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2017 (Ju) 1124

2018.12.07
2017 (Ju) 1124
Minshu Vol. 72, No. 6
Judgment upon the case in which the court ruled that where a continuous sales contract on metal scrap, etc. stipulates that the ownership of the subject matter shall be reserved to the seller until completion of payment for sale of the subject matter, a person who received a mortgage created by assignment of an aggregate of movables in relation to inventory products, etc., including metal scrap, etc. which the buyer stores, could not claim the aforementioned mortgage by assignment against the seller in relation to metal scrap, etc. for which payment has not been completed
Case seeking return of unjust enrichment
Judgment of the Second Petty Bench, dismissed
Tokyo High Court, Judgment of March 9, 2017
Where a continuous sales contract on metal scrap, etc. stipulates that the ownership of the subject matter shall be reserved to the seller until completion of payment for sale of the subject matter, under the following circumstances as held in this judgment, a person who received the mortgage created by assignment of an aggregate of movables in relation to inventory products, etc., including metal scrap, etc. which the buyer stores, cannot claim the aforementioned mortgage by assignment against the seller in relation to metal scrap, etc. for which payment has not been completed; the aforementioned contract stipulates that the amount of payment for sale of delivered metal scrap, etc. shall be calculated for each period while considering the period from the 21st of a month to the 20th of the following month as one period and that the ownership of metal scrap, etc. delivered for one period shall be reserved to the seller until completion of the payment for sale for the relevant period, and therefore, the ownership is not to be reserved to the seller in order to secure payment for sale for another period; the seller had comprehensively approved the buyer's resale of metal scrap, etc., but this is understood as being intended to have the buyer secure funds for the payment of the sale under the aforementioned contract.
Articles 176, 369 (mortgage by assignment), and 369 (reservation of ownership) of the Civil Code



Civil Code

(Creation and Transfer of Real Rights)

Article 176 The creation and transfer of real rights shall take effect solely by the manifestations of intention of the relevant parties.



(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.
The appeal is dismissed.

The cost of the final appeal shall be borne by the appellant of final appeal.
Concerning Reason I for a petition for acceptance of final appeal argued by the counsels for final appeal, TATSUNO Morihiko, et al.

1. The outline of facts lawfully determined by the court of prior instance is as follows.

(1) The appellant is a financial institution whose principal business is provision of loans, etc. to small and medium-sized enterprises, etc., and the appellee is a company whose principal business is the manufacturing, sale, etc. of automobile parts, etc.

Misaki Sangyo Kabushiki Kaisha is a company whose principal business is the processing, recycling, sale, etc. of metal scrap, etc.

(2) On March 10, 2010, the appellee and Misaki Sangyo concluded a contract stipulating that the appellee shall continuously sell metal scrap, etc. to Misaki Sangyo (hereinafter referred to as the "Sales Contract"). The Sales Contract stipulates the matters as summarized below.

A. The delivery of the subject matter from the appellee to Misaki Sangyo shall, in principle, be conducted in a manner that Misaki Sangyo periodically collects the subject matter from a subsidiary company of the appellee.

B. Misaki Sangyo shall check and conduct acceptance inspection of the subject matter delivered from the appellee promptly after receiving the subject matter.

C. The appellee shall charge Misaki Sangyo for the subject matter for which acceptance inspection was conducted for a period ended on the 20th of each month, and Misaki Sangyo shall make the aforementioned payment to the appellee on the 10th of the following month.

D. The ownership of the subject matter shall be transferred from the appellee to Misaki Sangyo by the completion of the aforementioned payment (hereinafter these provisions are referred to as the "Provisions").

(3) The appellee had comprehensively approved Misaki Sangyo's resale of metal scrap, etc. that it had sold based on the Sales Contract, and Misaki Sangyo made it a rule to resell the metal scrap, etc. to a specific company immediately after receiving the delivery thereof.

(4) On March 11, 2013, the appellant and Misaki Sangyo concluded a contract stipulating that the appellant shall provide loans to Misaki Sangyo upon the individual request of Misaki Sangyo with the maximum limits of 100,000,000 yen, and also concluded a contract for creation of mortgage by assignment of an aggregation of movables in which the appellant is the mortgagee and Misaki Sangyo is the mortgagor (hereinafter referred to as the "Creation Contract" and the mortgage by assignment created thereby is referred to as the "Mortgage by Assignment") for the purpose of securing the claims which the appellant currently has and will have in the future based on the aforementioned loan contract. The Creation Contract stipulates as summarized below.

A. The subject matter of the mortgage by assignment shall be inventory products, inventory goods, raw material inventory, and inventory products in process for nonferrous metal products (hereinafter all of these are collectively referred to as "inventory products, etc.") and shall be all of those which Misaki Sangyo possesses and stores at its plant in Gotemba-shi, Shizuoka, (hereinafter referred to as the "Plant") and at its refining department.

B. The inventory products, etc. which Misaki Sangyo possessed and stored at the aforementioned storage locations on the date of conclusion of the Creation Contract shall be considered to have been completely delivered to the appellant by way of constructive transfer with retention of possession.

C. The inventory products, etc. of which ownership Misaki Sangyo acquires after the aforementioned date shall naturally become the subject matter of mortgage by assignment as of the time when they are carried into the aforementioned storage locations.

(5) On March 11, 2013, assignment of movables pertaining to the Mortgage by Assignment was registered as provided in Article 3, paragraph (1) of the Act on Special Provisions, etc. of the Civil Code Concerning the Perfection Requirements for the Assignment of Movables and Claims.

(6) By June 10, 2014, the appellee received from Misaki Sangyo payment for metal scrap, etc. which the appellee sold to Misaki Sangyo based on the Sales Contract on or before May 20, 2014, with some exceptions.

(7) The appellee sold metal scrap, etc. to Misaki Sangyo based on the Sales Contract for the period from May 21 to June 18, 2014.

(8) On June 18, 2014, Misaki Sangyo notified the obligees, including the appellee, of the closing of its business, but the appellee had not received payment for metal scrap, etc., which the appellee sold for the period mentioned in (7) above, as of the receipt of said notice.

(9) In November 2014, the appellee filed a petition for an order for provisional disposition resolutely implementing delivery of movables in relation to metal scrap, etc. stored at the Plant based on the ownership reserved under the Provisions, and a ruling accepting the aforementioned petition (hereinafter referred to as the "Ruling on Provisional Disposition") was made on January 13, 2015.

(10) On January 20 and 21, 2015, the appellee withdrew metal scrap, etc. stored at the Plant based on the Ruling on Provisional Disposition and sold it to a third party around that time. Incidentally, for a part of the aforementioned metal scrap, etc., Misaki Sangyo had completed payment to the appellee (hereinafter, the aforementioned metal scrap, etc. excluding such part for which the payment was completed is referred to as the "Movables").

2. In this case, the appellant alleged that the appellee's withdrawal and sale of metal scrap, etc. as stated in 1(10) above constituted a tort against the appellant and demanded that the appellee pay compensation for loss or damage of 50,000,000 yen with delay damages and also selectively demanded that the appellee return unjust enrichment of the same amount as benefits the appellee received by the withdrawal and sale and pay interest as prescribed in the first sentence of Article 704 of the Civil Code by arguing that said benefits fall under unjust enrichment. Regarding establishment of the aforementioned tort and unjust enrichment, the parties dispute whether the appellant can claim the Mortgage by Assignment against the appellee in relation to the Movables.

3. The counsels argue as follows: the court of prior instance determined that the ownership of the Movables had not been transferred from the appellee to Misaki Sangyo and that the appellant could not claim the Mortgage by Assignment against the appellee despite the fact that, in the Sales Contract, reservation of the ownership of the Movables to the appellee based on the Provisions should be considered as Misaki Sangyo's creating mortgage for the appellee after the ownership of the Movables was transferred from the appellee to Misaki Sangyo, but this determination of the court of prior instance contains an error in the interpretation of laws and regulations and violation of a judicial precedent.

4. According to the aforementioned facts, etc., the Sales Contract was on the repeated and continuous sale of metal scrap, etc., and the Provisions stipulate that the ownership of the subject matter shall be transferred from the appellee to Misaki Sangyo by the completion of payment for the subject matter and shall be reserved to the appellee until completion of the payment in order to secure the payment for sale.

The Sales Contract stipulates that the amount of payment for sale of metal scrap, etc. delivered shall be calculated for each period while considering the period from the 21st of a month to the 20th of the following month as one period and that the ownership of metal scrap, etc. delivered for one period shall be reserved to the appellee until completion of the payment for sale for the relevant period whose amount is calculated in the aforementioned manner, and thus the ownership is not reserved to the appellee in order to secure payment for sale for another period. The provisions as mentioned above provide the seller with a means of securing payment for the subject matter for the period from the delivery of the subject matter to completion of payment therefor in a continuous movable sales contract in which the amount of payment for sale is calculated for each period, and reserve the ownership of the subject matter to that extent.

Moreover, the appellee had comprehensively approved Misaki Sangyo's resale of metal scrap, etc., but this is understood as being intended to allow the appellee to have Misaki Sangyo secure funds for payment for sale under the Sales Contract and cannot be considered to mean that the ownership of the aforementioned metal scrap, etc. was transferred to Misaki Sangyo.

For the reasons described above, it is reasonable to consider that the ownership of the Movables is not transferred from the appellee to Misaki Sangyo until payment for the sale of the Movables is completed, as stipulated in the Provisions. Therefore, the appellant cannot claim the Mortgage by Assignment against the appellee in relation to the Movables.

5. The determination of the court of prior instance to the same effect as above is justifiable and can be upheld. All the judicial precedents cited in the counsels' arguments are irrelevant in this case because they addressed a different type of facts. The counsels' arguments are not acceptable.

Accordingly, the Court unanimously decides as set forth in the main text of the judgment.
Justice MIURA Mamoru

Justice ONIMARU Kaoru

Justice YAMAMOTO Tsuneyuki

Justice KANNO Hiroyuki
(This translation is provisional and subject to revision.)