Supreme Court Second Petty Bench Decision of March 10, 1995, 1525 Hanji 59, 875 Hanta 88. In a dispute between a creditor and a guarantor who had pledged property as security for the principal debtor's liability (butsujohoshonin), the Court affirmed dismissal of the guarantor's claim that the creditor's security interest in the guarantor's property had been extinguished by the statute of limitations. The principal debtor and the creditor had agreed to the suspension of the liability and, during that time, the debtor had become insolvent. The guarantor argued that under Civil Code Article 148, the agreed suspension did not apply to the guaranty contract regarding the pledged property and that the statute of limitations had been tolled with respect to this obligation. While there is no provision which specifically governs the extent of a guarantor's liability with respect to suspended obligations, the Court interpreted Civil Code Article 396, which provides that a security interest will lapse only upon lapse of the secured liability, as applying with equal force to guarantors.

Supreme Court Third Petty Bench Decision of March 28, 1995, 1526 Hanji 92, 876 Hanta 135. The Court overturned a lower court decision denying application of abuse of rights doctrine. The defendant, along with his wife and child, had leased a building from a company which the defendant managed and controlled and for which he acted as representative director. Upon disintegration of the marital relationship between the defendant and his wife, the defendant left the building, and by mutual consent between he and the landlord company, terminated the lease and demanded that his former wife and child vacate the leased building. The Court invalidated the termination as an abuse of rights, weighing the company's relative benefit against the detriment caused to the defendant's family. The Court also questioned whether the company had adequately expressed an objective intent to terminate.

Supreme Court Third Petty Bench Decision of September 5, 1995, 49 Minshu 8-2733, 1554 Hanji 44, 898 Hanta 181. The Court reversed and remanded a Tokyo High Court decision which had held the statute of limitations had not tolled plaintiff's claim as a member of a golf club despite the fact that the plaintiff had not used the club facilities or paid annual club dues since 1969. The Court determined that, apart from the obligation to pay membership fees and the right to demand return of the membership deposit, the essential component of a club membership is the ability to use the club facilities. Therefore, by application of Civil Code Article 291, the ten (10) year statute of limitations ran not from the date the plaintiff had ceased to use the club facilities, but from the date the plaintiff was prohibited from using the club facilities.

Supreme Court, Second Petty Bench Decision of December 15, 1995, 49 Minshu 10-3088, 1553 Hanji 70, 898 Hanta 194. The Court declined hold the occupation of a branch family (bunke) of land owned by the main family (honke) as comprising ownership by prescription. There had been a long-term understanding between the two families that the honke would retain title in the property and be responsible for taxes associated with fixed assets, whereas the bunke would, over the long term, construct and utilize buildings on the property. Because intent of ownership on the part of an occupying party is presumed under Commercial Code Article 186(1), the party opposing a claim of prescription has the burden of proving occupation for a different purpose such as (1) where the occupying party has the knowledge and expectation that it shall not have possession of the land; (2) the occupying party demonstrates an attitude inconsistent with ownership of the property and fails to act in a manner which would have been natural for the clear owner of the property; and (3) where there is objective evidence that the occupying party did not occupy the land with the intention of usurping ownership rights of another (Supreme Court First Petty Bench Decision of March 24, 1993, 37 Minshu 2-131)  Based on these premises, the Court determined that the bunke had not assumed ownership by prescription as neither party had intended that the bunke would own the property. The Court based its decision on (1) the familial relationship between the parties; the fact that the honke had never expressed disapproval of the bunke's use of the property; and (3) the fact that the bunke had received economic benefit from the honke and (4) the bunke had never sought to transfer registration of title in the property.

Supreme Court Second Petty Bench Decision of July 12, 1996, 50 Minshu 7-1901, 1580 Hanji 108, 921 Hanta 114. The Court reversed and remanded a lower court’s refusal to dismiss the plaintiff guarantor’s obligation to the defendant credit union based on tolling of the applicable statute of limitations. On April 7, 1992, the defendant sought to enforce an April 18, 1982 judgment against a debtor for nonpayment under a loan by obtaining judicial authority for auction sale of property offered as security by the plaintiff guarantor of the debtor’s obligation. On June 13, 1992, notification of the initiation of auction sale proceedings was received by the debtor. The plaintiff guarantor brought suit, asserting that, as the debtor's receipt of notification had occurred more than ten (10) years from the date of the 1982 judgment, the debtor’s obligation had been discharged by expiration of the period for prescription relating to judgments under Civil Code Article 174-2(1), thereby discharging the plaintiff guarantor as well. The lower court had sided with the defendant’s assertion that the date tolling the period of prescription was the court’s April 7, 1992 approval of the petition for auction sale rather than the date of debtor’s receipt of notification of auction sale proceedings based on Civil Code Article 147(2), which provides that the period of prescription is suspended upon the occurrence of a provisional disposition. Reversing and remanding, the Court, relied on Civil Code Article 148, which limits the applicability of suspension under Article 147(2) "solely to the parties themselves and their successors in title" and not to secured guarantors. Accordingly, the applicable statute is Civil Code Article 155, which provides that a provisional disposition does not suspend the period of prescription with respect to a person "in whose favor prescription is running" until such person has received notification thereof.

Supreme Court Second Petty Bench Decision of September 27, 1996, 50 Minshu 8-2395 1581 Hanji 57, 922 Hanta 204. The Court reversed a lower court determination regarding the applicable statute of limitations with respect to a secured guarantor. The plaintiff residential loan company had loaned money to the defendant subject to a guaranty of a limited portion of the loan amount by a third party guarantor. The third party guarantor’s obligation was in turn secured by another guarantor who agreed to the creation of a security interest in its real property in the amount of the guaranty. In August 1994, the defendant debtor defaulted under the loan, and in October 1984, the court authorized auction sale of the secured guarantor’s property. In December 1984, the third party guarantor, the obligee under the second guaranty agreement was sent notice of the auction sale. In October 1989, five years after the original loan was to be repaid, the plaintiff filed the instant action for payment of the amount in excess of the guaranteed amount. Despite the defendants’ claim that the statute of limitations had run on the loan under Commercial Code Article 522, which provides that a claim arising from a commercial transaction is extinguished if not exercised within five (5) years, the lower court had ruled in favor of the plaintiff. Reversing, the Court determined that while, under Civil Code 155, the statute of limitation with respect to a right of prescription is tolled when the person in favor of whom the prescription is running receives notice of a duly authorized auction sale, where auction sale is undertaken with respect to property offered as security by a secondary guarantor, the sale tolls the statute of limitations with respect to the primary guarantor, but does not toll the statute of limitations with respect to the principal debtor.

Supreme Court Third Petty Bench Decision of November 12, 1996, 50 Minshu 10-2591. The Court reversed a lower court's dismissal of the plaintiff's claims of ownership of real property and its appurtenant building by operation of prescription (Fukuoka High Court Decision of October 27, 1994). In 1954, the plaintiff and her husband began living rent free in a building situated on property owned by the plaintiff's father-in-law, managing the rented portion of the building. After her husband's death in 1957, the plaintiff continued to occupy the building and property and acted as manager with respect to the remainder of the property, negotiating rental agreements, adjusting and collecting rents, and performing necessary maintenance and repair. The plaintiff kept the title registration to the property and building and, after her husband’s death, also paid associated fixed asset taxes. In 1961, the plaintiff's father-in-law died and the property was inherited by his family, including the plaintiff's brothers-in-law, defendants in the current action. In 1963 and 1964, the defendants sought to sell the underlying property but, as a result of opposition from the plaintiff, never consummated the sale. In 1971, the plaintiff sought unsuccessfully to obtain the defendants' consent to the transfer of title to building and the underlying property. The lower court had denied the plaintiff’s prescriptive ownership, insofar as the plaintiff’s husband had not occupied the land for purpose of ownership and that the plaintiff had not demonstrated a belief in her own ownership until 1972. Reversing, the Court determined that, contrary to Civil Code Article 186, which creates a presumption that occupation of land is for the purposes of ownership, a person succeeding to occupation of property or buildings has the burden of establishing an objective change in the nature of occupation to one for the purposes of ownership. After her husband’s death, the plaintiff demonstrated actual control of the property with a clear intention of ownership. Her tardiness in seeking formal transfer of title was merely a function of the personal relationship between her and the defendants.