Waseda University Institute of Comparative Law

     Article 501 of the Civil Code provides that a person who is subrogated to the claim of the obligee may exercise any and all rights possessed by the ex obligee to the extent the subrogee may seek reimbursement under its own right to take such action. Therefore, in the event a person is subrogated to the claims for which the priorities of proceedings are recognized (claim on the estate in bankruptcy proceedings and a common benefit claim in civil rehabilitation proceedings) in reference to the bankruptcy proceedings, it will become a problem whether the subrogee may exercise the right of subrogation to the claim on the estate and the common benefit claim (hereinafter referred to as “Original Claims”), without bankruptcy proceedings even though the subrogee possesses only the right to reimbursement of a bankruptcy claim or a rehabilitation claim to which only the exercise of the right in accordance with the bankruptcy proceedings is recognized as valid. In other words, since Article 501 of the Civil Code allow the subrogee to exercise the right “to the extent the subrogee may seek reimbursement” with regard to Original Claims acquired by a subrogation by effecting performance, it will become a problem whether this restriction applies to the exercise of Original Claims acquired by a subrogation in the event only the exercise of the right to reimbursement in accordance with bankruptcy proceedings is permitted.

     With regard to this problem, both lower court judicial precedents and theories divided into supporting opinions and opposing opinions, and the judgment of the Supreme Court was awaited. Then, in a case where a third party performed a bankrupt’s obligation for unpaid salaries that were treated as a claim on the estate in bankruptcy proceedings, the judgment of the Supreme Court of November 22, 2011, indicated the opinion first as the Supreme Court that a person acquired a claim on the estate by subrogation by effecting performance may exercise the claim acquired by subrogation without bankruptcy proceedings as the claim on the estate even though the right to reimbursement is a mere bankruptcy claim, and clearly indicated that it would stand on the supporting opinion.

     This judgment is the opinion in a case pertaining to the subrogation payment for unpaid salaries, but the judgment indicates that the system of subrogation by performance intends to have Original Claims function as a kind of security to secure the right to reimbursement, and in view of the purpose of the system, even though the exercise of the right to reimbursement is restricted by bankruptcy proceedings, the exercise of the Original Claim shall not be restricted in the same manner as the right to reimbursement unless the exercise of the Original Claims in the said proceedings is restricted, and the range is considered to extend to general problems with regard to the exercise of Original Claims by the subrogees in bankruptcy proceedings. Subsequent to this judgment, a similar opinion was stated with regard to a case where the execution by subrogation had been effected for a common benefit claim in the rehabilitation proceedings (judgment of the Supreme Court of November 24, 2011/Minshu vol. 65, No. 8, p. 3213) so that the stance of the precedents may be deemed to be secured, and this judgment as a herald thereof may be considered very important theoretically and practically.