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Chapter Law Content

Title: Civil Code CH
Category: Ministry of Justice(法務部)
Part Ⅲ Rights In Rem
Chapter 1 General Provisions
Article 757
No rights in rem shall be created unless otherwise provided by the statutes or customs.
Article 758
The acquirement, creation, loss and alternation of rights in rem of real property through the juridical act will not effect until the recordation has been made. The acts as specified of the preceding paragraph shall be made in writing.
Article 759
A person, who has acquired rights in rem of real property by succession, compulsory execution, taking, a judgment of the court or other non juridical act before recordation, shall only dispose of such rights until recordation has been made.
Article 759-1
If a right in rem of real property has been recorded, the right-holder recorded in the register is presumed to own the rights legitimately.
If a bona fide third party in reliance of the real property recordation has recorded an alternation to the right in rem of real property pursuant to a juridical act, the validity of the alternation shall not be affected by the original false recordation of a right in rem.
Article 760
(Repealed)
Article 761
The transfer of rights in rem of personal property will not effect until the personal property has been delivered. However, if the transferee has been in possession of the personal property, the transfer effects when the parties agree to such transfer.
In the transfer of a right in rem of personal property, where the transferor is still in possession of it, a contract causing the transferee to acquire its indirect possession may be made between the parties in the place of its delivery.
In the transfer of a right in rem of personal property, where a third party is in possession of it, the transferor may transfer the claim against such third party for the return of it to the transferee in place of its delivery.
Article 762
If the ownership of a thing, and any other right in rem of the same thing assigned to one and the same person, such other right in rem of thing is extinguished by merger, except the owner or a third party has a legal advantage in the continuance of such other right in rem.
Article 763
If any right in rem other than ownership and any right of said right in rem assigned to one and the same person, such right of right in rem is extinguished by merger.
The exception of the provision in the preceding article shall apply mutatis mutandis to the case of the preceding paragraph.
Article 764
Unless otherwise provided by the statute, rights in rem are extinguished by waiver.
If the third party has any right in rem of said right in rem or other legal advantage of said right in rem, the waiver of the preceding paragraph shall only be made with the consent of the third party.
A person, who has waived the right in rem of a personal property, shall also abandon the possession of the personal property.
Chapter 2 Ownership
Section 1 - General Provisions
Article 765
The owner of a thing has the right, within the limits of the Acts and regulations, to use it, to profit from it, and to dispose of it freely, and to exclude the interference from others.
Article 766
Unless otherwise provided by the Act, the component parts of a thing and the natural profits thereof, belong, even after their separation from the thing, to the owner of the thing.
Article 767
The owner of a thing has the right to demand its return from anyone, who possesses it without authority or who seizes it. Where his ownership is interfered, he is entitled to claim the removal of the interference; and where the ownership might be interfered, he is entitled to claim the prevention of such interference.
The provision of the preceding paragraph shall apply mutatis mutandis to the rights in rem other than ownership.
Article 768
A person, who has peacefully, publicly and continually possessed another’s personal property with the intent of being an owner for ten years, acquires the ownership of such personal property.
Article 768-1
A person, who has peacefully, publicly and continually possessed another’s personal property with the intent of being an owner for five years, and was in good faith and not of negligence at the beginning of his possession, acquires the ownership of such personal property.
Article 769
A person, who has peacefully, publicly and continually possessed another’s real property which is not recorded for twenty years with the intent of being an owner, is entitled to claim to be recorded as the owner of the said real property.
Article 770
A person, who has peacefully, publicly and continually possessed another’s unrecorded real property with the intent of being an owner for ten years, and was acting in good faith and not negligently at the beginning of his possession, is entitled to claim to be recorded as the owner of the said real property.
Article 771
The prescription to acquire ownership is interrupted, if any of the following occurs to the possessor:
(1) The possessor has changed his intent of possession to that other than the intent of being an owner,
(2) The possession is changed to be not peaceful or public,
(3) The possessor himself stops possessing, or
(4) The possessor has unintentionally lost possession, unless possession is recovered in accordance with article 949 or article 962.
The prescription to acquire the ownership is interrupted if the possessor has been sued to return the property in accordance with the article 767.
Article 772
The provisions of the preceding five articles shall apply mutatis mutandis to the acquisition of rights over property other than ownership, and to the recorded real property as well.
Section 2 - Ownership of the Real Property
Article 773
Unless otherwise restricted by the Acts and regulations, ownership of land extends to such height and depth above and below the surface of the land within the range advantageous to the exercise of such ownership. Interference from others shall not be excluded if it does not obstruct the exercise of the ownership.
Article 774
In carrying on business and in exercising his ownership, the landowner shall takes care to prevent the occurrence of any injury to the adjacent land.
Article 775
The landowner shall not prevent the natural flow of water coming from an adjacent land.
The landowner shall not prevent all of the natural flow of water which is indispensable to the adjacent land, even though it is necessary for utility of his land.
Article 776
When the disruption or obstruction of works constructed on a piece of land for the purposes of storing, draining or drawing water has caused prejudice or may cause prejudice to another's land, the landowner shall, at his own expenses, make necessary repair, dredging or prevention. However, if the bearing of such expenses is otherwise provided by custom, such custom shall be followed.
Article 777
The landowner shall not construct the eaves, works or other equipment which will cause rain water or other liquid to fall directly upon the adjacent real property.
Article 778
When the flow of water is obstructed by accident on the adjacent land, the landowner is entitled to construct necessary works for its dredging at his own expenses. Provided that the owner of the adjacent land, who has taken the advantage, shall bear the reasonable expenses in proportion to the interests which he is benefited therefrom.
The bearing of such expenses of the preceding paragraph is otherwise provided by custom, such custom shall be followed.
Article 779
For the purpose of drying out the marshy land or discharging superfluous water of household use or of other use to the river or waterway, the landowner is entitled to conduct such water through the adjacent land, provided that the place and method which will cause the least injury to the adjacent land shall be chosen.
In the case of the preceding paragraph, the person entitled to passing through shall make compensation for any injury caused to the adjacent land.
In the case of the preceding two paragraphs, if it is otherwise provided by the statutes or custom, such statutes and custom shall be followed.
In the case of the exception of the first paragraph, where the owner of the adjacent land has an objection, the person entitled to passing through or the person who has objection is entitled to apply to the court to make a decision..
Article 780
The landowner is entitled, for the purposes of conducting water on his land, to use the works constructed by the owner of the adjacent land, provided that he shall bear the expenses of the construction and maintenance of such works in proportion to the interests which he is benefited therefrom.
Article 781
The owner of a land where water originates, or of a well, waterway or other land through which water flows, is entitles to freely use the water, except there are statutes or customs.
Article 782
The owner of a land where water originates, or of a well, is entitled to claim compensation against another, who, owing to the works carried on by him, cuts off, reduces or pollutes the water of such land or well. If the water is necessary for drinking or for utilizing the land, the said owner is also entitled to claim to have the status quo ante restored. If it is impossible to have the status quo ante completely restored, then restoration shall be performed within the possible scope.
In the case of the preceding paragraph, if the damages are not caused by intentional acts or negligence, the court may reduce the amount of damages or exempt the liability.
Article 783
The landowner, who cannot procure the water necessary for his household or for utilizing his land without undertaking excessive expenses or labor, is entitled to make compensation and demand the owner of the adjacent land for the spare water.
Article 784
The owner of a land through which the water flows shall not change the course or the width of the water, when the land on the opposite shore belongs to another person.
When the land on both shores belongs to the same owner of the land through which the water flows, he is entitled to change the course or the width of the water, provided that the natural course of the water at its lower mouth shall be kept.
In the case of the preceding two paragraphs, if it is otherwise provided by statutes or customs, such statutes or customs shall be followed.
Article 785
The owner of a land through which the water flows is entitled to, when it is necessary to construct a weir, rest the weir on the opposite shore, provided that compensation shall be made for any injury resulting therefrom.
The owner of the land on the opposite shore is entitled to use the weir specified in the preceding paragraph, when a part of the land through which the water flows belongs to him, provided that he shall bear the expenses of construction and maintenance of such weir in proportion to the interests which he is benefited therefrom.
In the case of the preceding two paragraphs, if it is otherwise provided by statutes or customs, such statutes or customs shall be followed.
Article 786
Where electric wires, water pipes, gas pipes or other pipes cannot be constructed without making use of the land of another or where they can only be constructed through the incurring of excessive expenses, the landowner is entitled to construct the said wires or pipes on, over or under the land of another person, provided that the place and method of constructing such wires or pipes which will cause the least injury to such other land shall be chosen and provided that compensation shall be made.
If, after the construction of electric wires, water pipes, gas pipes or other pipes has been made in accordance with the provision of the preceding paragraph, there is change of circumstances, the owner of such other land is entitled to demand to change the aforesaid construction.
The expenses of the change of such construction shall be born by the landowner. However, if it is otherwise provided by statutes or customs, such statutes or customs shall be followed.
The fourth paragraph of Article 779 shall apply mutatis mutandis to the exception of the first paragraph.
Article 787
If a piece of land is not fit for ordinary use because there is no suitable access to a public road, the landowner is entitled to access the surrounding land in order to reach the public road unless the lack of access is otherwise caused by the arbitrary behavior of a landowner. In the case of the preceding paragraph, the person with the right of access shall, within the limits necessary for access, choose the place and method which will cause the least injury to the surrounding land. Compensation shall be made for any injury caused as a result of the access.
The fourth paragraph of Article 779 shall apply mutatis mutandis to the case of the preceding paragraph.
Article 788
The person entitled to access may construct a road when necessary, provided that he shall compensate for any injury caused thereby to the land accessed.
In the preceding case, if extensive injury is caused by such access, the landowner may require the person accessing his property to purchase the land accessed and the odd lot caused thereby for a reasonable price, with such price agreed to by both parties. If the parties cannot agree upon the purchase price, the price shall be determined by a court.
Article 789
If, in consequence of a transfer of a part of a piece of land or of a partition of a piece of land, the land has no suitable access to the public road, and is not fit for ordinary use, the landowner in order to reach the public road, is only entitled to pass through the land owned by the transferee or the transferor or the other petitioners. The same rule shall be applied, if a piece of land has no suitable access to the public road and becoming unfit for ordinary use after the owner of many pieces of lands has transferred some of the lands or simultaneously transferred all lands to others.
In the case of the preceding paragraph, the person entitled to passing through shall not liable to make compensation.
Article 790
The landowner has the right to prohibit other persons from trespassing on his land, except any of the following cases:
(1) When the other persons are entitled to passing through the land.
(2) When, according to the local custom, it is allowed to enter his (the owner's) field, pasture or forest, around which no fence has been made, for the purpose of cutting and taking grass, of gathering dead branches or timber, of collecting wild products or of grazing stock.
Article 791
If, things or animals of another have by accident entered the land, the landowner shall allow the possessor or the owner of the things or animals to enter the land in order to find them and take them back.
In the case specified in the preceding paragraph, the landowner is entitled to claim compensation for the injury, if any; and he is also entitled to retain the said things or animals until such compensation has been made.
Article 792
The landowner shall allow the owner of an adjacent land to use such part of his land necessary for the construction or repair of the building or other works on or near the abuttal. However he may claim compensation for any injury resulting therefrom.
Article 793
The landowner is entitled to prohibit the discharge of gases, steam, odours, smoke, heat, soot, noises, vibrations and other similar nuisances from another person's land, building or other works, except such nuisance is insignificant or is justified by the shape of the land or by local custom.
Article 794
In excavating the land or in constructing buildings, the landowner shall not cause the foundations of the adjacent land to be shaken or endangered, nor can he cause any injury to the building or other works of the adjacent land.
Article 795
If there is danger of falling of the whole or a part of a building or other works on a piece of
and, and this may prejudice to the adjacent land, the owner of the adjacent land is entitled
to claim for necessary prevention.
Article 796
If a landowner constructs a building onto adjacent property with no intent or gross negligence, then the adjacent landowner shall not claim to remove or alter the building if the owner of the adjacent land is aware of the trespass and does not immediately object. The landowner shall compensate the adjacent property owner for any injury caused.
In the case of the preceding paragraph, the adjacent property owner may require the landowner to purchase the part of the trespassed land and the odd lot caused thereby at a reasonable price. If the parties cannot agree upon the purchase price, the price shall be determined by a court.
Article 796-1
If the landowner construct a building beyond the abuttal, and the owner of the adjacent property claim to remove or alter such building, the court may take the public interest and the interest of both parties into account and order the release of all or part of the removal or alternation, unless the landowner intentionallly construct a building beyond the abuttal.
Article 796-2
The preceding two articles shall apply mutatis mutandis to other constructions that have a value equivalent to a building.
Article 797
If the branches or roots of plants of the adjacent land have spread beyond the abuttal, the landowner is entitled to require the owner of the plants to cut and rid the said branches or roots within a reasonable period.
If the owner of the plants does not cut and rid the said branches or roots within the period specified in the preceding paragraph, the landowner is entitled to cut and take the encroaching branches or roots, and is also entitled to claim the expenses caused thereby.
The provisions of the preceding two paragraphs shall not apply to such encroaching branches or roots that do not interfere with the utility of the land.
Article 798
Fruits that fall naturally on an adjacent land are deemed to belong to the owner of such land, except if it is a land for public use.
Article 799
A condominium building is a building that is partitioned by several persons. Each of these persons owns an individual unit of it and has individual ownership of the individual unit, and the common elements of the building and its accessories is held tenancy in common by all the owners.
The individual unit which is a part of a condominium building, provided in the preceding paragraph, means the property that is independent both in construction and in use, is the object of individual ownership. The common elements means the property excluding the individual units of a condominium.
The individual unit, under the permission of its owner, may be jointly used by all the owners of the condominium by master lease. The common elements, unless the statutes provides otherwise, may be used by specific owners of the condominium by master lease.
The owner’s share to the common elements of the building and the land on which the building is erected is decided by the ratio of his own individual unit to the total of the individual units, if it is otherwise provided by master deed, such deed shall be followed.
The individual unit and its dependent rights of the common elements of the building with the land on which the building is erected, shall not separately transfers or establishing encumbrances.
Article 799-1
The expenses of repair and other charge to the common elements of a condominium building shall be born by all the owners in proportion to their respective shares, except there is another agreement.
The preceding paragraph shall apply mutatis mutandis to the individual unit which is agreed to be used by all owners of a condominium building in accordance with the provisions of the third paragraph of the preceding article.
After considering the location, coverage, its purpose of use, its use condition, whether or not the owner has paid the consideration, and other conditions of the individual unit, the common elements, and the land on which the building is erected, if the provision of the master deed is obviously unfair, the opposing owner of the condominium may file a claim with the court to revoke it within three months after the establishment of the master deed.
The rights and duties deriving from the master deed between the owners shall be binding upon owners’ successors. The rights and duties deriving from other agreements shall apply, if the specific successor knows or has a reason to know the content of the agreements.
Article 799-2
The provisions of Article 799 shall be mutatis mutandis applied where a person own a building and the building has been recorded as a condominium.
Article 800
In the case of Article 799, if it is necessary for an individual unit owner to use the middle gate which belongs to another individual unit owner, he is entitled to do so, unless it is otherwise provided by a particular agreement or custom which shall then govern.
Owing to the preceding use, compensation shall be made for any injury caused to another individual unit owner.
Article 800-1
The provisions of Article 774 to the preceding article shall apply mutatis mutandis to the superficiary, the agricultural right holder, the owner of a dominant real property, dian-holder, lessee or other users of land, building and other works.
Section 3 - Ownership of the Personal Property
Article 801
When a transferee of a personal property is in possession of it and is protected by the provisions concerning possession, he acquires the ownership of the same even if the transferor has no right to transfer such ownership.
Article 802
Whoever with the intent of being the owner of a personal property of no owner takes possession of the same, unless otherwise provided by the statutes, he acquires its ownership.
Article 803
A person who picks up a lost property has a duty to notify the one who lost the property, its owner, other person who is entitled as a receiver, or report to the police or the local autonomous institution as soon as possible and deposit the property with them at the time of such report. However, if a person picks up lost property at an institution, school, organization or other public place, he can also report to the management authority, company, its conductor or manager of such place, and deposit the property with them at the time of such report.
Those who have been reported in the preceding paragraph shall announce, broadcast, or use other appropriate means to advertise the owner of his claim to the property at the place where the property has been found or other proper place as soon as possible.
Article 804
If the person who is entitled to receive the lost property does not identify and claim the lost property within a reasonable time after the notice in accordance with the first paragraph of the preceding article, or after the advertisement of the management authority, company, its conductor or manager of such place in accordance with the second paragraph of the preceding article, then the person who picks up the lost property shall deposit the property with the police or the local autonomous institution.
If the police or the local autonomous institution has determined that the original place or method of advertising the owner of his claim to the lost property is improper, they may advertise again.
Article 805
If the person who is entitled to receive the lost property identifies and claims it within six months from the date of the notification or the last day of advertisement, then the person who picks up the lost property, the person who advertise the owner of his claim to the property, the police or the local autonomous institution shall return the lost property after the person who is entitled to receive the property has reimbursed those who have incurred costs for notice, advertisement, or preserving the property.
When the person who is entitled to receive the lost property identifies and claims the lost property, the person who picks up the lost property is entitled to claim a reward not to exceed ten percent of the value of the property. If the lost property does not have monetary value, the person who picks up is still entitled to claim a moderate reward.
If it is apparently unfair for the person who is entitled to receive the lost property to deliver the reward as specified in the preceding paragraph, the person who is entitled to receive the lost property may request the court to order a decrease in the reward or release him from the obligation to provide such reward.
The claim for reward as specified in the second paragraph will be extinguished by prescription, if it is not exercised within six months.
The person who incurs the expense set forth in the first paragraph or the person that is entitled to a reward has a lien over the lost property until such expense or reward has been paid. If several persons have reimbursement rights or the claim for reward, the possessor of the lost property is presumed to possess for them all.
Article 805-1
No claim for reward provided in the second paragraph of the preceding article shall be made under any of the following situations:
(1). The lost property is picked up in a public facility or in a public transportation facility by its manager or employee.
(2). The person who picks up the lost property fails to notify of, report or submit the pickup within seven days, or conceals the fact of his pick-up of the lost property when being asked.
(3). The person who is entitled to receive the lost property is a member in the family in hardship, low income household or medium-low income household or accepts emergency relief or disaster relief in accordance with the law or under any other emergencies.
Article 806
If the lost property being picked up is easy to corrupt, or if the cost to preserve it is excessive, the person who advertises the owner of his claim to the property, the police or local autonomous institution may sell it by auction or sell it at market price and keep the net proceeds of the sale.
Article 807
If the person who is entitled to receive the lost property does not identify and claims it within six months from the date of the notification or the last day of advertisement, the person who picks up the lost property acquires its ownership. The police or the local autonomous institution shall inform the person who picks up the lost property to claim such property or the net proceeds of its sale. If he can not be informed, an advertisement shall be done instead.
If the person who picks up the lost property does not claim such property within three months from the date of informing or advertisement in accordance with the preceding paragraph, the lost property or the net proceeds of its sale belongs to the local autonomous institution.
Article 807-1
When the value of the lost property is below five hundred NT dollars, the person who picks it up shall inform the loser, the owner, or other person who is entitled to receive as soon as possible. If there is a case of the exception of the first paragraph of Article 803, it can be handled in accordance with the exception of first paragraph and the second paragraph of such article.
If the lost property of the preceding paragraph has not been identified and claimed its ownership within the following period of time, the person who picks it up acquires its ownership or the net proceeds of its sale:
(1) Fifteen days after the date of informing or advertising the owner of his claim to the property.
(2) A month after the day of picking up, if it cannot be handled in accordance with the preceding paragraph.
Article 805 to the preceding article shall apply mutatis mutandis to the case of the preceding two paragraphs.
Article 808
Whoever finds a treasure-trove and takes possession of it, he acquires its ownership. However, if the treasure-trove is found in a personal or real property owned by another, the finder and the owner of such personal or real property shall equally acquire a half of the treasure-trove.
Article 809
When a treasure-trove that has been found is fit for the academic, artistic, archaeological or historical material, its ownership shall be determined in accordance with the provisions of the particular law relating thereto.
Article 810
The provisions concerning the picking up of the lost property shall apply mutatis mutandis to the picking up of the floating property, the sunken property or other property which separates from its possessor because of the natural force.
Article 811
When a personal property becomes an important component part of a real property through attaching, the owner of the real property acquires the ownership of such personal property.
Article 812
When a personal property belonging to one person is attached to a personal property belonging to another person in such a way that they cannot be separated without damage or can only be separated through the incurring of excessive expenses, both owners shall jointly own the composition in proportion to the value of each personal property at the time they were attached.
If one of the personal properties attached as specified in the preceding paragraph can be deemed to be the principal thing, the owner of such principal thing acquires the ownership of the composition.
Article 813
The provisions of the preceding article shall be mutatis mutandis applied when a personal property is mixed together with a personal property belonging to another person so as to be no longer distinguishable from each other or so as to be distinguished only through the incurring of excessive expenses.
Article 814
When a person has contributed work to a personal property belonging to another, the ownership of the personal property upon which the work is done belongs to the owner of the material thereof. However, if the value of the contributing work obviously exceeds the value of the material, the ownership of the personal property upon which the work is done belongs to the contributing person.
Article 815
When the ownership of a personal property is extinguished in accordance with the provisions of the preceding four articles, all other rights over such personal property are also extinguished.
Article 816
The person, who has a loss through the provisions of the preceding five articles, is entitled to claim a reimbursement of the value in accordance with the provisions concerning unjust enrichment.
Section 4 - Co-Ownership
Article 817
When several persons have the ownership of a thing in proportion to their own respective shares, they are co-owners.
If the shares to which each co-owner is entitled are not known, they are presumed to be equal.
Article 818
Each co-owner is, in proportion to his own share, unless otherwise provided by a covenant, entitled to use and to acquire the profits of the thing held in indivision.
Article 819
Each co-owner may freely dispose of his own share.
The disposition of, the alteration of and the creation of an encumbrance over a thing held in indivision shall only be made with the consent of all the co-owners.
Article 820
Unless otherwise provided by a covenant, the management of the thing held in indivision, the consent of more than half of the Co-owners whose holding of ownership is more than half of the total share shall be required. But if the holding of ownership is more than two thirds, the numbers of consenting co-owners need not be taken into account.
If the management in accordance with the preceding paragraph is obviously unfair, the disagreeing co-owner may apply to the court for the alternation.
When the management of the preceding two paragraphs cannot be maintained because of the change of circumstance, the court may rule an alternation on the application of any of the co-owners.
The co-owners, with intent or gross negligence, pursuant to the first paragraph of this article, pass the resolution of the management which caused damages to other co-owners, shall be jointly and severally liable to the damages suffered by the opposing co-owners.
In regard to simple repairs and such other act for the preservation of the thing held in indivision, each of the co-owners is entitled to make it alone.
Article 821
Each co-owner may exercise the right of ownership against the third party for the whole thing held in indivision. However a claim for restoration of the said thing may only be made for the common interests of all the co-owners.
Article 822
Unless otherwise provided by a covenant, the costs of management and other charges relating to the thing held in indivision shall be born by all the co-owners in proportion to their respective shares.
When one of the co-owners has paid more than the share incumbent on him for the charges relating to such thing held in indivision, he is entitled to claim a reimbursement from the other co-owners in proportion to their respective shares.
Article 823
Unless otherwise provided by the statutes, each co-owner is entitled to demand at any time the partition of the thing held in indivision, except in consequence of the purpose of using such thing that makes partition impossible, or a covenant that provides a period of non-partition.
The period of non-partition of such covenant as specified in the preceding paragraph shall not exceed five years. Where a period exceeding five years has been agreed upon, it shall be reduced to five years. However, if the covenant of the real property held in indivision has an agreement on the management, the period of non-partition shall not exceed thirty years. Where a period exceeding thirty years has been agreed upon, it shall be reduced to thirty years.
In the case of the preceding paragraph, if there is significant cause, each co-owner is still entitled to demand at any time the partition of the thing held in indivision,
Article 824
The partition of the thing held in indivision can be made in accordance with the method agreed by all the co-owners.
If the method of partition cannot be agreed upon, or the co-owner refuses to fulfill the deed of partition because of the completion of the prescription after making an agreement, the court may, on the application of any of the co-owners, order such partition to be made according to either of the following:
(1) The distribution of the thing held in indivision itself to every co-owner. If it is difficult to distribute the thing held in indivision itself to every co-owne, the thing held in indivision itself can be distributed to some of the co-owners.
(2) The sale of the thing held in indivision and the distribution of the net proceeds to the co-owners, if there is an obvious difficulty in distributing the thing held in indivision itself. The distribution of some parts of the thing held in indivision to every co-owner, together with the sale of other parts of the thing held in indivision and its distribution of net proceeds to every co-owner.
In the case of the distribution of the thing held in indivision itself, if some of the co-owners can not receive a distribution or cannot receive a distribution in proportion to their own shares, they may be compensated in money.
In the case of the distribution of the thing held in indivision itself, the thing held in indivision can be partially maintained in indivision in consideration of the interests of the co-owners or other necessary circumstances.
If the same group of co-owners owns several real properties, unless otherwise provided by the statute, the co-owner is entitled to claim to merge and then partition.
If the co-owners of several adjacent real properties are partially the same, the co-owner who owns a share to each real property is entitled to claim to merge and then partition with the consent of other co-owners whose holding of ownership are more than half of the total share of each real property according to the preceding paragraph. However, if the court considers that to merge and then partition is improper, it may still be partitioned respectively.
In the case of the sale of the thing held in indivision, under the same terms and conditions, the co-owners have the right of first purchasing to buy the thing held in indivision, unless the buyer is another co-owner. If two co-owners are willing to exercise the right of first purchasing, the buyer shall be decided by drawing lots.
Article 824-1
The co-owner acquires the ownership of the distinct part when the partition is effective.
When the thing held in indivision has been partitioned, a mortgage or the lien on the respective share is not thereby affected, except any of the following cases, such rights shift to the distinct part of the mortgagor or the lienee:
(1) The right-holder agrees to partition.
(2) The right-holder has participated in the litigation for the partition of the thing held in indivision.
(3) The right-holder is notified of the partition litigation and fails to join.
The provisions of the first and the second paragraph of Article 881, or the first paragraph of Article 899, shall apply mutatis mutandis to the exception of the preceding paragraph with the money distribution or the money compensation.
In the case of the third paragraph of the preceding article, if it is the partition of real property, the co-owner who shall be reimbursed has mortgage on the distinct part of the person who shall reimburse to such an extent as the amount of compensation.
The mortgage of the preceding paragraph shall be recorded at the same time the partition of the thing held in indivision is recorded. Such mortgage shall have priority over the mortgage of the exception of the second paragraph.
Article 825
Each co-owner in proportion to his share bears a liability or warranties the same as that of a seller in regard to the things which the other co-owners have acquired by partition.
Article 826
After the partition of a thing held in indivision, each participant shall preserve all documents relating to the thing which he has acquired.
After the partition of a thing held in indivision, all documents relating to the said thing shall be preserved by the person who has acquired the largest portion of the thing. If no person has acquired a larger portion, the partitioners shall determine the person who shall preserve the said documents by agreement, and if it cannot be determined by agreement, the person shall be nominated by the court on the application of the partitioners.
Each partitioner is entitled to claim the use of the documents preserved by the other partitioners.
Article 826-1
The covenant of the use, management, partition or partition inhibition or the decision made between the co-owners of the real property according to the first paragraph of Article 821, is bound to the share transferee or the person who acquires the right in rem after its recordation. The same rule shall apply to the management which a court has ruled that has been recorded.
The agreement and decision upon the thing held in indivision or the order made by the court between co-owners of personal property shall also bind the share transferee and the person who acquires the right in rem, but only when such person knows or should have known of such case while transferring or acquiring.
When the share of the thing held in indivision is transferred, the transferee is jointly and severally liable for the charges arising from the use, management, or other matters related to the thing held in indivision.
Article 827
Where several persons who constitute a relationship in common according to the provisions of statutes, customs or juridical acts hold a thing in common by virtue of the relationship in common, such persons are owners-in-common.
The relationship in common through juridical acts of the preceding paragraph shall only be constituted if there are statutes or customs.
The rights of each owner-in-common extend to the whole thing held in common.
Article 828
The rights and duties of the owners-in-common are determined according to the statute, juridical act or custom from which the relationship in common is derived.
The provisions of Article 820, Article 821 and Article 826-1 shall apply mutatis mutandis to the ownership-in-common.
Unless otherwise provided by statutes, the disposition of the thing held in common and the exercise of other rights relating to the same shall be made with the consent of all the owners-in-common.
Article 829
For the duration of the relationship in common, neither of the owners-in-common shall demand the partition of the thing held in common.
Article 830
The ownership-in-common is extinguished with the termination of the relationship in common or by the transfer of the thing held in common.
Unless otherwise provided by statutes, the provisions governing the methods relating to the partition of the thing held in indivision shall apply mutatis mutandis to the partition of the thing held in common.
Article 831
The provisions of this section shall be mutatis mutandis applied when rights over property other than ownership are held in indivision or in common by several persons.
Chapter 3 Superficies
Section 1- General Superficies
Article 832
A general superficies is the right to use the land of another person with the purpose of constructing a building or other works thereon or thereunder.
Article 833
(Repealed)
Article 833-1
If the superficies without a definite duration has existed for more than twenty years, or the purpose of establishing the superficies has no longer existed, the court may, upon the request claim by the parties, fix the duration or terminate the superficies after considering the purpose of establishing the superficies as well as the type, nature, and using conditions of the building or works.
Article 833-2
If a superficies without a definite duration is established for the purpose of public constructions, the duration of the superficies shall terminate upon the completion of the public construction.
Article 834
If a superficies is of no rental, the superficiary may waive his/her right at any time.
Article 835
If the superficies has a fixed duration and an agreed-upon rental, the superficiary may waive his/her rights after having paid the rental for the next three years.
If the superficies has an indefinite duration and an agreed-upon rental, and the superficiary may waive his/her rights, by either notifying the landowner one year before the waiver, or paying one-year rental.
If the land cannot satisfy the original purpose of use for reasons not imputable to the superficiary, the superficiary may waive his/her rights after paying half of the rental as specified in the preceding two paragraphs. If the land cannot satisfy the original purpose of use for reason imputable to the landowner, the superficiary may waive his/her rights and therefore be exempted from paying the rental.
Article 835-1
If the rise or fall in land value after the creation of a superficies makes the original rental arising therefrom obviously unfair, the party may file a claim with the court to increase or reduce the rental.
If the superficies has no rental and the burden unexpectedly increased after the creation of the superficies make it obviously unfair to use the land for free, the landowner may file a claim with the court to fix the rental.
Article 836
Where the superficiary has delayed the payment of the rental which has accumulated to the amount equivalent to the total rental for two years, the landowner is entitled to fix a reasonable time and notified the superficiary to pay the rental, if the superficiary does not pay within the fixed period, the landowner is entitled to terminate the superficies, unless otherwise provided by the custom. If a mortgage is created on the superficies, the mortgagee shall also be informed about such notice.
If the agreement of rental has been registered, when the superficies is transferred, the rental owed by the former superficiary shall also be taken into consideration. The transferee is jointly and severally liable with the transferor for the rental owed by the former superficiary.
The termination as specified in the first paragraph shall be made by an expression of intent to the superficiary.
Article 836-1
When the ownership of the land is transferred, the rental paid in advance shall not be effective against a third party unless it has been registered.
Article 836-2
The superficiary shall use the land and acquire profits therefrom according to the purpose of creating such superficies and the agreed method of use. If the method of use has not been agreed upon, the nature of the land shall be followed. However, the sustainable use for the land shall be maintained in following either one.
The agreed method of use as specified in the preceding paragraph shall not be effective against a third party unless it has been registered.
Article 836-3
When the superficiary violates the provision of the first paragraph of the preceding article, the landowner is entitled to terminate the superficies if the superficiary ignores his inhibition. If a mortgage is created on the superficies, the mortgagee shall also be informed about such inhibition.
Article 837
The superficiary is not entitled to claim for a release or reduction of the rental even if he is hindered by force majeure from using the land.
Article 838
The superficiary is entitled to transfer his/her rights to another person or create a mortgage, unless otherwise provided by the agreement of contract or the custom.
The agreement as specified in the preceding paragraph shall not be effective against a third person unless it has been registered.
A building or other works and the superficies thereon cannot be separately transferred or created other rights.
Article 838-1
Where the land and a building on such land are owned by the same person, a superficies is deemed to have been created and to exist at the time when the land and the building are thereafter sold by auction of compulsory execution to different bidder, and the rental, term, and scope of the superficies shall be determined by agreement between the parties. If such an agreement cannot be reached, the parties can apply to a court for a judgment determining these. The same rule shall apply when either the land or the building is auctioned.
The superficies as specified in the preceding paragraph is distinguished by the destruction of the building.
Article 839
When the superficies is extinguished, the superficiary is entitled to take his works back provided that the status quo ante of the land shall be restored.
If the superficiary does not take his works back within a month after the superficies is extinguished, those works belong to the landowner, and if it obstructs the use of the land, the landowner is entitled to have the status quo ante restored.
The superficiary shall inform the landowner before he takes his works back. If the landowner would like to purchase them at current market price, the superficiary can not refuse to sell without a good cause.
Article 840
Where the work of the superficiary is a building and the superficies is extinguished due to expiration, the superficiary is entitled to fix a period more than a month before the expiration, and request the landowner to compensate him according to the current market price of such building. However if it is otherwise provided by the agreement of contract, such agreement shall be followed.
The landowner refuses the request for compensation as specified in the preceding paragraph or does not respond within the period fixed, the duration of superficies shall consider to be extended. If the superficiary refuses to extend, he is not entitled to request for compensation as specified in the preceding paragraph.
If the current market price as specified in the first paragraph cannot be agreed upon, the superficiary or the landowner may apply to a court to determine it. The provision of the preceding paragraph shall be applied if the landowner refuses to compensate according to the current market price decided.
Extending the duration according to the second paragraph, the duration shall be determined by agreement between the landowner and superficiary. If such an agreement cannot be reached, they can apply to a court for a judgment to determine it by taking the interest of using the building and the land into consideration.
The provisions of the first and the second paragraph shall not apply after the expiration as specified in the preceding paragraph, expect there is an agreement between the land owner and the superficiary.
Article 841
A superficies is not extinguished by virtue of the loss or destruction of the building or other works.
Section 2 - Divided Superficies
Article 841-1
A Divided Superficies is a superficies created within a certain scope of space on or under other’s land.
Article 841-2
A divided superficiary may enter into an agreement regarding the limits on uses and profits with the person who has the rights to use and profit upon or under the land where a divided superficies is created. If the agreement is not consented to by the landowner, the landowner shall not be bound by it after rights to use and profit the land have extinguished.
The agreement provided in the preceding paragraph shall not be effective against a third party unless it has been registered.
Article 841-3
The court shall consider a third party’s interests in determineing the duration of the Divided Superficies according to the fourth paragraph of Article 840 if the third party’s rights will be affected.
Article 841-4
Where a divided superficies has been compensated at current market price or extended the duration according to Article 840, and the rights of a third party could have been affected, the third party should be reasonably compensated. The sum of compensation shall be determined by an agreement, if such agreement cannot be reached, the parties can apply to a court to determine it.
Article 841-5
Where a divided superficies and the right in rem for the purpose of use both exist on the same land at the same time, the exercise of the later created right in rem cannot interfere with the right in rem created ahead.
Article 841-6
Unless otherwise provided in this section, the provisions of general superficies shall be mutatis mutandis applied to divided superficies.
Chapter 4 (Repealed)
Article 842
(Repealed)
Article 843
(Repealed)
Article 844
(Repealed)
Article 845
(Repealed)
Article 846
(Repealed)
Article 847
(Repealed)
Article 848
(Repealed)
Article 849
(Repealed)
Article 850
(Repealed)
Chapter 4-1 Agricultural Right
Article 850-1
An agricultural right is the right to cultivate, to forest, to farm, to plant bamboos and trees or to conserve on the land of another person.
The duration of the agricultural right shall not exceed twenty years; where a period exceeding twenty years has been agreed upon, it shall be reduced to twenty years, except the agricultural right is created for the purpose of afforestation or conservation, or there is another statute.
Article 850-2
If the duration of the agricultural right is not fixed, the parties are at any time entitled to terminate unless the agricultural right is created for the purpose of afforestation or conservation.
The termination as specified in the preceding paragraph shall be informed to the other party six months before the termination.
The provision of Article 833-1 shall apply mutatis mutandis to the agricultural right which is created for the purpose of afforestation and conservation and of which the duration is not fixed.
Article 850-3
An agricultural right holder may transfer his right to another person or create a mortgage on it, unless otherwise provided by a contract or custom.
The agreement as specified in the preceding paragraph shall not be effective against a third party unless it has been registered.
Agricultural works and the agricultural right thereon shall not be separately transferred or created other rights.
Article 850-4
If an agricultural right has an agreed-upon rental, the agricultural right holder may request to reduce or relieve of the rental, or to change the originally agreed-upon purpose of land use, if he has reduced or no profits due to force majeure.
In the case of the preceding paragraph, the party is entitled to terminate the right if the agricultural right holder can not use the land for the original purpose agreed upon.
The provision regarding the landowner’s the right of termination as specified in the preceding paragraph shall apply mutatis mutandis to the agricultural right without agreed-upon rental.
Article 850-5
An agricultural right holder is not entitled to lease out the land or other agricultural works to another person. However if the lease upon agricultural works is otherwise provided by custom, such custom shall be followed.
If the agricultural right holder violates the provision of the preceding paragraph, the landowner is entitled to terminate the agricultural right.
Article 850-6
The agricultural right holder shall use the land and acquire the profit therefrom according to the purpose of creating such right and the agreed method, if the method of use has not been agreed upon; the nature of the land shall be followed. However, the productivity or sustainable use for the land shall be maintained in following either one.
If the agricultural right holder violates the provision of the preceding paragraph, the landowner is entitled to terminate the agricultural right if the agricultural right holder ignores his inhibition. If a mortgage is created on agricultural right, the mortgagee shall also been informed about such inhibition.
Article 850-7
When an agricultural right is extinguished, the agricultural right holder is entitled to retrieve his products on the land and the agricultural works.
The provision of Article 839 is applied mutatis mutandis to the circumstance as specified in the preceding paragraph.
Where the products as specified in the first paragraph are not yet able to be harvested, and the landowner does not want to purchase at current market price, the agricultural right holder is entitled to claim for extending the duration of agricultural right until the products are able to be harvested, and the landowner is not entitled to refuse. However the duration extended cannot exceed six months.
Article 850-8
The agricultural right holder is entitled to make special improvement for raising the production of the land or the convenience of using the land.
Where the agricultural right holder notifies the entries of special improvement and the sum of expense as specified in the preceding paragraph to the landowner in writing, and the landowner fails to express a contrary intent immediately after he received the notification, the agricultural right holder is entitled to demand the landowner to return the expense for the special improvement, in so far as the increased value presently existed thereby, when the agricultural right is extinguished.
The claim as specified in the preceding paragraph is extinguished by prescription if it is not exercised within two years.
Article 850-9
The provisions of Article 834, the first and the second paragraphs of Article 835, Article 835-1 to Article 836-1, the second paragraph of Article 836-2 shall apply mutatis mutandis to the agricultural right.
Chapter 5 Servitude of real property
Article 851
A servitude of real property is the right to use the property of another person for accessing, drawing water, lightening, surveying, telecommunication or other specific convenience of one’s own property.
Article 851-1
Where a servitude of real property and a right in rem for the purpose of benefiting from its use both exist on a real property at the same time, the exercise of the later created right in rem cannot interfere with the right in rem created ahead.
Article 852
A servitude of real property cannot be acquired by prescription except those which are continuous and apparent.
In the case of the preceding paragraph, if the dominant real property is held in division, the act of one of the co-owners or the act against one of the co-owners shall be effective for the interests of other co-owners.
The act, which interrupts the prescription, against those co-owners, who will acquire servitude of real property by prescription, will be effective to all of the co-owners.
Article 853
A servitude of real property can not be separately transferred from the dominant real property or created other right.
Article 854
The owner of the dominant real property is entitled to perform such attached acts as are necessary for exercising or preserving his/her rights, provided that he shall choose the place and the method which will cause the least injury to the servient real property.
Article 855
The owner of a dominant real property, who makes constructions for the purpose of exercising his/her rights, is bound to maintain such constructions. The same rule is applied when the construction is provided by the owner of the servient real property.
The owner of the servient land may use the constructions as specified in the preceding paragraph to the extent the exercise of the servitude of real property has not been obstructed, and shall bear his share of the expenses for the maintenance of the constructions in proportion to the interests he is benefited therefrom.
Article 855-1
The owner of a servient real property or the owner of a dominant real property may, for the necessity to change the place or method of exercising servitude of real property which does not heavily hinder the owner of the dominant real property or the owner of the servient real property to exercise his rights, claim to change by paying on his own.
Article 856
Where a dominant real property is partitioned, its servitude of real property still continues for the interests of all its parts. However if according to its nature the exercise of the servitude of real property actually refers to only one part of the dominant real property, such servitude still continues only in respect to such part.
Article 857
Where a servient real property is partitioned, the servitude of real property still continues on all its parts. However, if according to its nature the exercise of the servitude of real property actually refers to only one part of the servient real property, such servitude still continues only as against such part.
Article 858
(Repealed)
Article 859
Where the continuance of all or part of the servitude of real property is no longer necessary, the court may, on the application of the owner of the servient real property, declare such servitude of real property extinguished upon the part of which the continuance is no longer necessary.
A servitude of real property is extinguished by virtue of destruction or failure in use of the dominant real property.
Article 859-1
When a servitude of real property is extinguished, the provision of Article 839 shall apply mutatis mutandis to the construction made by the owner of a dominant real property.
Article 859-2
The provisions of Article 834 to Article 836-3 shall apply mutatis mutandis to a servitude of real property.
Article 859-3
When using the dominant real property is based on a right in rem for the purpose of benefiting from its use or a lease, a servitude of real property may be created for the said real property.
The servitude of real property as specified in the preceding paragraph is extinguished when the right in rem for the purpose of benefiting from its use or the lease is extinguished.
Article 859-4
A servitude of real property may be created on one’s own real property.
Article 859-5
The provisions of Article 851 to 859-2 shall apply mutatis mutandis to the preceding two paragraphs.
Chapter 6 Mortgage
Section 1 - General Mortgages
Article 860
A general mortgage is a preferential right of a creditor to receive satisfaction of a claim from the proceeds from sale of real property that a debtor or a third party has provided, without transferring possession, as security for the claim.
Article 861
Unless otherwise provided by a covenant, a mortgage secures the principal claim, interest, default interest, default penalties, and the cost of enforcing the mortgage.
The preferential right to satisfaction of a claim over interest, default interest, and such default penalties as are paid at regular periods of one year or less shall be limited to interest and penalties incurred during the five years preceding a mortgagee's enforcement of the mortgage or application for compulsory execution, and interest and penalties incurred during the process of compulsory execution.
Article 862
The effect of a mortgage extends to the accessories and accessory rights of the property mortgaged.
Rights acquired by a third party over such accessories before the creation of a mortgage are not affected by the provisions of the preceding paragraph.
When a building is the subject of a mortgage, any part added to the building and not independent of it is also subject to the effect of the mortgage. The provisions of Article 877 apply mutatis mutandis, however, when a part added to the building is an independent thing added after creation of the mortgage.
Article 862-1
The remnants of a mortgaged property after its destruction remain subject to the effect of the mortgage. The same shall be true of any component of the mortgaged property that is separated from it into independent personal property otherwise than in accordance with the ordinary use of the thing.
Under the circumstances described in the preceding paragraph, a mortgagee may claim possession of such remnants or personal property and exercise his or her rights in accordance with the provisions governing pledges.
Article 863
The effect of a mortgage extends to natural profits that are separated from the mortgaged property after the attachment of such property and that the mortgage holder is entitled to collect.
Article 864
The effect of a mortgage extends to civil profits that the mortgagor is entitled to collect on the mortgaged property after the attachment of such property. The mortgagee, however, may not claim against the obligor who shall pay such civil profits until he has notified such obligor of the fact of attachment of the mortgaged property.
Article 865
If the owner of a real property creates multiple mortgages on the same property for the purpose of securing multiple claims, the ranks of these mortgages are determined according to the order of their registration.
Article 866
After the creation of a mortgage, the owner of a real property may, on the same real property, create superficies or other rights in rem for the purpose of benefiting from their use, or establish a lease relationship, but the mortgage will not be affected thereby.
When a mortgagee's enforcement of a mortgage is affected by circumstances described in the preceding paragraph, a court may remove such rights or terminate such lease relationships and thereafter auction the property.
The preceding paragraph applies mutatis mutandis when an owner of a real property, after creating a mortgage on the real property, creates rights other than the rights specified in paragraph 1 on the same real property.
Article 867
After the creation of a mortgage, the owner of the real property may transfer the real property to another person, but the mortgage will not be affected thereby.
Article 868
When a mortgaged real property is partitioned or partially transferred, or when one property among multiple real properties securing the same claim is transferred to another person, the mortgage is not affected thereby.
Article 869
If a claim secured by a mortgage is partitioned or partially transferred, the mortgage is not affected thereby.
The provisions of the preceding paragraph apply when a debt is partitioned or partially assumed.
Article 870
A mortgage may neither be transferred nor furnished as security for any other claim by separating it from the claim that it secures.
Article 870-1
If there are multiple mortgages on the same mortgaged property, a mortgagee may adjust its proportional share of preferential right to satisfaction by the following means, provided that the interests of the other mortgagees are not thereby affected:
1. Assigning the priority ranking of its mortgage in favor of a specified mortgagee.
2. Waiving the priority ranking of its mortgage in favor of a specified mortgagee of lesser priority.
3. Waiving the priority ranking of its mortgage in favor of all mortgagees of lesser priority.
No assignment or waiver of the priority ranking of a mortgage pursuant to the preceding paragraph will take effect without registration. Prior to such registration, the mortgagee shall notify the debtor, the mortgagor, and any joint mortgagors.
A mortgagee who benefits from an adjustment in priority rankings under paragraph 1 also may enforce the mortgage with the higher pre-adjustment ranking.
When an adjustment is made to the proportional share of preferential right to satisfaction, if the claim secured by the higher ranking mortgage is also secured by real property of a third party, the mortgage to which the third party's real property is subject will be extinguished to the extent of any increase in encumbrance on the property that results from the adjustment, unless the third party has otherwise given its consent.
Article 870-2
When an adjustment is made to the proportional share of preferential right to satisfaction, if the claim secured by the higher ranking mortgage is also secured by a guarantor, the guarantor shall be exempted from liability to the extent of any loss of the benefits of preferential satisfaction that results from the adjustment, unless the adjustment is made with the consent of the guarantor.
Article 871
If an act of a mortgagor is likely to cause a reduction in the value of the mortgaged property, the mortgagee may demand cessation of the act. Under urgent circumstances, the mortgagee himself may make a necessary disposition to safeguard the mortgage.
Costs incurred for a demand or disposition specified in the preceding paragraph shall be borne by the mortgagor. Such costs shall have priority of satisfaction over claims secured by any mortgage on the property.
Article 872
If the value of a mortgaged property has been reduced for reasons attributable to the mortgagor, the mortgagee may set an appropriate time limit and demand that the mortgagor restore the status quo ante of the said property or that the mortgagor provide a security commensurate with the amount of the reduction in value.
When a mortgagor fails to perform a demand made by a mortgagee within the time limit set under the preceding paragraph, the mortgagee may set an appropriate time limit and demand that the debtor provide security commensurate with the reduction in value. If the mortgagor fails to provide such security within the time limit, the mortgagee may demand full repayment of the claim.
When the mortgagor is the debtor, the mortgagee may immediately proceed to demand full repayment of the claim without first making the demand referred to in the preceding paragraph.
If the value of a mortgaged property has been reduced for reasons not attributable to the mortgagor, the mortgagee is entitled to demand the provision of security only to the extent of the benefit thereby received by the mortgagor.
Article 873
A mortgagee who has not been paid upon maturity of the claim may apply to a court to have the mortgaged property sold by auction and to receive payment out of the proceeds of the sale.
Article 873-1
A stipulation that ownership of mortgaged property will be transferred to the mortgagee upon failure to pay the claim at maturity shall not be effective against a third party unless it has been registered.
When a mortgagee demands that the mortgagor transfer the ownership of a mortgaged property, any portion of the property's value in excess of the claim it secures shall be returned to the mortgagor; if the mortgaged property is insufficient to repay the claim it secures, the mortgagee may demand full repayment of the obligation by the debtor.
Before the ownership of a mortgaged property has been transferred to the mortgagee, the mortgagor may extinguish the mortgage by repaying the claim secured by the mortgage.
Article 873-2
When a mortgagee enforces a mortgage, the mortgage on the real property is extinguished by the sale at auction of the mortgaged property.
In the circumstances referred to in the preceding paragraph, any unexpired payment period on the claim secured by the mortgage will be deemed to have expired to the extent that payment may be effected from the proceeds from the sale at auction of the mortgaged property.
If no payment period is specified for the claim secured by the mortgage or the payment period has not yet expired, and the auction winner or the creditor succeeding to the mortgaged property declares a willingness to pay the claim to the extent of the value of the mortgaged property as auctioned or received through succession, and the mortgagee has consented, the provisions of the preceding two paragraphs shall not apply.
Article 874
Except as otherwise provided by law, the proceeds from the sale of the mortgaged property shall be distributed to the mortgagees according to their priority ranking by order of the creation of the mortgages. For mortgages of the same rank, proceeds shall be distributed pro rata to the amounts of the claims secured by the mortgages.
Article 875
If a mortgage is created on multiple real properties for the purpose of securing the same claim but without specifying the amount to be apportioned against each of those real properties individually, the mortgagee may demand performance of the whole or a part of his claim from the proceeds from the sale of any and each of those real properties.
Article 875-1
If a mortgage is created on multiple real properties for the purpose of securing the same claim, when some or all of the properties are auctioned at the same time and any property or properties among those auctioned is owned by the debtor, the mortgagee shall receive satisfaction first from the proceeds from sale of the debtor's mortgaged property or properties.
Article 875-2
If a mortgage is created on multiple real properties for the purpose of securing the same claim, the amount to be apportioned toward the claim from each of the mortgaged properties shall be calculated as follows:
1. When the apportionment from each individual mortgaged property has not been specified, the apportionment shall be made pro-rata to the values of the properties.
2. When the apportionment from each individual mortgaged property has been specified, the apportionment shall be made pro-rata to the amounts specified for apportionment from the properties.
3. When the apportionment has been specified for only some of the mortgaged properties, the apportionment shall be made pro-rata to the amounts specified for apportionment from the properties and, for those properties for which no amount has been specified, to the values of the properties.
When calculating the amounts to be apportioned under subparagraphs 2 and 3 of the preceding paragraph, when the amount specified for apportionment from any individual mortgaged property is higher than the value of that mortgaged property, the value of the mortgaged property shall be used in the calculation.
Article 875-3
If a mortgage is created on multiple real properties for the purpose of securing the same claim, if some or all of the mortgaged properties are sold by auction simultaneously, and the proceeds from their sale exceed the amount of the claim secured by the mortgages, the provisions of the preceding article apply mutatis mutandis to the calculation of the amount to be apportioned from each of the auctioned mortgaged properties toward payment of the claim.
Article 875-4
If a mortgage is created on multiple real properties for the purpose of securing the same claim, if individual mortgaged properties are sold by auction separately, the following provisions apply:
1. When a mortgaged property sold by auction is owned by a third party other than the debtor and the amount of satisfaction received on the claim by the mortgagee from the auction proceeds exceeds the amount apportionable from that property, the owner of the mortgaged property, within the extent of that excess amount, may demand reimbursement from any other third party or parties whose properties provided as security for the mortgage have not been auctioned, and may also succeed to the rights of the mortgagee in the mortgaged property of such other third parties, to the extent of their apportionment, unless such succession would be prejudicial to the rights of the mortgagee.
2. When a mortgaged property sold by auction is owned by a given person and the amount of the mortgagee's claim satisfied out of the proceeds from auctioning that property exceeds the amount apportionable from that property, then a mortgagee with a junior mortgage on that same property, within the extent of that excess amount, succeeds to the rights of the enforcing mortgagee in any remaining mortgaged properties provided as security by the same given person that have not yet been auctioned, unless such succession would be prejudicial to the rights of the mortgagee.
Article 876
If the land and a building on such land are both owned by the same person at the time a mortgage is created, and either the land or the building only is mortgaged, a superficies is deemed to have been created and to exist at the time when the mortgaged property is sold by auction, and the land rental, term, and scope of the superficies shall be determined by agreement between the parties. If such an agreement cannot be reached, the parties may apply to a court for a judgment determining these.
If the land and a building on such land are both owned by the same person at the time a mortgage is created, and both the land and the building are mortgaged, if the land and the building are thereafter sold by auction to different bidders, the provision of the preceding paragraph shall apply.
Article 877
If, after the creation of a mortgage, the landowner constructs buildings on the mortgaged land, the mortgagee may when necessary apply to a court in the course of compulsory execution procedures to have the buildings sold by auction together with the land, but shall have no preferential right to satisfaction from the proceeds from the sale of such buildings.
The provisions of the preceding paragraph shall apply mutatis mutandis to any building of a rights holder, or used by a person with the rights holder's consent, on the mortgaged property under the circumstances set out in Article 866, paragraphs 2 and 3.
Article 877-1
When a mortgage is created on a building and the mortgaged property is subject to court auction, such assignable rights as necessarily inhere in the mortgaged property shall be auctioned together with it. The mortgagee, however, shall have no preferential right to satisfaction from the proceeds from the sale of those rights.
Article 878
A mortgagee who has not received payment by the maturity of a claim may enter into a contract to acquire the ownership of the mortgaged property, or dispose of it by any means other than an auction, unless so doing would be prejudicial to the interests of the other mortgagees.
Article 879
When a third party who creates a mortgage for a debtor pays the debt in full for such debtor, or loses the ownership in rem of the mortgaged property through the enforcement of the mortgage by the mortgagee, the third party succeeds to the claims of the creditor against the debtor to the extent required for repayment, unless such succession would be prejudicial to the rights of the creditor.
When the debtor has a guarantor, the portion of the debt for which the guarantor is obligated shall be determined pro rata by the guarantor's liability for performance relative to the value of, or the specified monetary amount of apportionment from, the mortgaged property. When the amount of the claim secured by the mortgaged property is less than the value of the property, the amount of the claim secured by the property shall be used in calculation.
Under the circumstances of the preceding paragraph, the mortgagor may demand reimbursement from the guarantor of the portion for which the guarantor is obligated, to the extent that the portion for which the mortgagor is obligated has been exceeded.
Article 879-1
When a third party creates a mortgage for a debtor, if the creditor waives the guarantor's liability for performance, a portion of the mortgage will be extinguished commensurate with the portion for which the guarantor is obligated pursuant to paragraph 2 of the preceding article.
Article 880
For a claim secured by a mortgage, if the right of claim is extinguished by prescription, the mortgage will be extinguished if not enforced by the mortgagee within five years after the completion of such prescription.
Article 881
Unless otherwise provided by law, a mortgage is extinguished by the destruction of the mortgaged property, unless the mortgagor is entitled to receive compensation or other benefits as a result of such destruction.
The mortgagee enjoys a pledge of rights over any right to compensation or other right of claim exercisable by the mortgagor as referred to in the preceding paragraph. The seniority of the pledge shall be the same as that of the original mortgage.
If a payment obligor, intentionally or through gross negligence, makes a payment to the mortgagor, the payment has no effect against the mortgagee.
The provisions of the preceding three paragraphs apply mutatis mutandis with respect to compensation or other benefits that may be received as a result of damage to a mortgaged property.
Section 2 - Line of Credit Mortgages
Article 881-1
A line of credit mortgage is a mortgage created for not more than a specified maximum amount on real property belonging to a debtor or a third party and provided thereby to secure a creditor's unspecified claim within a specific scope against the debtor.
Claims secured by line of credit mortgages shall be limited to claims deriving from specific legal relationships or to rights deriving from negotiable instruments.
For rights deriving from negotiable instruments, with the exception of those obtained on the basis of a specific legal relationship with a debtor as referred to in the preceding paragraph, if the mortgagee accepts any further transfers of negotiable instruments once the debtor has ceased payment and begun liquidation proceedings, or once there has been any composition agreement, application for bankruptcy, or application for company reorganization pursuant to the Bankruptcy Act, the rights under such negotiable instruments are not a claim secured by the line of credit mortgage. This restriction shall not apply, however, if the mortgagee has accepted transfer of a negotiable instrument without knowledge of those circumstances.
Article 881-2
The mortgagee of a line of credit mortgage may exercise rights with respect to the principal claim, once it has been determined, only within the stipulated maximum amount.
The mortgagee of a line of credit mortgage may exercise rights with respect to interest, default interest, and default penalties on a claim under the preceding paragraph only insofar as the aggregate sum of those items and the claim under the preceding paragraph does not exceed the stipulated maximum amount.
Article 881-3
Prior to the determination of the principal claim, the mortgagee and the mortgagor may stipulate a change in the scope or in the debtor of a claim as set out in Article 881-1, paragraph 2.
A change referred to in the preceding paragraph does not require the consent of mortgagees holding junior mortgages or other interested parties.
Article 881-4
A line of credit mortgage may stipulate a date on which the principal claim it secures shall be determined, and prior to the determination date, a change in that date may be stipulated.
The determination date referred to in the preceding paragraph may not be more than 30 years from the time the mortgage is created. If a period of 30 years from that time is exceeded, the period will be reduced to 30 years.
The time period referred to in the preceding paragraph may be renewed by the parties.
Article 881-5
If no date has been stipulated for determination of the principal claim secured by a line of credit mortgage, the mortgagor or the mortgagee may at any time demand determination of the principal claim secured by the mortgage.
Under the circumstances referred to in the preceding paragraph, the day 15 days from the date of the demand will be the date for determination of the principal claim, unless otherwise stipulated between mortgagor and mortgagee.
Article 881-6
If the claim secured by a line of credit mortgage is assigned to another person prior to determination of the principal claim, the line of credit mortgage is not transferred along with the claim. The same shall be true when a third party satisfies the debt on behalf of the debtor.
If, prior to determination of the principal claim, a third party assumes the claim secured by a line of credit mortgage, and the debtor is exempted from liability, the mortgagee may not exercise the line of credit mortgage with respect to the portion that has been assumed.
Article 881-7
If, prior to the determination of the principal claim, the mortgagee or the debtor of a line of credit mortgage is a juristic person and undergoes a merger, the mortgagor may, within 15 days from the date on which it learns of the merger, demand determination of the principal claim. This provision shall not apply, however, more than 30 days after the record date of the merger or when the mortgagor is a party to the merger.
When a demand is made pursuant to the preceding paragraph, the principal claim shall be determined at the time of merger.
The juristic person surviving or created by the merger shall notify the mortgagor within 15 days from the date of the merger, and shall be liable for damages for any injury to the mortgager resulting from failure to make such notification.
The provisions of the preceding three paragraphs apply mutatis mutandis under the circumstances set out in Article 306 or to demerger by the juristic person.
Article 881-8
Prior to determination of the principal claim, the mortgagee may, with the consent of the mortgagor, assign the line of credit mortgage in whole or divide and assign it in part to a third person.
Prior to determination of the principal claim, the mortgagee may, with the consent of the mortgagor, cause another or others to become joint mortgage holders of the line of credit mortgage.
Article 881-9
If multiple persons are joint mortgage holders of a line of credit mortgage, the share of each joint mortgage holder in proceeds to which the holders are preferentially entitled is allotted pro-rata to the holder's proportional share in the claim, unless otherwise stipulated by the joint mortgage holders prior to determination of the principal claim.
The right of a joint mortgage holder to be allotted a share pro-rata to its proportional share in the claim pursuant to the preceding paragraph may not be disposed of without the consent of all of the joint mortgage holders, unless prior stipulations have been made concerning the shares to which the mortgage holders are entitled.
Article 881-10
If line of credit mortgages are created on multiple real properties for the purpose of securing the same claim, and if there occurs cause for determination of the principal claim with respect even to just one among the mortgaged real properties securing the principal claim, the principal claim secured by each of the line of credit mortgages will thereupon be determined.
Article 881-11
A line of credit mortgage is not affected by the death of the mortgagee, mortgagor, or debtor, unless such event has been stipulated as a cause for determination of the principal claim.
Article 881-12
Unless otherwise provided in this Section, any of the events below will be cause for determination of the principal claim secured by a line of credit mortgage:
1. The arrival of the stipulated date for determination of the principal claim.
2. A change in the scope of the secured claim, or any other event, that results in discontinuance of the principal claim.
3. The termination of the legal relationship under which the secured claim was incurred, or extinguishment of that relationship due to any other cause.
4. Refusal by the creditor to allow incurrence of further claims, and a demand by the debtor for determination.
5. An application by the mortgagee of a line of credit mortgage for a court ruling for auction of the mortgaged property; a demand for transfer of ownership of the mortgaged property pursuant to Article 873-1; or the establishment of a contract pursuant to Article 878.
6. Attachment of the mortgaged property by a court due to an application by another creditor for compulsory execution, where the mortgagee of the line of credit mortgage knows of the attachment, or where the executing court notifies the mortgagee of the same, provided that this will not apply if the attachment of the property has been cancelled.
7. A court ruling pronouncing bankruptcy of the debtor or mortgagor, provided that this will not apply if the bankruptcy ruling has been vacated by a final and unappealable court ruling.
The provisions of Article 881-5, paragraph 2, apply mutatis mutandis to subparagraph 4 of the preceding paragraph.
The provisos of paragraph 1, subparagraphs 6 and 7 do not apply if, after determination of the principal claim, a third party has taken assignment of the secured claim, or has created any right to which the claim is subject.
Article 881-13
After the occurrence of a cause for determination of the principal claim secured by a line of credit mortgage, the debtor or mortgagor may demand that the mortgagee provide a final accounting of the actual amount of the claim incurred, and may demand registration of that amount as amended to a regular mortgage. The amount registered, however, may not exceed the originally stipulated maximum amount of the mortgage.
Article 881-14
Except as otherwise provided in this Section, once the principal claim secured by a line of credit mortgage has been determined, the effectiveness of the security does not extend to any claim further incurred or any right in a negotiable instrument obtained subsequent to such determination.
Article 881-15
Once the right of claim over the claim secured by a line of credit mortgage has been extinguished by prescription, if the mortgagee does not enforce its mortgage right during the five years following the completion of such prescription, that claim is thenceforth excluded from the scope secured by the line of credit mortgage.
Article 881-16
Following determination of the principal claim secured by a line of credit mortgage, if the actual amount of the claim exceeds the stipulated maximum amount of the mortgage, a third person who established the mortgage for the debtor, or any other person with a legal interest in the existence of the mortgage, may apply for its cancellation after repayment of an amount equivalent to the maximum amount.
Article 881-17
The provisions regarding regular mortgage apply mutatis mutandis to line of credit mortgages, with the exception of the provisions of Article 861, paragraph 2, Article 869, paragraph 1, Article 870, Article 870-1, Article 870-2, and Article 880.
Section 3 - Other Mortgage
Article 882
A superficies, an agricultural right and a dian may be the object of a mortgage.
Article 883
The provisions concerning regular mortgages and line of credit mortgages apply mutatis mutandis to the mortgages specified in the preceding article and other mortgages.
Chapter 7 Pledge
Section 1 - Pledge of Personal Property
Article 884
A pledge of personal property is a preferential right of a creditor to receive satisfaction of a claim from the proceeds from sale of personal property the possession of which has been transferred by a debtor or a third party as security for the claim.
Article 885
The creation of a pledge becomes effective by the transfer 1into the possession of the creditor of the personal property provided as security.
The pledgee may not cause the pledgor or the debtor to possess the pledged property in place of the pledgee.
Article 886
When a recipient of a pledge is in possession of the personal property and is protected by the provisions concerning possession, the recipient of the pledge acquires the pledge even if the pledgor has no right of disposal over the thing pledged.
Article 887
Unless otherwise provided by a covenant, a pledge secures the principal claim, interest, default interest, default penalties, cost of preserving the thing pledged, cost of executing the pledge, and damages for any injury arising from a concealed defect in the thing pledged.
The cost of preserving the thing pledged referred to in the preceding paragraph shall be limited to the cost necessary for preventing impairment of the value of the thing pledged.
Article 888
The pledgee shall keep custody of the thing pledged with the due care of a good administrator.
The pledgee may not use the thing pledged or lease it to others except with the consent of the pledgor, provided that use necessary for the preservation of the thing pledged is not subject to this restriction.
Article 889
The pledgee may collect profits produced from the thing pledged, unless otherwise provided by a covenant.
Article 890
A pledgee who has the right to collect profits from the thing pledged shall do so with the same care he would take for his own property and shall render an account of the profits.
The profits as specified in the preceding paragraph shall first be applied to discharge the costs of collecting the profits, then to discharge the interest on the principal claim, and finally to discharge the principal claim.
If appraisal at current value is required before discharge may be made from the profits, the provisions regarding enforcement of pledge rights shall apply mutatis mutandis to the method of appraisal.
Article 891
For the duration of the pledge, the pledgee may, on his responsibility, sub-pledge the thing pledged to a third party. The pledgee shall be also responsible for any loss caused by force majeure resulting from the sub-pledge.
Article 892
If the thing pledged is likely to be perishable or there is an obvious depreciation in its value sufficient to prejudice the rights of the pledgee, the pledgee may sell the thing pledged by auction and keep the proceeds from sale in place of the thing pledged.
Under the circumstances referred to in the preceding paragraph, the pledgee shall lodge the proceeds from sale of the thing pledged with a court if the pledgor so requests. The pledgee may enforce its pledge rights against the thing lodged with the court if the pledgee has not received payment upon maturity of the claim.
Article 893
A pledgee who has not received payment upon maturity of the claim may sell the thing pledged by auction and receive payment from the proceeds of the sale.
The provisions of Article 873-1 apply mutatis mutandis to any stipulation that ownership of the thing pledged will be transferred to the pledgee upon failure to pay the claim upon maturity.
Article 894
Under the circumstances referred to in the two preceding articles, the pledgee shall notify the pledgor before the sale by auction, unless such notification is impracticable.
Article 895
The provisions of Article 878 shall apply mutatis mutandis to pledges of personal property.
Article 896
Upon the extinction of the claim secured by a pledge of personal property, the pledgee shall return the thing pledged to the person entitled to receive it.
Article 897
A pledge on personal property is extinguished when the pledgee returns the thing pledged to the pledgor or delivers it to the debtor. Upon the return or delivery of the thing pledged, any reservation made in contemplation of continuance of the pledge is void.
Article 898
A pledge of personal property is extinguished when the pledgee loses possession of the thing pledged and does not within a period of two years thereafter demand its return.
Article 899
A pledge of personal property is extinguished by the destruction or loss of the thing pledged, unless the pledgor is entitled to receive compensation or other benefits as a result of such loss or destruction.
The pledgee retains a pledge over any right to compensation or other right of claim exercisable by the pledgor as referred to in the preceding paragraph. The seniority of the pledge so retained is the same as that of the original pledge.
If a payment obligor, intentionally or through gross negligence, makes a payment to the pledgor, the payment has no effect against the pledgee.
Under the circumstances referred to in the preceding paragraph, the pledgee may demand that the pledgor deliver the thing given in payment or make a lodgment of the money paid.
The provisions of the preceding four paragraphs apply mutatis mutandis with respect to compensation or other benefits that may be received as a result of damage to a thing pledged.
Article 899-1
A debtor or a third party may provide personal property belonging thereto to create a line of credit pledge, for not more than a specified maximum amount, to secure a creditor's unspecified claim within a specific scope against the debtor.
The creation of a pledge referred to in the preceding paragraph shall be done in writing, in addition to transferring the possession of the personal property.
The provisions regarding line of credit mortgages, and of Article 884 through the preceding article, apply mutatis mutandis to line of credit pledges.
Article 899-2
A pledgee that has received approval to engage in the business of taking pledges may exercise its rights only against the things pledged. If a pledgor does not redeem the thing pledged within five days after the expiration of the period for redemption, the pledgee obtains ownership of the thing pledged, and the claim that it secures is thereupon extinguished.
The provisions of Articles 889 to 895, Article 899, and Article 899-1 do not apply to pledges referred to in the preceding paragraph.
Section 2 - Pledge of Rights
Article 900
A pledge of rights is a pledge the subject of which is a transferable claim or other transferable right.
Article 901
Unless otherwise provided in this section, the provisions concerning pledges of personal property shall apply mutatis mutandis to pledges of rights.
Article 902
The creation of a pledge of rights shall be made in accordance with the provisions concerning the transfer of such rights, as well as with the provisions of this section.
Article 903
A pledgor may not, by means of a juristic act, cause a right that is the subject of a pledge to be extinguished or modified without the consent of the pledgee.
Article 904
If the subject of a pledge is a claim, the pledge shall be created in writing.
If there is any document evidencing a claim referred to in the preceding paragraph, the pledgor is obligated to deliver it.
Article 905
If a claim that is the subject of a pledge is a pecuniary claim with a maturity earlier than the maturity of the claim it secures, the pledgee may demand that the debtor lodge the payment for the pecuniary claim, and may exercise its pledge against the thing lodged.
If a claim that is the subject of a pledge is a pecuniary claim with a maturity later than the maturity of the claim it secures, then at the maturity of the claim secured by the pledge, the pledgee may demand payment of the amount of the claim secured by the pledge.
Article 906
If a claim that is the subject of a pledge is a claim for payment by delivery of personal property other than money, then at the maturity of that claim, the pledgee may demand that the debtor deliver the personal property, and the pledgee will hold a pledge over the thing delivered.
Article 906-1
If a claim that is the subject of a pledge is a claim for payment by the creation or transfer of rights in rem in real property, then at the maturity of that claim, the pledgee may demand that the debtor create or transfer such rights in rem in the real property in favor of the pledgor, and the pledgee will hold a mortgage on the rights in rem in the real property.
At the time of the creation or transfer of the rights in rem in the property in favor of the pledgor, the mortgage referred to in the preceding paragraph shall be registered together therewith.
Article 906-2
When a pledgee has not received payment upon maturity of the claim secured by a pledge, in addition to taking measures under the preceding three articles, the pledgee also may enforce its pledge in accordance with the provisions of Article 893, paragraph 1, or Article 895.
Article 906-3
When a claim that is the subject of a pledge may be caused to reach maturity by the exercise of a certain right, the pledgee also may exercise that right when the pledgee has not received satisfaction upon maturity of the claim secured by the pledge.
Article 906-4
When a debtor makes a lodgment or a payment in accordance with Article 905, paragraph 1, Article 906, or Article 906-1, the pledgee shall notify the pledgor but need not obtain the consent of the pledgor.
Article 907
If the subject of a pledge is a claim, and its debtor has been notified of the creation of the pledge, that debtor, when making any payment either to the pledgor or the pledgee, shall first obtain the consent of the other of those parties. In the absence of such consent the debtor shall lodge the thing given as payment.
Article 907-1
If the subject of a pledge is a claim, and its debtor, after having been notified of the creation of the pledge, obtains any claim against the pledgor, that debtor may not assert offset of that claim against the claim that is the subject of the pledge.
Article 908
If the subject of a pledge is securities for which no rights holder is named, the creation of the pledge becomes effective by the delivery of the securities to the pledgee. If the subject is any other type of securities, endorsement is also required to be made.
The endorsement referred to in the preceding paragraph may include a notation as to the purpose for which the pledge is created.
Article 909
If the subject of a pledge is securities for which no rights holder is named, a negotiable instrument, or any other securities transferred by endorsement, the pledgee may collect payments receivable on such securities even if the claim secured thereby has not matured. If to do so it is necessary to cause the securities to reach maturity, the pledgee shall also have the right to bring about the maturity by giving notice or by other means. And the debtor may make payments only to the pledgee.
The provisions of Article 905, paragraph 1, or Article 906 apply to payments collected pursuant to the preceding paragraph.
The provisions of Article 906-2 and Article 906-3 apply mutatis mutandis to pledges the subject of which is securities.
Article 910
If the subject of a pledge is securities, the effect of the pledge further extends to attached interest coupons, fixed-payment securities, or any other attached securities, provided they have been delivered to the pledgee.
Unless otherwise stipulated, if attached securities are issued after the creation of the pledge, the pledgee may demand their delivery from the issuer or the pledgor.
Chapter 8 Dian
Article 911
Dian is, by delivering a price, the right to use and collect profits on a real property of another person, and the ownership of such real property is acquired if the said person refuses to redeem.
Article 912
The period of dian cannot exceed thirty years. If a period exceeding thirty years has been agreed upon, such period is to be reduced to thirty years.
Article 913
If a period of a dian less than fifteen years has been agreed upon, a clause, which provides that the property not redeemed on the date of expiration will be considered sold without a right of redemption, cannot be included in the contract.
If a clause, which provides that the property not redeemed on the date of expiration will be considered sold without a right of redemption, has been agreed upon, the dian-holder acquires the ownership of the property dianed if the dian-maker refuses to redeem at the original dian price on the date of expiration.
A clause, which provides that the property not redeemed on the date of expiration will be considered sold without a right of redemption, shall not be effective against a third party unless it has been registered.
Article 914
(Repealed)
Article 915
For the duration of the dian, the dian-holder may sub-dian or lease the property dianed to another person. Unless it is otherwise provided by agreement or by customs, such agreement or custom shall apply.
If the dian’s duration has been fixed, the duration of the sub-dian or lease cannot exceed that of the original dian. In the absence of such fixed duration, the sub-dian or lease shall not have a fixed duration.
The price for the sub-dian cannot exceed the price of the original dian.
If the land and the buildings thereon belong to the same person, and a dian is created for one person, the dian-holder shall not separately sub-dian or dispose of the property dianed.
Article 916
The dian-holder is liable to compensate for any injury caused to the property dianed resulting from the sub-dian or lease.
Article 917
The dian-holder may transfer the dian to another person or create a mortgage.
If the property dianed is a land, and the dian-holder has a building thereon, the dian and such building cannot be separately transferred or disposed of.
Article 917-1
The dian-holder shall use the property dianed and acquire the profit therefrom according to the nature of the property dianed, and shall maintain sustainable use for the property dianed maintained.
If the dian-holder violates the provision of the preceding paragraph, the dian-maker is entitled to redeem the property dianed if the dian-holder ignores his inhibition. If a mortgage is created on the dian, the mortgagee shall also been informed about such inhibition.
Article 918
The dian-maker may after the creation of the dian transfer the property dianed to another person. However, the dian remains un-affected.
Article 919
When the dian-maker sells the property dianed to another person, the dian-holder has the right of first purchasing under the same terms and conditions.
In the case of the preceding paragraph, the dian-maker shall notify the dian-holder in writing accordingly. If the dian-holder fails to express his intent of purchasing in writing under the same terms and conditions within ten days after receiving the notice of sell, his right of first purchasing is deemed waived.
If the dian-maker violates the provision of notice of the preceding paragraph and transfers the ownership of the property dianed, such transfer shall not be effective against the dian-holder.
Article 920
If, for the duration of the dian, the property dianed has been wholly or partially destroyed by force majeure, both the dian and the right of redemption are extinguished in respect to the part destroyed.
In the case of the preceding paragraph, if the dian-maker redeems the part remaining, he may deduct from original price received for the dian the price for the dian of the destroyed part. The price for the dian of the destroyed part is calculated according to the proportion of the value which the part destroyed had at the time of such destruction and the value which the property dianed had at the time of such destruction.
Article 921
If, for the duration of the dian, the property dianed is wholly or partially destroyed by force majeure, the dian-holder may reconstruct or repair the property dianed within the value which the part destroyed had at the time of such destruction, unless otherwise agreed by the dian-maker. Original dian is deemed continually existing on the reconstruction.
Article 922
If, for the duration of the dian, the property dianed is wholly or partially destroyed due to
the dian-holder's fault, he is liable for such destruction to the extent of the amount of the
price given for the dian. However, if the destruction is caused by his intentional actions or
gross negligence, he shall compensate for further injury, in addition to that covered by the
price given for the dian.
Article 922-1
A reconstruction is financed by the compensation received from the loss of the property dianed, the original dian shall be deemed as continuously existing upon the reconstructed property.
Article 923
If a period has been fixed for the duration of the dian, the dian-maker may redeem the property dianed at the original price received for the dian after the end of such period.
If the dian-maker does not redeem the property dianed at the original price received for the dian within two years from the end of the said period, the dian-holder acquires the ownership of the property dianed.
Article 924
If no period has been fixed for the duration of the dian, the dian-maker may redeem the property dianed at any time at the original price received for the dian. However, if it is not redeemed within thirty years from the creation of the dian, the dian-holder acquires the ownership of the property dianed.
Article 924-1
When the dian-maker makes an expression of redeeming the property sub-dianed to the dian-holder, if the dian-holder does not redeem from the sub-dian-holder and cancel the recordation of dian within a reasonable period, the dian-maker is entitled to redeem, within the price of original claim, the property dianed from the last sub-dain holder at the price of the last sub-dianed.
In the case of the preceding paragraph, if the price for sub-dian is lower than the price for the original dian, the dian-holder or the sub-dian-holder is entitled to claim the difference of the price between the original dian and the sub-dian. The dian-maker can also lodge the difference in amount for every person who is entitled to claim.
The provision of the preceding two paragraphs shall also apply to the following circumstances:
1. The dian-holder has previously declared that he refuses to cancel the recordation of the dian.
2. The dian-maker cannot make the expression of redemption because the dian-holder is missing or other circumstances.
Article 924-2
Where the land and the building thereon are owned by the same person, and the dian is only created on the land, a lease relationship is presumed to exist between the dian-holder and the owner of the building during the existence of the dian or the building. If the dian is only created on the building, a lease relationship is presumed to exist between dian-holder and the landowner within the duration of the dian. If the dian is created on the land and the building respectively, a lease relationship is presumed to exist between the dian-holders within the duration of both dian.

In the case of the preceding paragraph, if the sum of the rental cannot be agreed upon by the parties, they can apply to a court for a judgment to determine it.
Where the dian is created according to the first paragraph, and the dian-holder acquiring the ownership of the property dianed according to the provisions of the second paragraph of Article 913, the second paragraph of Article 923 and Article 924 results in the land and the building owned by different person, the provision of Article 838-1 shall be applied.
Article 925
The redemption made by the dian-maker shall be informed to the dian-holder six months beforehand.
Article 926
If, for the duration of the dian, the dian-maker expresses to transfer to the dian-holder the ownership of the property dianed, the dian-holder may acquire such ownership by paying the difference between the current value of the property dianed and the price given for such dian.
The payment of the difference specified in the preceding paragraph shall be made once only.
Article 927
If beneficial outlays have been incurred by the dian-holder, whereby the value of the property dianed is increased or where reconstruction or repairs have been made in accordance with the provisions of Article 921, the dian-holder may demand return to the extent of the benefits existing at the time of the redemption of the said property.
The provision of Article 839 shall apply mutatis mutandis to the redemption of the said property.
If the property dianed is a land, and the dian-maker agrees the dian-holder to construct buildings on it, the dian-maker shall reimburse the dian-holder according to the current market price of such building at the time of the redemption of the said property, except there is another agreement. If the dian-maker refuses to reimburse, a superficies is deemed to be created at the time of the redemption.
If the dian-maker is willing to reimburse according to the preceding paragraph, but the parties cannot agree upon the current market price, the parties can apply to a court to determine the price. If the dian-maker refuses to reimburse according to the price decided by the court, a superficies is also deemed to be created at the time of the redemption.
In the circumstance that a superficies is deemed to be created as specified in the preceding two paragraphs, if the parties cannot agree upon the rental, duration and scope, the parties can apply to a court to determine it.
Chapter 9 Right Of Retention
Article 928
The right of retention is the right of a creditor who is in possession of the personal property of another to retain that personal property if there is a nexus between the occurrence of the creditor's claim and that property and the creditor has not received payment upon maturity of the claim.
The provisions of the preceding paragraph do not apply if the creditor possesses the personal property as the result of a tort or other unlawful cause, or if at the time the creditor took possession the creditor knew, or due to gross negligence failed to know, that the personal property is not owned by the debtor.
Article 929
The nexus specified in the preceding article is deemed to exist where the personal property is taken into possession due to a business relationship existing between traders and the claim arises from that business relationship.
Article 930
Personal property may not be retained if retention is contrary to public order or good morals. The same shall be true if retention conflicts with a duty that shall be borne by the creditor or with a stipulation between creditor and debtor.
Article 931
Upon the insolvency of the debtor, the creditor has the right of retention, even before the claim has matured.
If the debtor becomes insolvent after the delivery of the personal property or if his insolvency becomes known to the creditor only after such delivery, the creditor may exercise his right of retention, even if there exists a conflict referred to in the preceding article.
Article 932
When a creditor has not yet received full payment of its claim, the creditor may exercise its right of retention against the whole of the thing retained, provided that if the thing retained is divisible, the creditor may exercise its right only pro rata by the ratio of its claim to the value of the thing retained.
Article 932-1
When rights in rem other than ownership rights exist in a thing retained, the holder of those rights in rem may not assert them against a bona fide holder of the right of retention.
Article 933
The provisions of Articles 888 to 890 and of Article 892 apply mutatis mutandis to the right of retention.
Article 934
The creditor may demand reimbursement from the owner of the thing retained for any necessary outlays incurred for maintaining custody of the thing retained.
Article 935
(Repealed)
Article 936
A creditor who has not received payment upon maturity of a claim may set an appropriate time limit of at least one month, notify the debtor, and declare that if the claim is not paid within the time limit, payment will be taken out of the thing retained. If the thing retained is owned by a third party or other rights in rem exist in the thing, and the creditor knows this, the creditor shall also notify the third party or rights holder at the same time.
If the debtor or the owner of the thing retained does not pay the claim within the time limit specified in the preceding paragraph, the creditor may apply mutatis mutandis the provisions regarding the enforcement of pledge rights and receive preferential payment out of the proceeds from the sale of the retained thing or obtain ownership of the thing.
If notification under paragraph one is impossible, the creditor may also exercise the rights specified in the preceding paragraph if it has not yet received payment of the claim six months after maturity of the claim.
Article 937
If the debtor or the owner of the thing retained has furnished commensurate security for the payment of the claim, the creditor's right of retention is extinguished.
The provisions of Articles 897 to 899 apply mutatis mutandis to the right of retention.
Article 938
(Repealed)
Article 939
The provisions of this Chapter regarding right of retention apply mutatis mutandis to any other rights of retention, provided that if there are separate provisions regarding such other rights of retention, those provisions shall govern.
Chapter 10 Possession
Article 940
A possessor is a person who has a controlling power de facto over a thing.
Article 941
If a person possesses a thing of another as a superficiary, agricultural right holder, dian-holder, lien creditor, lessee, or depositary, or by virtue of some other similar legal relationship, such other person is an indirect possessor.
Article 942
If, by following the instructions of another person, a person has the controlling power over a thing as an employee, apprentice, or family member or by virtue of some other similar relation he is entitled to the said power, then only such other person is the possessor.
Article 943
A possessor is presumed to have legally the right which he exercises in rem of thing possessed.
The presumption provided in the preceding paragraph shall not apply to the following circumstances:
1. Possess the registered real property and exercise its rights in rem.
2. Exercise the rights other than ownership to the person who has put it in his possession.
Article 944
It is presumed that the possessor possesses a thing with the intent of being its owner, in good faith, peacefully, openly and not negligently.
If it is proved that possession existed at the beginning and at the end of a period, it is presumed that the possessor has been in continuous possession during the intermediate time.
Article 945
When, according to the nature of the facts from which the possession of a thing originates, the possessor has no intent of being its owner, he takes the possession with the intention of being its owner from the time when he expresses such intent to the person who has put it in his possession. The same rules shall apply when the possession becomes one with the intent of being its owner through a new fact.
Where the person who has put it in his possession is not the owner, and the possessor already knows the exact owner of the thing possessed when he made the expression as specified in the preceding paragraph, the possessor shall also express his intent to the said owner.
The preceding two paragraphs shall apply mutatis mutandis to where the possessor with the intent of being its owner changes his intent of possession to that other than the intent of being an owner, and the possessor with one intent of possession changes his intent to another intent of possession.
Article 946
The transfer of possession becomes effective by the delivery of the thing possessed.
The provisions of Article 761 shall apply mutatis mutandis to the transfer as specified in the preceding paragraph.
Article 947
The successor or transferee in a possession may assert either his own possession or his possession together with that of his predecessor.
In case the possessor asserts the possession of the predecessor together with that of his own, he succeeds also to its defects.
Article 948
If, with the purpose of transferring the ownership of, or creating other rights to a personal property, a person in good faith takes the possession of such personal property, such possession shall be protected by law, even though the transferor had no right to transfer it. Provided, however, this provision shall not apply, if the transferee knows, or does not know with gross negligence, that the transferor has no right to transfer it.
If a personal property’s possession is transferred according to the provisions of Paragraph Two, Article 761, the transferee shall only be protected by the preceding paragraph, if he receives delivery and is in good faith at the time of delivery.
Article 949
If the thing possessed is a steal, lost property, or its original possessor has lost possession unintentionally, the original possessor is entitled to demand from the current possessor, who in a good faith takes the possession of such property, the restoration of the thing within two years from the time when he lost possession.
Once the thing is restored in accordance with the preceding paragraph, the rights on it have also been restored from the time the possession was lost.
Article 950
If the steal or the lost property, or other thing which its original possessor unintentionally lost possession, is bought in good faith by the current possessor in an open trade market, or from traders selling things similar to the one possessed, the thing cannot be restored without returning the buyer with the price he paid for it.
Article 951
In case the steal or the lost property or other thing which its original possessor unintentionally lost possession consists of moneys or securities for which no right holder is named, restoration of the same cannot be demanded from its bona fide current possessor.
Article 951-1
The provisions of Article 949 and Article 950 shall not apply to the original possessor who is a mala fide possessor.
Article 952
A bona fide possessor may use the thing possessed and collect the profits therefrom within the scope of his legally presumed right.
Article 953
If, in consequence of circumstances for which the bona fide possessor is responsible the thing possessed is lost or destroyed, he is liable for the injury to the person demanding the restoration only to the extent of the interests which he, the said possessor, has received by reason of the destruction or damaged.
Article 954
A bona fide possessor may demand from the person demanding restoration return of any necessary outlays incurred for the preservation of the thing possessed. However, he cannot demand to return the general necessary outlays, if he has collected the profits of the said thing.
Article 955
A bona fide possessor may demand from the person demanding restoration return for any beneficial outlays incurred for the improvement of the thing possessed in so far as the existing value of the thing is increased thereby.
Article 956
If, owing to circumstances for which a mala fide possessor or anyone possessing the thing without the intent of being its owner is responsible, the thing possessed is lost or destroyed, he is liable to the person demanding restoration for any injury arising therefrom.
Article 957
A mala fide possessor may demand from the person demanding restoration return for any necessary outlays incurred for the preservation of the thing possessed in accordance with the provisions concerning management of affairs without mandate.
Article 958
A mala fide possessor is liable for the return of profits. If the profits have been consumed, or have been destroyed through his negligence, or have not been collected through his neglect, he is bound to compensate for the value of such profits.
Article 959
A bona fide possessor becomes a mala fide possessor since he is sure that he has no right to possess the thing.
A bona fide possessor, who loses in an action concerning his right which the possession originates, is deemed to be as a mala fide possessor from the date the notice of complaint is served.
Article 960
A possessor may defend himself with his own force against any act which deprives him of or interferes with his possession.
If the thing possessed has been seized, the possessor may, if it is a real property, retrieve the same by expelling the tortfeasor immediately after the seizure; or, if it is a personal property, retrieve it from the tortfeasor in the very act or in a pursuit.
Article 961
The person entitled to the controlling power as specified in Article 942 may also exercise the right of the possessor provided by the preceding article.
Article 962
If possession has been deprived from a possessor, he may demand the return of the thing possessed; if it is interfered with, he may demand the removal of the interference; and if it is in danger of being interfered with, he may demand the prevention of such interference.
Article 963
The claim as specified in the preceding article is extinguished by prescription, if it is not exercised within one year from the time of the deprivation or interference or from the existence of the danger of being interfered with.
Article 963-1
If several persons possess a thing in common, each possessor may exercise the rights provided by Article 960 or Article 962 over the thing possessed as a whole.
The thing retrieved or returned in accordance with the preceding paragraph shall be possessed for all the possessors.
Article 964
The possession of a thing is extinguished by the loss of the controlling power de facto, which the possessor exercises in rem of said thing, unless the loss of such controlling power is only temporary.
Article 965
If several persons possess a thing in common, each possessor cannot demand for the protection of possession against other possessor in so far as the extent of using the said thing is concerned.
Article 966
A quasi-possessor is a person who exercises such property rights over a thing as are established without having taken possession of the said thing.
The provisions of the present chapter concerning possession shall apply mutatis mutandis to the quasi-possession as specified in the preceding paragraph.
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