In a case where the contractor Gap corporation sought confirmation of the non-existence of the insurance claim against Byung corporation's Byung corporation's joint and several liability for indemnity upon Byung corporation's payment of insurance money to guarantee the obligation of return of advance payment to the contractor Eul corporation pursuant to the contract for performance guarantee concluded with Byung Guarantee Insurance Co., Ltd. in order to guarantee the obligation of return of advance payment to the contractor Eul corporation, the case holding that there is no benefit of confirmation as to the claim.

In a case where the contractor Gap corporation sought confirmation of non-existence of the insurance claim against Byung corporation's Byung corporation's joint and several liability for payment of the insurance claim against Byung corporation according to the contract for performance guarantee concluded with Byung Guarantee Insurance Co., Ltd. in order to guarantee the obligation of return of advance payment to the contractor Eul, and Byung corporation paid the insurance claim to Eul corporation, the case holding that the judgment below erred by misapprehending the legal principles on the part of Eul's claim, which determined otherwise, that it is the most effective and appropriate method for dispute resolution, rather than seeking confirmation of non-existence of the insurance claim against Byung corporation's existing legal relationship, inasmuch as the uncertainty of the legal status asserted was the existence of the obligation for indemnity against Byung corporation's already extinguished corporation Byung's non-existence of the insurance claim against Byung corporation.

Article 250 of the Civil Procedure Act

Plaintiff

Social Welfare Foundation Calculation Board (Attorney Kang Young-young, Counsel for defendant-appellant)

Gwangju District Court Decision 2014Na8970 Decided January 30, 2015

Of the lower judgment, the part of the lower judgment seeking confirmation of the absence of the obligation to pay guaranteed insurance money to the Defendant of Seoul Guarantee Insurance Co., Ltd. is reversed, and this part of the lawsuit added at the lower court is dismissed.

1. Basic factual basis and the process of litigation

A. Basic facts

(1) On May 3, 2013, the Defendant entered into a contract for the Cheongdae General Construction Co., Ltd. (formerly, “Sast Construction Co., Ltd.”; hereinafter “Sast Construction”) and the Defendant’s work for the extension of Sungwon Program Construction (hereinafter “instant contract”). On May 29, 2013, the Defendant paid KRW 81,195,000 as advance payment (hereinafter “instant advance payment”).

(2) On May 10, 2013, in order to guarantee the repayment obligation of the instant advance payment, Cheong Name Construction concluded an advance payment performance guarantee insurance contract with the Seoul Guarantee Insurance Co., Ltd. (hereinafter “Seoul Guarantee Insurance”) and the insured as the Defendant and the Defendant did not perform the instant contract, and submitted to the Defendant an advance payment performance guarantee policy issued by the Seoul Guarantee Insurance Co., Ltd. (hereinafter “Seoul Guarantee Insurance”) with the purchase amount of the said advance payment to be returned to the Defendant.

(3) At the time of concluding the above advance payment performance guarantee insurance contract, the Plaintiff jointly and severally guaranteed the liability for reimbursement that the Seoul Guarantee Insurance pays to the Defendant the advance payment pursuant to the above advance payment performance guarantee insurance contract.

(4) On October 14, 2013, the period of the suspension of the construction project, the Defendant filed a claim for the advance payment performance guarantee insurance with the Seoul Guarantee Insurance, and the Seoul Guarantee Insurance paid KRW 30,979,290 to the Defendant with the advance payment performance guarantee insurance on May 20, 2014.

B. Progress of litigation

(1) On May 3, 2013, the Plaintiff filed the instant lawsuit against the Defendant that “The obligation to return KRW 26,845,936 to the Defendant of Cheong name Construction pursuant to the instant contract between Cheong name Construction and the Defendant does not exist” and partly won in the first instance trial.

(2) The Plaintiff appealed against the judgment of the first instance, and in addition to the above claims at the appellate court, the appellate court added the claim that “The obligation to pay the guaranteed insurance to the Defendant of the Seoul Guarantee Insurance Co., Ltd., based on the insurance contract concluded on May 10, 2013, does not exist.” Of the instant lawsuit, the lower court rejected the part seeking confirmation of the absence of the obligation to return advance payment to the Defendant of the Seoul Guarantee Insurance Co., Ltd., by viewing that there was no benefit of lawsuit. The Seoul Guarantee Insurance’s claim seeking confirmation of the absence of the obligation to pay the guaranteed insurance against

(3) Of the lower judgment, the Plaintiff filed another appeal against the part against the Plaintiff regarding the part on seeking confirmation of the absence of the guaranteed insurance payment obligation against the Defendant of Seoul Guarantee Insurance.

2. Ex officio determination on the benefit of confirmation

We examine the grounds of appeal ex officio before determining them.

A. Although a lawsuit for confirmation does not necessarily have to be limited to a legal relationship between the parties, but can also be subject to the legal relationship between one of the parties and a third party or between third parties, in order to have an interest to seek confirmation of such legal relationship, it is necessary to immediately confirm the legal relationship by the confirmation judgment in order to remove any danger or omission existing in the claimant’s rights or legal status, and it should be the most effective and appropriate means (see Supreme Court Decision 2013Da30196, Dec. 12, 2013, etc.).

B. (1) According to the reasoning of the judgment below, with respect to the claim for confirmation of non-existence of the guaranteed insurance against the Defendant of the Seoul Guarantee Insurance Co., Ltd. among the lawsuit in this case, the court below held that the Plaintiff has a benefit to seek a lawsuit for confirmation of non-existence of the guaranteed insurance against the Defendant of the Seoul Guarantee Insurance, even if the Seoul Guarantee Insurance has already paid the insurance money to the Defendant, as there is no difference in the fact that the Plaintiff had already been liable for reimbursement, and since

(2) However, on May 20, 2014, Seoul Guarantee Insurance paid advance payment performance guarantee insurance to the Defendant and the liability for the Defendant of Seoul Guarantee Insurance has already been extinguished. Since unstable legal status asserted by the Plaintiff exists as to the Plaintiff’s Seoul Guarantee Insurance, it would be the most effective and appropriate method to seek confirmation of the absence of indemnity liability, which is the current legal relationship, directly against the Seoul Guarantee Insurance, rather than to resolve disputes between the Plaintiff and the Seoul Guarantee Insurance, by means of bypassing the absence of insurance claims against the Defendant of the Seoul Guarantee Insurance.

Nevertheless, the lower court’s determination on the merits on the part of the lawsuit in this case regarding the claim for confirmation of the absence of an insurance claim against the Defendant of the Seoul Guarantee Insurance Co., Ltd. is erroneous by misapprehending the legal doctrine on the benefit of confirmation in the lawsuit for confirmation of existence of an obligation.

3. Conclusion

Therefore, the part of the judgment of the court below that seeks confirmation of the absence of the obligation to pay guaranteed insurance to the defendant of Seoul Guarantee Insurance, but the above part of the above claim added at the court below is sufficient for the Supreme Court to directly render a judgment, and this part of the lawsuit is dismissed, and the total cost of reversal is borne by the plaintiff. It is so decided as per Disposition

Justices Kim Shin (Presiding Justice)