[1] Whether Article 107 (1) of the Civil Act applies mutatis mutandis to an act of acting as an agent in breach of trust (affirmative), and the criteria for determining whether the other party has acted in bad faith or negligence

[2] The case denying the establishment of an entrustment contract for the purchase of claims and bonds between a customer and a securities company in accordance with the proviso of Article 107(1) of the Civil Act where an employee of a securities company received claims from a customer and arbitrarily operated them

[1] In a case where a true expression of intention is made by an agent and the other party knew or could have known that the intention of the agent was in breach of trust for the benefit of himself or a third party against his own interest or will, the principal cannot be held liable for the act of the agent under the analogical interpretation of the proviso of Article 107(1) of the Civil Code. Whether the other party knew or could have known that it is not the intention of the agent's expression of intention should be determined reasonably based on objective circumstances, such as the process of formation of the expression of intention, its contents, and the effects arising therefrom.

[2] The case holding that, in case where an employee of a securities company received claims from a customer from the customer and arbitrarily operates the securities company without depositing in the account of the securities company, unlike ordinary bonds or certificates of deposit, the fixed interest after tax deduction was paid to the customer, the customer only traded with the securities company through the employee, but the balance of the comprehensive passbook in the name of the customer was lost, but only the balance certificate or certificate was issued by the employee, and if the employee could not withdraw in cash or bonds with the securities company without using the balance certificate or certificate of deposit, it is reasonable to view that the customer could have known that the employee's intent of the securities company was not for the securities company, even if he did not know that it was not for the securities company, it was ordinarily paid due care to the customer and the securities company, it cannot be deemed that the entrustment contract for the bonds or the bonds purchase fund was established between the customer

[1] Articles 107(1) and 116 of the Civil Act / [2] Articles 107(1) and 116 of the Civil Act

[1] [2] Supreme Court Decision 86Da371 delivered on November 10, 1987 (Gong1988, 78), Supreme Court Decision 97Da24382 delivered on February 27, 1998 (Gong1998Sang, 867), Supreme Court Decision 98Da39602 delivered on January 15, 199 (Gong199Sang, 290)

Kim Yong-sik et al. (Attorney Jeong-sung et al., Counsel for the defendant-appellant)

Defendant (Law Firm Sejong, Attorneys Osung-hwan et al., Counsel for the defendant-appellant)

Seoul High Court Decision 99Na42270 delivered on March 28, 2000

All appeals are dismissed. The costs of appeal are assessed against the plaintiffs.

The grounds of appeal are examined.

1. On the first ground for appeal

In a case where the other party knew or could have known that the other party's expression of intention was made by an agent and the intention of the agent was in breach of trust for the benefit of himself or a third party against the principal's interest or will, the principal cannot be held liable for the act of the agent under an analogical interpretation of the proviso of Article 107 (1) of the Civil Act. Whether the other party knew or could have known that the other party was not the intention of representation should be reasonably determined based on objective circumstances (see, e.g., Supreme Court Decisions 86Meu371, Nov. 10, 1987; 97Da24382, Feb. 27, 1998; 98Da39602, Nov. 15, 1999).

According to the reasoning of the judgment of the court below, the court below acknowledged that Kim Ho-ho, who substituted the plaintiffs, purchased a bond certificate, etc. designated by the defendant company by taking account of the evidence adopted in the judgment, and then delivered it to the non-party 1, who is an employee of the defendant company, the non-party 1 sold and commercialized the bond certificates or issued the bond purchase funds directly to the non-party 1, the head of the defendant company's main office and the non-party 2, and the non-party 3, etc. by using a false electronic document as if they purchased the bond certificates and delivered them to the non-party 1, the non-party 1 and the non-party 1 were not aware of the fact that it did not have any effect on the balance of the bond certificates issued by the plaintiffs to the non-party 1 and operated the fund at will every three months. The court below determined that the non-party 1 did not have any error in the law regarding the contract's issuance of the bond certificates and the bond purchase funds to the non-party 1, etc. by using the bond certificates or the defendant 3's trust.

2. On the second ground for appeal

The fact-finding or determination of the rate of comparative negligence in determining the degree of fault of the parties involved in a tort is an exclusive right of fact-finding unless it is deemed considerably unreasonable in light of the principle of equity (see, e.g., Supreme Court Decisions 97Da24382, Feb. 27, 1998; 98Da39602, Jan. 15, 199). Damage suffered by the victim due to the tort by deceit or embezzlement of money or property shall be the value of money or property at the time of the tort where the loss occurred. The victim's profit in proximate causal relation with the tort shall be deducted from the amount of damage. Upon examining the reasoning of the judgment below in light of the records, the fact-finding and the determination of evidence established by the court below as to the rate of fault of the plaintiffs, and the amount equivalent to the amount equivalent to the interest accrued to the non-party 1, etc. at the time of delivery to the non-party 1, etc. of the deposit certificate which the plaintiffs delivered to the non-party 1, etc. shall not be included in the amount of damages.

3. On the third ground for appeal

Of the judgment of the court below, the part of the judgment of the court below as to the joint plaintiff Kim Jong-ray was not appealed within the final appeal period, and the plaintiffs are already finalized. Since there is no interest in the judgment of the court below as to the part concerning Kim Jong-ray, the plaintiffs' ground of appeal as to the part concerning Kim Jong-ray cannot be a legitimate ground of appeal

4. Therefore, all appeals are dismissed, and the costs of appeal are assessed against the appellant. It is so decided as per Disposition by the assent of all participating Justices.

Justices Lee Yong-woo (Presiding Justice)