I wrote my answer based on the precedent case (Japanese Supreme Court ruling of June 5, 1987) on "Acquisition of Leasehold Rights by Prescription" (Article 163 of the Japanese Civil Code)

This time, I would like to create questions and write answers using Section 43 of the 100 Selected Civil Law Cases I: General Principles of Property Rights, 9th Edition, “Acquisition of Leasehold Rights by Prescription”, Supreme Court decision of June 5, 1987.

The question is a case study.

For details on the case, please see the Civil Law Case Blog "Acquisition of Leasehold Rights by Prescription," "Person Who Can Invoke Prescription," and "Performance of Lien."

The provisions in the answer are quoted below the answer.

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photo credit: K.G.Hawes Corner via photopin (license)

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Question

There was X, the owner of the land, and A, B, and Y, the occupants of the land.

On April 1, 1998, A sold and handed over the land to B, promising, "There is a slight problem with the ownership of the land, but if anything happens, I will take responsibility."

On June 15, 1998, B and Y concluded a lease agreement for the land, with B as the lessor and Y as the lessee, and the purpose of use being the ownership of the building. At that time, B apparently explained to Y the above circumstances regarding the ownership of the land.

On July 1, 1998, B handed over the land to Y, and Y transferred the agreed rent to the designated bank account from that month onwards.

On October 1, 1998, construction work on the building began, and on March 1, 1999, construction was completed, and the ownership preservation registration for the building was made in Y's name. Furthermore, the land in question was left vacant and unused until construction began.

Under these circumstances, on August 1, 2018, X, the true owner of the land, filed a lawsuit against Y, demanding that Y remove the building and vacate the land, based on his land ownership rights.

In this case, can Y refuse X's request? Explain the grounds for this and consider whether Y's claim should be accepted.

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Answer

1. X has filed a claim against Y for the removal of the building and eviction of the land as a real right claim based on the ownership of the land.

In response, Y claims possession of the land and would like to refuse the eviction.

Y claims the right to lease the land as the right to possess it.

However, the lease contract for the land that Y concluded with B is a third-party lease contract for the land owned by X. Although such a contract is valid (Articles 560 and 559), its effect is limited to the creation of a credit relationship between B and Y. Since B does not have ownership of the land or any other right to lease the land, Y does not in principle acquire a leasehold right that has priority (Article 605, etc., which has been converted into a real right).

Therefore, Y could make the following claim. 1. The leasehold of the land in question was acquired by prescription after 20 years (Article 163); 2. Party B's acquisition of ownership of the land in question by prescription (Article 162) is invoked (Article 145); 3. The lien is opposed (Article 295).

2. The claim that the lease of the land in question was acquired by prescription

2.1 Whether or not a lease can be acquired by prescription

Does the lease include the acquisition by prescription of "property rights other than ownership" (Article 163)?

Even if it is "property rights other than ownership", the acquisition by prescription of claims is denied. This is because the purpose of the prescription system is to respect the permanent factual state, but claims are usually satisfied and extinguished by a single payment.

Under the current Civil Code, leases are claims (Article 601), so it seems likely that acquisition by prescription will be denied.

However, even if leases are claims, they have the right of continuous use. In particular, real estate leases have an aspect of being real rights due to the importance of their social significance, as they are often the foundation of life and business (Article 605, Land and House Lease Law Article 10, Paragraph 1). In view of the purpose of the prescription system, which is to respect the permanent factual state, and the importance of the right, I believe that acquisition by prescription should be recognized as a "property right other than ownership" as stated in Article 163.

2.2 Requirements for the statute of limitations on acquisition of lease rights

2.2.1 Does Y meet the requirements for the statute of limitations on the acquisition of lease rights?

According to Article 163, Article 162, the requirement for the statute of limitations on a tenancy right is (i) "the right of tenancy," (ii) "with the will to do so," (iii) "peacefully" and "openly" (iv) "exercising" (v) "10 or 20 years have passed." Furthermore, in order to receive the benefit of the statute of limitations, (vi) "inviting the statute of limitations" (Article 145) is necessary.

Since Y has been explained about the circumstances surrounding the rights of the land in question, it is deemed negligent to B's lack of rights, and will the 20-year long-term statute of limitations on acquisition will be reached?

Requirements (i)(ii)(iii)(iii) are permitted. The question is (iv)(v).

2.2.2 (iv) "Exercising the right to lease" refers to "use and profits of goods" (Article 601), but its meaning is that it is necessary to: 1) the existence of an external fact of the continued utility of the land, and 2) the purpose of the utility is objectively expressed as being based on the will to lease. This is because ① is necessary as a basic requirement required by the purpose of the statute of limitations system, which is respect for a permanent state of fact, and ② is necessary to ensure that the completion of the statute of limitations is not a surprise attack for the true owner, and so that the statute of limitations is not taken by the true owner.

In this case, it is recognized that 1) Y has an ongoing utility on the land in question, and 2) continues to pay rent, and that the benefit is objectively expressed as being based on the will to rent.

Therefore, we also have set the requirement (iv) below.

2.2.3 (v) "Twenty years have passed"

The question is where to set the starting point.

Assuming that Y was the starting point on July 1, 1998, when the land was handed over, 20 years have passed since August 1, 2018, when a lawsuit was filed for a request for eviction, but if the starting point on October 1, 1998, when the construction of the building began, 20 years have passed since August 1, 2018, when the lawsuit was filed for a request for eviction, 2018, when the lawsuit was filed for a request for eviction, 2018, it has not yet been 20 years have passed since August 1, 2018. When "use and revenue of goods" begins, which should we consider to be the starting point for the statute of limitations?

The purpose of the statute of limitations is to respect the lasting state of fact and increase it to a rights relationship, but on the other hand, there is a need for the true rights holder to have an opportunity to suspend the statute of limitations so that the completion of the statute of limitations does not come as a surprise to the true rights holder. Therefore, the starting point should be viewed as the starting point in a way that is recognizable by the true rights holder, that is, when the benefits are objectively and realistically started.

In this case, even after the land was handed over to Y, the land was not used at all until construction work began, and it remained vacant. The actual use of the True Rightsholder X began on October 1, 1998, when construction began. Therefore, the starting point for the statute of limitations should be set on October 1, 1998, when construction began.

Since the construction began on October 1, 1998, when the project began, 20 years have not yet been in progress as of August 1, 2018, when a lawsuit was filed to file a request for eviction.

Therefore, we do not meet the requirement of (v) "20 years have passed."

2.3 Therefore, claims to obtain the statute of limitations on the lease rights are not accepted.

3. Assisting the statute of limitations on the acquisition of land ownership by Party B.

3.1 If Party B obtains the statute of limitations on the land in question (Article 162), it will acquire the title to lease the land in question, and as a result, Y will also acquire a lease right that has a counter-strength (Article 10, Paragraph 1 of the Land and House Act).

Is the statute of limitations on the acquisition of land ownership in this case? Can Y use it (Article 145)?

3.2.1 First, is the statute of limitations on the acquisition of land ownership in this case for B?

Since Party B has been explained about the circumstances surrounding the rights of the land in question, it is deemed negligent to at least the absence of Party A, and will the statute of limitations on long-term acquisition of Party B be achieved for 20 years?

According to Article 162, the requirement for the long-term statute of limitations on ownership is that (i) "someone else's thing," (ii) "with the will to own it," (iii) "peacefully" and "openly" (iv) "occupying" (v) "twenty years have passed." Furthermore, in order to receive the benefit of the statute of limitations, (vi) "inviting the statute of limitations" (Article 145) is necessary.

3.2.2 Party B acquires the land owned by X through a sales contract, and continues to occupy it peacefully and openly with the intention of ownership (even after leasing to Y, it continues to indirectly occupy it through Y).

It has been 20 years since the land was handed over on April 1, 1998, and the time the lawsuit was filed for a request for vacancies on August 1, 2018.

The requirements from (i) to (v) are met.

3.3.1 So, can Y be used (vi) to invoke the statute of limitations on B's acquisition?

Does Y correspond to the "party" (Article 145) that can invoke the statute of limitations on acquisition by B? The scope of the aiding rights becomes a problem.

3.3.2 The "parties" in Article 145 are considered to be limited to those who will be directly benefited by the statute of limitations. This is because the purpose of Article 145 that requires "inviting the parties" to occur in order to create an effect of the statute of limitations is to respect the parties' wishes, and it is not permissible to have a third party who cannot find a direct legal relationship and invoke the parties' wishes without permission, despite the parties' intentions.

Y is in a relationship in which, if Party B obtains the statute of limitations of the land in question, acquires the title to rent the land in question, and as a result, it is possible to acquire a lease right with a counter-strength, and if the statute of limitations on the acquisition cannot be used, it is in the disadvantageous of acquiring the building and surrendering the land in question. In other words, a direct right relationship can be recognized between Y and B, and Y is a person who directly benefits from the acquisition of B's ​​rights.

Y is the right to assist.

3.4 Therefore, Y may invoke the statute of limitations on the acquisition of land title in question by asserting the lease right of the land in question (Article 10, Paragraph 1 of the Land Lease Act) and refuse to request X to evict.

4. opposition to lien

4.1 Y may use the right to claim damages against Party B (Article 561, Article 559, Article 415) as a secured claim and refusing to surrender the land in question until it has been paid (Article 295).

4.2 However, as mentioned above, with the establishment of the statute of limitations on the acquisition of land ownership in question, Y was able to acquire a leasehold right in opposition. No right to claim damages against You will be accrued.

As long as there is no secured claim, the exercise of the lien is not permitted.

Since Y can counter the lease rights, it can be said that there is no longer a need to exercise the lien.

5. From the above, Y may invoke the statute of limitations on the acquisition of land ownership of Party B, and claim the lease rights that have a countervail (Article 10, Paragraph 1 of the Land and House Act) and refuse to request X to evict.

That's all

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