2018.10.19

2017 (Ju) 1735

Minshu Vol. 72, No. 5

Judgment on the transfer of a share in inheritance made without compensation between joint heirs and on a “gift” as referred to in Article 903, paragraph (1) of the Civil Code

Case seeking abatement of a gift to preserve a statutory reserved share

Judgment of the Second Petty bench, quashed and remanded

Tokyo High Court, Judgment of June 22, 2017

The transfer of a share in inheritance made without compensation between joint heirs constitutes a “gift” as referred to in Article 903, paragraph (1) of the Civil Code in terms of inheritance by the person who made the transfer, except in cases where the transferred share in inheritance has no substantial proprietary value as calculated by taking into account the value, etc. of the positive and negative properties included in such transferred share in inheritance.

Article 903, paragraph (1) and Articles 905 and 1044 of the Civil Code

Civil Code
(Share in Inheritance of Heir who has Received Special Benefit)
Article 903 (1) If there is a person from amongst joint heirs who has previously received a testamentary gift, or has received a gift for marriage, adoption, or as capital for livelihood, the total inherited property shall be deemed the value calculated by adding the value of the gift to the value of the property belonging to the decedent at the time of commencement of inheritance and the share in inheritance of that person shall be the remaining amount after deducting the value of that testamentary gift or a gift from the share in inheritance calculated pursuant to the provisions of the preceding three Articles.
(Recovery Right of Share of Inheritance)
Article 905 (1) If one joint heir assigns his/her share of inheritance to a third party before a division of the inherited property, any other joint heir may obtain the share through the reimbursement of the value and expenses of that and recover the share in inheritance.
(2) The right of the preceding paragraph shall be exercised within one month.
(Provisions regarding Heirs per Stirpes and Share in Inheritance to be Applied Mutatis Mutandis)
Article 1044 The provisions of paragraph (2) and paragraph (3) of Article 887, Article 900, Article 901, Article 903, and Article 904 shall apply mutatis mutandis to legally reserved portion.

The judgment of prior instance is quashed.
This case shall be remanded to the Tokyo High Court.

Reasons for the petition for acceptance of final appeal filed by the counsels for the appeal, OONISHI Yukio and KOBAYASHI Kenichi
1. An outline of the factual circumstances, etc. confirmed by the court of prior instance is as follows:
(1) The deceased A was the deceased B’s wife. The appellant, the appellee and C are all children of the deceased A and the deceased B. D is the appellee’s wife and was adopted by the deceased A and the deceased B.
(2) The deceased B died in December 2008. His legal heirs were the deceased A, the appellant, the appellee, C and D.
(3) In the mediation proceedings for dividing property inherited from the deceased B, the deceased A and D transferred their respective shares in inheritance to the appellee before completion of the division of inherited property (hereinafter the deceased A’s transfer of her share in inheritance is referred to as the “Transfer of Share in Inheritance”), and withdrew from the proceedings.
(4) In August 2010, the deceased A executed a notarial will which stated to the effect that all of her property shall be inherited by the appellee.
(5) In December 2010, a division of the property inherited from the deceased B was agreed through mediation between the appellant, the appellee and C. As a result of this, the appellant obtained the land lot listed in I-6 of the “List of Properties Inherited from the Deceased B” attached to the judgment of the first instance and the buildings listed in II-4 through II-8 of the same list. The appellee obtained the land lots listed in I-5 and I-7 through I-13 of the same list, the buildings listed in II-2, II-3, II-9 and II-10 of the same list, the cash, deposits and savings listed in IV of the same list, and the other properties listed in V of the same list. C obtained the land lots listed in I-1 through I-4 of the same list and the building listed in II-1 of the same list.
(6) The deceased A died in July 2014. Her legal heirs were the appellant, the appellee, C and D.
(7) At the time of commencement of inheritance of her property, the deceased A had deposit receivables in the amount of approximately 350 thousand yen and unpaid payables for using nursing-care facilities in the amount of approximately 360 thousand yen.
(8) In November 2014, the appellant manifested to the appellee her intention to exercise her claim for abatement of the deceased A’s gift to the appellee to preserve the appellant’s statutory reserved share in inheritance from the deceased A.
2. In this case, the appellant demands that the appellee follow proceedings for registration of transfer of the appellee’s title interest in certain part of the real properties obtained by the appellee through the mediation for division of inherited property mentioned in 1 (5) above, due to abatement of a gift to preserve a statutory reserved share on the grounds that the appellant’s statutory reserved share has been infringed by the Transfer of Share in Inheritance. The point at issue is whether or not the Transfer of Share in Inheritance constitutes a gift whose value should be included in the value of property inherited by the appellee from the deceased A based on which the appellant’s legally reserved portion should be calculated (Articles 1044 and Article 903, paragraph (1) of the Civil Code).
3. The court of prior instance ruled as follows in summary, and dismissed the appellant’s claim on the grounds that her statutory reserved share has not been infringed.
The transfer of a share in inherited property through a transfer of a share in inheritance is made for the time being until completion of the division of the inherited property. Upon finalization of the division of the inherited property, the division becomes effective retrospectively and the transferee of the inherited property is deemed to have obtained the property directly from the decedent retrospectively from the time of commencement of inheritance. Therefore, one cannot consider that a gift was made by the transferor to the transferee. In addition, a transfer of a share in inheritance does not always benefit the transferee economically; whether or not the transferred share in inheritance is economically beneficial is unknown until calculation is made by taking into account the value, etc. of the positive and negative properties included in such transferred share in inheritance. Therefore, the Transfer of Share in Inheritance does not constitute a gift whose value should be included in the value of property based on which the appellant’s legally reserved portion should be calculated.
4. However, the court of prior instance’s ruling described above is unacceptable, for the following reasons.
The Court considers that when a transfer of a share in inheritance is made between joint heirs, the transferor’s proportionate share in the entire inherited property, comprising positive and negative properties, is transferred to the transferee, and this transfer of the share in inheritance results in the transfer of the transferor’s shares in individual inherited properties to the transferee.
The joint heir to whom the transferor’s share in inheritance is transferred then participates in the proceedings for dividing inherited property as a person whose share in inheritance consists of a total of his/her original share in inheritance and the share in inheritance so transferred to him/her. In the proceedings for dividing inherited property, the transferee is able to demand from the other joint heirs that the transferee be allotted inherited property whose value is equivalent to the total of his/her original share in inheritance and the share in inheritance so transferred to him/her.
Thus, a transfer of a share in inheritance may be considered a transfer of economic benefit from the transferor to the transferee by mutual agreement, except in cases where the transferred share in inheritance has no substantial proprietary value as calculated by taking into account the value, etc. of the positive and negative properties included in such share in inheritance. This interpretation is not precluded by the fact that a division of inherited property becomes effective retrospectively from the time of commencement of inheritance (the main clause of Article 909 of the Civil Code).
Therefore, the transfer of a share in inheritance made without consideration between joint heirs constitutes a “gift” as referred to in Article 903, paragraph (1) of the Civil Code in terms of inheritance by the person who made the transfer, except in cases where the transferred share in inheritance has no substantial proprietary value as calculated by taking into account the value, etc. of the positive and negative properties included in such transferred share in inheritance.
5. The court of prior instance’s ruling which, based on a view different from the above, dismissed the appellant’s claim on the grounds that the Transfer of Share in Inheritance does not constitute a gift whose value should be included in the value of property based on which the appellant’s legally reserved portion should be calculated, contains legal violations that obviously affect its judgment. The arguments submitted by the appellant are well grounded, and the judgment of prior instance should inevitably be quashed. The Court remands this case to the court of prior instance in order to have it further and fully hear the case.
Accordingly, the Court unanimously decides as set forth in the main text.

Justice ONIMARU Kaoru
Justice YAMAMOTO Tsuneyuki
Justice KANNO Hiroyuki
Justice MIURA Mamoru