[1] The validity of an insurance contract concluded for the purpose of illegally acquiring insurance proceeds through a large number of insurance contracts (negative), and whether such purpose may be ratified on the basis of all the circumstances, including the occupation and financial status of the policyholder, in cases where there is no evidence to directly acknowledge whether the policyholder has concluded a large number of insurance contracts for the purpose of illegally acquiring the insurance proceeds

[2] In a case where Gap entered into a total of seven months insurance contracts with multiple insurance companies including Eul and received insurance money from Eul for reasons of hospitalized treatment, etc., and Eul filed a claim for return of unjust enrichment on the grounds that the insurance contract was null and void in violation of good morals and other social order, the case holding that the judgment below erred by misapprehending legal principles, although it is insufficient to confirm that the insurance premium was an abnormal or excessive amount in light of Gap's income level, and thus, it is hard to find the insurance premium to be deemed to be an improper or excessive amount

[1] Article 103 of the Civil Code, Articles 730 and 737 of the Commercial Code / [2] Article 103 of the Civil Code, Article 737 of the Commercial Code

[1] Supreme Court Decision 2016Da255125 Decided September 13, 2018 (Gong2018Ha, 1967)

M&C Co., Ltd. (Law Firm Document, Attorney Sung Jae-young et al., Counsel for the plaintiff-appellant)

Defendant 1 and one other (Attorney Kim Tae-tae, Counsel for the defendant-appellant)

Busan District Court Decision 2015Na42862 Decided May 12, 2016

The part of the judgment below against the Defendants is reversed, and that part of the case is remanded to Busan District Court.

The grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed).

1. Where a policyholder concludes an insurance contract for the purpose of unjust acquisition of insurance proceeds through multiple insurance contracts, the insurance contract is null and void in violation of good morals and other social order stipulated under Article 103 of the Civil Act. The payment of insurance proceeds under such insurance contracts not only leads to the deviation of social reasonableness by inducing speculative spirit to gain unjust profits through abuse of insurance contracts, but also would undermine the purpose of the insurance system, harming the rational diversification of risks, destroying the contingencyness of risks, and causing the sacrifice of many subscribers, thereby harming the foundation of the insurance system.

Unless there is any evidence that directly recognizes whether a policyholder has concluded multiple insurance contracts with the intention of illegally acquiring insurance proceeds, such purposes may be ratified based on various circumstances, such as the occupation and financial status of the policyholder, the timing and developments of concluding multiple insurance contracts, the scale and nature of the insurance contracts, and the circumstances after concluding the insurance contracts.

2. Based on the following circumstances, the lower court determined that the instant insurance contract was concluded by Nonparty 1 for the purpose of illegally acquiring insurance proceeds through multiple insurance contracts, and was null and void against good morals and other social order stipulated in Article 103 of the Civil Act.

The total insurance premium of KRW 579,192, including the instant insurance contract, appears to have been excessive to Nonparty 1. From February 20, 2009 to April 30, 2009, Nonparty 1 concluded a total of seven insurance contracts including the instant insurance contract, and it is difficult to deem that there is a reasonable ground to conclude multiple insurance contracts including similar security within the short period. Nonparty 1 was hospitalized for KRW 586,40,863 as of June 9, 2009 to February 10, 2015, and Nonparty 1 was hospitalized for KRW 586,40,863 as of February 10, 209. The frequency of Nonparty 1’s hospitalization and the period of hospitalization appears to have been considerably frequent and the insurance amount received as of February 10, 2015 were found to have been excessively excessive.

3. However, the lower court’s determination is difficult to accept.

A. According to the reasoning of the lower judgment and the record, the following circumstances are revealed.

(1) Nonparty 1 was in a de facto marital relationship with Nonparty 2, and Nonparty 2 registered his business in the name of Nonparty 3 or female Nonparty 4 and operated a meat wholesale and retail business with the trade name of “○○○○○○○○○○○○○○○○○○○○○○,” and used the account in the name of Nonparty 4. Examining the details of the account in question, the balance remains in total at the time of entering into the instant insurance contract. The sum of monthly insurance premiums of KRW 579,192 is difficult to be deemed to be an abnormal or excessive amount in light of the income level of Nonparty 1 or Nonparty 2.

(2) Nonparty 2’s speech, Nonparty 5 is an insurance solicitor of the Dongyang Life Insurance Co., Ltd., and Nonparty 1 concluded a total of seven insurance contracts at the recommendation of an insurance solicitor who is Nonparty 5 and his branch. Nonparty 1 concluded with the Dongyang Life Insurance Co., Ltd. on February 209 and △△△△△△△△△△△△ insurance contract (monthly insurance premium of KRW 206,250) concluded with the Dongyang Life Insurance Co., Ltd. on March 11, 2009 and the life insurance standard insurance contract of KRW 20 years (monthly insurance premium of KRW 165,612), which entered into with the ASEAN Life Insurance Co., Ltd. on March 11, 2009, it is questionable that the lower court concluded a short-term insurance contract of KRW 371,862, total insurance premium of KRW 79,579,192, including the total insurance premium of KRW 192.

(3) On June 9, 2009, after entering into the instant insurance contract, Nonparty 1 received the first diagnosis of “insulgin-sulgic urine disease accompanied by circular mergers,” and was mainly hospitalized or operated due to an internal disease, such as urology and a combination thereof. Even if examining the evidence submitted in the instant case, there is no evidence to prove that there was only the data on the external disease, and there was no need for hospitalized treatment or surgery with respect to the internal disease.

B. Examining the following circumstances in light of the aforementioned legal principles: (a) the occupation and financial status of the policyholder; (b) the timing and developments of concluding multiple insurance contracts; (c) the scale and nature of the insurance contracts; and (d) circumstances after concluding the insurance contracts, there is insufficient evidence to conclude that Nonparty 1

Nevertheless, the court below confirmed that the insurance contract of this case was null and void in violation of good morals and other social order as stipulated in Article 103 of the Civil Act on the ground that it was aimed at illegally acquiring insurance proceeds to Nonparty 1. The court below did not exhaust all necessary deliberations and erred by exceeding the bounds of the principle of free evaluation of evidence in violation of logical and empirical rules, or by misapprehending the legal principles as to whether Article 103 of the Civil Act was violated

4. The Defendants’ appeals are with merit. The part of the judgment below against the Defendants is reversed, and this part of the case is remanded to the court below for a new trial and determination. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Lee Dong-won (Presiding Justice)