Civil Code of Japan/Part II

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Civil Code (Japanese: 民法 Minpō)
the Government of Japan, translated by Ministry of Justice, Government of Japan

Source: Civil Code Japanese Law Translation by the Ministry of Justice on April 1, 2009.

Civil Code

  • Law number: Act No. 89 of 1896
  • Last amendment : Act No. 78 of 2006

PART 2 Real Rights

Chapter 1 General Provisions

(Establishment of Real Rights)

Article 175 No real rights can be established other than those prescribed by laws including this Code.

(Creation and Transfer of Real Rights)

Article 176 The creation and transfer of real rights shall take effect solely by the manifestations of intention of the relevant parties.

(Requirements of Perfection of Changes in Real Rights concerning Immovable properties)

Article 177 Acquisitions of, losses of and changes in real rights concerning immovable properties may not be asserted against third parties, unless the same are registered pursuant to the applicable provisions of the Real Estate Registration Act (Law No. 123 of 2004) and other laws regarding registration.

(Requirements of Perfection of Transfer of Real Rights concerning Movables)

Article 178 The transfers of real rights concerning movables may not be asserted against third party, unless the movables are delivered.

(Confusion of Rights)

Article 179 If ownership and other real rights with respect to the same Thing have vested in the same person, such other real rights shall be extinguished; provided, however, that, this shall not apply to cases where that Thing is, or such other real rights are, the object of the rights of a third party.

(2) If any real rights other than ownership and other rights for which those real rights are the object have vested in the same person, such other rights shall be extinguished. In such cases, the provisions of the proviso to the preceding paragraph shall apply mutatis mutandis.

(3) The provisions of the preceding two paragraphs shall not apply to possessory rights.

Chapter 2 Possessory Rights

Section 1 Acquisition of Possessory Rights

(Acquisition of Possessory Rights)

Article 180 Possessory rights shall be acquired by holding Thing with an intention to do so on one's own behalf.

(Possession by Agents)

Article 181 Possessory rights may be acquired by an agent.

(Actual Delivery and Summary Delivery)

Article 182 The transfers of possessory rights shall be effected by the delivery of the Thing possessed.

(2) In cases where a transferee or his/her agent actually holds a Thing, the transfers of possessory rights may be effected by the parties' manifestations of intention alone.

(Constructive Transfers)

Article 183 If an agent manifests an intention that The thing possessed by it shall thenceforward be possessed on behalf of its principal, the principal shall thereby acquire possessory rights.

(Transfers of Possession by Instructions)

Article 184 In cases where a Thing is in an agent's possession, if the principal orders that agent to thenceforward possess that Thing on behalf of a third party, and such third party consents thereto, that third party shall acquire possessory rights.

(Change in Nature of Possession)

Article 185 In cases where it is assumed, due to the nature of the title, that a possessor does not have the intention to own, the nature of the possessor's possession shall not change unless that possessor manifests to the person who made him/her possess the Thing that he/she has the intention of ownership, or commences possession under a new title with an intention to own from that time.

(Presumption regarding Nature of Possession)

Article 186 It shall be presumed that a possessor possesses Thing with the intention to own, in good faith peacefully and in public.

(2) If there is evidence of possession at two different points in time, it shall be presumed that possession continued during the interval.

(Succession to Possession)

Article 187 A successor to a possessor may, at the option of the successor, assert either his/her possession only, or his/her possession together with that of the predecessor.

(2) In cases where a person asserts the possession of the predecessor together with his/her own, he/she shall also succeed to defects in the same.

Section 2 Effect of Possessory Rights

(Presumption of Lawfulness of Rights Exercised with respect to Possessed Thing)

Article 188 It shall be presumed that a possessor lawfully has the rights that a possessor exercises with respect to Thing in his/her possession.

(Acquisition of Fruits by Possessor in Good Faith)

Article 189 A possessor in good faith shall acquire fruits derived from Thing in his/her possession.

(2) If a possessor in good faith is defeated in an action on the title, he/she shall be deemed to be a possessor in bad faith as from the time when such action was brought.

(Return of Fruits by Possessors in bad faith)

Article 190 A possessor in bad faith shall be obligated to return fruits, and reimburse the price of fruits that he/she has already consumed, has damaged due to negligence or has failed to collect.

(2) The provisions of the preceding paragraph shall apply mutatis mutandis to persons who possess Thing through violence or duress, or by concealing the same.

(Compensation for Damages by Possessors)

Article 191 If possessed Thing has suffered loss or damage due to reasons attributable to the possessor, a possessor in bad faith shall be liable to compensate the person recovering the loss for the entire loss, and a possessor in good faith shall be liable to compensate such person for the loss to the extent he/she is actually enriched as a result of such loss or damage; provided, however, that a possessor who does not have the intention of holding as owner must compensate the entire loss, even if he/she is in good faith.

(Immediate Acquisition)

Article 192 A person who commences the possession of movables peacefully and openly by a transactional act acquires rights to exercise with respect to such movables immediately if he/she is in good faith and faultless.

(Recovery of Stolen or Lost Goods)

Article 193 In the cases provided for in the preceding article, if the possessed Thing is lost or stolen goods, the victim or person who lost the Thing may demand the recovery of that Thing from the possessor within two years from the time of the loss or theft.

Article 194 If a possessor purchased lost or stolen goods in good faith at an auction or in a public market, or from a merchant who sells similar Things, the victim or person who lost the Thing may not recover the Thing unless he/she reimburses the possessor for the price paid.

(Acquisition of Rights through Possession of Animals)

Article 195 A person who possesses a non-domestic animal bred by others acquires rights to exercise with respect to that animal if he/she was in good faith at the beginning of the possession, and if recovery is not demanded by the owner of the animal within one month of the time when that animal left the possession of its owner.

(Possessors' Claims for Reimbursement of Expenses)

Article 196 In cases where a possessor returns Thing in his/her possession, he/she may have the person recovering the Thing reimburse necessary expenses including amounts paid to preserve that Thing, provided, however, that, if the possessor has acquired fruits, ordinary necessary expenses shall be borne by the possessor.

(2) With respect to beneficial expenses including amounts paid by a possessor to improve Thing in his/her possession, limited to cases where there is a current increase in value, the possessor may, at the election of the person recovering the Thing, have the person recovering the Thing reimburse monies the possessor paid or the amount of the increased value; provided, however, that, with regard to a possessor in bad faith, the court may, at the request of the person recovering the Thing, grant a reasonable period for same.

(Possessory Actions)

Article 197 A possessor may bring a possessory action in accordance with the provisions of the following article through Article 202. The same shall apply to a person who takes possession on behalf of others.

(Actions for Maintenance of Possession)

Article 198 When a possessor is disturbed in his/her possession, he/she may claim for the discontinuation of the disturbance and compensation for damages by bringing an action for maintenance of possession.

(Actions for Preservation of Possession)

Article 199 When a possessor is likely to be disturbed of his/her possession, he/she may claim either for the prevention of the disturbance or for the submission of security for the compensation for damages by bringing an action for preservation of possession.

(Actions for Recovery of Possession)

Article 200 When a possessor is forcibly dispossessed, he/she may claim for the restoration of the Thing and compensation for damages by bringing an action for recovery of possession.

(2) An Action for recovery of possession cannot be filed against a specific successor of the usurper of possession; provided, however, that this shall not apply if that successor had knowledge of the fact of usurpation.

(Periods of Time for Bringing Possessory Actions)

Article 201 Actions for maintenance of possession must be brought during the disturbance or within one year after the disturbance is extinguished; provided, however, that, in cases where possessed Thing is damaged due to construction, if one year has elapsed from the time when that construction started or if that construction has been completed, such action cannot be brought.

(2) Actions for preservation of possession may be brought so long as the danger of disturbance exists. In such cases, the proviso to the preceding paragraph shall apply mutatis mutandis if possessed Thing is likely to be damaged by construction.

(3) Actions for recovery of possession must be brought within one year of the time when possession was unlawfully usurped.

(Relationship with Actions on Title)

Article 202 Possessory Actions do not preclude actions on title, and actions on title do not preclude possessory actions.

(2) With respect to possessory actions, no judgment may be made based on reasons relating to title.

Section 3 Extinction of Possessory Rights

(Grounds for Extinction of Possessory Rights)

Article 203 Possessory rights shall be extinguished when the possessor renounces his/her intention to possess, or loses possession of the possessed Thing; provided, however, that this shall not apply if the possessor brings an action for recovery of possession.

(Grounds for Extinction of Agent's Possessory Rights)

Article 204 In cases where a person possesses a Thing through an agent, possessory rights shall be extinguished on the grounds listed below:

(i) That the principal renounces his/her intention to have his/her agent possess;

(ii) That the agent manifests his/her intention to the principal to thenceforward possess the possessed Thing on behalf of himself/herself or a third party; or

(iii) That the agent has lost the direct control over the possessed Thing.

(2) Possessory rights shall not be extinguished solely as a result of the extinction of the power of representation.

Section 4 Quasi-Possession

Article 205 The provisions of this Chapter shall apply mutatis mutandis to cases where a person exercises his/her property rights with an intention to do so on his/her own behalf.

Chapter 3 Ownership

Section 1 Extent of Ownership

Subsection 1 Content and Scope of Ownership

(Content of Ownership)

Article 206 An owner has the rights to freely use, obtain profit from and dispose of the Thing owned, subject to the restrictions prescribed by laws and regulations.

(Scope of Ownership in Land)

Article 207 Ownership in land shall extend to above and below the surface of the land, subject to the restrictions prescribed by laws and regulations.

Article 208 Deleted

Subsection 2 Neighboring Relationships

(Requests for Use of Neighboring Land)

Article 209 An owner of land may request the use of the neighboring land to the extent necessary for constructing or repairing walls or buildings on or in the vicinity of the boundary; provided, however, that he/she may not enter the dwelling house of the neighbor without the approval of the same.

(2) In the cases provided for in the preceding paragraph, if the neighbor sustained damages, he/she may claim compensation.

(Right of Passage over Other Land for Access to Public Roads)

Article 210 An owner of land that is surrounded by other land and has no access to public roads may pass through the other land that surrounds his/her land to reach the public roads.

(2) The preceding paragraph shall likewise apply in cases where an owner cannot access the public roads unless he/she passes through ponds, lakes, rivers, waterways or seas, or in cases where there is a considerable difference in height between the land and the public road on account of a cliff.

Article 211 In the cases provided for in the preceding article, the location and method of passage must be so chosen as to meet the needs of the person who is entitled to the right of passage under the provisions of that article, and cause the least damage to the other land.

(2) A person who holds the right of passage under the provisions of the preceding article may construct a road if necessary.

Article 212 A person who is entitled to the right of passage pursuant to the provisions of Article 210 must pay compensation for damage caused to the other land that he/she passes through; provided, however, that, except for damage arising from the construction of a road, compensation may be paid on an annual basis.

Article 213 If the partition of land creates a parcel of land that has no access to public roads, the owner of such parcel of land may pass to the public roads only through the lands owned by others who participated in the partition. In such cases, it shall not be necessary to pay compensation.

(2) The provisions of the preceding paragraph shall apply mutatis mutandis to cases where the owner of land assigns part of his/her land to others.

(Prohibition of Obstruction of Natural Water Streams)

Article 214 A landowner may not interfere with a natural water stream flowing from neighboring land.

(Removal of Barriers to Water Streams)

Article 215 If a stream is blocked at low-lying ground due to a natural disaster or other unavoidable event, an owner of higher ground may carry out construction work necessary to remove the barrier to the stream at his/her own expense.

(Repairs of Structures related to Streams)

Article 216 If land suffers, or is likely to suffer, damage due to destruction or blockage of a structure installed on other land to store, discharge or draw water, the owner of that land may have the owners of such other lands repair the structure or remove the barriers, or, if necessary, have the same carry out preventive construction work.

(Customs with respect to Allocation of Expenses)

Article 217 In the cases provided for in the preceding two articles, if there are other customs with respect to the allocation of expenses, those customs shall prevail.

(Prohibition of Installation of Structures that Discharge Rainwater to Neighboring Lands)

Article 218 A landowner may not install any structure including a roof that discharges rainwater directly onto neighboring land.

(Changes to Streams)

Article 219 An owner of land containing a stream including a channel or moat may not change the course or width of the same if the land on the other side is owned by others.

(2) If the land on both sides of a stream is owned by the owner of the land containing the stream, that owner may change the course or the width of the same; provided, however, that he/she must return the stream to its natural course at the point where the stream meets neighboring land.

(3) If there are customs that differ from the provisions of the preceding two paragraphs, those customs shall prevail.

(Running Water through Lower Ground for Discharge)

Article 220 An owner of a higher ground may run water through lower grounds to dry out his/her higher ground in cases where that land is flooded, or to discharge surplus water for household or agricultural or industrial use until the water meets a public stream or sewage system. In such cases, the location and method that cause the least damage to the lower ground must be selected.

(Use of Structures to Direct Water)

Article 221 A landowner may use structures established by owners of higher ground or lower ground in order to cause water from his/her land to pass through the same.

(2) In the cases provided for in the preceding paragraph, the person who uses the structures of others must bear the expenses of the establishment and preservation of the structures in proportion to the benefit he/she enjoys.

(Construction and Use of Dams)

Article 222 If the owner of land containing a stream needs to construct a dam, he/she may construct that dam by fixing it to the other side even if the land on the other side is owned by others; provided, however, that he/she must pay compensation for damages arising as a result.

(2) The owner of the land on the other side may use the dam under the preceding paragraph if he/she owns part of the land containing the stream.

(3) The provisions of Paragraph 2 of the preceding article shall apply mutatis mutandis to the cases provided for in the preceding paragraph.

(Installation of Boundary Markers)

Article 223 A landowner may install boundary markers, sharing the expenses with the owner of the neighboring land.

(Expenses of Installation and Preservation of Boundary Markers)

Article 224 The expenses of installation and preservation of boundary markers shall be borne equally by neighbors; provided, however, that measuring expenses shall be borne in proportion to the sizes of the relevant land parcels.

(Installation of Fences)

Article 225 If two buildings are owned by different owners and there is an open lot between them, each owner may install a fence on the boundary, sharing the expenses with the other owner.

(2) If no agreement can be reached between the parties, the fence under the preceding paragraph must be wooden fencing, bamboo fencing or fencing made of similar material and must be two meters high.

(Expenses of Installation and Preservation of Fences)

Article 226 The expenses of installation and preservation of the fences under the preceding article shall be borne equally by the neighbors.

(Installation of Fences by One of Neighbors)

Article 227 One of neighboring owners may install a fence using materials better than those provided for in Paragraph 2 of Article 225 or elevating the height provided for under the same paragraph; provided, however, that he/she must bear the increase in expenses arising as a result of the same.

(Customs relating to Installation of Fences)

Article 228 If there are customs that differ from the provisions of the preceding three articles, those customs shall prevail.

(Presumption of Co-ownership of Boundary Markers)

Article 229 Boundary markers, fences, walls, channels and moats installed on boundary lines shall be presumed to be co-owned by the neighbors.

Article 230 The provisions of the preceding article shall not apply to a wall on a boundary line that forms a part of a building.

(2) If the height of a wall that separates two neighboring buildings of different heights is higher than the height of the lower building, the preceding paragraph shall likewise apply with respect to such portion of that wall that is higher than the lower building; provided, however, that this shall not apply to fire walls.

(Construction Work raising Height of Co-owned Walls)

Article 231 One of neighboring owners may raise the height of a co-owned wall; provided, however, that, if the wall cannot withstand the construction work, he/she must reinforce that wall as necessary or rebuild the same.

(2) If the height of a wall is raised under the provisions of the preceding paragraph, the raised portion shall be owned solely by the person who carried out the construction work.

Article 232 In the cases provided for in the preceding article, if a neighbor suffers damage, he/she may demand compensation for the same.

(Cutting of Branches and Roots of Trees and Bamboo)

Article 233 If a tree or bamboo branch from neighboring land crosses a boundary line, the landowner may have the owner of that tree or bamboo sever that branch.

(2) If a tree or bamboo root from neighboring land crosses a boundary line, the owner of the land may sever that root.

(Restrictions on Buildings near Boundary Lines)

Article 234 In order to construct a building, the building must be distanced 50 centimeters or more away from the boundary line.

(2) If a person attempts to construct a building in violation of the provisions of the preceding paragraph, the owner of the neighboring land may have construction suspended or changed; provided, however, that, if one year has lapsed from the time when such construction started or if that building has been completed, the owner may only claim damages.

Article 235 A person who installs a window or porch (hereinafter in this and the following paragraph including a veranda) at a distance of less than one meter from a boundary line allowing the observation of the residential land of others, must put up a privacy screen.

(2) The distance under the preceding paragraph shall be calculated by measuring the length of a straight line from the point on the window or porch closest to the neighboring land to where it reaches the boundary line at a right angle.

(Customs relating to Construction near Boundary Lines)

Article 236 If there are customs that differ from the provisions of the preceding two articles, those customs shall prevail.

(Restrictions on Digging near Boundary Lines)

Article 237 In order to dig a well, service water pit, sewage pit or compost pit, the same must be distanced two or more meters from the boundary line, and in order to dig a pond, cellar or urine pit, the same must be distanced one or more meters from the boundary line.

(2) In order to bury water pipes, or dig a channel or moat, the same must be distanced from the boundary line by a measurement equivalent to at least half the depth of the same; provided, however, that the distance is not required to be more than one meter.

(Duty of Care regarding Digging near Boundary Lines)

Article 238 When construction under the preceding article is to be carried out near a boundary line, necessary care must be taken to ensure the prevention of earth collapses or leakages of water or contaminated liquids.

Section 2 Acquisition of Ownership

(Ownership in Ownerless Thing)

Article 239 Ownership of movables without an owner shall be acquired by possessing the same with the intention to own.

(2) Ownership of real estate without an owner shall vest in the National Treasury.

(Finding of Lost Property)

Article 240 If the owner of lost property is not identified within three months of the time when public notice thereof is effected as prescribed by the Lost Property Act (Law No. 73 of 2006), the person who found the lost property shall acquire ownership in the same.

(Discovery of Hidden Treasure)

Article 241 If the owner of hidden treasure is not identified within six months of the time when public notice thereof is effected as prescribed by the Lost Property Act, the finder shall acquire ownership in the same; provided, however, that, with respect to hidden treasure discovered in a Thing belonging to other person, the finder and such other person shall acquire equally proportionate ownership in the same.

(Accession to Real Estate)

Article 242 The owner of real estate shall acquire ownership in a Thing that has been attached thereto as its accessory ; provided, however, that the rights of the other person who attached such Thing by virtue of his/her title shall not be precluded.

(Accession to Movables)

Article 243 If two or more movables with different owners are so joined to each other that they can no longer be separated without damaging the same, ownership of the composite Thing shall vest in the owner of the principal movables. The same shall apply if excessive expense would be required to separate the same.

Article 244 If the distinction of principal and accessory cannot be made between the joined movables, the owner of each movable shall co-own the composite Thing in proportion to the respective price current at the time of the accession.

(Mixture)

Article 245 The provisions of the preceding two articles shall apply mutatis mutandis to cases where the Things of different owners are mixed together and can no longer be distinguished.

(Processing)

Article 246 If a person (hereinafter in this article referred to as "Processor") contributes work to the movables of others, ownership of the Thing so worked up shall vest in the owner of the materials; provided, however, that, if the value derived from the work significantly exceeds the value of the materials, the Processor shall acquire ownership in the processed Thing.

(2) In the cases provided for in the preceding paragraph, if the Processor supplies a portion of the materials, the Processor shall acquire ownership in the processed Thing, limited to if the value of such supplied materials plus the value derived from the work exceeds the value of the materials of others.

(Effect of Accession, Mixture or Processing)

Article 247 If the ownership of a Thing is extinguished in accordance with the provisions of Article 242 through the preceding article, other rights in existence in relation to such Thing shall also be extinguished.

(2) In the cases provided for in the preceding paragraph, if the owner of a Thing has become the sole owner of the Thing formed by accession, mixture or processing (hereinafter in this paragraph referred to as "composite Thing"), other rights in existence in relation to such Thing shall thereafter exist in relation to the composite Thing, and if the owner of the Thing becomes a co-owner of the composite Thing, other rights in existence in relation to such Thing shall thereafter exist in relation to his/her share in the same.

(Demands for Compensation in conjunction with Accession, Mixture or Processing)

Article 248 A person who suffers loss because of the application of the provisions of Article 242 through the preceding article may demand compensation in accordance with the provisions of Article 703 and Article 704.

Section 3 Co-Ownership

(Use of property in co-ownership )

Article 249 Each co-owner may use the entire property in co-ownership in proportion to his/her share.

(Presumption of Proportion of Co-owner's Shares)

Article 250 Each co-owner's share shall be presumed to be equal.

(Changes to Co-owned Thing)

Article 251 No co-owner may make any alteration to the property in co-ownership without the consent of the other co-owners.

(Management of Co-owned Thing)

Article 252 Matters regarding the management of property in co-ownership shall be determined by a majority of the value of the shares of the co-owners, except for cases provided for in the preceding paragraph; provided, however, that any co-owner may carry out acts of preservation.

(Obligations to bear Burdens regarding property in co-ownership)

Article 253 Each co-owner shall pay the expenses of management and otherwise bear burdens regarding the property in co-ownership, in proportion to his/her share.

(2) If a co-owner does not perform the obligations under the preceding paragraph within one year, other co-owners may acquire the share of such person by paying reasonable compensation.

(Claims on property in co-ownership)

Article 254 A claim that one of co-owners holds against other co-owners with respect to the property in co-ownership may be exercised against their specific successors.

(Renunciation of Shares and Death of Co-owners)

Article 255 If one of co-owners renounces his/her share or dies without an heir, his/her share shall vest in other co-owners.

(Demands for Partition of property in co-ownership)

Article 256 Each co-owner may demand the partition of property in co-ownership at any time; provided, however, that this shall not preclude concluding a contract to the effect that a partition will not occur for a period within five years.

(2) The contract under the proviso to the preceding paragraph may be renewed; provided, however, that the period thereof may not exceed five years from the time of the renewal.

Article 257 The provisions of the preceding article shall not apply to the property in co-ownership provided for in Article 229.

(Partition of property in co-ownership by Judgment)

Article 258 If no agreement is reached among co-owners with respect to the partition of property in co-ownership, a demand for partition of the same may be submitted to the court.

(2) In cases provided for in the preceding paragraph, if the property in co-ownership cannot be partitioned in kind, or it is likely that the value thereof will be significantly reduced by the partition, the court may order the sale of the same at auction.

(Performance of Obligations regarding Co-ownership)

Article 259 If one of the co-owners holds a claim regarding co-ownership against other co-owners, upon partition, the portion of the property in co-ownership that vests in the obligors may be appropriated for the performance of the same.

(2) If it is necessary to sell the portion of the property in co-ownership that vests in the obligors to obtain the performance under the preceding paragraph, the obligee may demand the sale of the same.

(Participation in Partition of property in co-ownership)

Article 260 Persons who hold rights with respect to property in co-ownership and the obligee of any co-owner may participate in partitions at their own expense.

(2) If, notwithstanding a request for participation under the provisions of the preceding paragraph, partition is effected without allowing the participation of the person who submitted the request, that partition may not be asserted against the person who submitted the request.

(Co-owners' Warranties upon Partitions)

Article 261 Each co-owner shall bear, in proportion to his/her share, the responsibility of warranty that a seller would have as to the Thing other co-owners have acquired by partition.

(Documents regarding property in co-ownership)

Article 262 If a partition has been completed, each person who participated in the partition must retain the documents regarding the Thing he/she acquired.

(2) Documents regarding the Thing that is partitioned for some or all co-owners must be retained by the person who acquired the largest portion of that Thing.

(3) In the cases provided for in the preceding paragraph, if no person acquired the largest portion, the person who is to retain the documents shall be determined by mutual agreement among the persons who participated in the partition. If no agreement is reached, the court shall designate the same.

(4) The person who is to retain the documents must allow other persons who participated in the partition to use the documents at the request of the same.

(Rights of Common with Nature of Co-ownership)

Article 263 Rights of common that have the nature of co-ownership shall be governed by local custom and shall otherwise be subject to the application of the provisions of this Section.

(Quasi Co-ownership)

Article 264 The provisions of this Section shall apply mutatis mutandis to the cases where two or more persons share property rights other than the ownership; provided, however, that this shall not apply if laws and regulations provide otherwise.

Chapter 4 Superficies

(Content of Superficies)

Article 265 A superficiary shall have the right to use the land of others in order to own structures, or trees or bamboo, on that land.

(Rents)

Article 266 The provisions of Articles 274 through 276 shall apply mutatis mutandis to cases where the superficiary must pay periodical rent to the owners of the land.

(2) In addition to the provisions of the preceding paragraph, provisions on leasehold shall apply mutatis mutandis to rent to the extent that application is not inconsistent with the nature of the same.

(Mutatis Mutandis Application of Provisions regarding Neighboring Relationships)

Article 267 The provisions of Subsection 2, Section 1 of the preceding Chapter (Neighboring Relationships) shall apply mutatis mutandis between superficiaries or between a superficiary and a landowner; provided, however, that the mutatis mutandis application of the provisions of Article 229 to holders of superficies shall be limited to cases where structures on the boundary line are installed after the creation of the superficies.

(Duration of Superficies)

Article 268 In cases where the duration of superficies is not fixed by the act that established the same, if there is no other custom, the superficiary may renounce their rights at any time; provided, however, that, if rent must be paid, the superficiary must give notice one year or more in advance or pay rent for one year that has not yet become due and payable.

(2) If the superficiary does not renounce its rights in accordance with the provisions of the preceding paragraph, the court may, at the request of the parties concerned, fix a duration of twenty years or more but not more than fifty years, taking into consideration the kind and status of the structures, or trees or bamboo and other circumstances at the time of the creation of the superficies.

(Removal of Structures)

Article 269 When the right of the superficiary is extinguished, he/she may restore the land to its original condition and remove structures and trees or bamboo on the same; provided, however, that, if the owner of the land gives notice that he/she will purchase the same by offering to pay an amount equivalent to the market price, the superficiary may not refuse that offer without justifiable grounds.

(2) If there are customs that differ from the provisions of the preceding paragraph, those customs shall prevail.

(Superficies for Underground or Overhead Space)

Article 269-2 Underground or overhead space may be used as the object of superficies in order to own structures by specifying limits in the vertical dimension. In such cases, restrictions on the use of that land may be added in the act that establishes superficies for the purpose of facilitating the exercise of the superficies.

(2) The superficies under the preceding paragraph may be established even in cases where third parties hold rights to use or receive profits from land if all persons who hold those rights or rights underlying the same consent. In such cases, persons who hold the rights to use or receive profits from the land cannot preclude the exercise of the superficies to the same.

Chapter 5 Emphyteusis

(Content of Emphyteusis)

Article 270 An emphyteuta shall have the right to engage in cultivation or livestock farming on the land of others by paying rent.

(Restrictions on Alterations to Land by Emphyteutas)

Article 271 An emphyteuta may not make any alteration of the land that will result in irrepara.le damage.

(Transfer of Emphyteusis or Leasing of Land)

Article 272 An emphyteuta may assign his/her rights to others, or lease the land during the duration of his/her rights to cultivate or farm livestock; provided, however, that this shall not apply if such acts are prohibited by the act that established his/her rights.

((Mutatis Mutandis Application of Provisions regarding Lease)

Article 273 In addition to the provisions of this Chapter and those provided for in the act that established the emphyteusis, provisions regarding lease shall apply mutatis mutandis to the obligations of a emphyteuta, to the extent that application is not inconsistent with the nature of the same.

(Rent Reductions or Exemptions)

Article 274 An emphyteuta may not demand an exemption from or reduction in the rent even if a loss of profits has been suffered due to force majeure.

(Waiver of Emphyteusis)

Article 275 If an emphyteuta has gained no profit whatsoever for three or more consecutive years or has gained profits less than the rent for five or more consecutive years due to force majeure, he/she may surrender his/her rights.

(Demand for Extinction of Emphyteusis)

Article 276 If an emphyteuta fails to pay the rent for two or more consecutive years, the landowner may demand the extinction of the emphyteusis.

(Customs regarding Emphyteusis)

Article 277 If there are customs that differ from the provisions of Article 271 through the preceding article, those customs shall prevail.

(Duration of Emphyteusis)

Article 278 The duration of the emphyteusis shall be twenty years or more but no more than fifty years. Even if an act establishing emphyteusis provides for a period longer than fifty years, the duration shall be fifty years.

(2) The establishment of emphyteusis may be renewed; provided, however, that the duration of the same may not exceed fifty years from the time of renewal.

(3) If an act establishing emphyteusis does not provide for the duration of the emphyteusis, the duration of the same shall be thirty years unless there is a custom to the contrary.

(Removal of Structures)

Article 279 The provisions of Article 269 shall apply mutatis mutandis to emphyteusis.

Chapter 6 Servitudes

(Content of Servitudes)

Article 280 A person entitled to a servitude shall have the right to make lands of others available for the benefit of their own lands in accordance with purposes prescribed in the acts establishing the servitudes; provided, however, that those rights should not violate the provisions (limited to those that relate to public policy) under Section 1 of Chapter 3 (Extent of Ownership).

(Appurtenant Nature of Servitudes)

Article 281 Servitudes are appurtenant to ownership in the dominant land (hereinafter referring to the land of a person entitled to a servitude, enjoying benefits from the land of others) and shall be transferred together with that ownership, or shall be the subject of other rights that exist in relation to the dominant land; provided, however, that this shall not apply if the act establishing the servitude provides otherwise.

(2) Servitudes may neither be assigned nor made the subject of other rights apart from the dominant land.

(Indivisibility of Servitudes)

Article 282 One of the co-owners of land may not extinguish, with respect to his/her own share, a servitude that exists on behalf of or in relation to the land.

(2) In cases where land is partitioned or a portion thereof is assigned to others, a servitude shall exist on behalf of or in relation to the respective portions of the same; provided, however, that this shall not apply if the servitude, by its nature, relates only to a portion of the land.

(Acquisition of Servitudes by Prescription)

Article 283 A servitude can be acquired by prescription so long as it is continuously exercised and can be externally recognized.

Article 284 If one of the co-owners of land acquires a servitude by prescription, the other co-owners shall also acquire the same.

(2) Interruption of prescription shall not be effected against co-owners unless it is made against each co-owner who exercises the servitude.

(3) In cases where there are two or more co-owners who exercise a servitude, even if there is cause to suspend the prescription with respect to one of them, the prescription shall run in favor of each co-owner.

(Water Servitude)

Article 285 If water on servient land (hereinafter referring to a land of any person other than the one entitled to the servitude, made available for the benefit of the dominant land) subject to a water servitude is insufficient for the demand of the dominant land and the servient land, the water shall be used in proportion to the demand on each parcel of land, firstly for household purposes with the remaining portion used for other purposes; provided, however, that this shall not apply if the act establishing the servitude provides otherwise.

(2) If more than one water servitude is created with respect to the same servient land, the persons subsequently entitled may not prevent the use of water by those previously entitled.

(Obligations of Owners of Servient Land to Install Structures)

Article 286 If the owner of servient land has assumed obligations to install or repair structures for the exercise of a servitude at his/her own expense by the act establishing the servitude or by a contract executed after the same, specific successors of the owner of the servient land shall also assume those obligations.

Article 287 An owner of servient land may be exempted from obligations of the preceding article at any time by abandoning the ownership in the portion of the land necessary for the servitude and transferring the same to the person entitled to a servitude.

(Use of Structures by the Owner of Servient Lands)

Article 288 The owner of a servient land may use structures installed on the servient land for the exercise of the servitude to the extent his/her use does not obstruct the exercise of that servitude.

(2) In the cases provided for in the preceding paragraph, the owner of the servient land must bear the expense for the installation and preservation of the structures in proportion to the benefit he/she receives.

(Extinction of Servitude by Acquisition by Prescription of Servient Lands)

Article 289 If the possessor of servient land has so possessed the same as to satisfy the requirements for acquisitive prescription, the servitude shall be extinguished thereby.

Article 290 The extinctive prescription of the preceding article is nullified by the person entitled to the servitude exercising his/her rights.

(Extinctive Prescription of Servitudes)

Article 291 The period of the extinctive prescription provided for in Paragraph 2 of Article 167 shall commence upon the final exercise of the servitude if the servitude is not exercised continuously, and upon the occurrence of a fact that prevents the exercise of the servitude if the servitude is exercised continuously.

Article 292 In cases where dominant land is co-owned by more than one person, if there is a suspension or interruption of prescription in favor of one co-owner, such suspension or interruption shall also be effective for the benefit of other co-owners.

Article 293 If a person entitled to a servitude does not exercise a portion of his/her rights, only that portion shall be extinguished by prescription.

(Rights of Common without the Nature of Co-Ownership)

Article 294 Rights of common that do not have the nature of co-ownership shall be governed by local customs and shall otherwise be subject to the mutatis mutandis application of the provisions of this Section.

Chapter 7 Rights of Retention

(Content of Rights of Retention)

Article 295 If a possessor of a Thing belonging to another person has a claim that has arisen with respect to that Thing, he/she may retain that thing until that claim is satisfied; provided, however, that this shall not apply if such claim has not yet fallen due.

(2) The provisions of the preceding paragraph shall not apply in cases where possession commenced by means of a tortious act.

(Indivisibility of Rights of Retention)

Article 296 A holder of a right of retention may exercise his/her rights against the whole of the Thing retained until his/her claim is satisfied in its entirety.

(Collection of Fruits by Holders of Rights of Retention)

Article 297 A holder of a right of retention may collect fruits derived from the Thing retained, and appropriate the same to the satisfaction of his/her claim prior to other obligees.

(2) The fruits under the preceding paragraph must be appropriated first to the payment of interest on the claim, and any remainder must be appropriated to the satisfaction of the principal.

(Keeping the Thing Retained by Holders of Rights of Retention)

Article 298 A holder of a right of retention must possess the Thing retained with the care of a good manager.

(2) A holder of rights of retention may not use, lease or give as a security the Thing retained unless he/she obtains the consent of the obligor; provided, however, that this shall not apply to uses necessary for the preservation of that Thing.

(3) If the holder of a right of retention violates the provisions of the preceding two paragraphs, the obligor may demand that the right of retention be extinguished.

(Demands for Reimbursement of Expenses by Holders of Rights of Retention)

Article 299 If a holder of a right of retention incurs necessary expenses with respect to the Thing retained, he/she may have the owner reimburse the same.

(2) If a holder of a right of retention incurs beneficial expenses with respect to the Thing retained, to the extent that there is currently an increase in value as a result of the same, he/she may have the expenses incurred or the increase in value reimbursed at the owner's election; provided, however, that the court may, at the request of the owner, grant a reasonable period for the reimbursement of the same.

(Exercise of Rights of Retention and Extinctive Prescription of Claims)

Article 300 The exercise of a right of retention shall not preclude the running of extinctive prescription of claims.

(Extinction of Rights of Retention by Tender of Security)

Article 301 An obligor may demand that a right of retention be extinguished by tendering reasonable security.

(Extinction of Rights of Retention by Loss of Possession)

Article 302 A right of retention shall be extinguished if the holder of the right of retention loses possession of the Thing retained; provided, however, that this shall not apply if the Thing retained is leased or it is made the subject of a pledge in accordance with the provisions of Paragraph 2 of Article 298.

Chapter 8 Statutory Liens

Section 1 General Provisions

(Content of Statutory Liens)

Article 303 A holder of a statutory lien shall have the rights to have his/her own claim satisfied prior to other obligees out of the assets of the relevant obligor in accordance with the provisions of laws including this Act.

(Extension of Security Interest to Proceeds of Collateral)

Article 304 A statutory lien may also be exercised against Things including monies that the obligor is to receive as a result of the sale, lease or loss of, or damage to, the subject matter of the statutory lien; provided, however, that the holder of the statutory lien must attach the same before the payment or delivery of the monies or other Thing.

(2) The provisions of the preceding paragraph shall likewise apply to the consideration for real rights established by the obligor on the subject matter of the statutory lien.

(Indivisibility of Statutory Liens)

Article 305 The provisions of Article 296 shall apply mutatis mutandis to statutory liens.

Section 2 Kinds of Statutory Liens

Subsection 1 General Statutory Lien

(General Statutory Lien)

Article 306 A person who has a claim that arose from the causes listed below shall have a statutory lien over the entire property of the obligor:

(i) Expenses for the common benefit;

(ii) An employer-employee relationship;

(iii) Funeral expenses; or

(iv) The supply of daily necessaries.

(Statutory Liens for Expenses for Common Benefit)

Article 307 Statutory liens for expenses for the common benefit shall exist with respect to the expenses of preservation, liquidation or distribution of the property of the obligor incurred for the common benefit of all obligee.

(2) With respect to expenses that were not beneficial for all obligees, a statutory lien shall exist solely for obligees who received a benefit as a result of such expenses.

(Statutory Liens for Employer-Employee Relationships)

Article 308 Statutory liens for employer-employee relationships shall exist with respect to salaries and other claims that arose under the employer-employee relationship between the obligor and his/her employee.

(Funeral Expenses)

Article 309 Statutory liens for funeral expenses shall exist with respect to the reasonable expenses of a funeral observed for the obligor.

(2) The statutory lien under the preceding paragraph shall also exist with respect to the reasonable expenses of a funeral observed by the obligor for a relative whom the obligor is bound to support.

(Statutory Liens for Household Items)

Article 310 Statutory liens for daily necessaries shall exist with respect to the supply of food and drink items, fuel and electricity for the most recent six months required for the household of the obligor or his/her relatives who reside with the obligor and whom the obligor is bound to support and the domestic servants of the same.

Subsection 2 Statutory Liens over Movables

(Statutory Liens over Movables)

Article 311 A person who has a claim that arose from the causes listed below shall have a statutory lien over certain movables of the obligor:

(i) A lease of immovable property;

(ii) A lodging at a hotel or inn;

(iii) The transportation of passengers or luggage;

(iv) The preservation of movables;

(v) The sale of movables;

(vi) The supply of seed or fertilizer (hereinafter including eggs of silkworms or mulberry leaves used to feed silkworms);

(vii) Agricultural labor; or

(viii) Industrial labor.

(Statutory Liens for Leases of Immovable Properties)

Article 312 Statutory liens for a lease of immovable property shall exist with respect to the movables of the lessee in connection with obligations of the lessee that arose from the lease relationship including rent for that immovable property.

(Scope of Subject Matter of Statutory Liens for Leases of Immovable Properties)

Article 313 The statutory lien of a lessor of land shall exist with respect to movables furnished to that land or buildings for the use of that land, movables provided for the use of that land, and fruits of that land in the possession of the lessee.

(2) The statutory lien of a lessor of a building shall exist with respect to movables furnished to that building by the lessee.

Article 314 In the cases of assignment of lessee's rights or subleasing, the statutory lien of the lessor shall extend to the movables of the assignee or sublessee. The same shall apply to monies that the assignee or sublessee is to receive.

(Scope of Secured Claims under Statutory Liens for Leases of Immovable Properties)

Article 315 In cases where all of the lessee's property is to be liquidated, the statutory lien of the lessor shall exist only with respect to obligations, including rent, for the previous, current and next terms, and obligations to compensate for damage that arose in the previous and current terms.

Article 316 In cases where a lessor has received a security deposit, he/she shall have a statutory lien solely in respect of the portion of his/her claim that will not be satisfied by that security deposit.

(Statutory Liens for Lodging at Hotels)

Article 317 Statutory lien for lodging at hotels shall exist with respect to the hand luggage of a hotel guest left at that hotel, in connection with room charges, and food and beverage charges, that should be borne by the hotel guest.

(Statutory Liens for Transportation)

Article 318 Statutory liens for transportation shall exist with respect to luggage in the possession of the transporter, in connection with transportation charges for passengers or luggage and expenses incidental to the same.

(Mutatis Mutandis Application of Provisions on Immediate Acquisition)

Article 319 The provisions of Articles 192 through 195 shall apply mutatis mutandis to statutory liens under the provisions of Article 312 through the preceding article.

(Statutory Liens for Preservation of Movables)

Article 320 Statutory liens for the preservation of movables shall exist with respect to movables, in connection with expenses required for the preservation of those movables, or expenses required for the preservation, approval or execution of rights regarding those movables.

(Statutory Liens for Sale of Movables)

Article 321 Statutory liens for the sale of movables shall exist with respect to movables, in connection with the price of those movables and interest on the same.

(Statutory Liens for Supply of Seed or Fertilizer)

Article 322 Statutory liens for the supply of seed or fertilizer shall exist with respect to fruits (including eggs of silk worms or any Thing derived from the use of mulberry leaves used to feed silkworms) derived from land where the seed or fertilizer was used, within one year of that use, in connection with the price of that seed or fertilizer and interest on the same.

(Statutory Liens for Agricultural Labor)

Article 323 Statutory liens for agricultural labor shall exist, with respect to fruits derived from labor, in connection with the most recent year's wages of the person who engages in that labor.

(Statutory Liens for Industrial Labor)

Article 324 Statutory liens for industrial labor shall exist, with respect to manufactured things derived from labor, in connection with the most recent three months' wages of the person who engages in that labor.

Subsection 3 Statutory Liens for Immovable Properties

(Statutory Liens for Immovable Properties)

Article 325 A person who has a claim that arose from the causes listed below shall have a statutory lien over certain immovable property of the obligor:

(i) The preservation of immovable property;

(ii) Construction work for immovable property; or

(iii) The sale of immovable property.

(Statutory Liens for Preservation of Immovable Properties)

Article 326 Statutory liens for the preservation of immovable property shall exist with respect to immovable property, in connection with the expenses required for the preservation of that immovable property or the expenses required for the preservation, approval or execution of rights regarding that immovable property.

(Statutory Liens for Construction Work for Immovable Properties)

Article 327 Statutory lien for construction work for immovable property shall exist, with respect to immovable property, in connection with the expenses of construction work performed by a person who designs, carries out or supervises construction work regarding the immovable property of the obligor.

(2) The statutory liens under the preceding paragraph shall exist, in cases where there is a current increase in the value of the immovable property resulting from the construction work, with respect to that increased value.

(Statutory Liens for Sales of Immovable properties)

Article 328 Statutory liens for sales of immovable properties shall exist, with respect to immovable property, in connection with the price of that immovable property and interest on the same.

Section 3 Order of Priority of Statutory Liens

(Order of Priority of General Statutory Liens)

Article 329 In cases where there is conflict among general statutory liens, the order of priority shall follow the order listed in each item of Article 306.

(2) In cases where there is conflict between a general statutory lien and a special statutory lien, the special statutory lien shall prevail over the general statutory lien; provided, however, that statutory liens on expenses for the common benefit shall have the effect of prevailing over all obligees who received the benefit of the same.

(Order of Priority of Statutory Liens over Movables)

Article 330 In cases where there is conflict among special statutory liens with respect to the same movables, the order of priority shall follow the order listed below. In such cases, if there are two or more preservers with respect to the statutory liens for preservation of movables listed in Item (ii), a new preserver shall prevail over previous preservers.

(i) Statutory liens for leases of immovable properties, lodging at hotels and transportation;

(ii) Statutory liens for the preservation of movables; and

(iii) Statutory liens for the sale of movables, the supply of seed or fertilizer, agricultural labor and industrial labor.

(2) In the cases provided for in the preceding paragraph, if a holder of a statutory lien ranked first knew at the time he/she acquired that claim of the existence of a holder of a statutory lien of the second or third rank, he/she cannot exercise his/her rights against those persons. The same shall likewise apply against persons who preserved Things on behalf of the holder of a statutory lien of the first rank.

(3) Regarding fruits, the first rank shall belong to persons who engage in agricultural labor, the second rand shall belong to persons who supply seed or fertilizer, and the third rank shall belong to lessors of land.

(Order of Priority of Statutory Liens over Immovable properties)

Article 331 In cases where there is conflict among special statutory liens with respect to the same immovable properties, the order of priority shall follow the order of the items of Article 325.

(2) In cases where successive sales are made with respect to the same immovable properties, the order of priority of the statutory liens for the sale of the immovable properties among sellers shall follow the chronological order of the sales.

(Statutory Liens with Same Priority)

Article 332 If there are two or more holders of statutory liens with the same priority with respect to the same object, the holders of statutory liens shall be paid in proportion to the amounts of their claims.

Section 4 Effect of Statutory Liens

(Statutory Liens and Third-party Acquirers)

Article 333 Statutory liens may not be exercised with respect to the movables that are the subject matter of the same after the obligors have delivered those movables to third-party acquirers.

(Conflict between Statutory Liens and Pledges of Movables )

Article 334 In cases where there is conflict between a statutory lien and a pledge of movables, the pledgee of such movables shall have the same rights as those of the holder of a statutory lien of the first rank under Article 330.

(Effect of General Statutory Liens)

Article 335 Holders of general statutory liens cannot be paid out of immovable properties unless they are first paid out of property other than immovable properties and a claim that is not satisfied remains.

(2) With respect to immovable properties, holders of general statutory liens must first be paid out of those that are not the subject matters of special security.

(3) If holders of general statutory liens fail to participate in distributions in accordance with the provisions of the preceding two paragraphs, they cannot exercise their statutory liens against registered third parties with respect to amounts that would have been paid to them if they had participated in the distribution.

(4) The provisions of the preceding three paragraphs shall not apply to cases where the proceeds of immovable properties are distributed prior to the proceeds of assets other than immovable properties, or the proceeds of immovable properties that is the subject matter of a special security are distributed prior to the proceeds of other immovable properties.

(Perfection of General Statutory Liens)

Article 336 General statutory liens may be asserted against obligees without special security, even if the liens are not registered with respect to the relevant immovable property; provided, however, that this shall not apply to registered third parties.

(Registration of Statutory Liens for Preservation of Immovable Properties)

Article 337 In order to preserve the effectiveness of statutory liens for preservation of immovable properties, registration must be carried out immediately after the completion of the act of preservation.

(Registration of Statutory Liens for Construction Work for Immovable Properties)

Article 338 In order to preserve the effectiveness of statutory liens for construction work for immovable properties, the budgeted expenses of the construction work must be registered prior to the commencement of the same. In such cases, if the expenses of the construction work exceed the budgeted amount, a statutory lien shall not exist with respect to the amount in excess of the same.

(2) The amount of increase in value of immovable properties that resulted from construction work must be evaluated by an appraiser selected by the court at the time of the participation in the distribution.

(Registered Statutory Liens for Preservation of Immovable Properties or Construction Work for Immovable Properties)

Article 339 Statutory liens registered in accordance with the provisions of the preceding two articles may be exercised prior to mortgages.

(Registration of Statutory Liens for Sales of Immovable Properties)

Article 340 In order to preserve the effectiveness of statutory liens for the sale of immovable properties, a statement to the effect that the price of the immovable properties or interest on the same has not been paid must be registered simultaneously with the execution of the sales contract.

(Mutatis Mutandis Application of Provisions regarding Mortgages)

Article 341 In addition to the provisions of this Section, the provisions regarding mortgages shall apply mutatis mutandis to the effects of statutory liens, to the extent that application is not inconsistent with the nature of the same.

Chapter 9 Pledges

Section 1 General Provisions

(Content of Pledges)

Article 342 Pledgees shall have the right to possess Thing received from obligors or third parties as security for their claims and to have their own claims paid prior to other obligees out of that Thing.

(Subject Matter of Pledges)

Article 343 Pledges cannot be created over a Thing that cannot be assigned to others.

(Creation of Pledges)

Article 344 The creation of a pledge shall take effect by delivering the subject matter of the same to the obligee.

(Prohibition of Possession by Pledgors as Agents)

Article 345 A pledgee may not allow a pledgor to possess the Thing pledged on behalf of the pledgee.

(Scope of Secured Claims under Pledges)

Article 346 Pledges shall secure the principal, interest, penalties, expenses of executing the pledge, expense of preserving the Thing pledged and the compensation of damage arising from failure to perform obligations or latent defects in the Thing pledged; provided, however, that this shall not apply if the act establishing the pledge provides otherwise.

(Retention of the Thing Pledged)

Article 347 Pledgees may retain the Thing pledged until the claims provided for in the preceding article are satisfied; provided, however, that this right cannot be asserted against obligees who have priority over the pledgees.

(Sub-pledges)

Article 348 Pledgees may sub-pledge the Thing pledged within the duration of their rights, upon their own responsibility. In such cases, the pledgees shall be responsible for any loss arising from the -pledge even if the same is caused by force majeure.

(Prohibition on Disposition of the Thing Pledged by Contract)

Article 349 Pledgors cannot, either by the acts establishing pledges or by contracts made prior to the due dates for performance of their obligations, allow pledgees to acquire ownership of the Thing pledged as payment, nor promise to allow pledgees to dispose of it in any manner other than is prescribed by law.

(Mutatis Mutandis Application of Provisions on Rights of Retention and Statutory Liens)

Article 350 The provisions of Articles 296 through 300 and those of Article 304 shall apply mutatis mutandis to pledges.

(Third Party Pledgors' Rights to Obtain Reimbursement)

Article 351 If persons who created pledges to secure the obligations of others have performed those obligations or have lost ownership of the Thing pledged due to the execution of the pledges, they shall have the right to obtain reimbursement from the obligors in accordance with the provisions regarding guarantee obligations.

Section 2 Pledges of Movables

(Requirements for the Perfection of Pledges of Movables)

Article 352 Pledgees of movables cannot assert their pledges against third parties unless they are in continuous possession of the Thing pledged.

(Recovery of Possession of the Thing Pledged )

Article 353 Pledgees of movables may, if the pledged Thing is usurped, recover the same solely by bringing actions for recovery of possession.

(Execution of Pledges of Movables)

Article 354 If claims of pledgees of movables are not performed, they may, limited to cases where there are reasonable grounds, demand from a court immediate appropriation of the Thing pledged to the performance of the claims in accordance with the evaluation of an appraiser. In such cases, the pledgees of movables must notify the obligors in advance of the demand.

(Order of Priority of Pledges of Movables)

Article 355 If more than one pledge is created with respect to the same movables, the order of priority of those pledges shall follow the chronological order of their creation.

Section 3 Pledges of Immovable Properties

(Use and Profit by Pledgees of Immovable Properties)

Article 356 Pledgees of immovable property may use and receive the profits from the immovable property that is the subject matter of a pledge, in accordance with the method of its use.

(Management Expenses Borne by Pledgees of Immovable Properties)

Article 357 Pledgees of immovable properties shall pay the expenses of management and otherwise bear burdens in relation to the immovable properties.

(Prohibition on Charging of Interest by Pledgees of Immovable Properties)

Article 358 Pledgees of immovable properties cannot demand interest on their claims.

(Cases of Other Provisions in Act of Establishment)

Article 359 The provisions of the preceding three articles shall not apply in cases where the acts establishing pledges provide otherwise or execution against profits derived from the immovable properties as collateral (hereinafter referring to the execution against profits from secured immovable properties provided for in Item (ii) of Article 180 of the Civil Execution Act (Law No. 4 of 1979)) has been commenced.

(Duration of Pledges of Immovable Properties)

Article 360 The duration of pledges of immovable properties cannot exceed ten years. Even if a longer period is provided for in the act establishing the pledge, the duration of the same shall be ten years.

(2) The creation of pledges may be renewed; provided, however, that the duration of the same cannot exceed ten years from the time of the renewal.

(Mutatis Mutandis Application of Provisions on Mortgages)

Article 361 In addition to the provisions of this Section, the provisions of the next chapter shall apply mutatis mutandis to pledges of immovable properties to the extent that application is not inconsistent with the nature of the same.

Section 4 Pledges of Rights

(Subject Matter of Pledges of Rights)

Article 362 Pledges may have property rights for their subject matters.

(2) In addition to the provisions of this Section, the provisions of the preceding three Sections (General Provisions, Pledges of Movables and Pledges of Immovable properties) shall apply mutatis mutandis to pledges under the preceding paragraph, to the extent that application is not inconsistent with the nature of the same.

(Creation of Pledges over Claims)

Article 363 When a pledges is to be created over a claim, and the delivery of an instrument evidencing it is required for its assignment, the creation of the pledge shall take effect by the delivery of such instrument.

(Requirements for Perfection of Pledges over Nominative Claims)

Article 364 If a pledge is created over a nominative claim, that pledge cannot be asserted against third parties including third party obligors unless notice of the creation of the pledge is given to third party obligors in accordance with the provisions of Article 467, or unless the third party obligors acknowledge the same.

(Requirements for Perfection of Pledges over Debts Payable to Order)

Article 365 If a pledge is created over debts payable to order, that pledge cannot be asserted against third parties unless the creation of the pledge is endorsed on the instrument of the same.

(Collection of Claims by Pledgees)

Article 366 A pledgee may directly collect the claim that is the subject matter of the pledge.

(2) If monies are the subject matter of a pledged claim, the pledgee may collect the same to the extent of the portion that corresponds to the amount of the pledgee's own claim.

(3) If the due date of the pledged claim under the preceding paragraph arrives prior to the due date of the claim of the pledgee, the pledgee may have the third party obligor deposit that amount to be paid to the pledgee. In such cases, the pledge shall exist over the amount so deposited.

(4) If the subject matter of the pledged claim is not monies, the pledgee shall have the pledge over the Thing received as performance of the obligation.

Article 367 Deleted

Article 368 Deleted

Chapter 10 Mortgages

Section 1 General Provisions

(Content of Mortgages)

Article 369 A Mortgagee shall have the right to receive the performance of his/her claim prior to other obligees out of the immovable properties that the obligor or a third party provided to secure the obligation without transferring possession.

(2) Superficies and emphyteusis can be the subject matter of a mortgage. In such cases, the provisions of this Chapter shall apply mutatis mutandis.

(Scope of Effect of Mortgages)

Article 370 A mortgage shall extend to the Things that is an integral part of immovable properties that is the subject matter of the mortgage (hereinafter referred to as "Mortgaged Immovable Properties") except for buildings on the mortgaged land; provided, however, that this shall not apply in cases where the act establishing the mortgage provides otherwise or the obligee can rescind the act of the obligor in accordance with the provisions of Article 424.

Article 371 If there is a default with respect to a claim secured by a mortgage, the mortgage shall extend to the fruits of the Mortgaged Immovable Properties derived after the default.

(Mutatis Mutandis Application of Provisions on Right of Retention)

Article 372 The provisions of Article 296, Article 304 and Article 351 shall apply mutatis mutandis to mortgages.

Section 2 Effect of Mortgages

(Order of Priority of Mortgages)

Article 373 If more than one mortgage is created with respect to the same immovable properties, the order of priority of those mortgages shall follow the chronological order of their registration.

(Changes in Order of Priority of Mortgages)

Article 374 The order of priority of mortgages may be changed with the agreement of all mortgagees; provided, however, that, if there are interested persons, the consent of the same must be obtained.

(2) The changes in order under the preceding paragraph shall not take effect unless registered.

(Scope of Secured Claims under Mortgages)

Article 375 If mortgagees have rights to demand periodic payments including interest, they may exercise their mortgages solely with respect to payments that have fallen due in the most recent two years; provided, however, that, if special registration is effected with respect to prior periodical payments that have fallen due, the mortgagees shall not be precluded from exercising their mortgages as from the time of that registration.

(2) In cases where mortgagees have rights to demand the compensation for damages resulting from defaults in obligations, the provisions of the preceding paragraph shall apply mutatis mutandis to the damages of the most recent two years; provided, however, that the aggregate period including the interest and other periodical payments may not exceed two years.

(Disposition of Mortgages)

Article 376 A mortgagee may apply his/her mortgage to secure other claims, or assign or waive his/her mortgage, or its order of priority, for the benefit of other obligees of the same obligor.

(2) In the cases provided for in the preceding paragraph, if a mortgagee disposes of his/her mortgage for the benefit of two or more persons, the order of priority of the rights of persons who receive the benefit of that disposition shall follow the chronological order noted in the registration of the mortgage.

(Requirements for Perfection of Disposition of Mortgages)

Article 377 In the cases in the preceding article, in accordance with the provisions of Article 467, mortgagees cannot assert the disposition of mortgages against principal obligors, guarantors, mortgagors or their respective successors unless the disposition is notified to the primary obligors or the principal obligors acknowledge that disposition.

(2) If the principal obligors have received the notice or given acknowledgement under the provisions of the preceding paragraph, performance effected without the approval of the persons who receive the benefit of the disposition of mortgages cannot be asserted against those beneficiaries.

(Payment of Mortgage Proceeds)

Article 378 If a third party who purchases the ownership or superficies of Mortgaged Immovable Properties pay the price of the same to the relevant mortgagee at the request of the mortgagee, the mortgage shall be extinguished for the benefit of that third party.

(Claims for Extinction of Mortgages)

Article 379 A third party acquirer of Mortgaged Immovable Properties may make a claim for the extinction of a mortgage as prescribed in Article 383.

Article 380 No primary obligor, guarantor or successor of the same may make a claim for the extinction of a mortgage.

Article 381 A third party acquirer of Mortgaged Immovable Properties that is subject to a condition precedent may not make a claim for the extinction of a mortgage whilst whether or not the condition precedent is satisfied is still undetermined.

(Timing of Claims for Extinction of Mortgages)

Article 382 A third party acquirer of Mortgaged Immovable Properties must make a claim for the extinction of a mortgage before attachment by auction as a result of the execution of the mortgage takes effect.

(Procedures for Claims for Extinction of Mortgages)

Article 383 If a third party acquirer of Mortgaged Immovable Properties intends to make a claim for the extinction of a mortgage, he/she must send the documents listed below to each registered obligee:

(i) A document that specifies the cause and date of the acquisition, the name and address of the assignor and the acquirer, the nature, location and price of the Mortgaged Immovable Properties and burdens of the acquirer;

(ii) A certificate of registered matters regarding the Mortgaged Immovable Properties (limited to certificates certifying all registered matters currently in effect); and

(iii) A document to the effect that, if the obligee does not file a petition for auction by executing the mortgage within two months, the third party acquirer of the immovable properties will pay or deposit the price provided for in Item (i) or an amount specifically designated in accordance with the order of priority of claims.

(Deemed Approval of Obligees)

Article 384 In the cases listed below, obligees who have received the documents listed in each item of the preceding article shall be deemed to have approved the price or amount that the third party acquirer of Mortgaged Immovable Properties has offered as stated in the document listed in Item (iii) of that article:

(i) If the obligee does not file a petition for auction by executing the mortgage within two months after receipt of the documents listed in each item of the preceding article;

(ii) If the obligee withdraws a petition under the preceding item;

(iii) If a ruling dismissing a petition under Item (i) has become final and binding; or

(iv) If a ruling rescinding auction procedures based on a petition under Item (i) (excluding rulings under the provisions of Paragraph 3 of Article 63 or Paragraph 3 of Article 68-3 of the Civil Execution Act applied mutatis mutandis under Article 188 of the same act, or under the provisions of Paragraph 2 of Article 183 of the same Act in cases where the certified copy under Item (v), Paragraph 1 of the same article is provided) has become final and binding.

(Notice of Petitions for Auction)

Article 385 If an obligee who has received the documents listed in each item of Article 383 files a petition under Item (i) of the preceding article, he/she must give notice to such effect to the obligor and assignor of the Mortgaged Immovable Properties within the period under that item.

(Effect of Claims for Extinction of Mortgages)

Article 386 A mortgage shall be extinguished if all registered obligees approve the price or amount offered by the third party acquirer of the Mortgaged Immovable Properties , and the third party acquirer of the Mortgaged Immovable Properties has paid or deposited the price or amount approved.

(Perfection of Leases with Registered Consent of Mortgagees)

Article 387 If all persons holding mortgages, the registrations of which precede the registration of a lease, give their consent, and such consents are registered, the lease so registered can be asserted against those mortgagees who gave their consent.

(2) For a mortgagee to give the consent under the preceding paragraph, the approval of the persons who hold rights for which the mortgage is the object and other persons who will suffer detriment as a result of the consent of the mortgagee must be obtained.

(Statutory Superficies)

Article 388 In cases where land and a building on the land belong to the same owner, if a mortgage is created with respect to that land or building, and the execution of that mortgage results in the creation of different owners, it shall be deemed that a superficies has been created with respect to that building. In such cases, the rent shall be fixed by the court at the request of the parties.

(Auction of Buildings on Mortgaged Lands)

Article 389 If a building is constructed on mortgaged land after the creation of a mortgage, the mortgagee may auction the building together with the land; provided, however, that his/her right of priority may be exercised solely against the proceeds of the land.

(2) The provisions of the preceding paragraph shall not apply in cases where the owner of that building has rights with respect to the possession of the mortgaged land that can be asserted against the mortgagee.

(Purchases of Mortgaged Immovable Properties by Third Party Acquirers)

Article 390 A third party acquirer of Mortgaged Immovable Properties may be the purchaser at the auction of the same.

(Claims for Reimbursement of Expenses by Third Party Acquirers of Mortgaged Immovable Properties)

Article 391 If a third party acquirer of Mortgaged Immovable Properties has incurred necessary or beneficial expenses with respect to the Mortgaged Immovable Properties, he/she shall be entitled to obtain reimbursement of the same out of the proceeds of the Mortgaged Immovable Properties prior to other obligees, in accordance with the distinctions in Article 196.

(Distribution of Proceeds in cases of Joint Mortgage)

Article 392 In cases where an obligee holds mortgages on several immovable properties to secure the same claim, if the proceeds of those immovable properties are to be distributed simultaneously, the obligee shall divide the burden of the claim in proportion to the value of each immovable property.

(2) In cases where an obligee holds mortgages on several immovable properties to secure the same claim, if the proceeds from a particular immovable property alone are to be distributed, the mortgagee may receive the payment of his/her entire claim out of those proceeds. In such cases, subordinated mortgagees may exercise their mortgages in subrogation of that mortgagee, up to the amount that that mortgagee who receives payment would otherwise be entitled to receive from the proceeds of other immovable properties, in accordance with the provisions of the preceding paragraph.

(Note in Registration of Subrogation in case of Joint Mortgages)

Article 393 A person who exercises a mortgage by way of subrogation under the provisions of the second sentence of Paragraph 2 of the preceding article may note his/her subrogation in the registration of that mortgage.

(Payment from Assets other than Mortgaged Immovable Properties)

Article 394 A mortgagee may receive payment from assets other than the Mortgaged Immovable Properties, limited to the extent of the portion of his/her claim not paid from the proceeds of that Mortgaged Immovable Properties.

(2) The provisions of the preceding paragraph shall not apply to cases where the proceeds of other assets are to be distributed prior to the proceeds of the Mortgaged Immovable Properties. In such cases, each other obligee may demand that the amount to be distributed to the mortgagee be deposited in order to have the mortgagee receive payment under the provisions of that paragraph.

(Suspension of Delivery by Users of Mortgaged Buildings)

Article 395 Any person who uses or receives profits from a building subject to a mortgage by virture of a lease that cannot be asserted against the mortgagee, and who is listed as follows (in the following paragraph referred to as "Mortgaged Building User") shall not be required to deliver that building to the purchaser thereof until six months have elapsed from the time when the purchaser purchased that building at auction:

(i) A person who has been using or receiving profits from the building since prior to the commencement of auction procedures; or

(ii) A person who is using or receiving profits from the building by virtue of a lease given after the commencement of auction procedures by the administrator of compulsory administration or execution against profits from secured immovable properties.

(2) The provisions of the preceding paragraph shall not apply in cases where the purchaser issues a notice to the Mortgaged Building User demanding payment of consideration for a period of one month or more with respect to the use of the building in that paragraph that has occurred after the time of purchase by the purchaser, establishing a reasonable period, and no payment is made within that reasonable period.

Section 3 Extinction of Mortgages

(Extinctive Prescription of Mortgages)

Article 396 No mortgage shall be extinguished by prescription in relation to obligors and mortgagors unless it is extinguished simultaneously with the claim the mortgage secures.

(Extinction of Mortgages by Acquisition by Prescription of Mortgaged Immovable Properties)

Article 397 If a person who is neither an obligor nor a mortgagor has possessed the Mortgaged Immovable Properties in complete conformity with the requirements for acquisitive prescription, the mortgage shall be extinguished thereby.

(Renouncement of Mortgaged Superficies)

Article 398 Even if a holder of superficies or a emphyteuta who created mortgage on his/her superficies or emphyteusis renounces his/her rights, the renouncement cannot be asserted against the mortgagee.

Section 4 Revolving Mortgages

(Revolving Mortgages)

Article 398-2 Mortgages may be created, by an establishing act, in order to secure unspecified claims of a certain scope, up to the limit of a maximum amount.

(2) The scope of the unspecified claims to be secured by the mortgage under the provisions of the preceding paragraph (hereinafter referred to as "Revolving Mortgage") must be prescribed by limiting the scope to claims arising from specific contracts with the obligor for continuous transactions or other claims arising from certain kinds of transactions with the obligor.

(3) Claims that accrue continuously with the obligor pursuant to a specific cause, or claims on negotiable instruments or checks may be treated as claims that are to be secured by a Revolving Mortgage, notwithstanding the provisions of the preceding paragraph.

(Scope of Secured Claims under Revolving Mortgages)

Article 398-3 A revolving mortgagee may exercise his/her Revolving Mortgage up to the maximum amount with respect to all fixed payments of principal as well as periodical payments including interest and compensation for damages resulting from failure to perform obligations.

(2) In cases where a claim on a negotiable instrument or check acquired by way of causes other than the transactions with the obligor is treated as a claim to be secured by a Revolving Mortgage, if any of the following grounds exist, such Revolving Mortgage may be exercised only with respect to claims acquired before such grounds arose; provided, however, that even with respect to claims acquired after such grounds arose, the exercise of the Revolving Mortgage shall not be precluded as far as the claims were acquired without knowledge of those grounds:

(i) The suspension of payments by the obligor;

(ii) A petition for the commencement of bankruptcy procedures, the commencement of rehabilitation procedures, the commencement of reorganization procedures or the commencement for special liquidation with respect to the obligor; or

(iii) A petition for auction in relation to Mortgaged Immovable Properties or attachment for delinquent taxes.

(Alterations in Scope of Secured Claims under Revolving Mortgages and of Obligors)

Article 398-4 The scope of the claims to be secured by a Revolving Mortgage may be altered if the alteration is effected before the principal is fixed. The same shall likewise apply with respect to alterations of obligors.

(2) In order to effect the alterations under the preceding paragraph, it is not required that the approval of third parties including subordinated obligees be obtained.

(3) If the alteration under Paragraph 1 is not registered before the principal is fixed, it shall be deemed that such alteration was not effected.

(Alterations in Maximum Amounts of Revolving Mortgages)

Article 398-5 Alterations in the maximum amount of a Revolving Mortgage cannot be made unless the approval of the interested parties is obtained.

(Provision of Date for Fixing Principal of Revolving Mortgage)

Article 398-6 With respect to the principal secured by a Revolving Mortgage, the date when the principal is to be fixed may be prescribed or changed.

(2) The provisions of Paragraph 2 of Article 398-4 shall apply mutatis mutandis to the cases under the preceding paragraph.

(3) The date under Paragraph 1 must be within five years of the day when the date was prescribed or changed.

(4) If registration with respect to an alteration in the date under Paragraph 1 is not effected before the old date, the principal secured shall be fixed on that old date.

(Assignments of Secured Claims under Revolving Mortgages)

Article 398-7 A person who acquires a claim from a revolving mortgagee before the principal is fixed may not exercise the Revolving Mortgage with respect to such claim. The same shall likewise apply to a person who made payment for or on behalf of an obligor before the principal was fixed.

(2) If an obligation is assumed before the principal is fixed, the revolving mortgagee may not exercise his/her Revolving Mortgage with respect to the obligation of the person who assumes the obligation.

(3) If any novation due to a change of obligee or obligor is effected before the principal is fixed, the parties may not transfer the Revolving Mortgage to the obligations after the novation, notwithstanding the provisions of Article 518.

(Inheritances of Revolving Mortgagees or Obligors)

Article 398-8 If an inheritance of a revolving mortgagee commences before the principal is fixed, the Revolving Mortgage shall secure the claims that exist at the time of the commencement of the inheritance and shall otherwise secure claims the heir prescribed by agreement between the heirs and the revolving mortgagor acquires after the commencement of the inheritance.

(2) If an inheritance of an obligor commences before the principal is fixed, the Revolving Mortgage shall secure the obligations that exist at the time of the commencement of the inheritance and shall otherwise secure the claims that the heir prescribed by agreement between the revolving mortgagee and the revolving mortgagor assumes after the commencement of the inheritance.

(3) The provisions of Paragraph 2 of Article 398-4 shall apply mutatis mutandis to cases where an agreement is made under the preceding two paragraphs.

(4) If the agreements under Paragraph 1 and Paragraph 2 are not registered within six months of the commencement of the inheritance, principal secured shall be deemed to have been fixed at the time of the commencement of the inheritance.

(Mergers of Revolving Mortgagees or Obligors)

Article 398-9 If there is a merger with respect to a revolving mortgagee before the principal is fixed for that revolving mortgagee, the Revolving Mortgage shall secure the claims that exist at the time of the merger and shall otherwise secure claims that a juridical person that survives the merger or a juridical person that is incorporated by the merger acquires after the merger.

(2) If there is a merger with respect to an obligor before the principal is fixed for that obligor, the Revolving Mortgage shall secure the obligations that exist at the time of the merger and shall otherwise secure the obligations that a juridical person that survives the merger or a juridical person that is incorporated by the merger assumes after the merger.

(3) In the cases provided for in the preceding two paragraphs, the revolving mortgagor may demand that the principal secured be fixed; provided, however, that this shall not apply, in the cases provided for in the preceding paragraph, if the relevant obligor is the revolving mortgagor.

(4) If a demand is made in accordance with the provisions of the preceding paragraph, the principal secured shall be deemed to have been fixed at the time of the merger.

(5) The demand under the provisions of Paragraph 3 may not be made if two weeks have elapsed since the day when the revolving mortgagor acquired knowledge of the merger. The same shall apply if one month has elapsed from the day of the merger.

(Company Splits of Revolving Mortgagees or Obligors)

Article 398-10 If, before the principal is fixed, a split in which the relevant revolving mortgagee is the company to be split is effected, the Revolving Mortgage shall secure the claims that exist at the time of the split and shall otherwise secure claims acquired after the split by the split company and the company incorporated by the split, or claims acquired after the split by the company that succeeded to some or all of the rights and obligations of the split company regarding its business.

(2) If, before the principal is fixed, a split in which the relevant obligor is the company to be split is effected, the Revolving Mortgage shall secure the obligations that exist at the time of the split and shall otherwise secure obligations that are assumed after the split by the split company and the company incorporated by the split, or claims acquired after the split by the company that assumed some or all of the rights and obligations of the split company regarding its business.

(3) The provisions of Paragraphs 3 through 5 of the preceding article shall apply mutatis mutandis to cases under the preceding two paragraphs.

(Disposition of Revolving Mortgages)

Article 398-11 Before the principal is fixed, a revolving mortgagee cannot dispose of a Revolving Mortgage under the provisions of Paragraph 1 of Article 376; provided, however, that he/she shall not be precluded from applying that Revolving Mortgage to secure other claims.

(2) The provisions of Paragraph 2 of Article 377 shall not apply to payments made before the principal is fixed in the cases provided for in the proviso to the preceding paragraph.

(Assignments of Revolving Mortgages)

Article 398-12 Before the principal is fixed, a revolving mortgagee may assign a Revolving Mortgage, with the approval of the revolving mortgagor.

(2) A revolving mortgagee may divide his/her Revolving Mortgage into two Revolving Mortgages and assign either of the same in accordance with the provisions of the preceding paragraph. In such cases, the rights for which that Revolving Mortgage is the subject matter shall be extinguished with respect to the Revolving Mortgage that was assigned.

(3) In order to effect an assignment under the provisions of the preceding paragraph, the approval of the person who holds the rights for which that Revolving Mortgage is the subject matter must be obtained.

(Partial Assignments of Revolving Mortgages)

Article 398-13 Before the principal is fixed, a revolving mortgagee may, with the approval of the revolving mortgagor, effect a partial assignment of the Revolving Mortgage (hereinafter in this Section referring to assignments of Revolving Mortgages that the assignor effects without dividing the Revolving Mortgage in order to co-own the same with the assignee).

(Co-ownership of Revolving Mortgages)

Article 398-14 Co-owners of a Revolving Mortgage shall be paid in proportion to the amount of their respective claims; provided, however, that, if before the principal is fixed, a proportion other than the above is agreed, or if it is agreed that a certain person should be paid prior to the others, that agreement shall prevail.

(2) A co-owner in a Revolving Mortgage may, with the consent of the other co-owners, assign rights of the same in accordance with the provisions of Paragraph 1 of Article 398-12.

(Assignments or Waivers of Order of Priority of Mortgages and Assignments or Partial Assignments of Revolving Mortgages)

Article 398-15 If a revolving mortgagee who has accepted an assignment or waiver of the order of priority of a mortgage has assigned or partially assigned his/her Revolving Mortgage, the assignee shall receive the benefit of the assignment or waiver of that order of priority.

(Joint Revolving Mortgages)

Article 398-16 The provisions of Articles 392 and 393 shall apply with respect to Revolving Mortgages, limited to cases where, simultaneously with the establishment of the same, it is registered that a Revolving Mortgage has been established on several immovable properties to secure the same claim.

(Alterations of Joint Revolving Mortgages)

Article 398-17 An alteration in the scope, obligors or maximum amount of the claims to be secured, or assignment or partial assignment of the Revolving Mortgages for which registration is effected in accordance with the preceding article shall not take effect unless registration is effected with respect to all immovable properties over which that Revolving Mortgages are established.

(2) The principal that is to be secured by the Revolving Mortgages for which the registration under the preceding article is effected shall be fixed even where grounds that would fix the same with respect to one immovable property alone arise.

(Aggregate Revolving Mortgages)

Article 398-18 A person who has Revolving Mortgages on several immovable properties may exercise his/her right of priority with respect to the proceeds of each immovable property up to the respective maximum amounts, except for cases provided for in Article 398-16.

(Requests for Fixing of Principal of Revolving Mortgages)

Article 398-19 If three years have elapsed from the time of the creation of a Revolving Mortgage, the revolving mortgagor may request the fixing of the principal secured. In such cases, the principal secured shall be fixed when two weeks have elapsed since the time of that request.

(2) A revolving mortgagee may request the fixing of the principal secured at any time. In such cases, the principal secured shall be fixed on the request of the same.

(3) The provisions of the preceding two paragraphs shall not apply in cases where the date on which the principal secured is to be fixed is prescribed.

(Grounds for Fixing of Principal of Revolving Mortgages)

Article 398-20 The principal secured by a Revolving Mortgage shall be fixed in the following cases:

(i) If the revolving mortgagee has filed, with respect to the Mortgaged Immovable Properties, a petition for auction or execution against profits from secured immovable properties or the attachment under the provisions of Article 304 cited in Article 372; provided, however, that this provision shall apply only in cases where the commencement of either auction procedures or execution procedures against secured immovable properties to realize profits, or an attachment has been effected;

(ii) If the revolving mortgagee has effected an attachment for delinquent taxes against the Mortgaged Immovable Properties;

(iii) If two weeks have elapsed from the time when the revolving mortgagee acquired knowledge of the commencement of auction procedures or attachment for delinquent taxes against the Mortgaged Immovable Properties; or

(iv) If the obligor or revolving mortgagor has become subject to a ruling for the commencement of bankruptcy procedures.

(2) If the effect of the commencement of auction procedures, the attachment under Item (iii) of the preceding paragraph or the ruling to commence bankruptcy procedures under Item (iv) of that paragraph has been extinguished, it shall be deemed that the principal secured was not fixed; provided, however, that this shall not apply if any person has acquired that Revolving Mortgage or a right for which the Revolving Mortgage is the subject matter on the assumption that the principal was fixed.

(Requests for Reductions in Maximum Amount of Revolving Mortgages)

Article 398-21 After the principal is fixed, the revolving mortgagor may request a reduction in the maximum amount of that Revolving Mortgage, to the amount of the obligations actually in existence plus the amount of the periodical payments including interest and the amount of damages due to default in obligations that will arise in the following two years.

(2) As to reductions in the maximum amount of Revolving Mortgages for which registration under Article 398-16 has been effected, the request under the preceding paragraph shall be sufficient if made with respect to one of those immovable properties.

(Requests for Extinction of Revolving Mortgages)

Article 398-22 If the amount of the obligations actually in existence after the principal is fixed exceeds the maximum amount of the Revolving Mortgage, a person who created his/her Revolving Mortgage to secure obligations of others or a third party who acquired ownership, superficies, emphyteusis or a lease that can be asserted against any third party with respect to the Mortgaged Immovable Properties, may request the extinction of that Revolving Mortgage by tendering or depositing an amount equivalent to that maximum amount. In such cases, that tender or deposit shall have the effect of payment.

(2) Revolving Mortgages for which registrations are effected under Article 398-16 shall be extinguished if the request for extinction in accordance with the preceding paragraph is made with respect to one immovable property.

(3) The provisions of Articles 380 and 381 shall apply mutatis mutandis to the requests for extinction under Paragraph 1.

Source[edit]

  • Civil Code Japanese Law Translation by the Ministry of Justice on April 1, 2009.
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