In the event that a policyholder intentionally causes an excessive insurance event after the insured event occurs when the value of the subject matter exceeds the value of the subject matter at the time of the conclusion of the insurance contract, and the insurer who did not know the fact that the insured event occurs, whether the act of claiming the insurance money constitutes a fraudulent act as a commission of fraud (affirmative with restriction)

In the event that a policyholder intentionally causes an insured event after the occurrence of an insured event after the occurrence of an insured event occurs because the insured amount exceeds the value of the subject matter clearly, if it is recognized that the insurer would have not concluded an insurance contract under the same conditions if it had known that the insured amount substantially exceeds the value of the subject matter, and that the insurer would not pay the amount of the insurance money in accordance with the agreed value, the act of claiming the insurance money without disregarding the value of the subject matter constitutes a fraudulent act as a commission of fraud.

Article 347 of the Criminal Act, Articles 669 and 670 of the Commercial Act

Defendant 1 and one other

Defendants and Prosecutor

Jeonju District Court Decision 2014No1194 decided April 22, 2015

The judgment of the court below is reversed, and the case is remanded to the Jeonju District Court Panel Division.

The grounds of appeal are examined.

1. As to the Defendants’ grounds of appeal

The Defendants’ grounds of appeal are not legitimate grounds of appeal, as they asserted in the grounds of appeal that the Defendants did not consider them as grounds of appeal or as subject to ex officio judgment by the court below.

Furthermore, even if examined, the lower court did not err by misapprehending the legal doctrine as alleged in the Defendants’ grounds of appeal.

2. As to the Prosecutor’s ground of appeal

A. Fraud as a requirement for fraud refers to all affirmative and passive acts that have a good faith and duty to observe each other in property transaction. It is sufficient that such deception does not necessarily mean false representation as to the important part of a juristic act, and it is based on the facts that constitute the basis of judgment for an actor to make an act of disposal of property desired by the other party by omitting the other party into mistake (see Supreme Court Decision 2003Do7828, Apr. 9, 2004). Where a policyholder claims insurance money by claiming for the amount of insurance money with implied consent of the value of an object when an insured event occurred after the occurrence of an insured event after the occurrence of an excessive exceeds the value of the object, if the insurer had known that the insured amount substantially exceeds the value of the object, and if it is acknowledged that the insurer did not pay insurance money as it was in accordance with the agreed value, the act of claiming insurance money without disregarding the value of the object constitutes a fraudulent act of fraud.

B. For the following reasons, the lower court found the Defendants not guilty on the ground that: (a) even if the Defendants violated the duty of disclosure by falsely notifying the purchase price of the horse of this case, which is the premise of the insurable value when concluding the instant insurance contract with the victim Nonindicted Co. 1 (hereinafter “victim Nonindicted Co. 1”) among the facts charged in the instant case, it is difficult to deem that the Defendants’ act of concluding the insurance contract constitutes a intentional deception for the purpose of acquiring insurance money, or that there was an intention to obtain insurance money from the Defendants; (b) the Defendants’ act of claiming insurance money in accordance with the terms of the insurance contract that had been concluded before the occurrence of the insurance accident due to a contingency after the occurrence of the insurance accident, also constituted a deception

C. However, we cannot accept the above determination by the court below for the following reasons.

(1) The following facts are acknowledged according to the evidence duly examined by the court below.

① Around June 2010, Defendant 1 purchased from Nonindicted 2 80 million won a total of 7 pieces of horses, including the instant horses.

② Defendant 1, among the 7 pages of the horses purchased from Nonindicted 2, tried to continue raising the horses in the stock farm operated by Nonindicted 2, on the ground that the horses in this case were cut down compared to other horses, and the physical condition was not good.

③ The victim Nonindicted Co. 1 did not separately investigate the value of the horse subject to insurance when concluding a livestock disaster insurance contract on the ground that it is difficult to confirm the objective market price of the horse or to compute it on the ground that the insurable value was determined based on the purchase price stated in the documents, such as a sales contract and medical certificate, submitted by the policyholder.

④ The Defendants, who were well aware of the aforementioned practices, drafted a sales contract stating that “Non-Indicted 2 sold the horses of this case to Non-Indicted 3 in the purchase price of KRW 30 million” and the sales contract stating that “Non-Indicted 3 sold the horses of this case to Defendant 2 in the purchase price of KRW 40 million” (hereinafter “the sales contract of this case”) on August 12, 2010, respectively, and submitted each of the above sales contracts to the Korean Racing Association to register the said contents on the website of the Korean Racing Association.

⑤ On August 2010, Defendant 2 subscribed for a livestock accident insurance contract with the victim Nonindicted Co. 1 as the subject-matter of the instant horse, and submitted relevant documents, such as the instant sales contract, and the victim Nonindicted Co. 1 concluded the instant insurance contract with Defendant 2 on September 1, 2010 on the ground of the purchase price stated in the instant sales contract with Defendant 2 and the sales price indicated in the instant sales contract.

④ On October 4, 2010, the end of the instant case was found to have been discarded in a stock farm operated by Nonindicted Party 2, and as a result of the autopsy, the end of the instant case was diagnosed as “culptive landing on the left side.”

7) On October 4, 2010, Defendant 2 claimed insurance money according to the instant insurance contract on the ground that the victim Nonindicted Company 1 was closed with silent the value of the horse of this case. On December 17, 2010, Defendant 2 received insurance money of KRW 32 million from the victim Nonindicted Company 1.

(2) In light of the above legal principles, the Defendants intentionally caused the status of excess insurance by preparing and delivering a false sales contract concerning the horses of this case, and the insured amount of the insurance contract of this case is considerably excessive than the value of the subject matter; ② Defendant 1 purchased the victim Nonindicted Co. 1’s 7 notes including the horses of this case in total at KRW 80 million; and if he knew that the end of this case was 40 million won or less than the end of the remaining 6 pages, he did not enter into the insurance contract of this case with the insured amount as to the end of this case, and if he did not know of the fact that the insurance amount would not have been paid as it was, it would not be deemed that the Defendants did not arbitrarily charge the victim for the insurance accident of this case or would not pay the insurance amount in accordance with the value of the agreed insurance. In light of the above legal principles, it would be deemed that the Defendants did not have any other knowledge of the fact that the insurance accident of this case occurred by preparing and delivering the false sales contract in excess of the value of the subject matter under the insurance contract.

(3) Nevertheless, the court below found the victim non-indicted 1 guilty on the part of the facts charged in this case. The court below erred by misapprehending the legal principles on the deception of fraud, which affected the conclusion of the judgment. The prosecutor's ground of appeal pointing this out is with merit.

3. Scope of reversal

For the same reason as seen above, the part of the judgment of the court below against the Defendants should be reversed. Since the above part of the facts charged and the remaining facts charged which the court below found guilty are concurrent crimes under the former part of Article 37 of the Criminal Act, the judgment of the court below should be reversed in its entirety.

4. Conclusion

Therefore, the judgment of the court below is reversed, and 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.

Justices Park Sang-ok (Presiding Justice)