[2] Whether a guarantee insurance company has a duty to investigate and verify the absence or invalidity of a principal contract subject to guarantee when concluding a guarantee insurance contract (negative in principle)

[2] Upon entering into a guarantee insurance contract, a guarantee insurance company has no duty to investigate and verify the absence or invalidity of the main contract subject to the guarantee generally. However, in special circumstances, such as where there is a discovery of the absence or invalidity of the main contract subject to the guarantee submitted by the policyholder, such as a guarantee insurance subscription form, etc., such duty of investigation and confirmation shall not be exempted.

1. Regarding ground of appeal No. 1

A. Legal principles on surety insurance

Guarantee insurance refers to a non-life insurance contract, the purpose of which is to accept by an insurer the recovery of the damage to be borne by an insured (creditors under a principal contract) due to a debtor’s default on an insurance contract with an insured party. Since an insurance contract which covers a debtor’s default on an insurance contract or in substance is the same as a guarantee contract with the nature of a guarantee, a guarantee insurance contract is formally based on the legal relationship of a principal contract, etc., and the insured’s failure to perform his/her obligation under a principal contract, etc., is to indemnify the damage to be incurred by the insured within the scope of the amount of the insurance contract and within the scope of the amount of the insurance contract. Therefore, if the guarantee insurance contract takes effect, the principal contract, etc. between the policyholder and the insured shall be effective. Furthermore, what is the principal contract which is the premise of the guarantee insurance contract, and who is who is the insured, shall be determined by comprehensively taking into account all the circumstances such as the content of the insurance contract and the content and process of the insurance contract to be concluded by the party (see, e.g., Supreme Court Decisions 2637Da.

B. As to the principal contract of the guaranteed insurance contract of this case

1) Review of the reasoning of the lower judgment and the evidence duly admitted by the lower court reveals the following facts.

A) The Defendant handled only the automobile installment sales guarantee insurance for which the selling company is the insured under the automobile installment sales contract as the principal contract. Since January 1, 1996, the government allowed the establishment of installment financing company as of January 1, 1996, making a new guarantee insurance product that guarantees the installment financing obligation of the automobile buyer necessary to develop a new guarantee insurance product that guarantees the installment financing obligation of the automobile buyer. As from January 3, 1996, the Defendant made a special terms and conditions of installment financing and used them by adding them to the existing installment sales guarantee insurance clause.

B) Article 1 of the Defendant’s general terms and conditions of installment sales guarantee insurance provide, “The company (hereinafter “the company”) shall not perform the obligation of installment payment as stipulated in the installment sales contract (hereinafter “main contract”) entered in the insurance policy, and shall compensate for the damages suffered by the seller (hereinafter “insured”) according to the terms and conditions of the insurance policy and the terms and conditions.” Article 5(1) of the same Act provides, “The insured shall immediately notify the company of the occurrence of an insured incident, and submit the following documents to the company, along with the claim documents for insurance.” Article 6(1) of the same Act provides, “The insurance money to be paid by the company shall be the amount of installment payment at the date specified in the main contract.”

Meanwhile, Article 1 of the General Terms and Conditions of Installment Financing provides that "this Special Terms and Conditions shall apply to cases where the policyholder was paid installment financing from the bank, insurance company, or installment financing company (hereinafter "financial institution") in accordance with the installment sale contract entered into on the insurance policy." Article 2 provides that "The company shall, notwithstanding Article 1 of the General Terms and Conditions of Installment Sales Guarantee Insurance, compensate for losses suffered by a financial institution due to failure of the policyholder, who was the purchaser, to perform the installment financing obligations stipulated in the monetary loan agreement entered into with the financial institution under the installment sale contract entered on the insurance policy (hereinafter "main contract"), and Article 3 provides that "the insured" in Article 5 of the General Terms and Conditions of Installment Sales Guarantee Insurance shall be deemed "financial institution" and "amount to be recovered" in Article 6 shall be substituted for "amount to be recovered".

C) The Defendant entered into a installment agreement with the Codefendant Hyundai Motor Co., Ltd. (hereinafter “Modern Motor Co., Ltd.”) in the lower judgment. If Hyundai Motor Co., Ltd. (hereinafter “Modern Motor”), through the installment agreement, sold an automobile in installments and caused a buyer to subscribe to the Defendant’s installment sales guarantee insurance, the Defendant accepted it, and if the buyer requests a buyer to attach the special terms and conditions of installment financing to the installment sales guarantee insurance and installment payments to receive the amount of installments from the installment

D) On December 207, 2007, PP Co., Ltd. (hereinafter “PP”) issued an insurance policy on the instant guarantee insurance contract (hereinafter “the instant guarantee insurance policy”) to the Defendant. Around December 2007, the Defendant: (a) submitted a copy of the automobile sales contract stating the purchase of 23 U.S. buses from Hyundai Motors (hereinafter “the copy of the instant automobile sales contract”); and (b) made an offer of installment sales guarantee insurance by submitting an subscription for installment sales; (c) the Defendant entered the installment insurance contract into an installment payment contract between December 7, 2007 and December 20, 207, with respect to each of the instant 23 LP and U.S. respectively; (d) the Defendant indicated the details of the instant guarantee insurance contract as Hyundai Motors; and (d) the insured stated the amount of installment payment as payment guarantee payment; (d) however, the details of the instant installment insurance policy and the details of the instant installment payment agreement were indicated in the form of special installment insurance policy.

E) The Plaintiff received a copy of the instant insurance policy and the instant automobile sales contract from the spectrum, and entered into an installment financing loan agreement with the spectrum between December 7, 2007 and December 20, 2007, and agreed to lend KRW 9,00,000 for each bus (hereinafter collectively referred to as the “instant loan agreement”).

2) In light of the following circumstances revealed based on the above facts, it is reasonable to view that, if the spectrum is a main contract for installment financing loans to be concluded with a financial institution, the agreement for installment financing loans can only be the main contract for the guarantee insurance contract in cases where the spectrum concludes a car sales contract regardless of whether it is a lump sum or temporary payment with Hyundai Motor, and takes installment financing loans from a financial institution to pay the purchase price. The insured is a financial institution that entered into such installment financing loan agreement.

A) In addition to the acquisition of an installment sales guarantee insurance to guarantee the installment sales payment obligation, the conclusion of an installment agreement with the purport of allowing the buyer to use the special terms and conditions of installment financing if the buyer wishes to purchase a motor vehicle, regardless of whether the buyer would make a lump sum payment or not, and in a case where the buyer receives a installment financing loan from the installment financing company and pays the purchase price of the motor vehicle with the loan, the degree of risk to be taken over at the time of guaranteeing the installment financing obligation is deemed to be substantially the same as at the time of guaranteeing the installment sales payment obligation, and further, the object of guarantee is extended to the installment sales agreement of the motor vehicle, thereby expanding the object of guarantee to the extent that the buyer bears not only the installment payment obligation but also the installment payment obligation for the payment of the purchase price of the motor vehicle.

B) The instant insurance policy states the content of the guarantee as “on-site automobile” and the content of the guarantee as “payment guarantee for installment payments,” and states that the installment payment is indicated in the form of installment financing and that the special terms and conditions of installment financing are applied. The special terms and conditions of installment financing stipulate that it applies to a case where an insurance policyholder was paid installment money from a financial institution, and thus, is compensated for losses incurred by a financial institution due to nonperformance of installment financing obligations. Where an insurance accident occurs, a financial institution shall submit a claim document and claim insurance money. The insurance money shall be determined as the amount of unpaid bonds of a financial institution. As such, the main contract of the instant guarantee insurance contract, to which the special terms and conditions of installment financing apply, is not the installment sales contract concluded with Hyundai Motor, but the installment financing loan agreement concluded with the Plaintiff by the policyholder, and the insured is deemed a financial institution which provided installment financing. The insured’s entry into the instant insurance policy as “on-site automobile” and the content of the guarantee as “payment guarantee for installment payments,” respectively, can be deemed to be limited to the agreement of this case.

C) The special terms and conditions of installment financing included in the instant insurance policy stipulate the scope of application of the said special terms and conditions as damages suffered by financial institutions due to failure to perform the installment financing obligations stipulated in the money loan agreement entered into with the financial institution “under the installment sale agreement entered in the insurance policy,” which is compensated for losses arising from the failure to pay such losses. As seen earlier, the special terms and conditions of installment financing are based on the following: (a) the degree of risk to be assumed when a buyer guarantees an installment financing loan to pay a purchase price is substantially the same as the time the buyer guarantees an installment payment; and (b) such circumstance is not different depending on whether payment of a purchase price is made or temporary payment; (c) where a buyer pays a purchase price using an installment loan, it is ordinarily understood as a closely combined combination with the sales contract and the installment financing loan agreement; and (d) it is reasonable to view that the automobile insurance agreement was concluded with the financial institution and the insurer’s terms and conditions associated with the installment financing loan agreement as the insurance policy, regardless of whether the terms and conditions of installment financing agreement were “A installment financing loan agreement”.

C. As to whether the instant loan agreement constitutes a principal contract of the instant guaranteed insurance contract

According to the reasoning of the judgment of the court below, we can find out the following facts: A spectrum entered into a contract to purchase 25 U.S. buses from Hyundai Motor around January 2007; the fact that most of the purchase prices were paid to Hyundai Motor using the money borrowed from Gag Capital, etc. Co., Ltd.; however, a spectrum entered into the guarantee insurance contract of this case with the defendant about 23 U.S. buses as seen earlier on December 2007, using a copy of the automobile sales contract delivered from the defendant Hyundai Motor, and entered into the instant loan agreement with the defendant; however, a spectrum entered into the instant loan agreement with the plaintiff; however, it did not newly purchase the U.S. bus 23 buses from Hyundai Motor; or paid the UN bus purchase price with loans under the instant loan agreement.

In light of the above facts in light of the contents of the instant guarantee insurance contract, insofar as a spectrum only made the same appearance as a new automobile sales contract was concluded by submitting a copy of the automobile sales contract concerning nitrob buses in which most of the purchase price was already paid while entering into the instant loan agreement, and did not purchase nitrob buses from modern automobiles, the instant loan agreement cannot be deemed as an installment financing loan agreement entered into with a financial institution for the purpose of entering into the instant automobile sales contract and paying the purchase price. Accordingly, the instant loan agreement cannot be deemed as a principal contract which is the subject of the instant guarantee insurance contract. Thus, even if a spectrum did not perform its obligation stipulated in the instant loan agreement, the Plaintiff cannot claim insurance against the Defendant.

D. Sub-committee

Therefore, it is not appropriate that the court below stated that the installment sales contract concluded between Hyundai Motor and Buyer is the main contract of the Guarantee Insurance Contract, but it is reasonable to reject the plaintiff's claim for insurance money against the defendant. Thus, the court below did not err by misapprehending the legal principles on the main contract of the Guarantee Insurance Contract and the insured, etc.,

2. Regarding ground of appeal No. 2

A. Upon entering into a guarantee insurance contract, a guarantee insurance company does not have the duty to investigate and verify the absence or invalidity of a main contract subject to the guarantee generally. However, in special circumstances, such as where there is a discovery of the absence or invalidity of a main contract subject to the guarantee submitted by the policyholder, such as a guarantee insurance subscription form, etc., the said duty of investigation and confirmation is not exempt.

B. As seen earlier, only in cases where a spectrum concludes a car sales contract with Hyundai Motor and receives installment financing loans from financial institutions for payment of the purchase-price, the installment financing loan agreement of this case may be the main contract of the Guarantee Insurance Contract. Therefore, if there are reasonable grounds to suspect that the Defendant, when concluding the Guarantee Insurance Contract of this case, is concerned with the documents regarding the previous car sales contract, such as a copy of the automobile sales contract submitted by the spectrum, as well as the documents concerning the previous automobile sales contract, which require installment financing loans, such circumstance constitutes a special circumstance to suspect the non-existence or invalidity of the main contract subject to guarantee, and the Defendant is not exempted from its duty to investigate and confirm the same.

However, inasmuch as there are some points to suspect a copy of the automobile sales contract which spectrum submitted to the Defendant at the time of the conclusion of the instant guaranteed insurance contract, or there are no other special circumstances to suspect the absence or invalidation of the principal contract subject to the guarantee, the obligation to investigate and confirm the absence or invalidation of the principal contract, which is the guarantee insurance company, to the Defendant as the guarantee insurance company, cannot be deemed to be acknowledged.

C. Although the reasoning of the court below is somewhat insufficient, the court below's rejection of the plaintiff's assertion that the court below breached the duty of care despite the duty to investigate and confirm whether the automobile sales contract was actually concluded between spectrum and Hyundai Automaticr, is just, and contrary to the allegations in the grounds of appeal, there is no error of law by misapprehending the legal principles as to the duty of investigation and confirmation as to the existence of the guaranteed insurance company's main contract.

3. Conclusion

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

Justices Kim Chang-suk (Presiding Justice)