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1988 (O) 357

1990.06.05
1988 (O) 357
Minshu Vol. 44, No. 4
Judgment concerning a person holding a mortgage created after a provisional registration for the purpose of preservation of the claim for the transfer of ownership was made based on a pre-contract of sale, and the invocation by that person of the extinctive prescription of the right to complete the pre-contract
Case seeking performance of the procedure for registration of cancellation of the provisional registration for the purpose of preservation of the claim for the transfer of ownership
Judgment of the Third Petty Bench, quashed and decided by the Supreme Court
Fukuoka High Court, Judgment of November 25, 1987
A person for whom a mortgage has been created on real property after a provisional registration for the purpose of preservation of the claim for the transfer of ownership of the real property was made based on a pre-contract of sale and who has then completed the registration of the creation of the mortgage is entitled to invoke the extinctive prescription of the right to complete the pre-contract.
Articles 145, 369 and 556 of the Civil Code



Civil Code

Article 145 The court may not make a judgment relying on the prescription unless the party invokes it.



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.



Article 556 (1) A pre-contract to sell or purchase made by one party shall take the effect of a sale when the other party has manifested his/her intention to complete such sale.

(2) If no period is provided in relation to the manifestation of intention set forth in the preceding paragraph, the other party to the pre-contact may issue a notice of demand to the other party, specifying a reasonable period, to the effect that the other party is to give a definite answer as to whether or not he/she will complete the sale within that period. In such cases, if the other party fails to give a definite answer within that period, the pre-contract of sale by one party shall lose its effect.
The judgment in prior instance is quashed.

The appeal to the court of second instance filed by the appellees of final appeal is dismissed.

The costs of the appeal to the court of second instance and the costs of the final appeal shall be borne by the appellees.
Concerning Reason I for a final appeal stated by the counsels for final appeal

A person who may invoke the extinctive prescription of a right as a party prescribed in Article 145 of the Civil Code is limited to a person who receives a direct benefit of the extinction of the right (see 1970 (O) No. 719, the judgment of the Second Petty Bench of the Supreme Court of December 14, 1973, Minshu Vol. 27, No. 11 at 1586). A person for whom a mortgage has been created on real property after a provisional registration for the purpose of preservation of the claim for the transfer of ownership of the real property was made based on a pre-contract of sale and who has then completed the registration of the creation of the mortgage would, if the right to complete the pre-contract is exercised, be obliged to give consent to the performance of the procedure for definitive registration of the transfer of ownership based on the provisional registration due to what is generally called the effect of a provisional registration in preserving the rank in the order of priority, and would eventually fall into a situation in which the registration of the creation of the mortgage is cancelled (Article 105 and Article 146, paragraph (1) of the Real Property Registration Act), while, on the other hand, such person would be able to foreclose on the mortgage if the right to complete the pre-contract is extinguished. In this regard, it is reasonable to consider that such person can be regarded as a person who receives a direct benefit of the extinction of the right to complete the pre-contract and is entitled to invoke the extinctive prescription of that right. The precedent judgment of the Former Supreme Court that presented a different view (1933 (O) No. 1723, the judgment of the Former Supreme Court of May 2, 1934, Minshu Vol. 13 at 670) should be replaced.

In this case, the court of prior instance lawfully determined the following facts. (I) The land indicated in the list of articles attached to the judgment in prior instance (hereinafter referred to as the "Land") was originally owned by D. On November 10, 1960, D concluded a pre-contract of sale of the Land with E (hereinafter referred to as the "Pre-Contract of Sale"), and on November 11, D completed a provisional registration for the purpose of preservation of the claim for the transfer of ownership of the Land for the benefit of E, with Reception No. 6415 at the Omuta Branch, the Fukuoka Legal Affairs Bureau (hereinafter referred to as the "Provisional Registration"). (II) D died on October 25, 1966, and F acquired the ownership of the Land by inheritance. However, as F also died on January 10, 1983, G and five other persons acquired the ownership of the Land by inheritance. Meanwhile, E also died on July 28, 1975, and the appellees succeeded to E's rights and obligations as E's heirs. (III) On June 26, 1980, the appellant provided a loan of 47,500,000 yen to Company H (a stock company) at the annual interest rate of 9.5% and the annual rate of damages of 18.25%, and in order to secure this loan claim, the appellant concluded a contract with F on the that day for the creation of a mortgage on the Land, and completed a registration of the creation of the mortgage on April 17, 1986, with Reception No. 4464 at the Omuta Branch, the Fukuoka Legal Affairs Bureau. (IV) After the conclusion of the Pre-Contract of Sale, ten years passed without the right to complete the pre-contract having been exercised, and the appellant filed this action and invoked the extinctive prescription of the right to complete the pre-contract. In view of these facts, it should be said that the appellant can be regarded as a person who receives a direct benefit of the extinction of the right to complete the Pre-Contract of Sale, and is entitled to invoke the extinctive prescription of the right to complete the pre-contract. Consequently, the judgment in prior instance that ruled that the appellant cannot be regarded as a person who receives a direct benefit of the extinction of the right to complete the pre-contract and therefore is not allowed to invoke the extinctive prescription of that right should be held to be illegal due to the errors in the interpretation and application of Article 145 of the Civil Code, and such illegality obviously affects the conclusion of the judgment. Therefore, the counsels' arguments are well-grounded, and without needing to examine other reasons for the final appeal, the judgment in prior instance should inevitably be quashed. According to the facts mentioned above, it should be said that the abovementioned right to complete the pre-contract has been extinguished by the prescription invoked by the appellant, and hence, the appellant's claim in this action to demand that the appellees should perform the procedure for registration of cancellation of the Provisional Registration is well-grounded, and the judgment in first instance that upheld this claim is reasonable. The appeal to the court of second instance filed by the appellees should inevitably be dismissed.

Accordingly, in accordance with Articles 408, 396, 384, 96, 89 and 93 of the Code of Civil Procedure, the Court unanimously decides as set forth in the main text of the judgment.
Justice YASUOKA Mitsuhiko

Justice SAKAUE Toshio

Justice TEIKA Katsumi

Justice SONOBE Itsuo
(This translation is provisional and subject to revision.)