The case holding that the special terms and conditions for additional risk-sharing of the performance guarantee insurance contract concluded with the guaranteed insurance company with the debtor who is the debtor as the insured with regard to the obligation to use telecommunications services are null and void because they violate the provisions of Articles 649 (1) and 663 of the Commercial Act and Article 541 of the Civil Act, which provide that "where the renewal insurance contract has been concluded within the insurance period of the renewed insurance contract, the liability of the insurance company for the immediately preceding the renewed insurance contract shall be terminated, and compensation shall be limited to the amount of

The case holding that the special condition that "where a renewal insurance contract has been concluded within the insurance period of a renewal insurance contract, the liability of an insurance company for the insurance immediately preceding the renewal insurance contract shall be terminated, and compensation shall be limited to the amount of insurance coverage of a renewal insurance contract for the obligations incurred before the commencement of the insurance period of a renewal insurance contract" in the special condition for liability for telecommunications service charges which a policyholder who is a debtor has entered into with a guarantee insurance company as the insured with the obligee, shall be exempted from the insurer's liability for the payment of insurance proceeds under the previous performance insurance contract by promptly cancelling the renewal insurance contract without the consent of the insured just because the renewal insurance contract has been concluded between the policyholder and the insurance company, and shall be exempted from the insurer's liability for the payment of insurance proceeds under the previous performance insurance contract just because all the insurance claims that the insured could have been compensated by the existing performance insurance contract are extinguished, and as long as the above renewal insurance contract becomes null and void, it cannot be viewed that the above special agreement was incorporated from the time of the conclusion of the existing performance insurance contract, or that the insured voluntarily agreed without the consent of the renewal

Articles 639, 649(1), and 663 of the Commercial Act; Articles 539 and 541 of the Civil Act

KNT Co., Ltd.

Seoul Guarantee Insurance Co., Ltd. (Attorney Choi Sung-sung, Counsel for defendant-appellant)

Seoul Central District Court Decision 2009Na35919 Decided May 4, 2010

The appeal is dismissed. The costs of appeal are assessed against the defendant.

The grounds of appeal are examined.

1. The term "guarantee insurance" means non-life insurance, the insurer takes over the coverage of the loss that the insured (beneficiary under a principal contract) will incur due to a policyholder's default on an obligation under a certain legal relationship with the insured. The formally aims at the same effect as a guarantee contract with the nature of the obligor's default on an obligation as an insurance contract or in substance, which covers the obligor's default on an obligation as an insured event (see Supreme Court Decision 2004Da20265, Dec. 24, 2004, etc.). In the case of a performance guarantee insurance, the provision on guarantee under the Civil Act is applicable mutatis mutandis (see, e.g., Supreme Court Decision 2004Da20265, Dec. 24, 2004). Thus, in the case of a performance guarantee insurance, the insured is ordinarily to perform the obligation under a contract entered into or already entered into with the guaranteed insurance contract, and thus, it is necessary to protect the insurer's trust if the insurer becomes able to have a new interest by trust (see, etc.

In addition, performance guarantee insurance is not only a type of non-life insurance for others stipulated in Article 639 of the Commercial Act, but also a contract for a third party stipulated in Article 539 of the Civil Act. As such, after the rights of the third party have occurred, the parties to the guarantee insurance contract may not modify or terminate their rights pursuant to Article 541 of the Civil Act. Meanwhile, Article 649(1) of the Commercial Act provides that "in case of non-life insurance for others, a policyholder shall not cancel the guarantee insurance contract without obtaining the consent of the insured or without carrying the insurance policy even before the occurrence of the insurance accident." Article 663 of the Commercial Act provides that it shall not be changed to the disadvantage of the policyholder, the insured, or the beneficiary by a special agreement

2. According to the reasoning of the judgment below and the records, the defendant, on October 19, 2006, issued a performance guarantee insurance contract with the defendant, with the insurance coverage of 10 million won, and with the insurance coverage of 10 million won, and with the insurance coverage period of 20 million won from October 19, 2006 to October 18, 2007, with the insurance coverage of 40 billion won, to compensate the plaintiff for losses arising from failure to perform his/her obligations under the above performance guarantee insurance contract with the insurance coverage period of 0.0 billion won. Article 1 of the common terms and conditions applicable to the instant guarantee insurance contract provides that the defendant, who is the debtor, shall provide the defendant with the performance guarantee insurance contract with the insurance coverage of 0 billion won within the scope of 00 billion won, and that the defendant shall also be liable for damages arising from the non-performance of obligations under the above performance guarantee insurance contract with the insurance coverage period of 20 billion won within the same insurance period of time as the renewed insurance contract of 9.

In light of the above legal principles, the Plaintiff already acquired the right to claim for the guaranteed insurance under the instant guaranteed insurance contract within 90 days from the date following the expiration date of the insurance period ( October 18, 2007) pursuant to the instant guaranteed insurance contract, where there was a default on the part of the insured, who is a policyholder, within 90 days from the expiration date of the relevant guaranteed insurance contract, and actually received the guaranteed insurance contract, and thereby has a new interest by trusting the function of the secured claim of the guaranteed insurance contract, such as the performance of the obligations under the said contract, by concluding a new guaranteed insurance contract and performing the obligations under the said contract. Thus, the instant renewed contract can be deemed null and void as it goes against the provisions of the Commercial Act and the Civil Act, since the contract was concluded at will since it was concluded with the policyholder and the insurance company without the consent of the insured, solely on the ground that the renewal contract was concluded with the insurance company.

The court below held that the special contract for renewal of this case was null and void in some different statements of its reasoning, and ruled that the liability for the payment of insurance proceeds under the guarantee insurance contract of this case was extinguished by the special contract for renewal of this case, or rejected all the defendant's assertion that the plaintiff impliedly accepted the contract for renewal of this case and accepted the plaintiff's claim for insurance proceeds under the guarantee insurance contract of this case. In so doing, the court below's conclusion is just, and there is no error of law by misunderstanding legal principles as to the validity of the renewal special contract

3. Therefore, the appeal is dismissed and all 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 Yang Sung-tae (Presiding Justice)