Supreme Court: "Taking someone else's wallet found in a store and claiming it as your own is fraud"

[Asia Economy Reporter Choi Seok-jin, Legal Affairs Specialist] The Supreme Court has ruled that when a person claims a wallet lost by someone else in a store as their own and takes it from the owner, it constitutes fraud rather than theft.

The Supreme Court's 3rd Division (Presiding Justice Lee Heung-gu) confirmed on the 11th the lower court's ruling that recognized A (54), who was indicted on charges of theft (primary) and fraud (alternative), guilty of fraud and sentenced him to a fine of 500,000 won.

The court stated, "The lower court's judgment to acquit on the primary charge of theft and convict on the alternative charge of fraud is appropriate, and there is no error in the lower court's legal interpretation regarding the distinction between fraud and theft that would affect the verdict."

A went to a store in Jongno-gu, Seoul, on May 16, 2021, to buy an umbrella. When the store owner, who found a wallet on the floor, asked, "Is this wallet yours?" A replied, "Yes, it is mine," and took the wallet from the owner, leading to a trial on theft charges.

The wallet A took contained another person's ID card, credit cards, and one 50,000 won bill in cash.

In court, A denied the charges, claiming he mistakenly took the wallet thinking it was his own, and after realizing it belonged to someone else, he tried to return it by placing it in a mailbox. He also said he was unaware there was cash inside the wallet.

However, the first trial court rejected A's claims based on the facts that the wallet is an item usually carried on the person and frequently used, that A had already put his own wallet in his bag after paying for the umbrella when asked by the store owner, that the colors and materials of A's wallet and the wallet taken from the store owner were different, and that A ran out of the store immediately after receiving the wallet. The court found A guilty of theft and sentenced him to a fine of 500,000 won.

The second trial court also acknowledged that A took someone else's wallet with the intent of illegal possession.

However, the issue was whether A's act constituted theft or fraud.

A appealed the first trial verdict, arguing not only that he took the wallet by mistake thinking it was his own but also that since the act was mediated by the store owner's "disposition act," theft could not be established, only fraud.

Fraud requires the "disposition act" of the deceived party who is mistaken due to deception, whereas theft requires "taking" that excludes the possession of the person currently holding the item against their will and transfers possession to oneself.

There are ambiguous cases between fraud and theft, such as "strategic theft," where deception is used as a means to take possession.

For example, if someone deceives a jewelry store owner into handing over a ring by pretending to buy it, then lies about going to the restroom and takes the ring, or if someone at a wedding pretends to be collecting congratulatory money and takes money from guests, the Supreme Court has recognized these as theft, not fraud.

For fraud to be established, the deceived party must perform a final "disposition act" regarding the property, but the jewelry store owner or guests cannot be seen as having fully handed over the ring or congratulatory money.

Meanwhile, considering these points, the prosecutor requested a change in the indictment during the appeal to add fraud as an alternative charge, which the court approved.

The second trial court acquitted A of theft but found him guilty of fraud, maintaining the fine of 500,000 won imposed in the first trial.

The court explained, "Theft means taking possession of another person's property that is possessed by someone else against the possessor's will and transferring possession to oneself or a third party. Fraud, on the other hand, is a crime established by deceiving another person, causing them to make a disposition act under mistaken belief, thereby obtaining property or economic benefits."

It continued, "It is reasonable to consider that the wallet left in the store belonged to the store owner's possession, and since the defendant obtained the wallet by using the owner's act, who mistakenly believed the defendant was the owner, it is difficult to evaluate the defendant's act as acquiring property by taking it away. Therefore, the defendant's act cannot be seen as theft of the victim's property."

The court also stated, "The store owner, as the person who found the item left by the customer, was in a position to return it to the victim or owner. Since the defendant obtained the wallet through the delivery act based on the deceived store owner's intention, this corresponds to the disposition act in fraud," thus recognizing the fraud conviction.

The Supreme Court also agreed that the second trial court's judgment was correct.