[1] Whether aiding and abetting by negligence in the area of civil law is possible (affirmative), and in such a case, the content of negligence / The standard for determining a proximate causal relationship between aiding and abetting by negligence and causing damage to a tort

[2] Criteria to determine whether there exists a proximate causal relationship between a financial institution’s breach of its duty of care to establish a master account and a victim or a third party’s loss

[1] Article 760(3) of the Civil Act provides that an assistant of a tort shall be deemed a joint tortfeasor and shall be held liable for a joint tort. Aiding and abetting refers to all direct or indirect acts facilitating a tort, and it is also possible to assist by negligence in the area of civil law where negligence is the same as that of an intentional act in principle for the purpose of compensating for damages. In such a case, the content of negligence refers to a violation of the duty of care not to assist a tort on the premise that there is a duty of care not to assist a tort. However, in order to impose joint tort liability for aiding and abetting and abetting another person’s tort by negligence, proximate causal relation between aiding and abetting act and the victim’s damage should be acknowledged. In determining proximate causal relation, reasonable causal relation should be established between aiding and abetting act and aiding act’s occurrence of damage. In addition, in determining proximate causal relation, caution should be exercised so as to avoid excessively expanding liability by comprehensively taking into account the probability of the situation that facilitate a tort by negligence, the impact of the damage caused by negligence

[2] In a case where an account was opened by gathering another person’s name, it cannot be deemed that a financial institution should always be liable for damages equivalent to money deposited and withdrawn through the master account solely on the ground that the financial institution failed to undergo the procedure for identification. In order to recognize liability for damages, a proximate causal relation exists between the violation of the financial institution’s duty of care and the occurrence of loss to the victim or a third party. Presumption of proximate causal relation should be comprehensively taken into account not only the probability of the occurrence of a general result, but also the purpose and legal interest of the law and other rules of conduct that erases the duty of identification, the contents of illegal act using the account, degree of contribution to the account’s account, degree of loss to the account user and the account user, degree of damage, etc. Inasmuch as a financial institution failed to conduct the procedure for identification of identity, etc., and accordingly, bears responsibility for damages incurred to an unspecified financial institution due to the mere fact that the account was used in trading with an unspecified number of individuals, it should be determined by taking account of various types of circumstances such as a misunderstanding of legal interests and interests arising from various types of transaction and responsibilities.

[1] Article 760 (3) of the Civil Code / [2] Article 750 of the Civil Code

[1] Supreme Court Decision 2013Da91597 Decided March 27, 2014 (Gong2014Sang, 943) Supreme Court Decision 2012Da84707 Decided January 15, 2015 / [2] Supreme Court Decision 2005Da21821 Decided July 13, 2007 (Gong2007Ha, 1257)

Plaintiff (Law Firm this, Attorney Quota-il, Counsel for plaintiff-appellant)

Defendant 1 and one other (Law Firm Han, Attorneys Kim Sung-min et al., Counsel for the defendant-appellant)

Daegu High Court Decision 2014Na22414 decided August 13, 2015

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

The grounds of appeal are examined.

1. Regarding ground of appeal No. 1

A. Article 760(3) of the Civil Act provides that an assistant of a tort shall be deemed a joint tortfeasor and shall be held liable for a joint tort. Aiding and abetting refers to all direct or indirect acts facilitating a tort, and it is also possible to assist by negligence in the area of the civil law where negligence is the same as that of an intentional act in principle for the purpose of compensating for damages. In such a case, the content of negligence refers to a violation of the duty of care not to assist a tort on the premise that there is a duty of care not to assist a tort. However, in order to impose joint tort liability for aiding and abetting and abetting another person’s tort by negligence, proximate causal relation between aiding and abetting act and the victim’s damage should be acknowledged. In determining proximate causal relation, in addition to the likelihood of expectation of the situation that facilitate a tort by negligence, the likelihood of the occurrence of damage caused by negligence, the degree of contribution to the formation of the victim’s trust, and whether the victim was able to easily prevent damage on the part of the victim, etc., should not be excessively expanded (see, e.g., Supreme Court Decision 2015Da1757.

Therefore, in a case where an account is opened by gathering another person’s name, it cannot be deemed that the financial institution should always be liable for damages equivalent to money deposited and withdrawn through the original account solely on the ground that the financial institution failed to undergo the procedure for identification. In order to recognize liability for damages, there is a proximate causal relation between the violation of the financial institution’s duty of care and the occurrence of loss to the victim or a third party. The proximate causal relation should be established by comprehensively taking into account the following factors: (a) the purpose and legal interest of the Acts and subordinate statutes and other behavioral rules that impose the duty of identification as well as the probability of general outcome; (b) details of illegal acts using the account; (c) degree of contribution to the account to the account; (d) the degree of damage to the account user and the account user; (e) whether the account holder did not undergo the procedure for identification; and (e) the circumstance or attitude used in trading with an unspecified number of people; (e) if an unspecified financial institution bears responsibility for damages incurred by the account’s failure to undergo the procedure for identification; and (e) the determination of losses arising from various types of property rights caused to an unspecified financial institution.

B. The reasoning of the lower judgment and the evidence duly admitted by the lower court reveal the following.

(1) Nonparty 1, who is a public official in the general civil petition of the Gyeongcheon-gun, Gyeongcheon-gun, who is a public official, had a false statement to the Plaintiff stating that “The Plaintiff shall obtain a resident registration certificate and a certificate of seal from the Plaintiff for the purpose of preparing a tender around February 10, 201, when it is necessary to prepare a tender on the part of the Plaintiff for the preparation of a tender, with the intention of forging the money under the pretext of no maintenance of the military.”

(2) On February 10, 201, Nonparty 1 opened a deposit account in the Plaintiff’s name (hereinafter “instant account”) by presenting the Plaintiff’s resident registration certificate and a certificate of seal impression delivered to Defendant 1, who works as the director at the YA branch (hereinafter “instant branch”) of the Defendant Nonghyup Bank Co., Ltd. (hereinafter “Defendant Nonghyup”) and submitting a transaction application form with the Plaintiff’s seal impression affixed thereto. Nonparty 1 was issued a passbook with the Plaintiff’s seal impression affixed (hereinafter “instant passbook”).

(3) In the process of opening the instant account, Defendant 1 did not take measures to verify whether there was a legitimate delegation of the Plaintiff, such as demanding Nonparty 1 to make a proxy in the name of the Plaintiff and a certificate of personal seal impression. Upon Nonparty 1’s request, Defendant 1 stated that “(Ycheon-gun)” was “(Ycheon-gun)” in the column of deposit account of the instant passbook.

(4) On February 11, 2011, Nonparty 1 copied the transaction drawing and the deposit price among the instant passbook at the office located in theYacheon-gun Office. Nonparty 1 affixed the official seal of the Yacheon-gun Office’s public service center in blank, affixed it to the transaction drawing column of the passbook copied, and made a copy of the passbook with the official seal of the Yacheon-gun Office’s public service center (hereinafter “the instant passbook”).

(5) On February 13, 2011, Nonparty 1 demanded that the Plaintiff deposit KRW 500 million of the price of each land in this case with the instant account, while Nonparty 1 said that the copy of the passbook in this case was the corporate passbook of the Ycheon-gun Office.

(6) On February 14, 201, the Plaintiff requested Nonparty 2, an employee, to deposit KRW 500 million in the instant account, upon submitting a written request for deposit from the Ycheon Saemaul Bank, which was traded in Pyeongtaek-gun on February 14, 201. However, Nonparty 2 explained to the Plaintiff that it is difficult for the Plaintiff to transfer money on the ground that the deposit holder of the instant account is not the Ycheon-gun, and that the one-time transaction of other remittance was KRW 100 million, and thereafter, the recipient was changed to the Plaintiff with the Plaintiff’s consent, and then deposited KRW 500 million in the instant account.

(7) On February 15, 2011, Nonparty 1 collected KRW 500 million from the instant account by withdrawing KRW 500 million from the instant account by using the withdrawn money ticket with which the Plaintiff’s seal impression was affixed at the time of filing the application for the opening of the instant account at the instant branch (hereinafter Nonparty 1’s aforementioned series of defraudation as referred to as “instant fraud”).

C. The lower court: (a) premised on the fact that a financial institution, in the course of opening a deposit account with an agent, takes such minimum measures as receiving the power of attorney and a certificate of personal seal impression and confirming the agent’s identity card, etc. to prevent the possibility that the deposit account opened by the agent will be used for a criminal act against a large number of unspecified potential victims, thereby not aiding and abetting others’ tort; and (b) held that Defendant 1 was negligent in violating the duty of identification during the process of opening the instant account; and (c) proximate causal relation between Defendant 1’s negligence and the Plaintiff’s losses caused by the instant fraudulent act by Nonparty 1 is acknowledged; and (d) held that Defendant 1 is liable for joint tort by aiding and abetting the Plaintiff, and Defendant Agricultural Cooperative is liable for the employer as Defendant

D. (1) However, in order to impose liability for aiding and abetting the instant fraud on Defendant 1, as recognized by the lower court, even if Defendant 1 was negligent in failing to properly verify the intent of the Plaintiff himself at the time of opening the instant account, there is insufficient circumstance that Defendant 1 opened the instant account and issued the instant passbook, and Defendant 1, at the time of opening the instant account, should be able to have proximate causal relation in light of various circumstances, including the background leading up to the instant fraud, the degree of contribution to the formation of the Plaintiff’s trust in the instant fraud, and whether the Plaintiff could have easily prevented damage on his own.

(2) However, based on the reasoning of the lower judgment and the evidence duly admitted by the lower court, it is difficult to recognize that Defendant 1 could have specifically predicted that the account and passbook of this case would be used as a means of deception to believe that the account and passbook of this case would be a real land sub-party transaction in the course of the instant fraud, by deceiving Nonparty 1, the Plaintiff, the deposit owner of the instant passbook, as the corporate account, and receiving money under the pretext of military maintenance and payment. It does not change because Defendant 1, at the time of opening the instant account, stated “(Ycheon-gun)” in the column for the deposit note of the instant passbook at Nonparty 1 on the ground that Defendant 1 was the Plaintiff’s deposit owner and the Plaintiff’s seal impression was affixed.

In addition, the depositer of the copy of the passbook presented to the Plaintiff is the Plaintiff himself/herself, while the official seal of the Ycheon-gun civil petition office, which is not related to the non-fluoring business of the land owned by Ycheon-gun, and thus, the Plaintiff could have sufficiently doubtful the fact that the instant account may not be a corporate account. Furthermore, at the time of the Plaintiff’s transfer of KRW 500 million to the instant account from the employees of the community credit cooperative until the time of the Plaintiff’s transfer of KRW 500 million, the account owner of the instant account was not the Ycheon-gun, but the Plaintiff could have verified whether the instant account was a corporate account of Ycheon-gun, but did not confirm it properly. Therefore, the Plaintiff could have easily prevented Nonparty 1 from incurring damages of KRW 500 million if he/she paid a little attention at the time of the instant fraudulent act.

Examining the above circumstances in light of the legal principles as seen earlier, even if Defendant 1 was negligent in failing to verify the Plaintiff’s intent at the time of opening the instant account, it is difficult to view that a proximate causal relationship exists between the negligence and the damage suffered by the Plaintiff by Nonparty 1’s instant fraud.

E. Nevertheless, the lower court determined, solely on the grounds indicated in its reasoning, that there was a proximate causal relation between Defendant 1’s negligence and the Plaintiff’s damage caused by Nonparty 1’s instant fraud, and held that the Plaintiff is liable for joint tort liability. In so doing, the lower court erred by misapprehending the legal doctrine on joint tort liability due to negligent aiding and abetting and abetting and the proximate causal relation between tort and damage. The allegation in the grounds of appeal on this point is with merit

2. Conclusion

Therefore, without examining the remaining grounds of appeal by the Defendants, the lower judgment is reversed, and the case is remanded to the lower court for further proceedings consistent with this Opinion. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Park Poe-young (Presiding Justice)