2018.04.18

2017 (Kyo) 13

Minshu Vol. 72, No. 2

Decision regarding whether Article 42, paragraph (2), main clause of the Bankruptcy Act applies in the case where the obligor became subject to an order of commencement of bankruptcy proceedings after a statutory deposit of money equivalent to the amounts of distribution for obligees stated in the distribution list was made in the procedure for compulsory execution against shares regarding which share certificates are not issued (excluding book-entry transfer shares) and before the entrustment of the payment of the deposit money is conducted

Case of appeal with permission against a decision to dismiss an appeal against a disposition of execution against a decision to revoke an order to attach shares

Decision of the Second Petty Bench, dismissed

Tokyo High Court, Decision of March 28, 2017

In the case where, in the procedure for compulsory execution against shares regarding which share certificates are not issued (excluding book-entry transfer shares), after sales of such shares were carried out based on a sale order, an action to oppose liquidating distribution was filed with regard to amounts of distribution for obligees stated in the distribution list, and a statutory deposit of money equivalent to the above amounts of liquidating distribution was made, if the obligor has become subject to an order of commencement of bankruptcy proceedings before the grounds for the statutory deposit are extinguished and the entrustment of the payment of deposit money is conducted, Article 42, paragraph (2), main clause of the Bankruptcy Act applies to such procedure for compulsory execution.

Article 42, paragraph (2), main clause of the Bankruptcy Act, Article 91, paragraph (1), item (vii), Article 92, paragraph (1), Article 166, paragraph (1), item (ii) and paragraph (2), and Article 167, paragraph (1) of the Civil Execution Act, Article 61 and Article 145 of the Rules of Civil Execution, and Article 30, paragraph (1) of the Deposit Regulation



Bankruptcy Act

(Loss of Effect of Other Procedures, etc.)

Article 42 (2) In the case prescribed in the preceding paragraph, the procedure for compulsory execution, provisional seizure, provisional disposition, exercise of a general statutory lien or exercise of an enterprise mortgage or disposition of foreign tax delinquency prescribed in said paragraph, which has already been initiated against property that belongs to the bankruptcy estate, shall cease to be effective against the bankruptcy estate;



Civil Execution Act

(Statutory Deposit of the Amount of Liquidating Distribution, etc.)

Article 91 (1) When any of the following grounds exist for the claim of an obligee who is to receive liquidating distribution, etc., a court clerk shall make a statutory deposit of money equivalent to the amount of such liquidating distribution, etc.:

(vii) When an action to oppose liquidating distribution has been filed

(Implementation of Liquidating Distribution, etc. when the Right Becomes Final and Binding, etc.)

Article 92 (1) In cases where a statutory deposit has been made under the provisions of paragraph (1) of the preceding Article, if the grounds for such statutory deposit have been extinguished, the execution court shall implement liquidating distribution, etc. of the deposit money.

(Implementation of Liquidating Distribution, etc.)

Article 166 (1) An execution court shall implement liquidating distribution, etc. in any of the following cases, in addition to the cases prescribed in Article 109 as applied mutatis mutandis pursuant to Article 161(6):

(ii) Cases where a sale was carried out based on a sale order

(2) The provisions of Article 84, Article 85 and Articles 88 to 92 shall apply mutatis mutandis to the procedure of liquidating distribution, etc. to be implemented by an execution court pursuant to the provisions of the preceding paragraph.

(Compulsory Execution against any Other Property Right)

Article 167 (1) Compulsory execution against a property right other than real property, a vessel, movables or a claim (hereinafter referred to as "any other property right" in this Article) shall be governed by the rules of execution against a claim, except as otherwise provided.



Rules of Civil Execution

(Procedure for Delivery of the Proceeds of a Sale, etc.)

Article 61 The procedure for delivery of the proceeds of a sale or for consignment of the payment of deposit money to each obligee and obligor is carried out by the court clerk.

(Application Mutatis Mutandis of Provisions on Execution Against Real Property, etc.)

Article 145 The provisions of Articles 26 and 27 apply mutatis mutandis to an execution against a claim, the provisions of Article 63 and Articles 65 through 72 apply mutatis mutandis to an administration order, the provisions of the portion related to a record in Article 141, paragraph (4) apply mutatis mutandis when the court execution officer sells movables pursuant to the provisions of Article 163, paragraph (2) of the Act, and the provisions of Articles 59 through 62 apply mutatis mutandis to the procedure of Liquidating Distribution, etc. implemented by the execution court with regard to an execution against a claim. In this case, the phrase "and the obligor" in Article 27 is deemed to be replaced with ", the obligor, and the administrator" if an administration order has been issued, the phrase "the price for real property has been paid" in Article 59, paragraph (1) and the phrase "the price was paid" in paragraph (2) of said Article is deemed to be replaced with "implementation of Liquidating Distribution, etc. was decided on."



Deposit Regulation

(Special Provisions in the case of liquidating distribution, etc.)

Article 30 (1) When deposited property is to be paid out by liquidating distribution or other decision of a government agency or public office, according to the type of deposited property, such government agency or public office shall send a payment entrustment document in the Formats of No. 27 to No. 28-2 to the official depository, and shall deliver a certificate in the Format of No. 29 to a person to whom the deposited property is to be paid out.

The appeal is dismissed.

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

Reasons for appeal filed by the counsel for the appeal, ITO Koichiro

1. The appellant obtained an attachment order (hereinafter referred to as the “Attachment Order”) against shares held by the obligor, which consisted of shares for which share certificates were not issued (excluding book-entry transfer shares prescribed in Article 128, paragraph (1) of the Act on Book-Entry Transfer of Corporate Bonds and Shares; the same applies hereinafter). After sales of the above shares were carried out based on a sale order, an action to oppose liquidating distribution was filed with regard to the amounts of distribution for the appellant and another person stated in the distribution list. Therefore, a statutory deposit of money equivalent to the above amounts of liquidating distribution was made. Before the grounds for the statutory deposit were extinguished, the obligor became subject to an order of commencement of bankruptcy proceedings, and the obligor’s bankruptcy trustee filed a petition to seek revocation of the Attachment Order to the execution court.

Under the above process of facts, on the premise that the procedure for compulsory execution pertaining to the Attachment Order (hereinafter referred to as the “Procedure for Compulsory Execution”) ceases to be effective against the bankruptcy estate pursuant to Article 42, paragraph (2), main clause of the Bankruptcy Act, the execution court rendered by its authority a decision to revoke the Attachment Order. Therefore, in this case, whether the main clause of the same paragraph applies to the Procedure for Compulsory Execution is in dispute.

2. The argument of the counsel for the appeal alleges that since the procedure for compulsory execution against shares for which share certificates are not issued should be deemed to have ended at the time when the sales of such shares were carried out based on a sale order and a court execution officer received the proceeds, and following this, Article 42, paragraph (2), main clause of the Bankruptcy Act does not apply to the procedure, the determination in prior instance, which held that the main clause of the same paragraph applies to the Procedure for Compulsory Execution, contains an error in the construction of laws and regulations and violation of a judicial precedent.

3. In the case where, in the procedure for compulsory execution against shares for which share certificates are not issued, after sales of such shares were carried out based on a sale order, an action to oppose liquidating distribution was filed with regard to the amounts of distribution for obligees stated in the distribution list, and a statutory deposit of money equivalent to the above amounts of liquidating distribution was made, if the obligor has become subject to an order of commencement of bankruptcy proceedings before the grounds for the statutory deposit are extinguished and the entrustment of the payment of deposit money is conducted, it is appropriate to understand that Article 42, paragraph (2), main clause of the Bankruptcy Act applies to such procedure for compulsory execution. The reasons are as follows.

Article 42, paragraph (2), main clause of the Bankruptcy Act prescribes that when an order of commencement of bankruptcy proceedings is rendered, the procedure for compulsory execution that has already been initiated against property that belongs to the bankruptcy estate based on bankruptcy claims shall cease to be effective against the bankruptcy estate. When the compulsory execution has already ended at the time of the above order, the main clause of the same paragraph does not apply to the procedure.

In the procedure for compulsory execution against shares for which share certificates are not issued, in the case where the sales of such shares were carried out based on a sale order, the execution court shall implement liquidating distribution, etc. (Article 167, paragraph (1) and Article 166, paragraph (1), item (ii) of the Civil Execution Act). Furthermore, in the case where an action to oppose liquidating distribution was filed with regard to the amounts of distribution for obligees stated in the distribution list, and a statutory deposit of money equivalent to the above amounts of liquidating distribution was made, if the grounds for such statutory deposit have been extinguished, entrustment of the payment of deposit money is to be conducted by the court clerk as implementation of liquidating distribution, etc. (Article 167, paragraph (1), Article 166, paragraph (2), Article 91, paragraph (1), item (vii), and Article 92, paragraph (1) of the Civil Execution Act, Article 145 and Article 61 of the Rules of Civil Execution, and Article 30, paragraph (1) of the Deposit Regulation). It can be said that the above deposited money does not belong to the obligee who is to receive liquidating distribution, etc. until the above entrustment of the payment is conducted. Therefore, it can be understood that the above procedure for compulsory execution in such case naturally has not ended at the time when a court execution officer received the proceeds based on a sale order, and even thereafter, until the above entrustment of the payment is conducted, and when the obligor becomes subject to an order of commencement of bankruptcy proceedings before the above entrustment of the payment is conducted, Article 42, paragraph (2), main clause of the Bankruptcy Act applies to the procedure.

4. For the above reasons, Article 42, paragraph (2), main clause of the Bankruptcy Act applies to the Procedure for Compulsory Execution. The determination in prior instance, which held that the execution court can revoke the Attachment Order by its authority, taking the point of view that goes along with this conclusion, can be affirmed as legitimate. Judicial precedents of the Supreme Court of Judicature cited in the argument of the counsel for the appeal are irrelevant in this case because they addressed different types of facts. The argument cannot be accepted.

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

Justice YAMAMOTO Tsuneyuki

Justice ONIMARU Kaoru

Justice KANNO Hiroyuki