Defendant 1 shall be punished by a fine for negligence of KRW 5,00,000, and a fine of KRW 2,000,000, respectively.

In the event that the Defendants did not pay the above fine, the Defendants shall be confined in the Labor House for the period calculated by converting each of the 100,000 won into one day.

To order the Defendants to pay an amount equivalent to the above fine.

Of the facts charged against the Defendants, the fraud against the victim non-indicted 1 corporation is acquitted.

The summary of the acquittal part in the judgment against the Defendants shall be published.

All of the defendants of the applicant for compensation are dismissed.

A. Defendants

1) misunderstanding of facts and misunderstanding of legal principles (as to the crime of fraud against victim non-indicted 1 corporation)

According to the terms and conditions of the instant insurance contract, the insurable value shall be determined by mutual agreement between the contracting parties. The insurable value of the sales contract is only significant in calculating the insurable value, and the insurance company is not bound by the purchase price. As such, even if the Defendants entered the purchase price of the sales contract at a higher level than the actual one, it cannot be deemed that the Defendants constitute deception, or there was a criminal intent to commit fraud against the Defendants. Furthermore, the payment of insurance money, which may be deemed an act of disposal by Nonindicted Co. 1 (hereinafter “Nonindicted Co. 1”) is not due to the death of the end of the instant case, which is the insurance accident, not due to the submission of the sales contract by the Defendants, nor due to the Defendants’ arbitrary manipulation of the instant insurance accident, there is no causal relationship between the Defendants’ act of submitting the sales contract and the act of disposal. Furthermore, the Defendants paid the insurance premium calculated in proportion to the insurable value calculated.

Nevertheless, the judgment of the court below which found the guilty of this part of the facts charged is erroneous by misapprehending the legal principles and thereby affecting the conclusion of the judgment.

2) Unreasonable sentencing

The sentence of the lower court (Defendant 1: 1 year of imprisonment, 2 years of suspended sentence, 6 months of imprisonment and 1 year of suspended sentence) is too unreasonable.

(b) Prosecutors;

The sentence of the court below is too unhued and unfair.

2. Judgment on the misunderstanding of facts and misapprehension of legal principles by the Defendants

A. Summary of the facts charged regarding the fraud of Nonindicted Company 1

The Defendants knew that they would calculate the sales price at the time of purchasing the livestock disaster insurance for horses as the insurable value, and, with the knowledge of the fact that they made it possible to write down and submit a sales contract with respect to the horses “○○○○” with a false statement on the purchase price.

Although Defendant 1 purchased the said horses from Nonindicted 2 at KRW 12 million on June 2010, Defendant 1 formulated a sales contract stating that “ Nonindicted 2, May 10, 2010, sold the said horses at KRW 30 million to Defendant 1; Defendant 1, June 1, 2010, sold the said horses at KRW 30 million to Nonindicted 3; Defendant 3, August 12, 2010, sold the said horses at KRW 40 million to Defendant 2; Defendant 2, who purchased the said horses at KRW 400,000,00,000, to Defendant 40,000,000,000,000,000,000,000 won; Defendant 2 purchased the said horses from Defendant 1, who purchased the said insurance contracts at KRW 400,00,00,000,000,000,000,00,000.

However, Defendant 2 did not purchase the above horses, and Defendant 1 only purchased the above horses at KRW 12 million and did not purchase them at KRW 40 million.

Nevertheless, around October 4, 2010, the Defendants filed a claim with the victim for payment of insurance proceeds of KRW 40 million on the same day of the death of the above end, and the victim paid KRW 32 million, excluding KRW 8 million of self-payment, from the insurable value of KRW 40 million to the agricultural bank account in the name of Defendant 2 around December 17, 2010.

As a result, the defendants conspired to acquire the property of the victim.

B. The judgment of the court below

In full view of the following circumstances, the lower court found the Defendants guilty of taking into account the following circumstances: (a) the Defendants’ insurance premium subsidies for entering into the instant sales contract with Nonindicted 4’s legal statement and each horse sales contract; (b) the Defendants, regardless of the instant insurance contract, cannot be deemed to have prepared the instant sales contract to sell the horses at a higher price; (c) the Defendants, in practice, submitted a sales contract with the knowledge that the insurable value is determined according to the sales price at the time of entering into the livestock disaster insurance contract; and (c) the end of the instant sales contract is deemed to have been low in age and body; (d) the sales price stated in the instant sales contract appears to have been considerably reduced compared to the value of the end of the instant case. In so doing, even if the Defendants knew that the insurable value of the instant insurance contract was determined based on the sales price prepared by the Defendants’ fraudulent means, the Defendants’ act of claiming for insurance proceeds in accordance with the aforementioned false sales contract constitutes deception, and thus, constitutes the Defendants’ act of fraud.

C. Judgment of the court below

1) The term "accident" refers to an agreement for the payment of insurance money to the insured's "accident" as to the insured's property. The term "accident" here refers to an accident caused by an unforeseeable cause, which is not intentional but unforeseeable, and the occurrence of an accident resulting from ordinary process. Therefore, even if a policyholder entered into a non-life insurance contract with an insurer in violation of the duty of disclosure under the Commercial Act, the insurance money is not paid only by the conclusion of the insurance contract, but only by an accident occurs. Thus, it shall not be concluded that there was an intentional deception for the acquisition of the insurance money. Furthermore, even if the policyholder entered into the insurance contract in violation of the duty of disclosure under the Commercial Act, it shall not be concluded that there was an intentional deception for the acquisition of the insurance money. Furthermore, it shall not be concluded that the policyholder had committed an intentional deception for the acquisition of the insurance money with the intent to arbitrarily manipulate the insurance accident, such as the case of entering into the insurance contract with the intent to arbitrarily manipulate the insurance accident, and it shall be harming the essence of the insurance contract like the "accident".

2) According to the evidence duly adopted and examined by the lower court and this court: (a) even though Defendant 1 purchased from Nonindicted 2 the horses of KRW 80,000,00,000, including the horses of “○○○○” around June 2010, the Defendants purchased the horses of KRW 30,000 from Nonindicted 3 on September 1, 2010, “Defendant 2 purchased the horses of KRW 40,000,000 from Nonindicted Company 1 and KRW 40,000,000,000 from August 12, 2010; (b) the insured value, which serves as the basis for the insurance money when the instant insurance contract was concluded, was determined as the insurable value assessed by consultation at the time of conclusion of the contract; (c) the insured was determined as the insurable value of Nonindicted Company 1 in view of the practice of the Livestock Disaster Insurance Contract, and (d) the Defendants were aware of the fact that ○○△△△△△△’s purchase price was determined as the insurance price.

3) However, in light of the following circumstances revealed by comprehensively taking account of the evidence duly adopted and examined by the lower court and this court, even if the Defendants violated the duty of disclosure by notifying ○○○○○○, which is the premise of the insurable value as above in entering into the livestock disaster insurance contract with Nonindicted Company 1, differently from the fact in entering into the said contract, it is difficult to deem that the Defendants’ act of entering into the insurance contract constitutes a intentional deception for the purpose of acquiring insurance money, or that there was an intention to obtain insurance money from the Defendants.

① The Defendants purchase green horses and raise and train them for not less than six months, but not less than one year and resell them for racing. In the absence of objective data or criteria to confirm or calculate the value of horses, the Defendants and the same professionals have customarily submitted a sales contract for livestock disaster insurance in preparation for a increase in the value of horses in the future. However, in light of the age of the horses actually used for racing and horse, the possibility of increasing the value of horses through breeding and refining after concluding the insurance contract cannot be ruled out.

② At the time of the conclusion of the instant insurance contract, the average auction of the race-line was KRW 25 million; 00,000,000,000,000 among the horses corresponding to the scambble; 00,000 won as of the six-month end; and 25,00,000 through 30,000,000 based on the 18-month end. Defendant 1 purchased the 7 horses including the ○○○○○○○○, which was 12 months from Nonindicted 2, including the instant horse that was 12 months from Nonindicted 2, at a low level due to the economic circumstances of Nonindicted 2. Meanwhile, it is difficult to conclude that the horses of this case were to be raised more from Nonindicted 2’s stock farm because of the age of the horse of this case, the number of the horses of this case was smaller than that of Defendant 1, more than that of other horses, and it is considerably difficult to conclude that the Defendants’ sales price was more than that of grassland.

③ Since the insurance premium of the livestock accident insurance contract is determined in proportion to the insurable value, the insurance premium to be borne by the Defendants would also be higher if the insurable value is high. Meanwhile, Defendant 1 concluded the livestock accident insurance contract with respect to the horses with the insurable value of KRW 20 million through KRW 65 million on five occasions from January 2009 to October 2010, Defendant 1 did not receive the insurance premium on the expiration of the term without the occurrence of the insurance accident.

④ In light of the above legal principles, in order for the Defendants to constitute the Defendants’ violation of the above duty of disclosure to constitute intentional deception for the fraud of insurance money, it should be acknowledged that the Defendants had concluded an insurance contract with the intent to recognize the possibility of the occurrence of the above insurance accident or with the intent to arbitrarily manipulate the insurance accident at the time of entering into the instant livestock disaster insurance contract. However, the evidence submitted by the Prosecutor alone is insufficient to acknowledge this.

4) Meanwhile, the lower court deemed that the Defendants’ act of claiming insurance proceeds from Nonindicted Company 1, even though having knowledge that the insurable value had been determined on the basis of the sales price of the sales contract prepared by false means, and then receiving the insurance proceeds therefrom, constitutes deception. However, in light of the following circumstances, it is difficult to readily conclude that the Defendants’ act of claiming insurance proceeds according to the terms of the insurance contract that had been concluded before the occurrence of the insured event due to a sudden circumstance constitutes deception for the purpose of acquiring insurance proceeds.

① As seen above, the possibility of raising the end value at the time of the occurrence of the insured event after the conclusion of the insurance contract cannot be ruled out. Even if it is higher than the value at the time of the conclusion of the insurance contract, the fact that the insured wishes to receive insurance proceeds equivalent to the value at the time of the occurrence of the insured event, which is the actual loss, is contrary to the nature of the non-life insurance

② It is not allowed for the insured to receive compensation in excess of the insured benefits actually suffered through non-life insurance, and the Commercial Act provides that, in a valued insurance, if the insurable value agreed upon between the parties significantly exceeds the insurable value at the time of the occurrence of the insured event, the insurable value at the time of the occurrence of the accident (proviso of Article 670 of the Commercial Act). Accordingly, the terms and conditions of the insurance contract of this case provide that, in cases where the agreed value substantially exceeds the insurable value at the time of the occurrence of the accident, the insurable value at the time of the occurrence of the accident shall be the insurable value at the time of the occurrence of the accident (Article 6(3) of the Terms and Conditions), even if

③ Under the Commercial Act, a policyholder or the insured is obligated to immediately notify the insurer of the occurrence of an insured event (Article 657(1) of the Commercial Act). Even if a policyholder’s breach of duty to notify in concluding an insurance contract exists, under the circumstances where the insurer does not explicitly deny the validity of the livestock disaster insurance concluded with the policyholder, the policyholder or the insured must notify the insurer of the occurrence of the insured event under the livestock disaster insurance contract concluded with the insurer as a matter of course, and the submission of their claims may be deemed accompanied by the performance of the obligation to notify the occurrence of the insured event under the Commercial Act or the act of accompanying

④ After the occurrence of an insured incident against ○○○○○, the Defendants only filed a claim for insurance money under the instant insurance contract, and did not commit any further fraudulent act, such as submitting false documents on the value of ○○○○○○○○.

D. Sub-determination

Therefore, among the facts charged against the Defendants, the fraud of Nonindicted Company 1 constitutes a case where there is no proof of crime and thus, the Defendants should be acquitted pursuant to the latter part of Article 325 of the Criminal Procedure Act, but the judgment of the court below which found the Defendants guilty is erroneous in the misapprehension of legal principles, which affected the conclusion of the judgment. The

3. Conclusion

Therefore, since the defendants' appeal is well-grounded, the judgment of the court below is reversed pursuant to Article 364(6) of the Criminal Procedure Act without examining the defendants' and the prosecutor's respective arguments on unfair sentencing, and the judgment below is again decided after oral proceedings as follows (as long as the defendant's appeal is reversed on the grounds of the appeal, the prosecutor's appeal

Defendant 1 purchased and owned the horses “○○○○○” at around June 2010. However, Defendant 2, along with Defendant 2, prepared a false sales contract as if Defendant 2 purchased the said horses, and Defendant 2, on September 1, 2010, prepared and submitted a false insurance subscription contract with Defendant 2 as if Defendant 2 was the owner of the said horses, and submitted relevant documents, such as a false insurance subscription contract, to the △-gun Office, as if Defendant 2 were the owner of the said horses. The said insurance company had the victim notify the fact of the said false insurance contract to the △-gun Office. The victim paid KRW 2,348,00,00,000, total insurance premium of the said horses, around September 20, 2010.

As a result, the Defendants conspired to induce the victim to pay the above insurance company premium of KRW 2,348,00 to the victim, thereby obtaining economic benefits equivalent to the above amount.

1. Legal statement of the witness Nonindicted 2

1. The prosecutor’s statement concerning Nonindicted 4

1. Each marina sales contract and investigation report (to submit Nonindicted 4 documents for reference);

Defendants: Articles 347(1) and 30 (Selection of Fine) of the Criminal Act

1. Detention in a workhouse;

Defendants: Articles 70 and 69(2) of the former Criminal Act (Amended by Act No. 12575, May 14, 2014)

1. Order of provisional payment;

Defendants: Article 334(1) of the Criminal Procedure Act

1. Dismissal of an application for compensation order;

Article 32 (1) 2 of the Act on Special Cases Concerning the Promotion, etc. of Legal Proceedings (Inasmuch as the fraud against Nonindicted Co. 1 is pronounced not guilty, the application for compensation order for Nonindicted Co. 1 is groundless)

Judges Park Chang-chul(Presiding Judge)