[1] In a case where an insurer cancels a guarantee insurance contract on the grounds of the policyholder's deception, whether such cancellation may oppose the insured (negative with qualification)

[2] The case holding that in light of all the circumstances, the cancellation of an insurance contract made on the ground of the insurer's deception shall also affect the insured, on the grounds that the insured knew or could have known that the guarantee insurance contract was concluded by the policyholder's deception

[3] The other party to the termination under the guarantee insurance contract on the ground of the policyholder's breach of duty of disclosure

[4] In a case where an insurance accident occurred within the insurance period in a performance guarantee insurance contract, but the insured did not claim the insurance amount even after the insurance period expires, whether the insurance claim is extinguished (negative)

[5] The method of determining whether an insurance accident occurred, where a performance guarantee insurance policy was issued according to a performance guarantee agreement entered into between the policyholder and the insurer and the insurer

[6] The case holding that, where a performance guarantee insurance policy is concluded between a policyholder and an insurer and the insurer are issued accordingly, an insurance accident cannot be deemed to have already occurred for the other individual insurance contract which was concluded after the occurrence of an insurance accident under the previous individual insurance contract based on the guarantee insurance comprehensive agreement

[1] In a guarantee insurance contract where the insurer cancels the insurer's expression of intent to conclude a guarantee insurance contract on the ground that the policyholder who is the primary debtor was aware of the insurer in the course of concluding the contract, if the insurer already issued the guarantee insurance contract by issuing the guarantee insurance policy, and the insured was able to have a new interest by trusting the claims security function of the guarantee insurance contract by executing a new contract or performing obligations under the already concluded contract, etc., in principle, it cannot be set up against the insured as a matter of principle. However, even in this case, if there are special circumstances such as that the insured knew or could have known such deception, the insurer may set up against the insured with cancellation on the ground that

[2] The case holding that in light of all the circumstances, the cancellation of an insurance contract made on the ground of the insurer's deception shall also affect the insured, on the grounds that the insured knew or could have known that the insurance contract was concluded by deception of the policyholder

[3] Guarantee insurance contract is a non-life insurance contract for others whose content is the insurer's acceptance of the compensation for damages suffered by the obligee due to the obligor's default. In such a guarantee insurance contract, in the event of termination on the ground of the policyholder's breach of duty of disclosure, a policyholder who is the other party to the contract or his/her heir (or his/her agent) must express his/her intention of termination, and in the absence of special circumstances (such as separate entry in the terms and conditions of insurance) to the beneficiary of the insurance money, it shall not be effective, and such conclusion shall not be changed solely on the ground that the guarantee insurance contract was made as a commercial activity or that the policyholder's whereabouts

[4] Since a performance guarantee insurance contract is an insurance contract to indemnify the insured for losses sustained by the insured due to the failure to perform his/her obligation on the date of performance of the obligation stipulated in the principal contract within the insurance period, barring any special circumstance, if the period of performance of the obligation between the parties to the principal contract extends after the lapse of the insurance period, the obligation to pay the insurance proceeds does not occur. However, once an insurance accident occurred due to the failure to perform the obligation on the date of performance within the insurance period, the insured did not claim the insurance proceeds after the lapse of the insurance period

[5] A contractor of a guarantee insurance must enter into a guarantee insurance contract continuously and repeatedly with an insurer in order to guarantee the continuous supply of goods from the insured, and the insurer first set the type of the insurance, trading limit, transaction period, and security to be provided, and then make an application for a limit of guarantee insurance transaction between the two parties by applying for a guarantee insurance contract. Under the above comprehensive contract, the insurer shall submit an application for performance guarantee insurance to the insurer along with a detailed written agreement with the insured on the purchase and sale of goods prepared between the insured under the above comprehensive contract. In a case where the insurer is issued an individual performance guarantee insurance policy in which the amount and insurance period of the insurance, the principal contract terms and conditions, the contents of the guarantee contract, and the insurance premium independently stated, the issue of the specific insurance event that the payment of the price of goods for which the date of payment is due within the specific individual insurance period should be determined by dividing it

[6] The case holding that, where a performance guarantee insurance policy is concluded between a policyholder and an insurer and the insurer are issued accordingly, an insurance accident cannot be deemed to have already occurred for another individual insurance contract which was concluded after the occurrence of an insurance accident under the previous individual insurance contract based on the guarantee insurance comprehensive agreement

[1] Articles 110 and 428 of the Civil Act; Articles 639(1) and (2), 651, and 659 of the Commercial Act / [2] Articles 110 and 428 of the Civil Act; Articles 639(1) and (2), 651, and 659 of the Commercial Act / [3] Articles 639 and 651 of the Commercial Act / [4] Articles 639 of the Commercial Act / [5] Article 105 of the Civil Act; Article 639 of the Commercial Act / [6] Article 105 of the Civil Act; Article 639 of the Commercial Act

[1] Supreme Court Decision 98Da63162 delivered on July 13, 1999 (Gong1999Ha, 1612), Supreme Court Decision 99Da13737 delivered on February 13, 2001 (Gong2001Sang, 639) / [3] Supreme Court Decision 87Meu2973 delivered on February 14, 1989 (Gong1989, 410)

[Plaintiff-Appellant] ELJ Co., Ltd. (Law Firm Square, Attorneys Jeong-hwan et al., Counsel for plaintiff-appellant)

Seoul Guarantee Insurance Co., Ltd. (Law Firm Namsan, Attorneys Jeon Dong-jin et al., Counsel for the defendant-appellant)

Seoul High Court Decision 99Na4094 delivered on March 10, 2000

All appeals are dismissed. The costs of appeal are assessed against each party.

1. Plaintiff’s ground of appeal (the supplementary ground of appeal within the scope of supplement)

A. The lower court determined that each of the above insurance contracts that had already been made against the Plaintiff at the time of the conclusion of each of the above insurance contracts with respect to each of the guaranteed insurance contracts listed in Nos. 12 through 14 of the separate sheet No. 2 as indicated in the judgment of the lower court (as of July 3, 1997, and July 7, 199) was KRW 1,234,608,014 exceeding the aggregate amount of the maximum debt amount and the certificate of deposit provided as security to the Defendant, which had already been set forth above at KRW 1,234,608,014, and it was impossible to pay the outstanding amount at all before the conclusion of each of the above insurance contracts with the Defendant for the reason that it had not been known that the aforesaid insurance contracts had already been made at the time of signing each of the above insurance contracts without notifying the Defendant of its intention to pay the outstanding amount at KRW 100,000,000,000,000,000 won.

In light of the records, the above fact-finding and judgment of the court below are just, and there is no error of law in misconception of facts, incomplete deliberation or misapprehension of legal principles as to the arrival of deception or the declaration of intent to revoke, as alleged in the grounds of appeal.

B. In a guarantee insurance contract where the insurer cancels the insurer's expression of intent to conclude a guarantee insurance contract on the ground that the policyholder who is the principal obligor was aware of the insurer in the course of concluding the guarantee insurance contract, if the insurer had trusted the collateral function of the guarantee insurance contract by issuing the guarantee insurance contract and by executing the obligations under the already concluded contract after receiving the guarantee insurance contract, and thereby has a new interest, in principle, it cannot be set up against the insured as a matter of principle. However, even in this case, if there are special circumstances, such as that the insured knew or could have known of such deception, the insurer may set up against the insured on the ground that it had revoked the policyholder's deception (see, e.g., Supreme Court Decisions 9Da63162, Jul. 13, 199; 9Da13737, Feb. 13, 2001).

According to the records, at the time of the conclusion of each guarantee insurance contract of the above 12 to 14, the outstanding amount against the plaintiff of Sod Metal had already been more than the secured amount that the defendant acquired with respect to Sod Metal. So Sod, Kud Metal was unable to pay the outstanding amount already incurred prior to the conclusion of each insurance contract, and the plaintiff was in a situation where the plaintiff urged payment of the outstanding amount exceeding 1.1 billion won before and after May 15, 1997, before and after the conclusion of each of the above insurance contracts, but was not notified of any particular measure from Sod Metal. Thus, even if the plaintiff had the above circumstances, it can be seen that he knew or could have known that the Sod Metal, which was already in arrears, was issued a surety insurance policy by the defendant to continue to be supplied with the goods without any particular measure to pay the price of the goods.

Therefore, since the cancellation of each of the above insurance contracts by the defendant on the ground of the above fraudulent act by the policyholder, the validity of the cancellation shall also extend to the plaintiff who is the insured, the conclusion of the court below's decision to the same purport is correct, and there is no violation of law by misapprehending the legal principles as to the cancellation of the guaranteed insurance contract

2. As to the Defendant’s ground of appeal

(a) First point:

The Guarantee Insurance Contract is a non-life insurance contract for another person whose content is the insurer's acceptance of the compensation for the loss suffered by the obligee due to the obligor's default. In such guarantee insurance contract, in the event of termination on the ground of the policyholder's breach of duty of disclosure, the policyholder who is the other party to the contract or his/her heir (or his/her agent) must express his/her intention of termination, and in the absence of special circumstances (see Supreme Court Decision 87Meu2973 delivered on February 14, 1989), it shall not be changed solely on the ground that the surety contract was made as a commercial activity or that the policyholder's whereabouts cannot be known.

The court below rejected the defendant's claim for termination on the premise that the defendant, in order to terminate each of the insurance contracts of this case on the ground of the violation of the obligation to notify the policy holder of his intention to terminate each of the above insurance contracts, under the premise that the defendant, within the exclusion period, has no evidence to prove that the defendant notified the representative director of the Solo metal of his intention to terminate each of the above insurance contracts. In light of the above legal principles and records, the above fact-finding and decision of the court below are just, and there is no error of law by misunderstanding the legal principles as to the counter-party to the notification of termination of the contract in a contract or commercial transaction for a third party, as alleged

(b) Second point:

The court below rejected the defendant's assertion that, with respect to each guarantee insurance contract listed in the separate list No. 1 to 11 of the separate list No. 2 of the decision of the court below, it was difficult to conclude the above insurance contract with the plaintiff from April 1995 to KRW 6.78,000. The gross amount of transaction reaches KRW 6.70 million. So Soon metal has been offered a guaranty insurance policy by the defendant and offered the plaintiff as security. So Soon metal has been offered to the plaintiff because it did not pay less than 200 million in advance before the conclusion of the above insurance contract. So, it was hard to view that, in light of the above circumstances, it was hard to view that the above insurance contract and the defendant did not know that the above insurance contract had been concluded with the plaintiff for more than one year and 3 months, and that it was hard to conclude the insurance contract or the above insurance contract with the defendant for more than the above insurance contract without any problem.

In light of the records, we affirm the above fact-finding and judgment of the court below, and there is no error of law by misunderstanding the legal principles on mistake or deception due to violation of the rules of evidence, as argued in the Grounds for Appeal.

(c) Third point;

The performance guarantee insurance contract is an insurance contract to indemnify the insured for losses incurred by the insured by failing to perform his/her obligation on the date of performance of the obligation stipulated in the principal contract within the scope of the insurance period. Thus, unless there are special circumstances, the obligation to pay the insurance proceeds has been extended between the parties to the principal contract after the expiration of the insurance period. However, once the insured event occurred due to the failure to perform his/her obligation on the date of performance within the insurance period, the insured did not claim the insurance proceeds after the lapse of the insurance period, and there is no reason to terminate

In light of the records, in each insurance contract listed in the judgment below Nos. 1 through 8 of the plaintiff's argument, the date of payment of alinium to the plaintiff of Solo metal, the policyholder of the insurance contract, is clear that all is within the insurance period of each guarantee insurance contract between the defendant and Solo metal, and there is no evidence to acknowledge that the plaintiff extended the payment period of each guarantee insurance contract to the insurance period of each guarantee insurance contract (it shall not be deemed that the plaintiff extended the payment period of the price obligation because the plaintiff did not claim the insurance money within the insurance period). The judgment of the court below which accepted the plaintiff's claim based on each of the above insurance contracts is just in accordance with the above purport, and there is no error of law by misunderstanding facts against the rules of evidence, or by misunderstanding the legal principles as to the insurance period as

(d) Fourth point:

According to the records, in order to guarantee the continuous supply of the Aluminum in this case from the plaintiff, it is necessary to enter into a performance guarantee insurance contract with the defendant continuously and repeatedly. The defendant first concludes a performance guarantee insurance contract with the defendant, setting the type of insurance, the transaction limit, the transaction period, and the matters on the guarantee of provision. After submitting an application for the limit of guarantee insurance transaction with the defendant pursuant to the above comprehensive contract, it can be recognized that the defendant submitted an application form for performance guarantee insurance with specific goods transaction agreement prepared between the plaintiff and the defendant pursuant to the above comprehensive contract, and that the defendant was issued an individual performance guarantee insurance contract with separate descriptions of the purchase amount and insurance period, the main contract contents, the contents of guarantee, and the insurance premium. Thus, if there are such circumstances, the specific insurance accident that the payment of the price of the goods whose payment date has arrived within the specific insurance period should be determined by dividing it by individual insurance contract, not by the aforesaid comprehensive guarantee insurance contract.

However, each of the insurance contracts of this case is concluded by setting the insurance period after the date of the contract to guarantee the payment of the price of the credit goods which arrives in the future, so it cannot be deemed that the insurance accident occurred at the time of the contract. Although each of the insurance contracts of this case is based on a single guarantee insurance comprehensive agreement, the above guarantee insurance comprehensive agreement provides only matters concerning the policyholder's credit and security, and does not provide any provision regarding the aggregate of the insurance accidents, it cannot be deemed that the insurance accident of the previous individual insurance contract under the comprehensive agreement has already occurred (the outstanding amount has occurred due to the default of debt) and it cannot be deemed that the other insurance contract of this case has already occurred.

The judgment of the court below to the same purport is just, and there is no error of law by mistake or misunderstanding of legal principles as to the occurrence of an insurance accident.

(e) No. 5;

The court below held that the "damage caused by a cause attributable to the insured" under each of the above insurance contracts or "damage increased by neglecting to claim the insurance money without any justifiable reason," merely because the plaintiff demanded the defendant to pay the insurance money to the defendant for the obligation to pay the money to the defendant from July 30, 1997 without immediately claiming the insurance money, until August 4, 1997, and the defendant claims the insurance money to the defendant on August 4, 1997. In light of the records, the court below held that the above fact-finding and decision of the court below are acceptable, and there is no error of law by misconception of facts or by misapprehending legal principles as to the reason attributable to the plaintiff or the obligation to prevent and mitigate damage, as alleged in the ground for appeal.

3. Therefore, the plaintiff's appeal and the defendant's appeal are all dismissed. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Kim Ji-dam (Presiding Justice)