2022.10.06

2020 (Ju) 1462

Minshu Vol. 76, No. 6

Judgment concerning a statutory deposit to be made by an executor of a condominium reconstruction project in the case where the executor has the obligation to make a statutory deposit of compensation under Article 76, paragraph (3) of the Act on Facilitation of Reconstruction of Condominiums and conflict of seizures has arisen due to issuance of multiple orders of seizure in relation to a claim for payment of the aforementioned compensation

Case seeking collected money

Judgment of the First Petty Bench, quashed and decided by the Supreme Court

Osaka High Court, Judgment of June 23, 2020

Where an executor of a condominium reconstruction project referred to in Article 2, paragraph (1), item (iv) of the Act on Facilitation of Reconstruction of Condominiums has the obligation to make a statutory deposit of compensation under Article 76, paragraph (3) of the same Act and conflict of seizures has arisen due to issuance of multiple orders of seizure in relation to a claim for payment of the aforementioned compensation, the executor must make a mixed statutory deposit for the aforementioned compensation under the same paragraph and Article 156, paragraph (2) of the Civil Execution Act as underlying provisions.

Article 76, paragraph (3) and Article 77 of the Act on Facilitation of Reconstruction of Condominiums, Article 156, paragraph (2) and Article 157, paragraph (4) of the Civil Execution Act, and Article 13, paragraph (2), item (v) of the Deposit Regulation

Act on Facilitation of Reconstruction of Condominiums

(Statutory Deposit of Compensation)
Article 76
(3) If an executor pays compensation for the subject matter of a statutory lien, pledge or mortgage or a right pertaining to a provisional registration or registration of special agreement on redemption (hereinafter referred to as a "statutory lien, etc."), the executor must make a statutory deposit of the compensation, except for the case where all of the holders of those rights make a proposal that the statutory deposit not be required.

(Extension of Security Interest to Proceeds of Collateral)
Article 77 A person who holds a statutory lien, pledge or mortgage referred to in paragraph (3) of the preceding Article may exercise that right against compensation that was statutorily deposited pursuant to the provisions of the same paragraph.

Civil Execution Act

(Statutory Deposit by a Third Party Obligor)
Article 156 (2) A third party obligor shall, by the time he/she receives a service of a complaint for the action prescribed in paragraph (1) of the following Article, make a statutory deposit of money equivalent to the total amount of the claim in the case where he/she has received a service of an order of seizure, a disposition of seizure or an order of provisional seizure that has been issued beyond the unseized portion of a monetary claim pertaining to a seizure, or money equivalent to the seized portion in the case where he/she has received a service of a document stating that a demand for liquidating distribution was made, to an official depository at the place of performance of the obligation.

(Suit for Collection)
Article 157 (4) When upholding the plaintiff's claim in a suit for collection against a third party obligor who is obligated to make a statutory deposit pursuant to the provisions of paragraph (2) of the preceding Article, the court in charge of the case shall include a statement to the effect that the payment of money pertaining to the claim shall be made by the method of a statutory deposit in the main text of the judgment.

Deposit Regulation

(Deposit Certificate)
Article 13
(2) The following matters must be entered in a deposit certificate referred to in the preceding paragraph:
(v) provisions of laws and regulations that oblige or permit the statutory deposit

1. The judgment in prior instance is quashed, and the judgment in first instance is revoked.

2. The appellee of final appeal shall pay to the appellant of final appeal 19,050,000 yen and the amount accrued thereon at the rate of 5% per annum for the period from May 15, 2018 until the completion of the payment.

3. The payment referred to in the preceding paragraph must be made by the method of statutory deposit.

4. The total court costs shall be borne by the appellee.

Concerning the reasons for a petition for acceptance of final appeal stated by the counsel for final appeal, YOSHIDA Masaki and FUKUDA Miki

1. The appellee is an executor referred to in Article 2, paragraph (1), item (v) of the Act on Facilitation of Reconstruction of Condominiums (hereinafter referred to as the "Facilitation Act") who executes a condominium reconstruction project referred to in item (iv) of the same paragraph in relation to a condominium located in Suita City, Osaka Prefecture (hereinafter referred to as the "Condominium"). B, who was a unit owner of the Condominium, had a claim for payment of compensation of 19,050,000 yen (hereinafter referred to as the "Compensation") against the appellee under Article 75, item (i) of the Facilitation Act.

This case is a suit for collection in which the appellant: who seized the claim for payment of the Compensation, demands that the appellee pay 19,050,000 yen and delay damages accrued thereon at the rate of 5% per annum as prescribed in the Civil Code prior to the amendment by Act No. 44 of 2017 for the period from May 15, 2018, the day following the date of service of a complaint, until the completion of the payment by the method of statutory deposit. Article 76, paragraph (3) of the Facilitation Act provides that if an executor pays compensation prescribed in Article 75 of the Facilitation Act for the subject matter of a statutory lien, pledge or mortgage (hereinafter referred to as a "mortgage, etc."), he/she must make a statutory deposit of the compensation, except for the case where all of the holders of those rights make a proposal that the statutory deposit not be required (hereinafter referred to as a "proposal not to require a statutory deposit"). After the aforementioned seizure by the appellant, the appellee made a statutory deposit of the Compensation based on Article 76, paragraph (3) of the Facilitation Act as the "provisions of laws and regulations that oblige or permit the statutory deposit" as referred to in Article 13, paragraph (2), item (v) of the Deposit Regulation (hereinafter referred to as "underlying provisions"). The issue of this case is the advisability of duly asserting against the appellant with the aforementioned statutory deposit.

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

(1) In March 2017, the appellee was established as a condominium reconstruction association that executes a condominium reconstruction project of the Condominium.

(2) B is a person who had the unit ownership of a proprietary element of the Condominium as stated in the item list attached to the judgment in first instance (hereinafter referred to as the "Building Element"). However, in the aforementioned project, B lost the aforementioned unit ownership and a determination was made not to grant B any right for the reconstructed condominium. Therefore, B acquired a claim for payment of the Compensation against the appellee under Article 75, item (i) of the Facilitation Act.

(3) A mortgage in which the mortgagee is Kinkishinyohosho Kabushiki Kaisha (a credit guarantee stock company) and a revolving mortgage in which the revolving mortgagee is the Kita Osaka Shinkin Bank were placed on the Building Element, respectively, and the relevant mortgage and revolving mortgage had been registered, respectively.

(4) A. The appellant filed a petition for an order of seizure of the claim for payment of the Compensation with the Osaka District Court based on a claim receivable of over 21,530,000 yen, which was part of the claim for performance of joint and several suretyship obligation that the appellant held against B. Based on the aforementioned petition, an order of seizure was issued on October 2, 2017, and the order was served to the appellee and B, respectively, around that time.

B. The Kita Osaka Shinkin Bank filed a petition for an order of seizure of the claim for payment of the Compensation with the Osaka District Court as the exercise of the right of extension of a security interest to the proceeds of the collateral based on the revolving mortgage on the Building Element. Based on the aforementioned petition, an order of seizure was issued on October 26, 2017, and the order was served to the appellee around that time.

C. Kinkishinyohosho filed a petition for an order of seizure of the claim for payment of the Compensation with the Osaka District Court as the exercise of the right of extension of a security interest to the proceeds of the collateral based on the mortgage on the Building Element. Based on the aforementioned petition, an order of seizure was issued on November 2, 2017, and the order was served to the appellee around that time.

(5) In relation to the Compensation, the Kita Osaka Shinkin Bank and Kinkishinyohosho did not make a proposal to not require a statutory deposit to the appellee. On November 14, 2017, the appellee made a statutory deposit of 19,050,000 yen (hereinafter referred to as the "Statutory Deposit") to B as the depository under Article 76, paragraph (3) of the Facilitation Act as underlying provisions.

3. The court of prior instance determined as summarized below based on the aforementioned facts, and ruled that the appellant's claim should be dismissed.

Taking into account the fact that the purport of Article 76, paragraph (3) of the Facilitation Act is to protect security interest holders who can exercise the right of extension of a security interest to the proceeds of the collateral in relation to a compensation, it is considered that if an executor has the obligation to make a statutory deposit under the same paragraph, the executor can make neither a statutory deposit only under Article 156, paragraph (2) of the Civil Execution Act as underlying provisions nor a mixed statutory deposit under Article 76, paragraph (3) of the Facilitation Act and Article 156, paragraph (2) of the Civil Execution Act as underlying provisions in relation to the aforementioned compensation even if multiple orders of seizure were issued in relation to a claim for payment of the Compensation and conflict of seizures has arisen. Thus, the aforementioned executor has no other choice but to make a statutory deposit only under Article 76, paragraph (3) of the Facilitation Act as underlying provisions and can duly assert against obligees effecting a seizure thereby. Therefore, the appellee can duly assert against the appellant with the Statutory Deposit.

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

(1) Article 76, paragraph (3) of the Facilitation Act provides that if an executor pays compensation for the subject matter of a mortgage, etc., he/she must, in principle, make a statutory deposit of the compensation, and the purport of this paragraph is considered to exist in the protection of obligees who hold the aforementioned mortgage, etc. (hereinafter referred to as "mortgagees, etc.") by obliging, in principle, the executor to make a statutory deposit of the aforementioned compensation because mortgagees, etc. are likely to become virtually unable to exercise the right of extension of a security interest to the proceeds of the collateral in relation to the aforementioned compensation if paid by the executor directly to the owner, etc. of the aforementioned subject matter in such case. In light of such purport, in the aforementioned case, even if the claim for payment of compensation is seized by an obligee, such as the aforementioned owner, the executor has the obligation to make a statutory deposit under the same paragraph, except for the case where all of the mortgagees, etc. have made a proposal not to require a statutory deposit. This should be considered to be the same even if conflict of seizures has arisen.

On the other hand, according to Article 156, paragraph (2) of the Civil Execution Act, if multiple orders of seizure were issued in relation to one monetary claim and conflict of seizures has arisen, a third-party obligor is to have the obligation to make a statutory deposit of the amount of money equivalent to the full amount of the claim. The Facilitation Act and other laws and regulations do not have any provision stipulating that if an executor has the obligation to make a statutory deposit under Article 76, paragraph (3) of the Facilitation Act, he/she does not have the obligation to make a statutory deposit under Article 156, paragraph (2) of the Civil Execution Act.

For the reasons described above, it should be said that if an executor has the obligation to make a statutory deposit of compensation under Article 76, paragraph (3) of the Facilitation Act and conflict of seizures has arisen due to issuance of multiple orders of seizure in relation to a claim for payment of the aforementioned compensation, the executor has the obligation to make a statutory deposit under Article 156, paragraph (2) of the Civil Execution Act, in addition to the obligation to make a statutory deposit under Article 76, paragraph (3) of the Facilitation Act, in relation to the aforementioned compensation. Thus, it is reasonable to consider that the aforementioned executor must make a mixed statutory deposit in relation to the aforementioned compensation under Article 76, paragraph (3) of the Facilitation Act and Article 156, paragraph (2) of the Civil Execution Act as underlying provisions. Even based on this idea, mortgagees, etc. can receive payment of deposit money pertaining to the aforementioned mixed statutory deposit in preference to obligees effecting a seizure by exercising the right of extension of a security interest to the proceeds of the collateral, and obligees effecting a seizure can only receive liquidating distribution, etc. in relation to the amount that remains after that payment if any. Therefore, this idea does not lack protection of mortgagees, etc.

(2) When this determination is applied to this case, according to the aforementioned facts, the appellee has the obligation to make a statutory deposit of the Compensation under Article 76, paragraph (3) of the Facilitation Act. In relation to the claim for payment of the Compensation, multiple orders of seizure were issued based on the petitions filed by the appellant, the Kita Osaka Shinkin Bank, and Kinkishinyohosho, and conflict of seizures has arisen. Therefore, it should be said that the appellee must make a mixed statutory deposit in relation to the Compensation under the same paragraph and Article 156, paragraph (2) of the Civil Execution Act as underlying provisions. Consequently, the appellee cannot duly assert against the appellant with the Statutory Deposit.

5. The determination of the court of prior instance that differs from the above 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, and the judgment in prior instance should inevitably be quashed. According to the explanations made above, the appellant's claim for payment of 19,050,000 yen, which is the amount equivalent to the Compensation, and delay damages accrued thereon by the method of statutory deposit is well-grounded. Therefore, the judgment in first instance that dismissed the appellant's claim shall be revoked, and the aforementioned claim should be upheld.

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

Justice YASUNAMI Ryosuke

Justice YAMAGUCHI Atsushi

Justice MIYAMA Takuya

Justice OKA Masaaki

Justice SAKAI Toru