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| TITLE | Supreme Court en banc Decision 2019Do9756 Decided February 20, 2020 【Fraud and Breach of Trust】 [full Text] |
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| Summary | |
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[1] Meaning of “a person, administering another’s business,” one who is a subject of breach of trust In a case where an obligor shall be liable for the maintenance and preservation of the collateral value of secured property to a person who holds the right to the said property transferred for security, an obligee, by placing the said obligor’s own movable asset as security by means of transfer to secure a monetary debt or have the duties to avoid the acts which may disrupt the exercise of a security interest by disposing of, losing or damaging the security, whether the obligor constitutes “a person, administering another’s business,” one who is a subject of breach of trust (negative) and, on this occasion, in a case where an obligor endangers in the exercise of the security interest or the resultant realization of claims as a result of a decrease or loss in value of the security by disposing of the security to a third person, whether a breach of trust may be established (negative) Whether the foregoing legal doctrine may apply even to the case where an obligor disposes of assets to a third person even though the said obligor is under an obligation to conclude a contract for the establishment of a security by means of transfer with respect to movable assets and then transfer them to an obligee (affirmative) and whether this legal doctrine is likewise applicable in the case where an obligor who had concluded a contract for the establishment of a security by means of transfer in relation to stocks disposed of the said stocks to a third person (affirmative) [2] In a case where a criminal defendant was indicted on charges of breach of trust on the grounds that the Defendant engendered damages equivalent to the loan to Bank B by selling out the movable asset, the object of security, to Party C and others although the criminal defendant, who manages Stock Company A, had concluded a contract, providing a movable asset owned by Stock Company A in the manner stipulated in the agreement on possession as security by means of transfer until Stock Company A pays the loan off, when obtaining a loan from Bank B, the case holding that there exists the illegality of misunderstanding of legal principles in the judgment of the lower court that handed down a guilty verdict as to the facts charged on the grounds that the typical and fundamental content of the relationship between Stock Company A and Bank B of the said transfer security contract refers to the repayment of loan debt and the security therefor, and the criminal defendant who manages Stock Company A cannot be deemed to corresponds to “a person who administers another’s business,” in the relationship with Bank B unless Stock Company A can be seen as administering Bank B’s business on the basis of a fiduciary relationship with Bank B beyond a relation involving conflicts of interest in an ordinary contract |
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