2021.06.29

2020 (Ju) 205

Minshu Vol. 75, No. 7

Judgment concerning the effect of an agreement to the effect that a person who has not obtained a license referred to in Article 3, paragraph (1) of the Real Estate Brokerage Act will borrow the name from a person who is engaging in real estate brokerage with the relevant license for the purpose of engaging in real estate brokerage and that both of those persons will divide profits from transactions that the former conducted by borrowing the name

Principal action seeking remuneration, etc., counterclaim seeking return of unjust enrichment, case of a petition referred to in Article 260, paragraph (2) of the Code of Civil Procedure

Judgment of the Third Petty Bench, quashed and remanded

Tokyo High Court, Judgment of September 26, 2019

An agreement to the effect that a person who has not obtained a license referred to in Article 3, paragraph (1) of the Real Estate Brokerage Act will borrow the name from a person who is engaging in real estate brokerage with the relevant license for the purpose of engaging in real estate brokerage and that both of those persons will divide profits from transactions that the former conducted by borrowing the name goes against public policy as an action that goes against the purpose of Article 12, paragraph (1) and Article 13, paragraph (1) of the same Act, and is thus invalid.

Article 12, paragraph (1) and Article 13, paragraph (1) of the Real Estate Brokerage Act and Article 90 of the Civil Code (prior to amendment by Act No. 44 of 2017)

Real Estate Brokerage Act
(Prohibition against unlicensed businesses)
Article 12　(1)　A person who has not obtained a license as provided for in Article 3, paragraph (1), is not to engage in Real Estate Brokerage.
(Prohibition against name lending)
Article 13　(1)　A Real Estate Broker must not have another person engage in the Real Estate Brokerage under the name of said Real Estate Broker.

Civil Code
(Public Policy)
Article 90　A juristic act with any purpose which is against public policy is void.

1. Of the judgment in prior instance, the part against the appellant of final appeal is quashed.

2. This case is remanded to the Tokyo High Court regarding the part referred to in the preceding paragraph and the petition for a judicial decision referred to in Article 260, paragraph (2) of the Code of Civil Procedure filed by the appellant.

Concerning the reasons for a petition for acceptance of final appeal stated by the counsel for final appeal, SHIMIZU Toshihiko and SUGAWARA Kohei (however, except for the reasons excluded)

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

(1) Around October 2016, with P, the appellee made a plan to engage in the business pertaining to real estate transactions.

In the aforementioned plan, the appellee was expected to continue to work at a company designating the appellee as the exclusive real estate transaction agent and also conduct real estate transactions at a company to be newly established on a continuous basis by using the appellee's network of contacts, etc.

(2) After that, Y, who is qualified as a real estate transaction agent, participated in the aforementioned plan, and it was decided to designate y as the exclusive real estate transaction agent of the company to be newly established.

(3) In January 2017, Y established the appellant in accordance with the aforementioned plan and assumed the office of its representative director. In February 2017, the appellant obtained a license for real estate brokerage while designating Y as its exclusive real estate transaction agent.

(4) By around February 2017, the appellee was referred to land and building owned by Stock Company R (hereinafter referred to as the "Real Estate") by a real estate broker, Stock Company Q. The appellee decided to conduct transactions pertaining to the Real Estate as part of business based on the aforementioned plan. However, based on a sense of distrust in Y, the appellee thought of using the name of the appellant only for the transactions pertaining to the Real Estate and preventing the appellant and Y from being involved in the aforementioned business thereafter, and held consultations with Y through P. Consequently, the appellee and the appellant reached an agreement as summarized below (hereinafter referred to as the "Agreement") on March 7, 2017.

A. The name of the appellant will be used for the purchase and sale of the Real Estate. However, the appellee will select purchasers and conduct all affairs necessary for the purchase and sale of the Real Estate. The appellee will also assume liability associated with the sale of the Real Estate.

B. The appellee will acquire the proceeds of sale of the Real Estate and cover the purchase price of the Real Estate and other expenses, etc. by the proceeds of sale. The appellee will distribute 3,000,000 yen to the appellant as a fee for name lending. The appellant will receive the remittance of the proceeds of sale from the purchaser of the Real Estate and pay to the appellee the remaining amount after deducting the aforementioned purchase price and other expenses, etc. as well as the fee for name lending from the same proceeds of sale.

C. After the completion of the transactions pertaining to the Real Estate, the appellee and the appellant will not jointly conduct any real estate transactions.

(5) Regarding the Real Estate, a sales contract at the price of 130,000,000 yen, with Stock Company R as the seller and the appellant as the purchaser, was concluded in March 2017, and a sales contract at the price of 162,000,000 yen, with the appellant as the seller and S as the purchaser, was concluded in April 2017. Regarding these sales contracts, the appellee carried out the selection of the purchasers, communication with Stock Company Q, and the preparation of the draft contracts and draft instructions on important matters, etc.

(6) On April 26, 2017, the appellee demanded that the appellant pay over 23,190,000 yen as soon as he/she received the remittance of the proceeds of sale of the Real Estate based on the Agreement, alleging that the remaining amount after deducting the purchase price of the Real Estate and other expenses, etc. as well as the fee for name lending from the same proceeds of sale comes to over 23,190,000 yen.

(7) On April 27, 2017, the appellant received the remittance of the aforementioned proceeds of sale but did not respond to the aforementioned demand on the grounds that he/she was not satisfied with the determination that his/her take would be 3,000,000 yen. In addition, the appellant desired continuation of his/her involvement in the business based on the aforementioned plan. However, in May 2017, the appellant paid 10,000,000 yen to the appellee as part of the payment based on the Agreement.

2. In the principal action, the appellee demands that the appellant pay over 13,190,000 yen as the remaining amount of money to be paid to the appellee based on the Agreement. In the counterclaim, the appellant argues that payment of 10,000,000 yen to the appellee did not have any legal grounds and demands the return thereof, etc. based on the claim for the return of unjust enrichment.

3. Based on the aforementioned facts, the court of prior instance determined that there is no circumstance to deny the effect of the Agreement and that the Agreement is found to be effective. Based on this determination, the court of prior instance upheld the appellee's claims in the principal action and determined that the appellant's claims in the counterclaim should be dismissed.

4. However, the aforementioned determination of the court of prior instance cannot be upheld for the following reasons.

(1) In Chapter II, the Real Estate Brokerage Act adopts a license system for persons engaged in real estate brokerage and provides that a license is not to be granted to a person who falls under the grounds for disqualification. In Chapter VI, the same Act provides for supervisory dispositions carried out by a prefectural governor, etc. against a person engaged in real estate brokerage upon being granted a license (hereinafter referred to as a "real estate broker"). The same Act prohibits a person who has not obtained a license (hereinafter referred to as an "unlicensed person") from engaging in real estate brokerage (Article 12, paragraph (1)) and also prohibits a real estate broker from having another person engage in real estate brokerage under his/her name as the real estate broker (Article 13, paragraph (1)). In addition, the same Act provides for criminal punishment for a violation of these provisions (Article 79, items (ii) and (iii)). It is considered that the same Act adopts a license system as mentioned above in relation to persons engaged in real estate brokerage with the aim of securing the proper operations of business of those persons and the fairness of real estate transactions and promoting the sound development of real estate brokerage, thereby protecting the profits of purchasers, etc. (see Article 1 of the same Act).

In consideration of the above, a real estate broker's act of lending his/her name to an unlicensed person and an unlicensed person's act of engaging in real estate brokerage by using the name of that real estate broker are in violation of Article 12, paragraph (1) and Article 13 paragraph (1) of the same Act and circumvent the license system adopted by the same Act. Therefore, those acts should be considered to be strongly antisocial. Consequently, an agreement to borrow the name of a real estate broker, which an unlicensed person makes with a real estate broker for the purpose of engaging in real estate brokerage, goes against the purport of Article 12, paragraph (1) and Article 13, paragraph (1) of the same Act and thus goes against public policy. If an agreement to distribute profits from transactions conducted by borrowing the name of a real estate broker is made in conjunction with the aforementioned agreement, that agreement should be considered to be integral to the agreement to borrow the name.

Therefore, an agreement to the effect that an unlicensed person will borrow the name from a real estate broker for the purpose of engaging in real estate brokerage and that both of them will divide profits from transactions conducted by borrowing the name goes against public policy as an agreement that goes against the purport of Article 12, paragraph (1) and Article 13, paragraph (1) of the same Act, and it thus should be considered invalid.

(2) According to the aforementioned facts, the content of the Agreement is that the appellee, who is an unlicensed person, will conduct transactions pertaining to the Real Estate by borrowing the name from the appellant, who is a real estate broker, and that the appellee and the appellant will divide profits from the transactions. In addition, the appellee seems to have planned to engage in real estate brokerage both before and after the Agreement. According to these circumstances, it is suspected that the Agreement goes against the purport of Article 12, paragraph (1) and Article 13, paragraph (1) of the Real Estate Brokerage Act as an agreement made as part of the aforementioned plan.

In prior instance, the appellant argued that the content of the Agreement is in violation of the same Act. However, the court of prior instance did not sufficiently consider the aforementioned circumstances and found the effect of the Agreement without examining and making a determination concerning the same argument. This determination of the court of prior instance contains a violation of laws and regulations that has clearly influenced the judgment. The counsel's arguments are well-grounded as arguments to this effect.

5. For the reasons described above, of the judgment in prior instance, the part against the appellant should inevitably be quashed. Regarding the aforementioned part and a petition filed by the appellant for a judicial decision referred to in Article 260, paragraph (2) of the Code of Civil Procedure, this case is remanded to the court of prior instance to be further examined in relation to the effect of the Agreement, etc.

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

Justice TOKURA Saburo

Justice MIYAZAKI Yuko

Justice UGA Katsuya

Justice HAYASHI Michiharu