Date of the judgment |
1998.5.26 |
Case number |
1996(O)No.497 |
Reporter |
Minshu Vol. 52, No. 4, at 985 |
Title |
Judgment upon the case that when X, under duress by A, became the borrower in a contract of loan for consumption and instructed Y, the lender, to provide a loan for Z, then rescinded the contract by reason of the duress, X is ruled to have not benefited from the payment of loan, in respect of a claim for return of unjust enrichment filed by Y against X |
Case name |
Case to seek payment of a promissory note |
Result |
Judgment of the Third Petty Bench, quashed and decided by the Supreme Court |
Court of the Second Instance |
Osaka High Court, Judgment of November 17, 1995 |
Summary of the judgment |
In light of such facts pointed out in the holding that X, under duress by A, became the borrower in a contract of loan for consumption and instructed Y, the lender, to provide a loan for Z, then rescinded the contract by reason of the duress, that there was no legal or de-facto relationship between X and Z prior thereto, that X did, as told by A, instruct Y, the lender, to provide a loan for Z and so forth, X, in relation to a claim for return of unjust enrichment filed by Y against X, could not be considered to have gained, from the said payment, a benefit corresponding to the value thereof. |
References |
Article 96, para.1, Article 537, Article 587, and Article 703 of the Civil Code Article 96, para.1 of the Civil Code (1) Manifestation of intention which is induced by any fraud or duress may be rescinded. Article 537 of the Civil Code (1) If one of the parties promises in a contract that he/she will tender a certain performance to any third party, the third party shall have the right to claim that performance directly from the obligor. (2) In the cases set forth in the preceding paragraph, rights of the third party shall accrue when the third party has expressed his/her intention to the obligor to enjoy the benefit of the contract under that paragraph. Article 587 of the Civil Code A loan for consumption shall become effective when one of the parties receives money or other things from the other party by promising that he/she will return by means of things that are the same in kind, quality and quantity. Article 703 of the Civil Code A person who has benefited (hereinafter in this Chapter referred to as "beneficiary") from the property or labor of others without legal cause and has thereby caused loss to others shall assume an obligation to return that benefit, to the extent the benefit exists. |
Main text of the judgment |
Of the judgment of prior instance, the part for which the appellant lost the case shall be quashed. The claim filed by the appellee with regard to the part specified in the preceding paragraph shall be dismissed. The whole court costs shall be borne by the appellee. |
Reasons |
Regarding reasons 1-1(1) and 2 for final appeal argued by appeal counsels NAKATANI Shigeru, YAMAGUCHI Tsutomu, and MAEDA Motohiro I. The facts legally determined by the court of second instance are outlined as follows: 1. The appellant, on March 15, 1991, under duress by A, entered into a contract of loan for consumption in question with the appellee to the effect that the appellant agrees to borrow from the appellee 35,000,000 yen due on June 15, 1991 at 36% interest per annum. At that time, the appellant, following A's instructions, instructed the appellee to transfer a loan to a current account of Hokuto Doro Co., Ltd., according to which the appellee transferred to the said account the balance less interest, etc. amounting to 30,337,000 yen. 2. The appellant, on February 24, 1994, manifested to the appellee his intention of rescinding the contract of loan for consumption by reason of A's duress. II. In this case, the appellee, arguing that the appellant falls under a beneficiary in bad faith with regard to the money provided under the said contract of loan for consumption, claims, pursuant to Article 704 of the Civil Code, payment of 29,417,917 yen of the money the appellee transferred to Hokuto Doro's current account plus the interest accrued thereon at the rate of 15% per annum during the term from on June 16, 1991, the day following the day when the appellant became mala fide, until the complete payment thereof. The court of second instance allowed the appellee's claim for return of unjust enrichment by determining the rate of the interest accrued at 5% per annum, which is the loan rate stipulated under the Civil Code, on the ground that since the appellee did transfer as described above according to the appellant's instructions, the appellant must be said to have benefited from the money provided through the said transfer. III. However, the said ruling of the court of second instance cannot be upheld for the following reasons: In the case where X, the borrower of a contract of loan for consumption, requested Y, the lender to provide a loan to Z, a third party, according to which Y effected provision to Z, then X rescinded the contract, for the part of X in relation to a claim for return of unjust enrichment filed by Y, unless otherwise justified with reasons, it is appropriate to consider X to have gained, from the said payment effected by Y to Z, a benefit corresponding to the value thereof. All in all, in such case, although it appears that the benefit of the payment directly came into existence upon Z who received the said payment while X did not benefit therefrom, X is likely to benefit therefrom depending on his relationship with Z, such that the said payment helps him/her to discharge his/her debt to Z and the like, and it is possible because there is usually some prior legal or de-facto relationship between X and Z. Also, in such case, since Y who complied with the said request could not be necessarily knowledgeable about the circumstantial details of the relationship between X and Z, it would not only put Y at a disadvantage if Y is required to prove his/her case with regard to the substance of relationship between X and Z as well as X's benefit enjoyed from the said payment effected by Y, but also it would undermine impartiality if both parties are treated differently, compared to the case where it is obvious that X was provided a loan by Y, then X provided it for Z. However, judging from the facts described above, since there was no prior legal or de-facto relationship between the appellant and Hokuto Doro, and the appellant under A's duress did, as told by A, enter into the said contract of loan for consumption and instruct the appellee to transfer a loan to the account of Hokuto Doro, this case obviously falls under the above-mentioned "otherwise justified with reasons" case, hence, the appellant must be said to have not gained any benefit from the said payment. On the contrary, the ruling of the court of second instance, different from the aforesaid, allowing part of the claim for return of unjust enrichment filed by the appellee on the ground that the appellant benefited from the transfer of a loan to Hokuto Doro effected by the appellee upon the appellant's instructions is found erroneous in applying/construing the laws and regulations, which obviously affects the conclusion of the judgment of prior instance. The appellant's argument making this point is found grounded. Without the need to consider the rest of the argument, the part of the judgment of prior instance which upheld a part of the appellee's claim shall be inevitably quashed. With regard to this part the appellee's claim is found groundless, therefore, it shall be dismissed without the need for a ruling on the other points. Thus, the Justices rule unanimously on the case as rendered in the main text of the judgment. |
Presiding Judge |
Justice CHIKUSA Hideo Justice SONOBE Itsuo Justice OZAKI Yukinobu Justice MOTOHARA Toshifumi Justice KANATANI Toshihiro |
| (This translation is provisional and subject to revision.) (* Translated by Judicial Research Foundation) |