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1987 (O) 1531

1990.01.22
1987 (O) 1531
Minshu Vol. 44, No. 1
Judgment concerning the meanings of the phrase "amount paid voluntarily by an obligor as interest" in Article 43, paragraph (1) of the Act on Control of Money Lending Business and the phrase "amount paid voluntarily by an obligor as damages" in paragraph (3) of the same Article
Case seeking a declaration of the nonexistence of an obligation
Judgment of the Second Petty Bench, dismissed
Osaka High Court, Judgment of September 18, 1987
The phrase "amount paid voluntarily by an obligor as interest" in Article 43, paragraph (1) of the Act on Control of Money Lending Business and the phrase "amount paid voluntarily by an obligor as damages" in paragraph (3) of the same Article are interpreted as referring to the situation wherein the obligor has paid such amounts at his/her own free will, while recognizing that these amounts will be appropriated for the payment of interest under a contract for interest or payment of damages under an agreement for liquidated damages, and the obligor is not required to further recognize that the amount of money paid exceeds the maximum amount of interest or liquidated damages specified in Article 1, paragraph (1) or Article 4, paragraph (1) of the Interest Rate Restriction Act or that the contract corresponding to the portion in excess is void.
Article 43, paragraphs (1) and (3) of the Act on Control of Money Lending Business, Article 1, paragraph (1) and Article 4, paragraph (1) of the Interest Rate Restriction Act



Act on Control of Money Lending Business



Article 43,paragraphs (1) and (3)

(1) If the amount of money paid voluntarily by an obligor as interest under a contract for interest (including any money deemed to be interest pursuant to the provisions of Article 3 of the Interest Rate Restriction Act (Act No. 100 of 1954) on a loan of money provided by a money lender on a regular basis exceeds the maximum amount of interest specified in Article 1, paragraph (1) of the same Act, and the payment thereof falls under either of the following items, the payment of the portion in excess is deemed to be the valid performance of an obligation to pay interest, notwithstanding the provisions of the same paragraph:

(i) payment under a contract for a loan provided to a person to whom the money lender has delivered a document prescribed in Article 17, paragraph (1) or paragraph (2) (including as applied mutatis mutandis pursuant to Article 24, paragraph (2); hereinafter the same applies in this item) pursuant to the provisions of Article 17, paragraph (1) or paragraph (2) in the case where the money lender has delivered any such document; or

(ii) payment regarding the performance referred to in Article 18, paragraph (1) (including as applied mutatis mutandis pursuant to Article 24, paragraph (2); hereinafter the same applies in this item) in the case where the money lender has delivered a document prescribed in Article 18, paragraph (1) pursuant to the provisions of the same paragraph.

(3) The provisions of the preceding two paragraphs apply mutatis mutandis in the case where the amount of money paid voluntarily by an obligor as damages under an agreement for liquidated damages due to a failure to perform an obligation under a loan of money provided by a money lender on a regular basis exceeds the maximum amount of liquidated damages specified in Article 4, paragraph (1) of the Interest Rate Restriction Act, and the payment thereof falls under either of the items of paragraph (1).



Interest Rate Restriction Act



Article 1 If the interest under a contract for interest on a loan of money exceeds the amounts calculated based on the interest rates specified in the following items in relation to each of the instances referenced in the following items, the contract shall be void in relation to the portion of interest which exceeds those respective amounts:

(i) where the amount of the principal is less than 100,000 yen: 20 percent per annum;

(ii) where the amount of the principal is 100,000 yen or more but less than 1,000,000 yen: 18 percent per annum; or

(iii) where the amount of the principal is 1,000,000 yen or more: 15 percent per annum.



Article 4,paragraph (1)

(1) If the ratio of liquidated damages to the principal under an agreement for liquidated damages due to a failure to perform an obligation under a loan of money, exceeds 2 times the rate prescribed in Article 1,paragraph (1), the agreement shall be void in relation to the excess portion.
The final appeal is dismissed.

The costs of the final appeal shall be borne by the appellant of final appeal.
Concerning Reasons for Final Appeal I, II, III, and V stated by the counsel for final appeal, IJIRI Kiyoshi

The Act on Control of Money Lending Business (hereinafter referred to as the "Act") provides for the following measures to ensure the proper management of business operations performed by money lenders and protect the interests of persons seeking funds, etc. by enforcing the necessary regulations on the business of money lenders: When a money lender has concluded a contract for a loan, the money lender must deliver a document that discloses the details of the contract with regard to the matters set forth in the items of Article 17, paragraph (1) of the Act, such as the loan interest rate and agreement for liquidated damages (hereinafter referred to as a "contract document") to the counterparty to the contract (Article 17, paragraph (1) of the Act); Whenever receiving performance of all or part of the claim under a contract for a loan, a money lender must deliver a document containing the matters set forth in the items of Article 18, paragraph (1) of the Act, such as the amount received and the amounts appropriated for payment of the interest, the agreed liquidated damages or the principal (hereinafter referred to as a "receipt") to the person who has made performance (Article 18, paragraph (1) of the Act). The Act thus makes it a duty for a money lender to deliver a contract document and a receipt so that an obligor would not suffer any disadvantage due to the details of the contract for a loan or the appropriation of the amount paid under the contract being unclear, while, at the same time, the Act provides that if a money lender fulfill this duty, the amount of money paid voluntarily by an obligor as interest or damages is deemed to be the valid performance of the obligation to pay interest or damages even if the amount thus paid exceeds the maximum amount of interest or liquidated damages specified in Article 1, paragraph (1) or Article 4, paragraph (1) of the Interest Rate Restriction Act (Article 43, paragraphs (1) and (3) of the Act). In light of the purpose of the Act as explained above, it is needless to say that the payment of money by an obligor to a money lender cannot be deemed to be the valid performance of an obligation to pay interest or damages pursuant to Article 43, paragraph (1) or paragraph (3) of the Act unless the information contained in a contract document and that contained in a receipt both conform to the purpose of the Act. In this respect, the phrase "amount paid voluntarily by an obligor as interest" in Article 43, paragraph (1) of the Act and the phrase "amount paid voluntarily by an obligor as damages" in paragraph (3) of the same Article are interpreted as referring to situations wherein the obligor has paid such amounts at his/her own free will, while recognizing that these amounts will be appropriated for the payment of interest under a contract for interest or payment of damages under an agreement for liquidated damages, and it is reasonable to consider that the obligor is not required to further recognize that the amount of money paid exceeds the maximum amount of interest or liquidated damages specified in Article 1, paragraph (1) or Article 4, paragraph (1) of the Interest Rate Restriction Act or that the contract corresponding to the portion in excess is void.

This reasoning is applied to this case as follows. The facts found by the court of prior instance with regard to the points argued by the counsel can be confirmed in light of the evidence cited in the judgment in prior instance, and given these facts, it is clear that the appellant paid money to Appellee B, who is a money lender, at his/her own free will, while recognizing that the amount paid will be appropriated for the payment of interest under the contract for interest or payment of damages under the agreement for liquidated damages, and therefore, the determination of the court of prior instance deeming the relevant payment of money by the appellant to be the voluntary payment of money by an obligor as interest or damages as referred to in Article 43, paragraph (1) or paragraph (3) of the Act can be accepted as justifiable. The judgment in prior instance does not contain such illegality as argued by the counsel. The counsel's arguments are, after all, only criticizing the selection of evidence and finding of facts made by the court of prior instance under its exclusive power, or denouncing the judgment in prior instance based on the counsel's own opinions, and they are therefore not acceptable.

Concerning Reason for Final Appeal IV

The findings and determination of the court of prior instance with regard to the points argued by the counsel are not unacceptable in light of the evidence cited in the judgment in prior instance, and there is no such illegality as argued by the counsel in the process for making these findings and determination. The counsel's arguments are, after all, only criticizing the selection of evidence and finding of facts made by the court of prior instance under its exclusive power, or denouncing the judgment in prior instance based on the counsel's own opinions, and they are therefore not acceptable.

Concerning Reason for Final Appeal VI

In light of the developments in the proceedings of this suit as found from the case record, it is not illegal for the court of prior instance to have not taken the measures argued by the counsel. The counsel's arguments cannot be accepted.

Accordingly, in accordance with Articles 401, 95, and 89 of the Code of Civil Procedure, the Court unanimously decides as set forth in the main text of the judgment.
Justice FUJISHIMA Akira

Justice SHIMATANI Rokuro

Justice KAGAWA Yasukazu

Justice OKUNO Hisayuki

Justice KUSABA Ryohachi
(This translation is provisional and subject to revision.)