[1] The validity of an insurance contract concluded for the purpose of unjust acquisition of insurance proceeds through a large number of insurance contracts (negative), and whether it may be ratified based on all the circumstances, such as the occupation and financial status of the policyholder, even if there is no direct evidence (affirmative)

[2] In a case where a policyholder acquires insurance claims by concluding a life insurance contract or accident insurance contract with another person as a beneficiary for the purpose of supporting another person's living or providing economic support, whether the insurer's payment to the beneficiary for the beneficiary has fulfilled his/her own obligation against the beneficiary (affirmative), and whether the insurer may seek a return of the insurance proceeds already paid to the beneficiary when the above insurance contract is null and void or cancelled (affirmative)

[1] In a case where a policyholder concludes an insurance contract for the purpose of unjust acquisition of insurance money through multiple insurance contracts, the payment of insurance money under an insurance contract concluded for such purpose would go beyond social reasonableness by encouraging speculative spirit to gain unjust profits through abuse of insurance contracts, and thereby impairing the purpose of the insurance system, such as reasonable diversification of risks, destroying the contingentness of risks, and causing the sacrifice of the majority of the insured, thereby impairing the foundation of the insurance system. Such insurance contract is null and void against good morals and other social order under Article 103 of the Civil Act. Meanwhile, even if there is no evidence to directly recognize that the policyholder concluded multiple insurance contracts for the purpose of unjust acquisition of the insurance money, such purpose may be ratified based on all the circumstances such as occupation and financial status of the policyholder, background leading to the conclusion of multiple insurance contracts, scale of the insurance contract, and circumstances after the conclusion of the insurance contract.

[2] In a case where a policyholder concludes a life insurance contract or accident insurance contract with an insurer as a beneficiary for the purpose of supporting another person's living or providing economic support and the beneficiary acquires the claim of insurance proceeds, the insurer's payment to the beneficiary is the insurer's performance of its own obligation against the beneficiary. Therefore, the insurer may seek a return of the beneficiary's payment against the beneficiary on the ground that the insurance contract is null and void or cancelled, and this cannot be viewed differently even if the life insurance or accident insurance for another person has the nature of the contract for the third party.

[1] Article 103 of the Civil Act; Articles 730 and 737 of the Commercial Act / [2] Articles 539, 548, and 741 of the Civil Act; Articles 639, 730, 733, 737, and 739 of the Commercial Act

[1] Supreme Court Decision 99Da49064 delivered on February 11, 2000 (Gong2000Sang, 669) Supreme Court Decision 2005Da23858 Delivered on July 28, 2005 (Gong2005Ha, 1421)

Case Non-Life Insurance Co., Ltd. (former Trade Name: ELA Property Insurance Co., Ltd.) (Law Firm Subdivision, Attorneys Kim Jong-chul et al., Counsel for the plaintiff-appellant)

Defendant

Gwangju High Court Decision 2016Na10949 decided September 9, 2016

The part of the judgment of the court below against the plaintiff is reversed, and that part of the case is remanded to the Gwangju High Court. The defendant's appeal is dismissed.

The grounds of appeal are examined.

1. As to the Defendant’s ground of appeal

A. In a case where a policyholder concludes an insurance contract for the purpose of unjust acquisition of insurance proceeds through multiple insurance contracts, the payment of insurance proceeds under an insurance contract concluded for such purpose would go beyond social reasonableness by encouraging speculative spirit to gain unjust profits through abuse of insurance contracts, and thereby impairing the purpose of the insurance system, such as reasonable diversification of risks, destroying the contingentness of risks, and causing the sacrifice of many subscribers, thereby impairing the foundation of the insurance system. Thus, such insurance contract is null and void against good morals and other social order under Article 103 of the Civil Act (see Supreme Court Decision 9Da49064, Feb. 11, 200). Meanwhile, in a case where a policyholder concludes a multiple insurance contract for the purpose of unjust acquisition of insurance proceeds, the purpose of the insurance contract may be confirmed based on all the circumstances, including the type of the policyholder’s occupation and financial status, the process of concluding multiple insurance contracts, the scale of insurance contracts, and the circumstances after concluding the insurance contract (see, e.g., Supreme Court Decision 2005Da38585, Jul. 28, 2005).

B. Upon citing the judgment of the court of first instance, the court below determined that: (a) the Defendant and his family members concluded 47 insurance contracts which are similar to each of the insurance contracts of this case, including each of the insurance contracts of this case for 1 year 2010; (b) the Defendant and their family members concluded 47 insurance contracts whose content and nature of coverage are similar to those of each of the insurance contracts of this case; (c) monthly insurance premium of each of the insurance contracts of this case for which the Defendant and their family members are the insured amounting to 2,017,87 won; and (d) the Defendant and their family members were deemed to have concluded the insurance contracts of this case for a significant amount of money in light of the revenue and income amount reported to the tax office of the Defendant and their family members; and (d) the insurance money received from each of the Defendant and their family members was considerably high in light of their income and property status, and thus, it was reasonable to deem the insurance contracts of this case to be null and void for each of the insurance contracts of this case through good social order.

C. Examining the reasoning of the lower judgment in light of the aforementioned legal principles and records, the lower court’s aforementioned determination is justifiable. Contrary to what is alleged in the grounds of appeal, the lower court did not err by exceeding the bounds of the principle of free evaluation of evidence against logical and empirical rules, by misapprehending the legal doctrine on the effect of multiple insurance contracts or Article

2. Plaintiff’s ground of appeal

A. In a case where a policyholder concludes a life insurance contract or accident insurance contract with an insurer as a beneficiary for the purpose of supporting another person’s living or providing economic support and the beneficiary acquires the claim of insurance money, the insurer’s payment to the beneficiary is the insurer’s performance of its own obligation against the beneficiary. Therefore, the insurer may seek a return of the beneficiary’s payment against the beneficiary on the ground that the insurance contract is null and void or cancelled, and the insurer may seek a return of the beneficiary’s payment to the beneficiary on the ground that the life insurance or accident insurance contract for the other person has the nature of the contract for

B. Review of the reasoning of the lower judgment and the record reveals the following facts.

1) On February 25, 2010, the Plaintiff and the Nonparty concluded an insurance contract with the Defendant as an insured concurrently as an insured beneficiary, and on June 24, 2013, the Nonparty changed the policyholder from the Nonparty to the Defendant.

2) On July 21, 2010, the Plaintiff and the Defendant concluded an insurance contract in attached Form 2 of the lower judgment with the Defendant as both the insured and the beneficiary, which was renewed on July 21, 2013, and concluded an insurance contract in attached Form 3 of the lower judgment (hereinafter referred to as “each of the instant insurance contracts”) by combining each of the instant insurance contracts with each of the aforementioned insurance contracts.

3) The Defendant received insurance proceeds of KRW 10,370,000 in total from the Plaintiff according to each of the instant insurance contracts. Of all, the amount of insurance proceeds that the Defendant received as a beneficiary before June 24, 2013 in relation to the insurance contracts listed in attached Form 1 of the lower judgment is KRW 2,220,000.

C. Examining the foregoing factual basis in light of the legal principles as seen earlier, insofar as each of the instant contracts is null and void in violation of good morals and other social order, the Plaintiff should be deemed to have filed a claim for return of unjust enrichment against the Defendant in relation to the insurance contract as set forth in Attachment No. 1 of the lower judgment regarding KRW 2,220,000, which the Defendant received as a beneficiary before June 24, 2013

D. Nevertheless, solely on the grounds stated in its reasoning, the lower court determined that the Plaintiff cannot file a claim for return of unjust enrichment against the Defendant, solely based on the grounds stated in its reasoning. In so doing, the lower court erred by misapprehending the legal doctrine on the return of unjust enrichment where an insurance contract for another person becomes null and void, thereby adversely affecting the conclusion of the judgment. The allegation in the grounds of appeal assigning this error is with merit.

3. Conclusion

Therefore, the part of the lower judgment against the Plaintiff is reversed, and that part of the case is remanded to the lower court for further proceedings consistent with this Opinion. The Defendant’s appeal is dismissed. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Kwon Soon-il (Presiding Justice)