Yong-Nam Mutual Savings Bank (Law Firm Jeong, Attorneys White-jin et al., Counsel for defendant-appellant)

Seoul Guarantee Insurance Co., Ltd. (Attorney Choi Byung-hoon, Counsel for defendant-appellant)

September 1, 2009

Busan District Court Decision 2008Gahap10177 Decided March 4, 2009

1. The plaintiff's appeal is dismissed.

2. The costs of appeal shall be borne by the Plaintiff.

Of the judgment of the court of first instance, the part against the defendant shall be revoked. The defendant shall jointly and severally pay the plaintiff 1 50 million won with 50 million won interest per annum from May 25, 2007 to the final delivery date of the copy of the complaint of this case, and 20% interest per annum from the next day to the day of complete payment.

1. Basic facts

The following facts are not disputed between the parties, or can be recognized by taking into account the following facts: Gap evidence (including a branch number if there is a serial number; hereinafter the same shall apply), Eul evidence 1 and 2, and non-party 3's testimony and the whole purport of pleadings.

A. On January 20, 2006, Nonparty 2 prepared a lease agreement (hereinafter “instant lease agreement”) with Nonparty 1 to lease the lease deposit amount of KRW 500 million and the lease term of KRW 500 million from January 25, 2006 to January 24, 2008 by setting the lease deposit amount for the funeral hall of ○○ General Hospital (hereinafter “the instant building part”) located in the Jindo-dong, ○○○○○○○ (Seb omitted) (hereinafter “instant lease agreement”).

B. On January 25, 2006, the Defendant concluded a performance guarantee insurance contract (hereinafter “instant performance guarantee insurance contract”) with Nonparty 2, which guarantees the return of the lease deposit amount to Nonparty 1’s non-party 2 during the insurance period from January 25, 2006 to January 24, 2008, with the period of insurance from January 25, 2006 to the cover of KRW 500 million. If an insurance accident occurs, the Defendant is designated as the holder of the right to receive the insurance money, and the Defendant is obliged to pay the insurance money directly to the Plaintiff (hereinafter “instant performance guarantee insurance contract”).

C. On January 26, 2006, the Plaintiff transferred the claim for the refund of the lease deposit of this case from Nonparty 2 with the consent of Nonparty 1. After being provided with the performance guarantee insurance policy under the guarantee insurance contract of this case as security, the Plaintiff loaned KRW 420 million to Nonparty 2 (hereinafter “the instant loan”). Nonparty 2 delayed the payment of interest on the said loan from April 26, 2007, and Nonparty 1 was subject to the suspension of check account transaction on June 22, 2007, the Plaintiff claimed for payment of the insurance money to the Defendant on December 13, 2007.

2. The parties' assertion

A. Nonparty 2 delayed the payment of interest on the above loan, and Nonparty 1 suffered an insured event such as the suspension of current account transaction, etc., and thus, the Plaintiff’s claim seeking the payment of KRW 500 million of the lease deposit with the insurance money pursuant to the instant guarantee insurance contract, the Defendant asserts that the instant lease contract between Nonparty 2 and Nonparty 1 is a false lease contract concluded for the purpose of obtaining a loan from a financial institution without having received the lease deposit, and is null and void as it constitutes a false declaration of conspiracy, or is exempted by the Defendant, the insurer, in accordance with the main text of

B. As to this, the Plaintiff is not a false conspiracy and thus null and void, and even if the instant lease agreement was null and void as it constitutes a false conspiracy, the Plaintiff, who received the claim to refund the instant lease deposit from Nonparty 2, and was established a pledge on the right to claim the insurance claim under the instant guarantee insurance contract, cannot oppose the Plaintiff, as it is a bona fide third party. Even if not, the Defendant asserts that the Defendant did not properly verify the falsity of the instant lease agreement at the time of entering into the instant guarantee insurance contract, thereby causing damage to the Plaintiff and thus, cannot avoid tort liability.

3. Determination on the claim for insurance proceeds

(a) Whether a person has conspired falsely and the effect of surety insurance contract;

(1) Comprehensively taking account of the aforementioned evidence and the purport of the entire pleadings with the testimony of the non-party 3 and the non-party 1 of the witness of the first instance trial. The part of the building of this case was leased on August 15, 2004 by the non-party 3 for a three-year lease term of August 15, 2007 and possessed and used until the date of the bankruptcy of the ○○ General Hospital operated by the non-party 1. The lease contract of this case can be acknowledged that the non-party 1, the head of the hospital, and the head of the administrative office, in collusion with the non-party 2, who was in charge of the administration of the hospital, prepares a false document for obtaining the loan from the plaintiff without entering into the actual lease contract or receiving the deposit. The above recognition is insufficient, and there is no other counter-proof evidence. Thus, the lease contract of this case between the non-party 1 and the non-party 2 shall be null and void by a contract under a false agreement.

(2) However, a guarantee insurance contract is a non-life insurance contract, the purport of which is to take over by an insurer the recovery of the loss that an insured person (a creditor under a principal contract) suffers due to a debtor's non-performance of an obligation under a certain legal relationship with the insured, and it is formally aimed at the same effect as a guarantee contract with the nature of a guarantee. Thus, a guarantee insurance contract is provided under the premise of a legal relationship such as a principal contract, and within the scope of the amount of a guarantee contract, as prescribed by the terms and conditions, and within the scope of the amount of a guarantee contract, and unless contrary to its nature, the provisions of the Civil Act concerning a guarantee insurance contract apply to a guarantee insurance contract (see, e.g., Supreme Court Decision 2004Da20265, Dec. 24, 2004). Thus, the guarantee insurance contract of this case becomes null and void as long as the lease contract of this case, which is a principal contract of this case.

B. Whether the person is a bona fide third party

(1) With respect to a bona fide third person, other than a party of a false indication and a general successor, who has de facto new legal interest based on the legal relationship formed externally by a false indication, as well as the party of a false indication, may not oppose the invalidity of such false indication (see Supreme Court Decision 94Da12074, Apr. 26, 1996). The purport that the false indication cannot be asserted against a third person acting in good faith is to protect a person who enters into a legal relationship with a legal interest that is unique to a separate legal cause based on such a different legal relationship, so the scope of the third person shall not be determined formally based on the legal relationship, not on the legal relationship, but on the basis of a new legal interest based on the false indication (see Supreme Court Decision 9Da51258, Jul. 6, 200). Meanwhile, where an insurer cancels the conclusion of a performance guarantee insurance contract for the reason that the policyholder was aware of the insurer during the process of concluding the contract corresponding to the primary debtor, if the insurer already issued the surety insurance contract and received the new obligation to perform its function as 20.

(2) In light of the above legal principles, as seen earlier, the Plaintiff received an insurance policy containing the phrase that the Plaintiff would directly pay the Plaintiff the insurance money if the insured event occurred in accordance with the method of establishing a pledge while taking over the claim for the refund of the lease deposit secured by the performance guarantee insurance. However, if the claim secured by the guarantee insurance is transferred, the insurance claim should also be transferred along with the claim transferee unless otherwise agreed by the parties (see Supreme Court Decision 98Da53707 delivered on June 8, 199). In light of the above legal principles, it is reasonable to view that the Plaintiff is a third party under Article 108(2) of the Civil Act as a person who has a new legal interest based on the false representation and who has concluded a new legal interest based on the false representation.

(3) Furthermore, as to whether the Plaintiff’s good faith or not, a third party provided for in Article 108(2) of the Civil Act is presumed in good faith, barring any special circumstance, and the third party’s assertion and burden of proof as to the fact that the third party is bad faith is presumed to be null and void (see Supreme Court Decision 2007Da53013, Nov. 29, 2007). In this case, the Defendant must prove the Plaintiff’s bad faith, and the testimony of the non-party 3 of the first instance trial witness alone is insufficient to recognize that the lease contract of this case was a false conspiracy at the time of the loan of this case, and there is no other evidence to prove otherwise.

On the other hand, the third party in good faith under Article 108 (2) of the Civil Code cannot assert the invalidity of the act of false labelling as well as any person who is not a party in the act of false labelling. Thus, even though the defendant is the defendant, the contract of this case cannot be asserted against the plaintiff on the ground of invalidity of the act of false labelling. As seen above, the guarantee insurance contract of this case also becomes null and void on the ground that the contract of this case is null and void as it is in conspiracy with false labelling, the defendant cannot oppose the plaintiff as a third party in good faith, and the defendant's argument in this part is therefore without merit.

(c) Whether the exemption is granted under Article 644 of the Commercial Act;

(1) Furthermore, we examine whether the Defendant can make a claim for discharge on the ground of the insurer’s exemption under the Commercial Act, which is not a claim for invalidity of false declaration of conspiracy under the Civil Act.

(2) Since it cannot be deemed that the guaranteed insurance is the requirement of a strict meaning such as that required in ordinary insurance, among the provisions of the Commercial Act concerning insurance, it is based on the friendlyness and good faith, and thus, it does not apply to the guaranteed insurance in principle. However, as the guaranteed insurance is a kind of insurance, at least a certain amount of insurance accident should not be determined at the time of the contract and good faith, Article 644 of the Commercial Act that is based on the friendlyness and good faith of the above meaning applies to the guaranteed insurance, i.e., Article 644 of the Commercial Act that becomes null and void if the insurance accident occurred or is not possible at the time of the insurance contract, so long as the instant guaranteed insurance contract was concluded in collusion with Nonparty 1 and Nonparty 2, it constitutes a case where the insurance accident at the time of the contract is not likely to occur at the time of the insurance contract, and thus, is null and void pursuant to the main sentence of Article 644 of the Commercial Act.

(3) Therefore, the defendant's claim for exemption on the ground of this point is well-grounded, and the defendant's claim for payment of insurance proceeds is without any need to further examine the defendant's claim for exemption under Article 659 of the Commercial Code.

4. Judgment on the claim for damages caused by a tort

The Plaintiff asserts that the Defendant is responsible for compensating the Plaintiff for damages caused to the Plaintiff due to the mistake that the instant lease agreement was false at the time of entering into the instant guarantee insurance contract. Therefore, it is insufficient to recognize that the testimony by Nonparty 3, a witness of the first instance trial, either knew or could have known that the instant lease agreement was invalid due to the falsity, but failed to verify it properly. The Plaintiff’s claim based on the premise is without merit, as there is no other evidence to prove otherwise

5. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it appears to be one mother or there is no ground, and the judgment of the court of first instance is just in conclusion, and the plaintiff's appeal is dismissed as it is without merit, and it is so decided as per Disposition.

Judges Lee Young-young (Presiding Judge)

1) On October 29, 2007, the trade name was changed from Non-Korean Mutual Savings Bank.

2) In the instant case, there is room to view that the Defendant also constitutes a bona fide third party who entered into a new legal relationship based on false representation. However, even if the Defendant is in such status, the Defendant cannot assert the invalidity of false representation against the Plaintiff, who is a bona fide third party claiming the validity of such act by reliance on false representation.

(3) In the instant case where the insured was recruited by the policyholder’s fraud, such provisions can be deemed as being applied (see Supreme Court Decision 93Da3417, Sept. 29, 1995).

4) The instant lease agreement is null and void due to a false declaration of agreement, and as long as Nonparty 2 did not deliver the lease deposit to Nonparty 1, the occurrence of an insurance accident, such as the non-performance of the obligation to return the lease deposit, cannot be caused to Nonparty 1.

(5) However, in light of the fact that the underlying legal relationship of the cause of the loan becomes null and void due to a false contract, there may be the following questions: (i) the substance of the performance guarantee is close to the guarantee; (ii) the view of the lending bank is completely the same as the other type of insurance accidents; (iii) even if the legal relationship that caused the loan can be protected by a false contract, it is not consistent with the original nature of the guarantee insurance system, and (iv) it would be likely that the performance guarantee company will be exempted solely because the legal relationship that caused the loan is a false contract, even if there is no other type of insurance accidents, such as a false contract, and thus, would be likely to undermine the safety of the transaction by destroying the collateral function of the performance guarantee system, and thus, it would be difficult to expect the new legal relationship of the performance guarantee company, such as a false contract, based on the fact-finding and the fact-finding theory that there is no possibility that it would be no possibility that the insurance company would have engaged in a false contract, such as the performance guarantee insurance contract, even if having the same social function as the performance guarantee insurance company.