DB Life Insurance Co., Ltd. (Law Firm Taeil et al., Counsel for the defendant-appellant)

Seoul Guarantee Insurance Co., Ltd. and one other (Law Firm Hongle et al., Counsel for the plaintiff-appellant)

December 14, 2010

Seoul Central District Court Decision 2009Kahap6207 Decided October 22, 2009

1. The plaintiff's appeal is all dismissed.

2. The costs of appeal shall be borne by the plaintiff.

1. Purport of claim

A. Claim against Defendant Seoul Guarantee Insurance Co., Ltd.

In the first place, the insurance money shall be the first place, and the second place shall be the damages.

The defendant Guarantee Insurance Co., Ltd. shall pay to the plaintiff 2,470,738,476 won with 20% interest per annum from the day following the day of service of a copy of the complaint of this case to the day of complete payment.

B. Claim against Defendant Hyundai Motor Corporation

For the above claim against Defendant Guarantee Insurance Co., Ltd.:

Optionally, as unjust enrichment or damages:

Defendant Hyundai Motor Co., Ltd. shall pay to the Plaintiff 2,470,738,476 won with 20% interest per annum from the day following the day of service of a copy of the complaint of this case to the day of complete payment.

2. Purport of appeal

The judgment of the first instance is revoked. The Defendants shall pay to the Plaintiff the same money as the above purport of the claim.

I. Basic facts

The following facts are not disputed between the parties, or acknowledged by comprehensively considering the overall purport of the arguments in Gap evidence Nos. 2, 3, 4, 7, 8, 11 (including each number, if any).

[1]

○ Defendant Seoul Guarantee Insurance Co., Ltd. (hereinafter “Seoul Guarantee Insurance Co., Ltd”) concluded a installment agreement with Defendant Hyundai Motor Co., Ltd. (hereinafter “Modern Motor”).

The contents of the said installment agreement were that the Hyundai Motor Vehicle, while selling a motor vehicle in installments, had the buyer subscribe to the installment sale guarantee insurance of the Defendant Seoul Guarantee Insurance, the Defendant Seoul Guarantee Insurance Co., Ltd. take over the installment sale guarantee insurance of the Defendant Seoul Guarantee Insurance, and such installment sale guarantee insurance of the △△△ is the subject of the insurance policy, but the subject of the insurance policy is the buyer’s installment payment obligation. In order to receive the installment payment from the installment financing company, the Defendant Seoul Guarantee Insurance Co., Ltd may accept the installment payment obligation.

[2]

around January 2007, Defendant Hyundai Motor entered into a contract for the sale of 25 U.S. buses with SPP Co., Ltd. (hereinafter “PP”) and delivered all of the said 25 U.S. to PP by May 2007.

At the time of 00, Hyundai Capital Co., Ltd., Estoo Lease Korea Co., Ltd., and Gag Capital Co., Ltd. directly granted the loans to the Defendant Hyundai Motor, while lending the amount equivalent to 70 to 80% of the sales proceeds to the trop.

○ The said lending institution completed the registration of establishment of a mortgage on the said floating bus 25 units for the security of the said loan claim, and the Defendant Hyundai Motor also completed the registration of establishment of a mortgage on the said floating bus 25 units for the security of the remaining sales proceeds claim.

[3]

00, however, the spectrum requested the Defendant Hyundai Motor to deliver a copy of the car sales contract prepared at the time of sale of 25 U.S. buses, and the Defendant Hyundai Motor sent a copy thereof to the SP.

Around December 2007, 007, 000, 000, 000, 000, 000,000,000,000,000,000,000,000,000,000,000.

○ In accordance with the above service agreement that Defendant Seoul Guarantee Insurance Co., Ltd concluded with Defendant Hyundai Motor, on December 7, 2007 and December 14, 2007, and December 20, 2007, with respect to the above universal buses 23 units, the policyholder entered into a sales guarantee insurance contract with Defendant Hyundai Motor Co., Ltd. (hereinafter the above contract referred to as “instant guarantee insurance contract”).

○ Defendant Seoul Guarantee Insurance Co., Ltd issued the securities of the instant guarantee insurance contract, and the securities are indicated as follows:

[Contents of Guarantee] Payment Guarantee for Installment Sales Price

[Form of Installment Contract] Installment: Installment financing

Items: Universal buses:

[Special Terms and Conditions for Installment Financing]

○ The general terms and conditions and special terms and conditions of installment financing have been attached to the said securities, and the contents are as follows:

[Ordinary Terms and Conditions]

Article 1 (Compensation for Loss)

The loss suffered by the seller (hereinafter referred to as the "insured") due to the buyer's failure to perform the obligation of installment payment as stipulated in the installment sale contract (hereinafter referred to as the "main contract") on the insurance policy, shall be compensated for in accordance with the terms and conditions of the insurance policy and in accordance with this contract.

[Special Terms and Conditions of Installment Financing]

Article 1 (Scope of Application)

This Special Terms and Conditions apply to cases where a policyholder received installment payments from a bank, insurance company, or installment financing company (hereinafter referred to as "financial institution") under an installment sale contract entered in the insurance policy.

Article 2 (Compensation for Loss)

Notwithstanding the provisions of Article 1 of the General Terms and Conditions, the damage suffered by a financial institution due to its failure to perform the installment financing obligations as stipulated in the Monetary Loan Agreement entered into with a financial institution pursuant to the installment sale contract entered into with the financial institution (hereinafter referred to as the "main contract") as the buyer on the insurance policy, shall be covered in accordance with the terms and conditions

[4]

In the meantime, the Plaintiff received the said securities of the instant guarantee insurance contract from the spectrum, and entered into a monetary loan agreement with the spectrum on December 7, 2007 and December 14, 2007 and December 20, 2007, with the spectrum, and agreed to lend KRW 99 million for each of the above units to the spectrum (hereinafter “instant loan agreement”).

○ At the time of the instant loan agreement, the following are written in the contract:

[Kinds of Security Insurance]

[Fund Use] Goods Purchase Fund

[Purchased Goods] Seller: Defendant Hyundai Motor

Name: Universal bus:

Article 6 (Loss of Benefit of Time)

Where any of the following grounds arises to a debtor, the debtor shall lose the benefit of the deadline, and the company may request the debtor to pay in lump sum the outstanding loans or request the delivery of goods purchased under the agreement:

1. Where he/she uses a loan for any purpose other than that of this Agreement;

○ In accordance with the instant loan agreement, the Plaintiff, up to December 20, 2007, remitted total of KRW 2.277 billion to the account of Geum Mang Capital Co., Ltd., the party in charge of the spectrum, and carried out the loan.

However, as of January 8, 2009, the spectrum failed to repay the above loans, the Plaintiff's principal and interest of loan, fees, etc., which was not paid from spectrum, led to KRW 2,470,738,476.

II. Claim for the Defendant Seoul Guarantee Insurance

1. Main claim;

A. The plaintiff and defendant's assertion

(1) The plaintiff's assertion

In the instant guarantee insurance contract, the term “principal contract” is the instant loan contract concluded between the Plaintiff and the spectrum. Since the spectrum did not repay to the Plaintiff the principal and interest of loan and fees, etc. under the instant loan contract, the Defendant Seoul Guarantee Insurance is liable to pay the said amount with the insurance proceeds to the Plaintiff.

(2) The defendant's assertion

In the instant guarantee insurance contract, the term “main contract” was an installment sales contract concluded between the Defendant Hyundai Motor and SP, and such installment sales contract does not exist, so the instant guarantee insurance contract is null and void. Accordingly, the Defendant did not have a duty to pay insurance money to the Plaintiff.

B. Guarantee insurance contract of this case

(1) The warranty insurance contract for △△ is a non-life insurance contract with the insurer taking over the liability of the insured (beneficiary in the principal contract) due to the nonperformance by a policyholder (beneficiary in the principal contract) who has any legal relationship with the insured, and is premised on the legal relationship of △△△ Contract, and is liable for the loss the insured suffers due to the failure of the policyholder to perform his/her obligation under the principal contract (Supreme Court Decision 99Da53483 delivered on December 8, 200).

(2) According to the above facts, the instant guarantee insurance contract was concluded by the Defendant Seoul Guarantee Insurance in accordance with the Installment Convention concluded with the Defendant Hyundai Motor. The contents of the installment agreement are that the Defendant Seoul Guarantee Insurance Co., Ltd. takes over the guarantee insurance for the subject-matter of the buyer’s obligation to pay the installment payment for the automobile sold by the Hyundai Motor. The Defendant Seoul Guarantee Insurance Co., Ltd., and the buyer requests the attachment of the installment financing special agreement to receive the installment payment from the installment company.

In addition, according to the above facts, the instant guarantee insurance contract is a modern automobile of the △△△ Party, the insured, and the content of the △△△ Guarantee, and the special terms and conditions for installment financing are applied to the installment financing contract. The contents of the said special terms and conditions for installment financing are to compensate for losses sustained by the financial institution due to its failure to perform the installment financing obligations under the monetary loan contract entered into with the financial institution in accordance with the installment sale contract entered into by the policyholder in the insurance policy.

Therefore, the instant guarantee insurance contract is based on the assumption of the Defendant Seoul Guarantee Insurance Co., Ltd. to compensate for the damages incurred by the Defendant Hyundai Motor by selling an automobile in installments and failing to perform the buyer’s obligation to pay the installment payment. However, in a case where the △△△△ was given a loan from the installment financing company for the payment of the installment payment, the buyer’s performance of the installment financing special terms and conditions attached to the installment financing special terms and conditions, thereby resulting in the Defendant Seoul Guarantee Insurance Co., Ltd.

As above, if a buyer receives a loan from an installment financing company for the payment of installment payments, the loan will result in the payment of installment payments by the Defendant Hyundai Motor. In such a case, a loan contract between an installment financing company and a buyer functions to clarify the performance of installment payments under the installment sales contract based on the installment sales contract between the Defendant Hyundai Motor Vehicle and a buyer. In economic substance, the above loan contract is not independent of the above installment sales contract, but is not independent of the above installment sales contract, and there is no reason to exist the above installment sales contract independently. In addition, in such a case, the installment payment claim against the buyer of the Defendant Hyundai Motor Vehicle may be transferred to the installment financing company by subrogation or assignment of credit, and the damage caused by nonperformance of the installment payment obligation and the default of the repayment obligation may be treated equally in economic substance.

(3) In addition to the above circumstances, in consideration of the fact that the terms of the instant guarantee insurance contract are indicated as installment financing and universal bus as the contents of the instant guarantee insurance contract in the securities of the instant guarantee insurance contract, as seen earlier, the term “principal contract” of the instant guarantee insurance contract is an installment sales contract concluded between the Defendant Hyundai Motor and the buyer. In a case where the buyer receives a loan from the installment financing company to pay the installment payment under the said installment sales contract, even in a case where the buyer receives a loan from the installment financing company for the payment of the installment payment, this is merely an economic substance of the damages incurred by the Defendant Hyundai Motor due to the nonperformance of the installment payment obligation, and the damages incurred by the installment company due to the nonperformance of the repayment obligation, which are treated as the same damages, thereby taking over by the Defendant Seoul Guarantee Insurance Co., Ltd., and it does not change the said loan contract itself into the “principal contract” of the instant guarantee insurance contract, and thus, it does not change the said loan contract itself between the Defendant Hyundai Motor and the buyer.

(c) Nullity;

(1) Meanwhile, according to the provisions of Article 644 of the Commercial Act, when an insurance accident is not likely to occur at the time of the insurance contract, the insurance contract becomes null and void unless both parties to the insurance contract and the insured do not know it. Since the insurance contract for △△ is basically a nature of the insurance contract, the insurance contract has the nature as an insurance contract. Thus, at least, the insurance contract for △△△△△△ has the nature of the insurance contract as an insurance contract. In order for the contract to be effective, at least, the requirements of the contingency and good faith should not be confirmed at the time of the contract. In a case where the insurance accident cannot occur because of the lack of the validity of the △△△△△ contract, the guarantee insurance contract is null and void pursuant to the provisions of Article 644 of the Commercial Act (Supreme Court Decision

(2) Therefore, in the event that there is no installment sales contract between Defendant Hyundai Motor and SP, which is the main contract, or there is no validity of the installment sales contract, the instant guarantee insurance contract is null and void because the installment sales contract cannot take effect.

However, according to the above facts in light of the above facts, the Defendant Hyundai Motor Co., Ltd. entered into a contract of selling the 25 U.S. buses with the Defendant Hyundai Motor Co., Ltd. around January 2007 and delivered all of the above 25 U.S. to the SP to the SP by May 2007. At the time, financial institutions, as to the above U.S. bus 25, directly provided the Defendant Hyundai Motor, with loans equivalent to 70 to 70 to 80% of the sales proceeds of the above U.S. to the SP, and the said financial institutions and the Defendant Hyundai Motor Co., Ltd completed the registration of the establishment of a mortgage on the above U.S. bus 25 vehicles, but the said financial institutions and the said Defendant Hyundai Motor Co., Ltd received a copy of the automobile sales contract, which was prepared at the time of the sale of the above U.S. bus 25 vehicles from the Defendant Hyundai Motor Co., Ltd., and accordingly, concluded the insurance contract of this case as to the instant 23 vehicles among the above U.

Therefore, regarding the guarantee insurance contract of this case, which was entered into around December 2007 with regard to the above 23 vehicles, even though the sales contract was entered into between the defendant Hyundai Motor and the defendant Hyundai Motor on January 2007 with regard to the above 23 vehicles, and the payment of sales proceeds through loans and the establishment of security had been completed, despite the fact that the above 23 vehicles had the same appearance as the first installment sales contract was entered into between the defendant Hyundai Motor and the defendant Hyundai Motor about the above 23 vehicles, and the above circumstance was known to the policyholder, and therefore, the guarantee insurance contract of this case concerning the above 23 vehicles constitutes a case where the accident is not caused because the installment sales contract, which is the main contract, was not entered into, and therefore, the guarantee insurance contract of this case is null and void.

(3) As above, the invalidity of the instant guarantee insurance contract is a cause for the occurrence of an insurance accident, and it does not meet the unique requirements as an insurance contract, and thus, even if the Plaintiff knew of such circumstances and offered a loan to spectrum by taking the securities of the instant guarantee insurance contract as security, the Defendant Seoul Guarantee Insurance Co., Ltd., the insurer of the instant guarantee insurance contract, can assert that the instant guarantee insurance contract is null and void as above against the Plaintiff (see Supreme Court Decision 2009Da81623, Apr. 15, 2010).

D. Sub-determination

Therefore, the guaranteed insurance contract of this case is null and void, and the defendant Seoul Guarantee Insurance can assert such invalidation against the plaintiff. Thus, the plaintiff's main claim seeking the payment of insurance money under the guaranteed insurance contract of this case against the defendant Seoul Guarantee Insurance is without merit.

2. Preliminary claim;

A. The plaintiff's assertion

When issuing the securities of the instant guaranteed insurance contract, the Defendant Hyundai Motors issued the said securities without investigating and verifying whether the instant guaranteed insurance contract was actually concluded between the Defendant Hyundai Motors and Scex, despite the fact that there was a duty of care to investigate and confirm whether the instant installment sales contract with respect to the 23 U.S. buses was actually concluded. If the instant guaranteed insurance contract is null and void as seen above, the Plaintiff suffered losses due to the Defendant Seoul Guarantee Insurance’s breach of the said duty of care. As such, the Defendant Seoul Guarantee Insurance is liable to compensate the Plaintiff for KRW 2,470,738,476, which was not repaid by the Plaintiff, within the scope of the said insurance amount.

B. Determination

(1) As seen earlier, the Guarantee Insurance Contract is premised on the legal relationship of the State Contracts, and the insured is compensated for losses incurred by the insured due to the insured’s failure to perform his/her obligations under the State Contracts. The essence of the Guarantee Insurance Contract basically has the nature as an insurance contract, and thus, if the State Contracts are not effective, it is null and void in accordance with the provisions of Article 644 of the Commercial Act.

Therefore, in the guarantee insurance contract, if the principal contract exists under the premise that the principal contract exists, the insurer should compensate for the loss suffered by the creditor under the principal contract in the event of the non-performance of the obligation under the principal contract, and the insurer should not guarantee the validity of the principal contract until the existence of the principal contract.

(2) In addition, according to the above facts, the Plaintiff entered into the instant loan contract with the SP and received the securities of the instant guarantee insurance contract from the SP as security insurance by taking the type of security as security insurance, and the securities of the instant guarantee insurance contract issued by the Defendant Seoul Guarantee Insurance Co., Ltd are indicated as the Defendant Hyundai Motor, and is indicated as installment financing and universal buses in the main contract.

If the Plaintiff received the securities of the guaranteed insurance contract of this case as security for loan claims, the Plaintiff, who acquired the security valid as security, must investigate and confirm the existence of the installment sales contract of this case as security. Thus, the Plaintiff, as security, must investigate and confirm whether the installment sales contract of this case as security exists in the securities of the guaranteed insurance contract of this case.

In addition, according to the above facts, while entering into the instant loan contract with the spectrum, the Plaintiff agreed that the Plaintiff would lose the benefit of the lending obligation and claim the Plaintiff for the delivery of the goods purchased, the Plaintiff would be a U.S. bus in which the Defendant Hyundai Motor sold the goods using the △△ Fund as the fund for the purchase of the goods. In the event that the △△△ Fund was used for any purpose other than the above goods purchase fund, the Pex would have lost the benefit of the lending obligation and the Plaintiff

As above, in the event that the plaintiff uses the loan for a specific purpose and uses it for other purposes, if certain disadvantages are imposed, whether the loan will be used for the specified purpose as above should be investigated and confirmed by the plaintiff himself/herself. As such, as stipulated in the loan contract of this case, the plaintiff must investigate and confirm whether the defendant Hyundai Motor has actually entered into a contract for selling universal buses to SPP, as determined by the loan contract of this case.

Furthermore, there is no evidence to prove that the Plaintiff, by concluding a separate contract with the Defendant Seoul Guarantee Insurance, agreed to assume the obligation to investigate and verify the validity of the principal contract when issuing the securities of the guaranteed insurance contract.

(3) If so, as seen earlier, the instant guarantee insurance contract is null and void because it is not a principal contract, and thus, the Defendant Seoul Guarantee Insurance does not guarantee that the principal contract exists, and as a result, the Plaintiff should investigate and confirm whether the principal contract exists when issuing the securities of the instant guarantee insurance contract. Thus, even if the Defendant Seoul Guarantee Insurance issued the securities of the instant guarantee insurance contract without investigating and verifying whether the principal contract exists, and the Plaintiff offered a loan to SP with the securities as security, the Defendant Seoul Guarantee Insurance is not liable for damages against the Plaintiff.

C. Sub-decision

Therefore, the plaintiff's preliminary claim for damages against the above defendant by asserting that the defendant violated the duty of care of the Seoul Guarantee Insurance is without merit.

III. Claims against Defendant Hyundai Motors

1. Claim for return of unjust enrichment;

A. The plaintiff's assertion

Defendant Hyundai Motor is obligated to return the above amount to the Plaintiff as unjust enrichment on the ground that Defendant Hyundai Motor obtained, without any legal cause, a profit equivalent to KRW 2,470,738,476 based on the loan agreement of this case and incurred considerable damages to the Plaintiff.

B. Determination

According to the above facts, there is no evidence to acknowledge that the Plaintiff transferred the loan under the instant loan agreement to the account of Geum Mang Capital Co., Ltd., the party who has been in charge of a spectrum, and Defendant Hyundai Motor received the above loan or obtained a profit equivalent to the above loan by other means.

Therefore, the plaintiff's claim seeking the return of unjust enrichment against the above defendant by asserting that the defendant Hyundai Motor had obtained a profit equivalent to the above loans is without merit.

2. Claim for damages;

A. The plaintiff's assertion

Defendant Hyundai Motor, around January 2007, issued a copy of the automobile sales contract, which was prepared at the time that he sold the trop 25 U.S. bus to the trop, to the trop, was concluded by submitting a copy of the trop to the Defendant Seoul Guarantee Insurance Co., Ltd., and the trop received and acquired the securities as security and the loans under the instant loan contract. As such, Defendant Hyundai Motor, as the joint tortfeasor or the user of the trop, who assisted the above illegal acts of the trop, is liable to compensate the Plaintiff for the amount equivalent to KRW 2,470,738,476.

B. Determination

According to the above facts, around January 2007, Defendant Hyundai Motor entered into a contract for the sale of 25 U.S. buses with a spectrum and delivered all of the above 25 vehicles to a spectrum until May 2007. At the request of a spectrum, it was ordered to deliver a copy of the automobile sales contract prepared at the time of the above sale to a spectrum, and a copy of the PP was submitted to the Defendant Seoul Guarantee Insurance Co., Ltd., and entered into the instant guarantee insurance contract by offering an installment sales guarantee insurance contract by submitting a copy of the PP to the Defendant Seoul Guarantee Insurance.

The copy of the automobile sales contract delivered by the Defendant Hyundai Motor to a spectrum as above is only a copy of the contract prepared by the Defendant Hyundai Motor to sell a vehicle to a spectrum to the extent that it can be proved that such sales contract was concluded. Thus, the mere fact that the Defendant Hyundai Motor delivered a copy of the automobile sales contract prepared at the time of sale to the buyer at that time to the buyer at that time cannot be deemed to constitute a tort. There is no evidence to prove that the Defendant Hyundai Motor knew or could have known that the spectrum was to perform an illegal act using the above copy at that time.

Therefore, the plaintiff's claim for damages against the above defendant by asserting the tort of defendant Hyundai Motor Vehicle is without merit.

IV. Conclusion

Therefore, all of the plaintiff's primary and conjunctive claims against the defendant Seoul Guarantee Insurance are dismissed, and all of the plaintiff's claims against the defendant Hyundai Motor are dismissed, and the judgment of the court of first instance is just in conclusion, and all of the plaintiff's appeals are dismissed. It is so decided as per Disposition.

Judges intentionally (Presiding Judge) Kim Yong-ho