1997 (Gyo-Tsu) No. 165

Date of the judgment	1999.04.22
Case number	1997 (Gyo-Tsu) No. 165
Reporter	Minshu Vol. 53, No. 4, at 759
Title	Judgment concerning whether or not Article 15 of the Administrative Case Litigation Act may apply mutatis mutandis where the plaintiff in a suit against the "officer" prescribed in Article 242-2, para.1, item 4 of the Local Autonomy Act has sued a wrong person who does not fall within the scope of "officer"
Case name	Case to seek damages
Result	Judgment of the First Petty Bench, partially quashed and decided by the Supreme Court, partially dismissed
Court of the Second Instance	Osaka High Court, Judgment of May 22, 1997
Summary of the judgment	1. Where the plaintiff in a suit to claim damages or restitution of unjust enrichment from the "officer" prescribed in Article 242-2, para.1, item 4 of the Local Autonomy Act has sued a wrong person who does not fall within the scope of "officer," the court may apply Article 15 of the Administrative Case Litigation Act and permit the change of the defendant. 2. Where clear provisions on the administration of affairs, such as official directives, designate persons who are to be mandated with the authorities to make discretionary decisions regarding acts relating to the financial and/or accounting matters within certain limits of amounts of money or under other certain conditions, if the plaintiff in a suit to claim damages or restitution of unjust enrichment from the "officer" prescribed in Article 242-2, para.1, item 4 of the Local Autonomy Act has erroneously sued a person who falls within the scope of "officer" mandated with the authority to make discretionary decisions on such acts but cannot be deemed to have actually conducted such acts by making discretionary decisions, a court may apply Article 15 of the Administrative Case Litigation Act mutatis mutandis and permit the change of the defendant. 3. Where the plaintiff in a suit to claim damages or restitution of unjust enrichment from the "officer" prescribed in Article 242-2, para.1, item 4 of the Local Autonomy Act made a request to change the defendant on the grounds that he/she had initially sued a wrong person as "officer," and the court has made a decision to permit the change of the defendant by applying mutatis mutandis Article 15 of the Administrative Case Litigation Act, the suit filed against the initial defendant can be regarded as neither a judicial claim to seek damages or restitution of unjust enrichment from the new defendant nor other grounds of interruption of prescription.
References	(Concerning 1 to 3) Article 242-2, para.1, item 4 of the Local Autonomy Act, Article 15 of the Administrative Case Litigation Act; (Concerning 1 and 2) Article 242-2, para.6 of the Local Autonomy Act, Article 40, para.2 and Article 43, para.3 of the Administrative Case Litigation Act; (Concerning 3) Article 147, item 1 and Article 148 of the Civil Code Article 242-2, para.1, item 4 of the Local Autonomy Act Any inhabitant of an ordinary local public entity who has made petition under para.1 of the preceding article may, by initiating litigation, claim the judicial remedies set forth in the following items for the illegal act or omission for which the claim under para.1 of the same article was made, if dissatisfied with the results of the audit or the recommendation of the audit committee member(s) under para.3 of the same article, or with the measures taken by the assembly, the head or other executive organs of the local public entity or their officers under para.7 of the same article, or if the audit committee member(s) fail to audit or make recommendation under para.3 of the same article within the period specified in para.4 of the same article, or the assembly, the head or other executive organs of the local public entity or their officers fail to take measures under para.7 of the same article: provided, however, that a claim set forth in item 1 may not be made unless such act will be likely to bring about irrecoverable damages to the ordinary local public entity, and a claim for restitution of unjust enrichment from an officer included in item 4 shall be allowed only to the extent that such gains are still retained by the officer. (iv) A claim, which is made by subrogation for the ordinary local public entity, for damages or for restitution of unjust enrichment against a officer, or for declaration of non-existence of legal relationships, for damages, for restitution of unjust enrichment, for recovery or for an elimination of obstruction against the other party in the act or omission. Article 15 of the Administrative Case Litigation Act (1) Where the plaintiff in a suit for revocation has sued a wrong person unintentionally or without gross negligence, the court may, upon the request of the plaintiff, make a decision to permit the change of the defendant. (2) The decision set forth in the preceding paragraph shall be made in writing, and the authenticated copy thereof shall be served to the new defendant. (3) Where the decision set forth in para.1 has been made, with respect to the observance of the statute of limitations, a suit against the new defendant shall be deemed to have been filed when the initial suit was filed. (4) Where the decision set forth in para.1 has been made, the suit against the initial defendant shall be deemed to have been withdrawn. (5) No appeal may be filed against the decision set forth in para.1. (6) An immediate appeal may be filed against a decision to dismiss the request set forth in para.1. (7) The court of the appeal instance that has made the decision set forth in para.1 shall transfer the case to the competent court of jurisdiction. Article 242-2, para.6 of the Local Autonomy Act In addition to what is listed in the preceding four paragraphs, the provisions of Article 43 of the Administrative Case Litigation Act shall apply to litigation prescribed in para.1. Article 40, para.2 of the Administrative Case Litigation Act The provisions of Article 15 shall apply mutatis mutandis to a party suit for which a statute of limitations for filing a suit is provided. Article 43, para.3 of the Administrative Case Litigation Act With respect to suits filed for the interest of the public or suits between governmental organs other than those prescribed in the preceding two paragraphs, the provisions on a party suit, except for Article 39 and Article 40, para.1, shall apply mutatis mutandis. Article 147, item 1 of the Civil Code The prescription shall be nullified upon issuance of: (i) any claim; Article 148 of the Civil Code The nullification of prescription pursuant to the provision of the preceding Article shall be effective solely among the parties with respect to whom the ground of such interruption arose, and their respective successors.
Main text of the judgment	1. The appeal to the court of the last resort filed by Appellants A, C, and D at the court of the last resort shall be dismissed. 2. The judgment of the second instance shall be quashed with respect to the part concerning the preliminary claims made by the appellees at the court of the last resort against Appellants E, F, and G at the court of the last resort, and the judgment of the first instance shall be revoked with respect to the part concerning these claims. 3. The claims made by the appellees with respect to the part mentioned in the preceding paragraph shall be dismissed. 4. Appellants A, C, and D shall bear the cost of the appeal incurred by these appellants, and the appellees shall bear the whole cost of the lawsuit between Appellants E, F, and G, and the appellees.
Reasons	I. Concerning Reason I for appeal to the court of the last resort argued by the appeal counsel TANABE Teruo 1. This is a citizens' suit in which the appellees at the court of the last resort, who are inhabitants of Kyoto City, alleging the illegality of the expenditures of public money indicated in Appended Table 1 and Appended Table 2 attached to the judgment of the first instance, seek damages under Article 242-2, para,1, item 4 of the Local Autonomy Act, by subrogation for the Kyoto City Government, from the appellants at the court of the last resort, to indemnify the losses incurred by the Kyoto City Government due to the illegal expenditures of public money. This suit was filed as a claim for damages against "officer" prescribed in the said item. The court of the second instance legally found the following facts. The Kyoto City Government has the Rules on Discretionary Decision by Bureau Directors, etc. (Official Directive Ko No. 2 of May 16, 1963), which designate the persons mandated with the authority to make discretionary decisions on the expenditure of public money within certain limits. Among the persons originally sued by the appellees when filing the suit, Appellant C at the court of the last resort was mandated under the Rules with the authority to make discretionary decisions on the expenditures of public money of not more than 100,000 yen per expenditure, and Appellant H at the court of the last resort was not mandated with the authority to make such decisions. On January 26, 1994, the appellees made a request pursuant to Article 43, para.3, Article 40, para.2, and Article 15, para.1 of the Administrative Case Litigation Act to change the defendants as follows: with respect to the claim relating to the expenditures of public money of over 100,000 yen numbered 1, 2, 4, 6, 8 to 11, 13 to 18, 21, and 22 in Appended Table 1 attached to the judgment of the first instance, from Appellant C to Appellant F at the court of the last resort who was mandated under the Rules with the authority to make discretionary decisions on the expenditures; with respect to the claim relating to the expenditures of public money numbered 3 to 5, and 7 in Appended Table 2 attached to the judgment of the first instance, from Appellant H to Appellant G at the court of the last resort who was mandated under the Rules with the authority to make discretionary decisions on the expenditures; with respect to the claim relating to the expenditure of public money numbered 6 in Appended Table 2, from Appellant H to Appellant E at the court of the last resort who was mandated under the Rules with the authority to make discretionary decisions on the expenditure. On June 27, 1994, the court of the first instance made a decision to permit the change of the defendants. 2. The term "officer" mentioned in Article 242-2, para.1, item 4 of the Local Autonomy Act includes persons who are in advance mandated, within the ordinary local public entity and in accordance with clear provisions on the administration of affairs such as official directives, by the person who is statutorily authorized to conduct acts relating to the financial and/or accounting matters in question, with the authorities to make discretionary decisions and are authorized to make decisions on whether to exercise such authority or not. Any suit against persons who cannot be deemed to hold the status or office with such authority that is filed as a suit to claim damages or restitution of unjust enrichment from the "officer" prescribed in the said item does not fall under the category of citizens' suits specially allowed by law, and therefore it is illegal (See 1980 (Gyo-Tsu) No. 157, judgment of the Second Petty Bench of the Supreme Court of April 10, 1987, Minshu Vol. 41, No. 3, at 239; 1990 (Gyo-Tsu) No. 138, judgment of the Second Petty Bench of the Supreme Court of December 20, 1991, Minshu Vol. 45, No. 9, at 1503). Where clear provisions on the administration of affairs such as official directives designate persons who are to be mandated with the authority to make discretionary decisions regarding acts relating to financial and/or accounting matters within certain limits of amounts of money or under other certain conditions, any suit filed to claim damages or restitution of unjust enrichment from persons who fall within the scope of "officer" holding the status or office with the authority but cannot be deemed to have actually conducted the acts of finance and accounting by making discretionary decisions, lacks a ground and therefore should be dismissed (See the above-mentioned judgment of the Second Petty Bench of the Supreme Court of December 20, 1991). However, due to the complexity of the related laws and regulations, ordinances, rules, and official directives as well as administrative structure within the ordinary local public entity in regard to who are to have the authority to conduct acts relating to the finance and/or accounting matters and the mandate thereof, it may not be always easy for citizens who wish to sue the "officer" prescribed in Article 242-2, para.1, item 4 of the Local Autonomy Act to identify who are the "officer" holding the status or office with the authority for the acts relating to the finance and/or accounting in question and who have actually conducted such act by making discretionary decisions. Meanwhile, it is provided that such a suit shall be filed within the period specified by items 1 to 4 of para.2 of the said Article. According to this provision, where citizens have filed a suit against a person who cannot be deemed to have held the status or office with the authority or cannot be deemed to be have actually conducted such acts by making discretionary decisions, they may not be allowed to file another suit against the correct person due to the expiry of the statute of limitations. These circumstances are also assumed in cases where the plaintiff has sued a wrong person in a suit for revocation of the administrative disposition, for which Article 15 of the Administrative Case Litigation Act permits the change of the defendant in order to help the plaintiff. Therefore, also in cases where the plaintiff sued a wrong person as "officer," it is appropriate to apply mutatis mutandis the provision of Article 15 of the Administrative Case Litigation Act pursuant to Article 242-2, para.6 of the Local Autonomy Act and Article 43, para.3 and Article 40, para.2 of the Administrative Case Litigation Act and permit the change of the defendant, thereby providing remedy to the plaintiff. Consequently, where the plaintiff in a suit to claim damages or restitution of unjust enrichment from the "officer" prescribed in Article 242-2, para.1, item 4 of the Local Autonomy Act has sued a wrong person as the "officer" unintentionally or without gross negligence, it is appropriate for the court to apply mutatis mutandis Article 15 of the Administrative Case Litigation Act, and make a decision, upon the request of the plaintiff, to permit the change of the defendant. Furthermore, where clear provisions on the administration of affairs such as official directives designate persons who are to be mandated with the authorities to make discretionary decisions regarding acts relating to the financial and/or accounting matters within certain limits of amounts of money or under other certain conditions, if the plaintiff has sued erroneously a person who falls within the scope of "officer" mandated in advance, by the person who is statutorily authorized to make discretionary decision for such acts, to make such discretionary decisions, but cannot be deemed to have actually conducted such acts by making discretionary decisions, it should be construed that that court may apply mutatis mutandis Article 15 of the Administrative Case Litigation Act and permit the change of the defendant. 3. Based on the reasoning mentioned above, the appellees may, through the application mutatis mutandis of Article 15 of the Administrative Case Litigation Act, make a request to change the defendants in the suit concerning the expenditures of public money when they initially sued wrong persons as such "officer." Therefore, by reason of the decision to permit the change of the defendants made by the court of the first instance, the suit concerning the expenditures of public money filed against Appellants C and H is deemed to have been withdrawn (para.4 of the said Article), and Appellants F, G, and E should be deemed to have become the defendants. The judgment of the second instance that goes along with this conclusion can be affirmed, and the appellants' argument cannot be accepted. II. Concerning Reasons II and III for appeal to the court of the last resort argued by the appeal counsel TANABE Teruo The determination of the court of the second instance on the points argued by the appellants can be affirmed as justifiable based on the evidence mentioned in the judgment of the second instance, and the determination process does not contain such illegality as argued by the appellants. The appellants' argument is nothing more than a criticism of the choice of evidence or fact-finding, which come under the exclusive jurisdiction of the court of the second instance, and therefore cannot be accepted. III. Concerning Reason IV for appeal to the court of the last resort argued by the appeal counsel TANABE Teruo 1. Where the plaintiff in a suit to claim damages or restitution of unjust enrichment from the "officer" prescribed in Article 242-2, para.1, item 4 of the Local Autonomy Act made a request to change the defendant on the grounds that he/she had initially sued a wrong person as "officer," and the court has made a decision to permit the change of the defendant by applying mutatis mutandis Article 15 of the Administrative Case Litigation Act, it is appropriate to construe that the suit filed against the initial defendant can be regarded as neither a judicial claim to seek damages or restitution of unjust enrichment from the new defendant nor other grounds of interruption of prescription. A suit to claim damages or restitution of unjust enrichment from the "officer" prescribed in Article 242-2, para.1, item 4 of the Local Autonomy Act is to be filed by citizens by subrogating the right of the ordinary local public entity under substantive law (the Civil Code or Article 243-2, para.1 of the Local Autonomy Act) to claim damages or restitution of unjust enrichment from the "officer." Needless to say, the initial suit has, as a judicial claim, the effect of interruption of prescription for this right under substantive law against the initial defendant. However, the interruption of prescription shall be effective solely among the parties with respect to whom the ground of such interruption arose and their respective successors (Article 148 of the Civil Code). On the other hand, Article 15, para.3 of the Administrative Case Litigation Act provides that with respect to the observance of the statute of limitations, a suit against the new defendant shall be deemed to have been filed when the initial suit was filed. The provision of Article 15, para.3 of the Administrative Case Litigation Act cannot be construed to supersede the principle under Article 148 of the Civil Code, nor is there any provision under substantive law that can be construed to supersede the principle. Furthermore, it should be deemed to be impossible to apply the provision of Article 434 of the Civil Code on joint and several obligation to the relationship between the right under substantive law against the initial defendant and the right under substantive law against the new defendant. 2. In this case, the right under substantive law against Appellants E, F, G, who became the new defendants by reason of the decision to permit the change of the defendants, is a right to claim damages under Article 243-2, para.1 of the Local Autonomy Act, and in accordance with Article 236, para.1 of the said Act, this right shall be extinguished by operation of prescription if it is not exercised within five years from the time that it became exercisable. According to the facts legally found by the court of the second instance, the expenditures of public money by the appellants had occurred by December 17, 1986, and it was January 26, 1994 that the appellees made a request to change the defendants for which the decision to permit the change of the defendants was made. Consequently, it is obvious that the right to claim damages from Appellants E, F, and G had already been extinguished by operation of prescription by the time when the request for the change of defendants was made. 3. Contrary to this reasoning, the court of the second instance determined that the initial suit had the effect of interruption of prescription for the right to claim damages from Appellants E, F, and G, and upheld the appellees' preliminary claims against these appellants. This determination should inevitably be deemed to be based on erroneous construction and application of laws and regulations, and this illegality has apparently affected the judgment. The appellants' argument is well-grounded, and without need to examine other points, the judgment of the second instance should inevitability be quashed with respect to the part concerning the preliminary claims against the appellants. Consequently, with respect to the said part, the judgment of the first instance should be revoked and the preliminary claims against the appellants should be dismissed. Therefore, the judgment was rendered in the form of the main text by the unanimous consent of the Justices.
Presiding Judge	Justice ONO Motoo Justice ENDO Mitsuo Justice FUJII Masao Justice ODE Takao

(This translation is provisional and subject to revision.)
(* Translated by Judicial Research Foundation)