Law Firm BelS et al., Counsel for the defendant

Attorney Gyeong-soo et al., Counsel for defendant

The costs of appeal by the Plaintiff are assessed against the Defendants. The costs of appeal by the Defendants are assessed against the Defendants.

1. Judgment on the Defendants’ grounds of appeal

The lower court, citing the judgment of the first instance court, determined that the instant insurance contract was null and void in violation of Article 103 of the Civil Act. For that reason, Defendant 1 concluded the instant insurance contract with a pure risk of life, body, etc. rather than entering into the instant insurance contract with a view to unfairly acquiring insurance proceeds.

Examining the reasoning of the lower judgment in light of the relevant legal doctrine, the lower court did not err by exceeding the bounds of the principle of free evaluation of evidence against logical and empirical rules, or by misapprehending the legal doctrine on the invalidation of insurance contracts.

2. Judgment on the Plaintiff’s grounds of appeal

A. The Plaintiff filed a claim against the Defendants for the return of the insurance money already paid on the ground that the insurance contract was null and void, and the Defendants asserted that the extinctive prescription period has expired. The key issue of this case is whether the period of extinctive prescription of the right to claim the return of unjust enrichment against the insurance money should be determined in accordance with the provisions of the Civil Act, or whether the provisions of the Commercial Act on the period of extinctive prescription of the

B. It is to apply mutatis mutandis the application of legal norms to a matter that does not have legal regulations to supplement the defects of laws by applying them to a matter that is similar thereto. This is to resolve a real legal dispute or to bring about a result substantially contrary to the concept of social justice in a case where a literal interpretation or logical interpretation of the provisions of the positive law is unable to resolve a practical legal dispute, or the court will take into account the legislative spirit of the positive law, thereby rationally resolving the legal dispute and deriving a result suitable for the concept of justice. In addition, for such analogy, there must be a common or similar point between a case that does not have legal regulations and a case where there is legal regulations, and an analogical application should be deemed justifiable in light of the legal system, legislative intent and purpose, etc. (see Supreme Court Decision 2019Da226135, Apr. 29, 2020).

In principle, the extinctive prescription period of a claim is ten years, either a claim arising from a contract or a claim for return of unjust enrichment arising from the invalidation of a contract (Article 162(1) of the Civil Act). However, the Commercial Act sets the period of extinctive prescription of a claim arising from a contract which is a commercial activity as five years (Article 64 of the Commercial Act). The reason why the period of extinctive prescription of a commercial contract is set short is that the contractual relationship needs to be carefully and promptly resolved compared to a civil contract relationship in light of the unique nature of a large volume, fixed and rapid commercial transaction relationship (see Supreme Court Decision 2004Da22742, Nov. 10, 2005). However, the Commercial Act, unlike the Civil Act, sets the extinctive prescription period of a claim arising from a contract which is a commercial activity as above, does not separately provide for the

The following principles and exceptions are acknowledged on the premise that Article 64 of the Commercial Act may be applied or applied mutatis mutandis to not only a claim directly arising from a commercial activity but also a claim corresponding thereto. The ten-year extinctive prescription period under Article 162(1) of the Civil Act shall apply to a claim for the return of unjust enrichment arising from the invalidation of a contract which is a commercial activity, barring any special circumstances, as the right to claim the return of unjust enrichment arising out of a contract based on unjust enrichment under Article 741 of the Civil Act. Provided, That the five-year extinctive prescription period under Article 64 of the Commercial Act shall apply or apply mutatis mutandis to a case where a legal relationship needs to be resolved rapidly to the same extent as that of a commercial transaction, in light of the developments leading up to the occurrence of a claim, the cause thereof, and the status and relationship of a party (see Supreme Court Decisions 2002Da64957, 64964, Apr. 8, 2003; 2017Da24803, Jun. 15, 2018).

C. It is reasonable to view that Article 64 of the Commercial Act applies mutatis mutandis to the insurer’s right to claim the return of unjust enrichment against the insurer’s insurance money where the policyholder concludes an insurance contract with the intention of unfairly acquiring insurance money through multiple contracts and it becomes invalid contrary to good morals and other social order pursuant to Article 103 of the Civil Act. Detailed reasons are as follows.

(1) In a case where an insurance contract is null and void against good morals and other social order, seeking the return by the insurer is the insurance money paid as a performance of obligations based on the insurance contract (Article 46 subparag. 17 of the Commercial Act), which is a basic commercial activity. Such right to request a return is closely related to the implementation of the insurance contract, and is accordingly corresponding to the claim for performance.

(2) The case where a policyholder concludes an insurance contract for the purpose of unfairly acquiring insurance proceeds through multiple contracts is one of the typical grounds for invalidation, which arise from the insurer’s failure to conclude the insurance contract through commercial activities. In this case, multiple insurance contracts are related to the characteristics of the case, so multiple insurers have the right to claim restitution of unjust enrichment, or one insurer has the right to claim restitution of unjust enrichment. Such legal relations need to be regularly and promptly treated as they have arisen from the same cause.

(3) Under an insurance contract, the policyholder’s duty to pay premiums and the insurer’s duty to pay insurance premiums are mutually in a quid pro quo relationship, and there is considerable limitation on claiming the return of insurance premiums already paid by the policyholder. First, Article 648 of the Commercial Act provides, “In cases where the whole or part of the insurance contract is null and void, the policyholder and the insured are bona fide and without gross negligence, the insurer may be demanded to return all or part of the insurance premiums. The same shall apply in cases where the policyholder and the beneficiary are bona fide and without gross negligence.” In light of the nature of the insurance contract, even if the insurance contract becomes null and void due to bad faith or gross negligence of the policyholder, etc., if it is possible for the policyholder, etc. to receive the already paid insurance premiums to the insurer who has paid many expenses in the course of the conclusion of the insurance contract, the return of the insurance premiums is restricted as above. Article 662 of the Commercial Act provides that the three-year extinctive prescription period shall apply to the claim for insurance money or the claim for return of insurance premiums arising from the invalidity of the insurance contract.

In order for a policyholder to claim the return of the premium as above, both the policyholder, the insured, or the beneficiary must be in good faith and without gross negligence pursuant to Article 648 of the Commercial Act, and the period of short-term extinctive prescription of three years is applied pursuant to Article 662 of the Commercial Act. However, Article 648 or 662 of the Commercial Act is apparent in its language that the insurer’s claim for the return of the insurance premium or the claim for the return of the premium is not subject to the insurer’s claim for the return of the insurance premium, and it is inappropriate to extend or analogically apply the above provisions to the case where the insurer claims the return of the insurance

However, it cannot be deemed that the period of extinctive prescription is applied to the insurer’s right to claim the return of unjust enrichment against the insurer’s insurance proceeds, and the provisions on the period of extinctive prescription should apply mutatis mutandis to the insurer’s right to claim the return of unjust enrichment. In light of the formation of an insurance contract and the need for prompt handling of legal relations, the provisions on the period of extinctive prescription should apply to the insurer’s right to claim the return of insurance proceeds. An insurer who has specialized knowledge about the implementation of an insurance contract is in superior position to the policyholder. Article 662 of the Commercial Act provides that the insurer’s right to claim the return of insurance premiums is related to the policyholder’s claim for the return of insurance premiums, but it is premised on

D. In contrast, the Supreme Court Decision 2014Da233596 Decided October 27, 2016, which held that the period of extinctive prescription of the right to claim the return of unjust enrichment is ten years in the case where the mutual aid company seeks the return of mutual aid money paid by the mutual aid company on the basis of an invalid mutual aid agreement contrary to good morals and other social order (this case also applies as is, the legal doctrine on the invalidation of the insurance contract) shall be amended to the extent inconsistent with this Opinion.

E. Determination on the instant case

The lower court, citing the first instance judgment, determined that the five-year extinctive prescription period under Article 64 of the Commercial Act shall apply to the claim that the Plaintiff, the insurer of the instant insurance contract, seeks the return of the insurance money already paid to Defendant 1.

The lower judgment is justifiable in light of the foregoing legal doctrine and did not err by misapprehending the legal doctrine on extinctive prescription as otherwise alleged in the grounds of appeal.

3. Conclusion

The appeal by the Plaintiff and the Defendants is dismissed in entirety as it is without merit. The costs of appeal are assessed against each losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Lee Ki-taik

Justices Kim Jae-hyung

Justices Cho Jae-chul

Justices Park Jung-hwa

Justices Ansan-chul

Justices Min You-sook

Justices Kim Jong-soo

Justices Lee Dong-won

Justices Noh Jeong-hee

Justices Noh Tae-ok

Justices Lee Dong-gu

Justices Yang Tae-sung