[1] The legal nature of the guaranteed insurance contract and the relationship of the payment of insurance proceeds / What constitutes the principal contract which is the premise of the guaranteed insurance contract and how to determine who is the insured

[2] In a case where Gap et al., a logistics company Gap et al. concluded an automobile sales guarantee insurance contract with Eul et al., which was a goods manufacturing and selling company Eul et al., and concluded an installment financing loan agreement with Eul et al., which was an installment financing company as collateral, with the insurance policy, the case holding that the said guarantee insurance contract was the main contract which is subject to the guarantee of installment financing loan agreement, and it

[1] A guarantee insurance policy is a non-life insurance policy with the content that an insurer accepts the recovery of the damage suffered by the insured (beneficiary under a principal contract) due to the nonperformance by a policyholder having a specific legal relationship with the insured, and its formally aims at the same effect as a guarantee contract with the nature of a guarantee. Therefore, a guarantee insurance contract is a guarantee insurance policy based on the premise of a legal relationship such as a principal contract, etc., and is to compensate for the loss suffered by the insured due to the failure of the insured to perform the obligation under a principal contract, etc. 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 exist. Determination shall be made by comprehensively taking into account the content of the guarantee contract and the contents of the insurance contract, as well as all the circumstances such as the process and process of the conclusion of the insurance contract by the parties.

[2] In a case where Gap et al., a logistics company Gap et al., concluded an installment financing loan agreement with Eul et al., a guarantee insurance company Eul et al., and concluded an installment financing loan agreement with Eul et al., as collateral, after concluding an automobile sales guarantee agreement with Eul et al., the case holding that the above guarantee insurance agreement is a main contract subject to guarantee of installment financing loan agreement, and it was concluded with Jung et al., as the insured et al., for the following reasons: although the insured et al., submitted or issued at the time of concluding a guarantee insurance agreement, and the contents of guarantee are respectively stated as a guarantee of installment sales payment; however, the special terms and conditions of installment financing are applied under the agreement with Byung et al., which is a policyholder of Byung et al., to compensate for losses incurred by Jung et al., a financial institution for the failure to perform the installment financing obligation stipulated

[1] Article 638 of the Commercial Code, Article 428 of the Civil Code / [2] Article 638 of the Commercial Code, Article 428 of the Civil Code

[1] Supreme Court Decision 89Meu25912 delivered on May 8, 1990 (Gong1990Ha, 1243) Supreme Court Decision 97Da14903 delivered on November 13, 1998

KNF Life Insurance Co., Ltd. (LLC, Kim & Lee LLC, Attorneys Kang Yong-tae et al., Counsel for the defendant-appellant)

Seoul Guarantee Insurance Co., Ltd. (Law Firm Hongle, Attorneys Landscaping-gu et al., Counsel for the defendant-appellant)

Hyundai Automobile Co., Ltd. (Law Firm LLC, Attorneys Park Sang-hoon et al., Counsel for the plaintiff-appellant)

Seoul High Court Decision 2011Na25598 decided June 21, 2012

The appeal is dismissed. The costs of appeal are assessed against Defendant Seoul Guarantee Insurance Co., Ltd., including the cost of participation.

The grounds of appeal are examined.

1. Whether the pertinent guarantee insurance contract exists

A. A. The guaranteed insurance policy is a non-life insurance policy, the purport of which is to take over by the insurer the recovery of the loss that the insured (creditors under the main contract) will incur due to the nonperformance of the obligation between the insured and the policyholder who has a specific legal relationship. The purpose of which is to formally be the same as the guarantee contract with the nature of the debtor's non-performance of obligation or the effect of the guarantee contract. Thus, the guarantee insurance contract is to compensate for the loss that the insured suffers due to the failure of the policyholder to perform the obligation under the main contract, etc. under the premise of the legal relationship of the main contract, etc., and within the scope of the amount of the insurance contract. Therefore, if the guarantee insurance contract takes effect, the main contract should be effective between the policyholder and the insured (see Supreme Court Decisions 89Meu25912, May 8, 199; 97Da14903, Nov. 13, 198; etc.).

B. The reasoning of the lower judgment and the evidence duly admitted by the lower court reveal the following.

① The Defendant Seoul Guarantee Insurance Co., Ltd. (hereinafter “Defendant Seoul Guarantee Insurance Co., Ltd.”) obtained authorization from the Financial Supervisory Service to handle the installment sale guarantee insurance, and handled only the installment sale guarantee insurance for automobiles with the selling company as the insured under the contract for installment sales. Since January 1, 1996, it was necessary for the government to develop a new guarantee insurance product that guarantees the installment financing obligation of a motor vehicle buyer as a result of allowing the new establishment of an installment financing company from January 1, 1996, it made a special terms and conditions of installment financing that grant the company the right to claim the insurance money from January 3, 1996 to the insurance money claim in addition to the right to receive the insurance money.

② Article 1 of the General Terms and Conditions of Installment Sales Guarantee Co., Ltd., which the Defendant Seoul Guarantee Insurance has already used, provides that “The damages suffered by the seller (hereinafter “insured”) due to the failure of the buyer to perform the obligation of installment payment as stipulated in the installment sales contract on the insurance policy (hereinafter “the prime contract”) and the seller shall be compensated for in accordance with the terms and conditions,” and the main text of Article 6(1) provides that “The insurance money to be paid by the company shall be the unpaid amount of installment payment at the date of payment as stipulated in the prime contract.”

However, with respect to the scope of application of Article 1 of the Special Terms and Conditions for Installment Financing of the Defendant Seoul Guarantee Insurance, “this Special Terms and Conditions apply to cases where an insurance policyholder is paid installment financing from a bank, insurance company, or installment financing company (hereinafter “financial institution”) in accordance with the installment sale contract entered into on the insurance policy,” and Article 2 of the General Terms and Conditions provides that “Notwithstanding the provisions of Article 1 of the Terms and Conditions, the damage to be compensated by an insurance policyholder who is the buyer pursuant to the installment sale contract entered into with a financial institution pursuant to the installment sale contract entered on the insurance policy (hereinafter “main contract”) shall be compensated for any damage incurred by a financial institution due to failure to perform the installment financing obligations as stipulated in the said contract.” Article 3(2) provides that “The main contract shall be deemed as a monetary loan contract,” and Article 6 of the General Terms and Conditions for Installment Sale Guarantee Insurance shall be deemed as a substitute for the application of the amount to be recovered” respectively.

③ Defendant Hyundai Motor Co., Ltd. (hereinafter “Defendant Hyundai Motor”), concluded a installment agreement (hereinafter “instant blanket agreement”) with Defendant Hyundai Motor Co., Ltd., and, through said installment agreement, Defendant Hyundai Motor Co., Ltd., agreed to accept the installment payment agreement if the Defendant Hyundai Motor Co., Ltd., sold an automobile by installment and caused the buyer to subscribe to the installment sales guarantee insurance of the Defendant Seoul Guarantee Insurance, and if the buyer requests to attach the installment payment agreement to the installment sales guarantee insurance in order to receive the installment payment from the installment company, the Seoul Guarantee Insurance Co., Ltd. may accept the installment payment agreement.

④ The instant truck as indicated in the holding of the lower judgment and the Defendant Hyundai Motor, from April 2007 to September 2007, 2007, was concluded a sales contract for the instant truck.

⑤ From August 3, 2007 to September 2007, the non-party company offered a subscription for the installment sale guarantee insurance for the instant truck to the Defendant Seoul Guarantee Insurance Co., Ltd., a loan brokerage company (hereinafter “gold Capital”). The Defendant Seoul Guarantee Insurance Co., Ltd. concluded each of the installment sale guarantee insurance contracts for the instant truck (hereinafter “instant guarantee insurance contract”) with the non-party company on August 30, 2007 and September 20, 2007 in accordance with the instant installment agreement.

The written application for the installment sale guarantee insurance submitted by the non-party company to the Defendant Seoul Guarantee Insurance Co., Ltd. at the time indicated as Defendant Hyundai Motor, and the content of the guarantee as payment guarantee for installment sale, and stated the installment sale amount and the installment period in the main contract, but as the purport of applying the special terms and conditions of installment financing was stated, the main contract was indicated as installment financing. The Defendant Seoul Guarantee Insurance Co., Ltd issued an insurance policy on the instant guarantee insurance contract (hereinafter “instant insurance policy”). The instant insurance policy also stated as Defendant Hyundai Motor and the content of the guarantee as the payment guarantee for installment sale, and the content of the main contract, but the form of installment payment was indicated as installment financing as stated in the main contract. In addition, the instant insurance policy was accompanied by the general terms and conditions of the installment sale guarantee insurance and the special terms and conditions of the installment financing.

6) The Plaintiff received the instant insurance policy from the Nonparty Company as collateral and entered into an installment financing loan agreement (hereinafter “instant loan agreement”) with the Nonparty Company from August 2007 to September 2007, and then remitted the instant loan to the Defendant Hyundai Motor.

C. The following circumstances revealed by such factual basis: (a) the Plaintiff’s subscription form and the instant insurance policy submitted or issued by the Defendant Seoul Guarantee Insurance Co., Ltd. at the time of entering into the instant guarantee insurance contract are indicated as Defendant Hyundai Motor; (b) the Defendant Seoul Guarantee Insurance Co., Ltd. applied the installment financing special terms and conditions pursuant to the agreement between the Defendant Seoul Guarantee Insurance Co., Ltd. and the Nonparty Co., Ltd.; (c) the Defendant Seoul Guarantee Insurance Co., Ltd. will compensate the Plaintiff for losses incurred if the Nonparty Co., Ltd., which is the policyholder, did not perform the installment financing obligations stipulated in the said contract; and (d) it would be deemed that the Plaintiff Co., Ltd. received the installment payment contract, and used the copy of the said contract in addition to the existing installment payment terms and conditions of the Plaintiff Co., Ltd.’s guarantee insurance contract, in light of the fact that the Plaintiff Co., Ltd. and the Defendant Co., Ltd. received the installment payment contract and the Plaintiff Co., Ltd., which appears to be an installment payment contract.

Therefore, while the reasoning of the lower judgment is somewhat inappropriate, the lower court is justifiable to have determined that the claim for insurance based on the instant guarantee insurance contract existed. In so doing, it did not err by exceeding the bounds of the principle of free evaluation of evidence in violation of logical and empirical rules, or by misapprehending the legal doctrine on the principal contract of the guaranteed insurance contract and the insured, thereby affecting the conclusion

2. Whether the instant guarantee insurance contract becomes invalid due to deception of Defendant Hyundai Motor Vehicle

A. According to the reasoning of the judgment below, the court below determined that: (a) since the actual insured of each of the guaranteed insurance contracts of this case is the plaintiff, the fraudulent act of the defendant Hyundai Motor is not a fraudulent act of the insured; (b) each of the guaranteed insurance contracts of this case was concluded between the policyholder and the defendant Seoul Guarantee Insurance as the actual insured; and (c) the defendant Hyundai Motor is not a party having an advantage to ascertain the authenticity of each of the guaranteed insurance contracts of this case; and (c) according to the defendant Seoul Guarantee Insurance's reply to the inquiry of the contract of the defendant Hyundai Motor Co., Ltd., the defendant Seoul Guarantee Insurance did not impose an obligation to ascertain the authenticity of the sales contract on the company of installment financing; (d) if the insured knew or could have known the deception, or if the insured had an obligation to examine it, it would be exceptionally cancelled on the ground of deception; and (d) it would be invalid for the defendant Hyundai Motor to the effect that the insurance contract of this case would become null and void for the reason that it would be unreasonable for each of the guaranteed insurance contracts of this case.

Furthermore, the lower court determined that the instant blanket agreement does not apply to each of the instant guarantee insurance contracts, on the grounds that there was no evidence to deem that the instant blanket agreement was concluded between the Defendants, and that there was an agreement between the Nonparty Company, the insurer, the Defendant Guarantee Insurance, and the Plaintiff, the actual insured, on the ground that the instant comprehensive agreement was concluded between the Defendants, and that there was no evidence to deem that the instant comprehensive agreement was concluded between the Nonparty Company, the insurer, and the Plaintiff, the actual insured, as the subject matter of each of the instant guarantee insurance contracts.

B. Examining the relevant legal principles and records, the above determination by the court below is just and acceptable, and there were no errors by misapprehending the legal principles on the validity of the guaranteed insurance contract of this case.

3. Whether a person is exempted from the obligation to pay insurance proceeds for reasons attributable to the defendant Hyundai Motor Vehicle

According to the reasoning of the judgment below, the court below determined that each of the insurance policies of this case does not compensate the insurer for any loss incurred by the reason attributable to the insured or a financial institution (Article 2(2) of the General Terms and Conditions, Article 3(1) of the Special Terms and Conditions for Installment Financing), but it cannot be deemed that there is a reason attributable to the insured in this case because the Defendant Hyundai Motor is not the actual insured, and further, if it is interpreted that the Defendant Seoul Guarantee Insurance is exempted from the obligation to pay insurance money under each of the guaranteed insurance contracts of this case due to the reason attributable to the Defendant Hyundai Motor, which is a policyholder or a third party not belonging to the insured or the beneficiary, such interpretation is more unfavorable than Article 659 of the Commercial Act, and thus, is null and void by Article 63 of the Commercial Act.

In light of the relevant legal principles and records, the above determination by the court below is just and acceptable, and there were no errors by misapprehending the legal principles on the validity of the guaranteed insurance contract of this case.

4. 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 on the bench.

Justices Park Poe-young (Presiding Justice)