Civil Code

If there is a merger with respect to a revolving mortgagee before the principal is fixed, the revolving mortgage secures the claims that exist at the time of the merger and otherwise secures claims that a corporation that survives the merger or a corporation that is incorporated by the merger acquires after the merger.

If there is a merger with respect to an obligor before the principal is fixed, the revolving mortgage secures the obligations that exist at the time of the merger and otherwise secures the obligations that a corporation that survives the merger or a corporation that is incorporated by the merger assumes after the merger.

In the cases provided for in the preceding two paragraphs, the mortgagor of the revolving mortgage may demand that the principal secured be fixed; provided, however, that this does not apply, in the cases referred to in the preceding paragraph, if the relevant obligor is the mortgagor of the revolving mortgage.

If a demand under the provisions of the preceding paragraph is made, the principal secured is deemed to have been fixed at the time of the merger.

The demand under the provisions of paragraph (3) may not be made if two weeks have passed since the day when the mortgagor of the revolving mortgage acquired knowledge of the merger. The same applies if one month has passed from the day of the merger.

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

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

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

Before the principal is fixed, a revolving mortgagee may not dispose of a revolving mortgage under the provisions of Article 376, paragraph (1); provided, however, that the revolving mortgagee is not precluded from applying that revolving mortgage to secure other claims.

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

Before the principal is fixed, a revolving mortgagee may assign a revolving mortgage, with the approval of the mortgagor of the revolving mortgage.

A revolving mortgagee may divide the revolving mortgage into two revolving mortgages and assign either of the same pursuant to the provisions of the preceding paragraph. In this case, the rights for which that revolving mortgage is the subject is extinguished with respect to the revolving mortgage that was assigned.

In order to effect an assignment under the provisions of the preceding paragraph, the approval of the person that holds the rights for which that revolving mortgage is the subject must be obtained.

Before the principal is fixed, a revolving mortgagee may, with the approval of the mortgagor of the revolving mortgage, effect a partial assignment of the revolving mortgage (meaning assignments of revolving mortgages that the assignor effects without dividing the revolving mortgage in order to co-own the same with the assignee; the same applies in this Section below).

Co-owners of a revolving mortgage are paid in proportion to the amount of their respective claims; provided, however, that if before the principal is fixed, a proportion other than the above is agreed upon, or if it is agreed upon that a certain person will be paid before another, that agreement prevails.

A co-owner in a revolving mortgage may, with the consent of the other co-owners, assign rights of the same pursuant to the provisions of Article 398-12, paragraph (1).

If a revolving mortgagee that has accepted an assignment or waiver of the order of priority of a mortgage has assigned or partially assigned that mortgagee's revolving mortgage, the assignee benefits from the assignment or waiver of that order of priority.

The provisions of Articles 392 and 393 apply with respect to a revolving mortgage only when the fact that the revolving mortgage has been simultaneously established on several immovables to secure the same claim is registered.

A change in the scope, obligors or maximum amount of the claims to be secured, or assignment or partial assignment of the revolving mortgages for which registration is effected in accordance with the preceding Article does not take effect unless registration is effected with respect to all immovables over which that revolving mortgages are established.

The principal secured by the revolving mortgage for registered pursuant to the preceding Article is fixed even when grounds on which the principal is fixed arise only with respect to one immovable property alone.

A person that has a revolving mortgage on several immovables may exercise the right of priority with respect to the proceeds of each immovable property up to the respective maximum amounts, except for cases provided for in Article 398-16.

If three years have passed from the time of the creation of a revolving mortgage, the mortgagor of the revolving mortgage may request the fixing of the principal secured. In this case, the principal secured is fixed when two weeks have passed since the time of that request.

A revolving mortgagee may request the fixing of the principal secured at any time. In this case, the principal secured is fixed on the request of the same.

The provisions of the preceding two paragraphs do not apply if the date on which the principal secured is to be fixed is specified.

The principal secured by a revolving mortgage is fixed in the following cases:

if the revolving mortgagee has filed, with respect to the mortgaged immovables, a petition for auction or enforcement against earnings from secured immovable property or the attachment under the provisions of Article 304 as applied mutatis mutandis pursuant to Article 372;provided, however, that these provisions apply only if the commencement of either auction procedures or enforcement against earnings from secured immovable property, or a seizure has been effected;

if the revolving mortgagee has effected an attachment for disposition of delinquency against the mortgaged immovables;

if two weeks have passed from the time when the revolving mortgagee acquired knowledge of the commencement of auction procedures or seizure for disposition to collect arrears against the mortgaged immovables; or

if the obligor or mortgagor of the revolving mortgage has become subject to an order commencing bankruptcy proceeding.

If the commencement of auction procedures, the seizure under item (iii) of the preceding paragraph or the order commencing bankruptcy proceeding under item (iv) of that paragraph ceases to be effective, it is deemed that the principal secured was not fixed; provided, however, that this does not apply if a person has acquired that revolving mortgage or a right for which the revolving mortgage is the subject on the assumption that the principal was fixed.

After the principal is fixed, the mortgagor of the revolving mortgage may request a reduction in the maximum amount of that revolving mortgage, to the amount of the obligations actually in existence plus the amount of the periodic payments including interest and the amount of damages due to default in obligations should arise in the following two years.

As to the reduction in the maximum amount of a revolving mortgage registered pursuant to Article 398-16, it suffices to make the request referred to in the preceding paragraph with respect to one of those immovables.

If the amount of the obligations currently in existence after the principal is fixed exceeds the maximum amount of a revolving mortgage, the person that created the revolving mortgage to secure the obligations of another person or a third party that has acquired ownership, superficies, farming rights, or a lease that may be duly asserted against any third party with respect to the mortgaged immovables may request the extinguishment of that revolving mortgage on paying or depositing with an official depository an amount equivalent to that maximum amount. In this case, that payment or deposit has the effect of performance of the obligation.

A revolving mortgage that has been registered pursuant to Article 398-16 is extinguished if the request for extinguishment referred to in the preceding paragraph is made with respect to one immovable property.

The provisions of Articles 380 and 381 apply mutatis mutandis to the requests for extinguishment under paragraph (1).