Where a policyholder or the insured is a juristic person, the meaning of "director of the juristic person or any other institution executing its business" in the insurance clauses that the insurer is exempted from liability for any damage caused by intentional or gross negligence of the "director of the juristic person" or "other institution executing its business" and the requirements that a director without the power of representation of the corporation falls under the above "director".

Where a policyholder or the insured is a juristic person, "a director of the juristic person or any other institution executing the business thereof" in the indemnity clause in this case where the insurer is exempted from liability for damages caused by the intentional or gross negligence of the "director of the juristic person" or "other institution executing the business thereof" shall, in principle, be deemed to be a representative institution having the authority of representation and the authority of business execution of the juristic person. In case of a director without the authority of representation, in full view of various circumstances, such as the size or composition of the company, the contents, status and influence of the director in the company at the time of occurrence of the insurance accident, commonality of economic interests with the relevant director and the relevant director's right to manage or dispose of the insurance money, etc., it shall be deemed to be a "director" only when the insurance accident caused by intentional or gross negligence of the relevant director is deemed to be the same as the act of the company.

Articles 659 and 663 of the Commercial Act

Tran Fire and Marine Insurance Co., Ltd. (Law Firm Marina, Attorneys Lee Jae-chul et al., Counsel for the plaintiff-appellant)

Shinyang Co., Ltd. (Attorney Seo-won, Counsel for the plaintiff-appellant)

Seoul High Court Decision 2003Na36722 delivered on October 22, 2003

The appeal is dismissed. The costs of appeal are assessed against the plaintiff.

We examine the grounds of appeal.

Article 659 of the Commercial Act provides that "if an insurance accident has occurred by intention or gross negligence of the policyholder, the insured, or the beneficiary, an insurer shall not be liable to pay the insured amount." The purport of this provision is to prevent the occurrence of an insurance accident by intention or gross negligence by the policyholder, the insured, etc. from being paid the insured amount, as well as against the contingency of the insurance accident, against the good faith and good faith, social order, and other good customs, against the policyholder, the insured, etc., and against the moral danger of the policyholder, the insured, etc., and to prevent it. Meanwhile, according to Article 663 of the Commercial Act, the above insurer's exemption provision provides that the insurer shall not change the disadvantage of the policyholder, the insured

Therefore, in light of the above exemption provisions and the purport of Article 663 of the Commercial Act, in the case where the policyholder or the insured is a juristic person, the "director of the juristic person or any other institution executing the business thereof" in the indemnity clause of this case where the insurer is exempted from liability for damages caused by the intentional or gross negligence of the "director of the juristic person" or "other institution executing the business thereof" shall, in principle, be deemed to fall under the "director" only if the relevant director has substantial control over the company or is in a position to receive directly profits from the receipt of the insurance proceeds, and the occurrence of the insurance accident caused by the intentional or gross negligence of the relevant director can be deemed to fall under the "director" only if there is no representative authority in the case of a juristic person, such as the size or composition of the company, the contents or status and influence of the relevant director in the company at the time of the occurrence of the insurance accident, and whether the relevant director has the authority to manage or dispose of the insurance proceeds.

The court below found that the non-party 1 was registered as a director on the corporate register of the defendant company at the time of the fire in this case. However, the defendant company was first engaged in the business by the non-party 2's personal business in the name of "one-day" and changed its form to a stock company. At the time of the fire in this case, six employees including the non-party 2, the representative director of the defendant company at the time of the fire in this case work, and the non-party 1 was in charge of the management of the warehouse under the direction and supervision of the non-party 2. The non-party 1 paid the non-party 1's income tax after receiving a certain amount of salary from the non-party 2 each month, and paid the monthly employment insurance premium with other four employees. In light of the above circumstances of incorporation, operation form and size of the defendant company, the non-party 1 is merely an employer who provides labor in subordinate relations with the purpose of wages, and it cannot be deemed that the non-party 1 has actual authority and responsibility for the insured's directors.

In light of the records, the above fact-finding by the court below is just, and its judgment is also justified in accordance with the above legal principles, and there is no error in the misapprehension of facts against the rules of evidence or in the misapprehension of legal principles as to the interpretation of the exemption clause of this case, as alleged in the grounds of appeal.

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 Yoon Jae-sik (Presiding Justice)