[1] The case holding that the judgment below did not err by misapprehending the legal principles as to the structure of insurance, etc. in holding that Gap company paid expenses incurred in purchasing a new mobile device on behalf of the insured customer who is the insured, and received the insurance money from Eul company on behalf of the insured customer who is the insured, in a case where the contents of the above insurance contract were at issue with Eul company's insurance contract with the insured customer who purchased a new mobile device on behalf of the stolen or lost mobile device

[2] In a case where Gap corporation, a mobile communications company, entered into an insurance contract with Eul insurance company as the insured with regard to the interpretation of "ex-factory price", which serves as the basis for calculating insurance proceeds in the insurance contract entered into with Eul insurance company, and the calculation of insurable benefits, the case holding that the judgment below did not err by misapprehending legal principles as to the calculation of the insurable value and the interpretation of the ex-factory price, which is the factor for calculating the insurance proceeds to be paid by Eul company, in the case where the insured customer, who was the insured, was stolen or lost the device, was an amount equivalent to the cost incurred in newly purchasing the device, i.e., the amount equivalent to the cost incurred by the insured customer when the device was stolen or lost

[1] The case holding that in a case where the contents of the above insurance contract are at issue, in a case where the contents of the insurance contract made with the insurance company Eul as the insured with the customer who subscribed to the above supplementary service are at issue, the agreement shall take precedence over the insurance contract in a case where the business agreement entered into with the above insurance contract provides that if there is any conflict between the insurance contract and the business agreement entered into with the insurance company Eul as the insured, the agreement shall take precedence over the insurance contract, and there is no content that Eul company shall pay the insurance money to the customer who is not the insured customer but the insurance company, and there is no content that Eul company shall provide the insurance money to the customer by purchasing the device, or that Eul company shall pay the purchase cost of the Eul company's mobile device, and in light of these circumstances, the above insurance contract is not erroneous in the misapprehension of legal principles as to the insurance structure, etc.

[2] In a case where the interpretation of "ex-factory price", which serves as the basis for calculating insurance proceeds in an insurance contract concluded with an insurance company B using the customer who subscribed to the mobile phone auxiliary services as the insured, and the calculation of insurable interest is at issue, the case holding that the court below's determination of the price of the mobile device "ex-factory price" and the price of the new mobile device purchased or lost by the customer who purchased the mobile device under the name of the insurance contract and the business agreement, should be paid to the user who seeks to purchase the device without concluding the new mobile communication service agreement, on the ground that the mobile device is paid on the condition that the consumer would conclude the new mobile communication service agreement with the mobile communication company and the existing mobile communication service agreement, and thus, the customer who purchased or lost the device is bound to purchase the new mobile device under the name of the user who purchased the new mobile device under the name of the user who purchased the mobile device under the insurance contract and the service agreement, and thus, it is also reasonable to view that the user would have to pay the new "ex-factory price" price of the mobile service.

[1] Article 665 of the Commercial Code / [2] Articles 665 and 668 of the Commercial Code, Article 105 of the Civil Code

KS Telecom Co., Ltd. (Law Firm Sejong, Attorneys Kim Yong-dam et al., Counsel for the plaintiff-appellant)

Han Fire Insurance Co., Ltd. (LLC, Kim & Lee LLC, Attorneys Kang Jong-gu et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2015Na2002513, 2002520 decided April 22, 2016

The appeal is dismissed. The costs of appeal are assessed against the Defendant (Counterclaim Plaintiff).

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

1. Determination on the grounds of appeal Nos. 1 through 3

The lower court determined as follows on the grounds stated in its reasoning.

A. Each of the instant insurance contracts concluded between the Plaintiff (Counterclaim Defendant; hereinafter “Plaintiff”) and the Defendant (Counterclaim Plaintiff; hereinafter “Defendant”) are linked to the Plaintiff’s additional services as the insured. The mobile phone additional services are provided by means of paying part of the purchase price to the agent when the Plaintiff purchases a new device on behalf of a stolen or lost mobile phone terminal (hereinafter “terminal”). According to the business agreement concluded with each of the instant insurance contracts, where there is a conflict between the insurance contracts and the business agreement of each of the instant case, the business agreement shall prevail. Meanwhile, there is no provision that the Defendant would pay insurance money to the Plaintiff, not the insured, or that the Defendant would pay the Plaintiff purchase cost of the Plaintiff. In light of such circumstances, each of the instant insurance contracts is reasonable to deem that the Plaintiff would pay the Plaintiff’s new purchase cost of the mobile device to the customer, who is the insured, and that the customer would be paid the Plaintiff’s purchase cost of the mobile device on behalf of the Plaintiff.

B. Bounty in the mobile device market is paid on the condition of concluding a specific mobile communications service agreement with the mobile communications company. As such, consumers who intend to purchase only a device while maintaining the existing mobile communications service agreement without concluding a new mobile communications service agreement and maintaining the existing mobile communications service agreement are bound to purchase the device at “ex-factory price,” which is the base price for the transaction disclosed to the mobile communications market. Accordingly, in connection with the Plaintiff’s mobile service linked to each of the instant insurance contracts and the instant service agreement, the premise is that the customer who stolen or lost the device, purchases the new device at an “ex-factory price.” Therefore, it is reasonable to deem that the term “ex-factory price” used in each of the instant insurance contracts and the service agreement was also used in the meaning used in the mobile market.

There are two retail prices for a device. One is the price to be paid when a consumer purchases a device while subscribing to a specific mobile communications service company, and the other is the price publicly announced in the name of the consumer, namely, the price that the manufacturer and the mobile communications company should pay when the consumer purchases a device other than that. Each of the instant insurance contracts is the contract that pays the user the cost to purchase the device as insurance money in the event the customer was stolen or lost because the user was the insured for the purchase of the device. As such, in the event the existing customer purchases a new device due to theft or loss of the device, the new customer is not entitled to benefits when the user purchases the device, and thus the price publicly announced as the above “ex-out price” should be paid.

Therefore, it is reasonable to view that the term “explosive price”, which is the basis for calculating the insurance amount that the Defendant is to pay, means the price that is disclosed in the name of “explosive price” to the consumers and the Defendant. Furthermore, even though the term “explosive price” changed during the period from 1.0 to 4.00, the term “explosive price” was used in the translation of the relevant insurance terms into the language “explosive price” in the Korean translation. In light of the circumstances where the business agreement that takes precedence over the terms of the insurance contract has consistently used the same term “explosive price” in the process, and the standard for the settlement of the insurance amount between the Plaintiff and the Defendant does not vary, the meaning of “explosive price” cannot be interpreted differently in the case of “explosive price”.

C. If so, the insurable value refers to the insurable value which is assessed as monetaryly the insurable interest, and the insurable interest of each insurance contract of this case eventually means the amount equivalent to the expenses incurred in newly purchasing the device if the insured customer has stolen or lost the device, and it can be deemed as the amount equivalent to the “ex officio price” as seen earlier.

In light of the relevant legal principles and records, the lower court did not err by misapprehending the legal doctrine regarding the structure of insurance and the provision of insurance benefits, the determination of the insurable value, the interpretation of the ex-factory price, which is an element for calculating the insurance amount, as otherwise

2. Determination on the grounds of appeal Nos. 4 and 5

The court below rejected the plaintiff's assertion of cancellation of an insurance contract based on the plaintiff's deception or the defendant's mistake, on the ground that the plaintiff did not have a duty to notify the defendant that the ex-factory price of the device was an unfeasible price in consideration of the incentive, and that the mistake of the defendant's assertion was merely an error in the motive of decision-making and cannot be deemed an error in the important part of the legal act.

In light of the relevant legal principles and records, the lower court did not err in its judgment by misapprehending the legal principles on the duty of disclosure, the establishment of deception, and mistake in important part of the content of the legal act, contrary to what is alleged in the grounds of appeal.

3. Conclusion

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 Ahn Jae-chul (Presiding Justice)