seek payment of KRW 58,214,883 of the price of goods (hereinafter “instant notarial deed”).

(4) The first instance court held that it cannot be deemed that the Defendant had the authority to modify the content of the mixed feed supply contract, and that there was a justifiable reason to believe that the Defendant had such authority on the part of Nonindicted Party 2. However, this cannot be completely ruled out the possibility that the victim was responsible for the contractual liability under the instant contract, and that the victim was responsible for the employer’s liability and other legal liability against Nonindicted Party 2. The instant case is currently pending in the appellate court trial (Seoul High Court 2016Na2067081).

4. Judgment of the Supreme Court

A. (1) The crime of occupational breach of trust is established when a person who administers another's business commits an act in violation of one's duty and obtains or causes a third party obtain economic benefits from such an act in violation of one's duty and thereby causing property damage to the principal. Here, property damage includes not only a real damage but also a case where a risk of actual property damage is caused, and the judgment on whether property damage has occurred should be based on legal judgment and should be grasped from an economic point of view (see, e.g., Supreme Court Decision 94Do1375, Nov. 21, 1995). However, the risk of actual property damage, which can be assessed as having caused property damage, means a case where there is a specific risk from an economic point of view that it is insufficient for the principal to cause damage to the principal, and it means a case where there is a specific risk from an economic point of view (see, e.g., Supreme Court en banc Decision 2006Do4876, Jun. 19, 2008).

(2) In the crime of occupational breach of trust, a person who administers another’s business is not likely to be deemed null and void as a juristic act contrary to the legal order in a civil trial, and there are many cases where the result does not cause any damage to the principal. In such a case, a thorough examination and determination should be made as to whether there are circumstances such as whether the performance of the obligation was actually performed due to the act of imposing the obligation or whether the principal bears the responsibility for the employer under the Civil Act, etc., and whether there is a risk of actual damage or actual damage (see, e.g., Supreme Court en banc Decision 2014Do1104, Jul. 20, 2017; Supreme Court Decision 2014Do960, Sept. 21, 2017).

B. We examine the judgment below in light of the above legal principles.

The judgment of the court below states that even if the defendant's act of paying the defendant's feed discount or the promise to pay additional incentives is null and void in relation to the victim company, it is difficult to completely exclude the possibility of paying user liability, etc. as long as the defendant continued in the first instance court of the goods price lawsuit, but the defendant won the victim company in favor of the victim company, and the other party's appeal was pending in the appellate court. However, even if it is based on the judgment below itself, it is difficult to say that the risk of actual damage to the victim company has reached a concrete and realistic level, it is difficult to deem that the risk of actual damage has occurred.

The court below should have determined whether the above act of the defendant had a specific impact on the property status of the victim company, notwithstanding the judgment of the court of first instance in the lawsuit for the purchase of goods in this case, it should have determined whether the victim company is responsible for the employer, and whether the risk of actual damage or actual damage has occurred. Nevertheless, the court below convicted the victim company of the facts charged on the sole basis of the circumstances as stated in its holding. In this case, the court below erred by misapprehending the legal principles on the property damage requirements of the crime of breach of trust, which led to failure

5. Conclusion

Therefore, without further proceeding to decide on 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 by the assent of all participating Justices

Justices Ko Young-han (Presiding Justice)