[1] Where a small-sum case does not meet the requirement of "when a decision contrary to the precedents of the Supreme Court has been made," which may be the ground of appeal, but the Supreme Court can determine the error in interpreting and applying the substantive law

[2] The legislative purport of Article 246 (1) 7 of the Civil Execution Act stipulating the claim for insurance money of a guaranteed nature insurance as the claim for prohibition of seizure

[3] In a case where both a guaranteed insurance contract and a savings insurance are in the nature of a single insurance contract, whether only the part of a contract that has the nature of a savings insurance can be separated and terminated and seized (negative), and the standard for determining whether the pertinent insurance constitutes a “security insurance” as stipulated in Article 246(1)7 of the Civil Execution Act / Whether the guaranteed insurance should be deemed as a guaranteed insurance under the Civil Execution Act, in a case where the maturity refund of the insurance exceeds the total amount of the paid-in insurance premium, even if it can be recognized as the principal nature and purpose of the pertinent insurance (affirmative)

[1] Where there are no Supreme Court precedents on the interpretation of statutes applicable to a specific case in a small-sum case, and there are many cases where the interpretation of the said statutes is pending in the lower court, and there are cases where the Supreme Court terminates the case without making a decision on the interpretation of statutes on the grounds that it is a small-sum case, it would be likely that the legal safety of people’s lives would be harmed if the case is terminated without making a decision on the interpretation of statutes. Therefore, where there are such special circumstances, even if the Supreme Court does not meet the requirement that “when it makes a decision contrary to the Supreme Court precedents” which can be deemed as the ground for appeal, it shall be deemed that the error of interpreting and applying substantive laws can be determined in a way that performs the essential function

[2] Article 246(1)7 of the Civil Execution Act provides that “The insurance money (including refund for termination or maturity) of a guaranteed insurance that a debtor receives on the ground of life, injury, disease, accident, etc. shall not be seized; however, the scope of prohibition of seizure shall be prescribed by Presidential Decree in consideration of the expenses, etc. anticipated to be incurred in maintaining livelihood, treating, and recovering from disability.” Article 6(1)3(a) of the Enforcement Decree of the Civil Execution Act provides that “The cancellation refund arising from the creditor’s exercise of the debtor’s right to terminate the insurance contract in accordance with Article 404 of the Civil Act or the creditor’s exercise the right to terminate the insurance contract against the guaranteed insurance by the collection order or all orders shall not be seized (free of the amount limit).” The legislative purport of the Civil Execution Act stipulating the claim for insurance money of a guaranteed insurance as the claim for prohibition of seizure is to prepare a minimum means to guarantee the basic life of policyholders, such

[3] Security insurance refers to an insurance with the main purpose of paying insurance proceeds agreed upon to the insured in preparation for economic risks that may arise in relation to the life and body of the insured, such as life, bodily injury, disease, and accident. Generally, savings insurance refers to an insurance with a maturity not exceeding the total amount of insurance premiums paid by an insurance company upon maturity. On the other hand, savings insurance is an insurance with a major purpose of raising money or old age funds for life, and the amount of insurance proceeds paid when the insured is due to his/her survival and maturity is larger than the total amount of the paid insurance premiums.

On the other hand, there are many kinds of insurance contracts with the nature of a guarantee insurance and a savings insurance. If two independent contracts are combined between a guarantee insurance contract and a savings insurance contract, only the part of a savings insurance can be terminated and seized. On the other hand, in cases where both a guarantee insurance and a savings insurance are in the nature of a single insurance contract, it would be problematic whether only the part of a contract with the nature of a savings insurance can be terminated and seized by separating them. Considering the social security nature of a guarantee insurance in the Civil Execution Act, considering the legislative purport of the provision of a guarantee insurance as a claim for prohibition of seizure in consideration of the social security nature of a guarantee insurance in the Civil Execution Act, even if one insurance contract has the nature of a savings insurance as well as a

As can be seen, in a case where both the guaranteed insurance policy and the savings insurance are in the nature of both a single insurance contract, if it cannot be terminated separately, only the part of the contract having the nature of the savings insurance should be determined by setting up the relevant insurance as a whole, and as a matter of principle, whether the maturity refund of the relevant insurance that was scheduled at the time of subscribing for the insurance policy exceeds the total amount of the paid-in premiums of policyholders, it shall be deemed that the term refund falls under the guaranteed insurance under Article 246(1)7 of the Civil Execution Act if it does not exceed the total amount of the paid-in premiums. However, even if the maturity refund exceeds the total amount of the paid-in premiums, if it can be recognized as the principal nature and purpose of the pertinent insurance, it shall be deemed as the guaranteed insurance as stipulated in the Civil Execution Act.

[1] Article 3 subparag. 2 of the Trial of Small Claims Act / [2] Article 246(1)7 of the Civil Execution Act, Article 6(1)3(a) of the Enforcement Decree of the Civil Execution Act / [3] Article 246(1)7 of the Civil Execution Act

[1] Supreme Court Decision 2003Da1878 decided Aug. 20, 2004 (Gong2004Ha, 1571) Supreme Court Decision 2006Da50420 decided Dec. 11, 2008 (Gong2009Sang, 6)

National Bank of Korea (Law Firm Democratic, Attorneys Yoon Don-do et al., Counsel for the defendant-appellant)

Dongyang Life Insurance Co., Ltd. (Law Firm Shin, Attorneys Ba-ju et al., Counsel for defendant-appellant)

Seoul Central District Court Decision 2015Na15121 Decided July 17, 2015

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

The grounds of appeal are examined.

1. A. In the absence of the Supreme Court precedents concerning the interpretation of the statutes applicable to a specific case in a small case, and where there are many small-sum cases where the interpretation of the said statutes is controversial issues in the lower court, and there are cases where the Supreme Court terminates the case without making a decision as to the interpretation of the statutes on the grounds that it is a small-sum case, it would be likely to impair the legal safety of people's lives if the case is terminated without making a decision as to the interpretation of the statutes on the grounds that it is the small-sum case. Therefore, in such special circumstances, even if the Supreme Court does not meet the requirement that "when it makes a decision contrary to the Supreme Court precedents," which can be viewed as the ground for final appeal, it shall be deemed that the error of interpreting and applying the substantive laws can be determined in a way that performs the fundamental function of the Supreme Court (see, e.g., Supreme Court Decisions 2003Da1878, Aug. 20, 2004; 206Da50420, Dec. 11)

Since there is no Supreme Court precedent concerning the interpretation of "guaranteeable insurance" as a claim prohibited from seizure under Article 246 (1) 7 of the Civil Execution Act, which is the key issue of the instant case, and there is no lower court's judgment, it is necessary to determine the interpretation and validity of the lower court's application.

B. Article 246(1)7 of the Civil Execution Act provides that “The insurance money (including refund for termination or maturity) of a guaranteed insurance that a debtor receives due to life, injury, disease, accident, etc. shall not be seized; however, the scope of prohibition of seizure shall be prescribed by Presidential Decree in consideration of the expenses, etc. anticipated to be incurred in maintaining livelihood, treating, and recovering from disability.” Article 6(1)3(a) of the Enforcement Decree of the Civil Execution Act provides that “The cancellation refund arising from the creditor’s exercise of the debtor’s right to terminate the insurance contract in accordance with Article 404 of the Civil Act or the creditor’s exercise the right to terminate the insurance contract in relation to the guaranteed insurance by the collection order or all orders shall not be seized (free of the amount limit).” The legislative purport of the Civil Execution Act stipulating the claim for insurance money of a guaranteed insurance as the claim for prohibition of seizure is to provide the minimum means to guarantee the basic life of policyholders, such

C. (1) Security insurance refers to an insurance with the primary purpose of paying insurance proceeds agreed upon to the insured in preparation for economic risks that may arise in relation to the life and body of the insured, such as life, injury, disease, and accident, and generally refers to an insurance with a maturity not exceeding the total amount of the insurance proceeds paid by an insurance company upon maturity. On the other hand, Savings Insurance is an insurance with a major purpose of raising money or old age funds for the life of the insured and with a maturity of maturity, the insurance proceeds paid when the insured is alive and its maturity is larger than the total amount of the paid insurance premiums.

(2) Meanwhile, among the insurance contracts, there are a lot of insurance contracts with the nature of a guarantee insurance and a savings insurance. If two independent insurance contracts are combined with a guarantee insurance and a savings insurance, only the part of a savings insurance can be terminated and seized. On the contrary, if both the guarantee insurance and the savings insurance are in the nature of a single insurance contract, it would be problematic whether only the part of a contract with the nature of a savings insurance can be terminated and seized separately. Considering the social security nature of a guarantee insurance in the Civil Execution Act, considering the legislative purport of the provision of a guarantee insurance as a claim for prohibition of seizure in consideration of the social security nature of a guarantee insurance in the Civil Execution Act, even if one insurance contract has the nature of a savings insurance as well as a guarantee insurance, it shall

(3) As can be seen, in a case where both the guaranteed insurance policy and the savings insurance are in the nature of a single insurance contract, if it is impossible to separately terminate only the part of the contract having the nature of the savings insurance, it should be determined whether the pertinent insurance can be “guaranteed insurance” as stipulated in Article 246(1)7 of the Civil Execution Act with the whole of the pertinent insurance, on the basis of whether the maturity refund of the pertinent insurance scheduled at the time of subscribing for insurance exceeds the total amount of the paid-in insurance premium of the policyholder. In principle, if the maturity refund does not exceed the total amount of the paid-in premium, it shall be deemed as “guaranteed insurance” as stipulated in Article 246(1)7 of the Civil Execution Act. However, even if the maturity refund exceeds the total amount of the paid-in premium, if the nature of the pertinent insurance can be recognized as its principal purpose, it shall be deemed as a guaranteed insurance as defined in the Civil Execution Act.

2. Regarding ground of appeal No. 2

Examining the record in accordance with the legal principles as seen earlier, since the instant insurance is characterized by a guaranteed insurance and a savings insurance, if each of the instant insurance are combined with an independent guaranteed insurance and a savings insurance, it may not be terminated separately, and if so, it may not be terminated separately. The lower court should have first deliberated on whether the instant insurance contract is combined with an independent guaranteed insurance and a savings insurance through the terms and conditions, etc. of the instant insurance contract, or both of the guaranteed insurance and the characteristics of a savings insurance are included in a single insurance contract, and determined that only the portion of the savings insurance cannot be terminated separately only when it falls under a single insurance contract. However, the lower court, without further proceeding to deliberate on this part, determined that the termination right of the collection right holder is limited on the grounds stated in its reasoning.

The lower court erred by misapprehending the legal doctrine on the interpretation of insurance contracts, thereby failing to exhaust all necessary deliberations.

3. Regarding ground of appeal No. 1

If the instant insurance contract is a single insurance contract in which the nature of the guaranteed insurance and the nature of the savings insurance cannot be terminated separately, it is necessary to first consider whether the maturity refund paid by the policyholder does not exceed the total amount of the paid-in insurance premium in order to determine whether the amount of the paid-in insurance premium is a “guaranteed insurance” as stipulated in Article 246(1)7 of the Civil Execution Act. Furthermore, even if the maturity refund exceeds the total amount of the paid-in insurance premium, the nature and degree of the insurance accident guaranteed by the instant insurance, the insured’s purpose and degree of coverage, the ratio of the insured’s subscription to the insurance premium to the guaranteed insurance premium to the part of the savings insurance to the part of the paid-in

Nevertheless, without conducting such deliberation, the lower court determined that the instant insurance contract constituted a guaranteed insurance, on the ground that the total amount of maturity refunds does not exceed the total amount of paid-in premiums, solely for the reasons indicated in its reasoning.

Such judgment below is erroneous in the misapprehension of legal principles as to insurance claim against guaranteed insurance, which is prohibited from seizure under the Civil Execution Act, thereby adversely affecting the conclusion of the judgment. The ground of appeal assigning this error is with merit.

4. Conclusion

Therefore, without further proceeding to decide on the remaining grounds of appeal, 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 Noh Jeong-hee (Presiding Justice)