2017.12.07

2017 (Ju) 408

Minshu Vol. 71, No. 10

Judgement regarding the case where a purchaser and a dealer of an automobile entered into an agreement to the effect that the dealer reserves the ownership of such automobile to secure the dealer’s claim for purchase money, and a guarantor of the debt for purchase money paid the remaining amount of purchase money to the dealer as performance of the guarantor’s guarantee obligation, and then by the commencement of bankruptcy proceedings for the purchaser, whether or not the guarantor may exercise the reserved ownership as a right of separate satisfaction

Case claiming delivery of an automobile

Judgment of the First Petty Bench, dismissed

Sapporo High Court, Judgment of November 22, 2016

If a purchaser and a dealer of an automobile enter into an agreement to the effect that the dealer reserves the ownership of such automobile to secure the dealer’s claim for purchase money, and a guarantor of the debt for purchase money pays the remaining amount of purchase money to the dealer as performance of the guarantor’s guarantee obligation, and then the bankruptcy proceedings for the purchaser commences, and if there is a registration for such automobile that designates the dealer as an owner at the time of such commencement, the guarantor may exercise ownership, which is reserved under the above-mentioned agreement, as a right of separate satisfaction.

Article 49 and Article 65, paragraph (1) of the Bankruptcy Act, and Article 369 (reservation of ownership), Article 500, and Article 501 of the Civil Code



Bankruptcy Act

(Effect of Registrations after Commencement)

Article 49 (1) A registration or a provisional registration under the provision of Article 105(i) of the Real Property Registration Act (Act No. 123 of 2004), which is made with respect to real property or a vessel after the commencement of bankruptcy proceedings based on a cause of registration that occurred prior to the commencement of bankruptcy proceedings, may not be asserted as effective in relation to the bankruptcy proceedings; provided, however, that this shall not apply to a registration or provisional registration made by a person entitled to demand registration, without knowledge of the commencement of bankruptcy proceedings.

(2) The provision of the preceding paragraph shall apply mutatis mutandis to a registration or provisional registration made with respect to the establishment, transfer or modification of a right, or registration made with respect to the establishment, transfer or modification of an enterprise mortgage.

(Right of Separate Satisfaction)

Article 65 (1) A right of separate satisfaction may be exercised without going through bankruptcy proceedings.

Civil Code

(Content of Mortgages)

Article 369 (1) A Mortgagee shall have the right to receive the performance of his/her claim prior to other obligees out of the immovable properties that the obligor or a third party provided to secure the obligation without transferring possession.

(2) Superficies and emphyteusis can be the subject matter of a mortgage. In such cases, the provisions of this Chapter shall apply mutatis mutandis.

(Statutory Subrogation)

Article 500 A person who has legitimate interest in effecting performance shall be subrogated by operation of law to the claim of the obligee by effecting performance.

(Effect of Subrogation by Performance)

Article 501 A person who is subrogated to the claim of the obligee pursuant to the provisions of the preceding two articles may exercise any and all rights possessed by such obligee as the effect of, and as a security for, such right to the extent he/she may seek reimbursement under his/her own right; provided, however, that:

(i) unless the fact of subrogation is noted in advance in the register of an applicable statutory lien, pledge of real estate, or mortgage, a guarantor may not be subrogated to the claim of the obligee vis-a-vis any third party acquirer of the real estate which is encumbered by such statutory lien, pledge of real estate, or mortgage;

(ii) a third party acquirer may not be subrogated to the claim of the obligee vis-a-vis the guarantor;

(iii) one of the third party acquirers of the real estate shall be subrogated to the claim of the obligee vis-a-vis other third party acquirers in proportion to the value of each real estate;

(iv) one of the third party pledgors shall be subrogated to the claim of the obligee vis-a-vis other third party pledgors in proportion to the value of each property;

(v) as between a guarantor and a third party pledgor, the subrogation to the claim of the obligee shall be effected depending on the number of such persons involved; provided, however, that, if there are more than one third party pledgor, such persons shall be subrogated to the claim of the obligee in proportion to the value of each property with respect only to the residual amount which remains after deduction of the portion to be borne by the guarantor; and

(vi) in the cases referred to in the preceding item, if the property in question is real estate, the provisions of item 1 shall apply mutatis mutandis.

The final appeal is dismissed.

The cost of the final appeal shall be borne by the appellant of the final appeal.

Reasons for the petition for acceptance of the final appeal filed by the appellant

1. In this case, the appellee of the final appeal, who jointly and severally guaranteed a debt for the purchase money of a person (hereinafter referred to as the “Purchaser”) who purchased an automobile stated in the list of objects attached to the judgement in first instance (hereinafter referred to as the “Automobile”) from Sapporo Toyota Motor Purchases Co. Ltd. (hereinafter referred to as the “Dealer”), is alleging that the appellee paid the remaining amount of purchase money to the Dealer as performance of the appellee’s guarantee obligation and acquired ownership of the Automobile, which had been reserved by the Dealer, by statutory subrogation, and is seeking delivery of the Automobile as exercise of a right of separate satisfaction from the appellant of the final appeal, who is a bankruptcy trustee of the Purchaser, who received a decision of commencement of bankruptcy proceedings after the above-mentioned payment.

2. The outline of facts that duly became final and binding in the judgment in prior instance is as follows.

(1) On August 20, 2013, three parties, the Purchaser, the Dealer and the appellee, entered into an agreement in writing to the effect that the Dealer sells the Automobile to the Purchaser on the condition of receiving an installment payment, that the Dealer reserves the ownership of the Automobile to secure the Dealer’s claim for purchase money (such reserved ownership hereinafter is referred to as the “Reserved Ownership”), and that the appellee jointly and severally guarantees the debt for purchase money owed by the Purchaser to the Dealer as entrusted by the Purchaser, and agreed mainly as follows in the same agreement:

(a) If the Purchaser fails to make a payment of purchase money even once, and the appellee finds it necessary to pay the remaining amount of the purchase money en bloc, the appellee may, without giving notice or making a demand to the Purchaser, pay the remaining amount of purchase money to the Dealer as performance of the appellee’s guarantee obligation;

(b) It is confirmed that if the appellee pays the remaining amount of purchase money to the Dealer as performance of the appellee’s guarantee obligation, the appellee, pursuant to the provisions of the Civil Code, exercises the claim for purchase money and the Reserved Ownership in subrogation of the Dealer by operation of law;

(c) If the Purchaser forfeits the benefit of time, the Purchaser delivers the Automobile immediately to the appellee as performance for the claim for purchase money, which is acquired by the appellee by subrogation; and

(d) The appellee appropriates the estimated amount, etc. of the Automobile, which is delivered pursuant to the above (c), as performance for the claim for purchase money.

(2) On August 20, 2013, a new registration for the Automobile was made, designating the Dealer as an owner and the Purchaser as a user, and around at that time, the Dealer delivered the Automobile to the Purchaser.

(3) Since the Purchaser failed to make a payment of purchase money, on September 2, 2014, the appellee paid the remaining amount of the purchase money to the Dealer as performance of the appellee’s guarantee obligation pursuant to the above (1)(a).

(4) On May 13, 2015, the Purchaser received a decision of commencement of bankruptcy proceedings, and the appellant was appointed as a bankruptcy trustee.

3. The argument of the appellant alleges that since the appellee’s exercise of the Reserved Ownership as a right of separate satisfaction should not be allowed as there was no registration for the Automobile that designated the appellee as an owner at the time of the commencement of bankruptcy proceedings for the Purchaser, determination in prior instance, in which exercise of the right of separate satisfaction was allowed, made an error in the construction of laws and regulations and contravenes to the judicial precedent.

4. If a purchaser and a dealer of an automobile enter into an agreement to the effect that the dealer reserves the ownership of such automobile to secure the dealer’s claim for purchase money, and a guarantor of the debt for purchase money pays the remaining amount of purchase money to the dealer as performance of the guarantor’s guarantee obligation, and then bankruptcy proceedings for the purchaser commences, and if there is a registration for such automobile that designates the dealer as an owner at the time of such commencement, it is adequate to construe that the guarantor may exercise ownership, which is reserved under the above-mentioned agreement, as a right of separate satisfaction. The reasons are as follows:

The guarantor has legitimate interests in making payments of the debt for purchase money, which is the main debt, and in order to secure a right to indemnification from the purchaser acquired by making such payments in subrogation, acquires by operation of law the dealer’s claim for purchase money against the purchaser, which otherwise would be extinguished by the payment, and the ownership of the automobile (hereinafter referred to as the “reserved ownership”), which has been reserved to secure such claim, and is allowed to exercise the claim for purchase money and the reserved ownership to the extent of the right to indemnification (Article 500 and Article 501 of the Civil Code). Furthermore, since people should be able to anticipate that ownership of the automobile has been reserved when registration for the automobile designates the dealer as an owner at the time of the commencement of bankruptcy proceedings for the purchaser, bankruptcy creditors will not be affected unanticipatedly by the formation of the bankruptcy estate based on the presence of the reserved ownership. Therefore, it should be held that the guarantor may exercise the reserved ownership acquired by statutory subrogation from the dealer as a right of separate satisfaction without registration for the automobile that designates the guarantor as an owner.

5. From the above points, the appellee may exercise the Reserved Ownership as a right of separate satisfaction against the appellant. The determination in prior instance, which goes along with this conclusion, can be affirmed as justifiable. The judgement cited in the argument of the appellant (2009 (Ju) No. 284, Judgment of the Second Petty Bench of the Supreme Court of June 4, 2010, Minshu Vol. 64, No. 4, at 1107) is on a case where three parties, a dealer, a credit company, and a purchaser of an automobile, entered into an agreement to the effect that the credit company, which made payments of the remaining amount of purchase money to the dealer on behalf of the purchaser, receives not by subrogation and reserves the ownership of the automobile, which has been reserved by the dealer, to secure a claim regarding payments made on behalf of the purchaser that are equivalent to the remaining amount of purchase money and a claim for fee, which means that the cited judgement addressed different types of facts and is irrelevant in this case. The argument of the appellee cannot be accepted.

Accordingly, the judgment has been rendered as set forth in the main text by the unanimous consent of the justices.

Justice OTANI Naoto

Justice IKEGAMI Masayuki

Justice KOIKE Hiroshi

Justice KIZAWA Katsuyuki

Justice YAMAGUCHI Atsushi