Civil Code

A person performing an obligation may, in exchange for the performance, request the person accepting the performance to issue a receipt.

A person performing an obligation may request the person accepting performance to provide an electronic or magnetic record on which the content of a receipt referred to in the preceding paragraph has been recorded, in lieu of issuing that receipt; provided, however, that this does not apply if it would impose an undue burden on the person accepting performance.

If there is an instrument evidencing a claim and the person performing the obligation has made full performance, that person may demand the return of the instrument.

If an obligor bears to a single obligee two or more obligations which require the same kind of payment or delivery, and the payment or delivery provided in performance of the obligations is not sufficient to extinguish all of these obligations (excluding the case prescribed in paragraph (1) of the following Article), the person that performs the obligation may, at the time of the payment or delivery, designate a particular obligation to which that performance should be appropriated before any others.

If the person performing an obligation does not make the designation under the provisions of the preceding paragraph, the person receiving the performance may, at the time of that receipt, designate a particular obligation to which the performance should be appropriated before any others; provided, however, that this does not apply if the person performing the obligation immediately raises an objection to that appropriation.

The designation of the appropriation of the performance under the preceding two paragraphs is effected through a manifestation of intention to the counterparty.

Neither the person that makes the performance nor the person that accepts the performance makes designation under the provisions of paragraph (1) or paragraph (2), the performance is appropriated pursuant to the provisions of the following items:

if the obligations include those which are due and those which are not yet due, the performance is appropriated to those which are due;

if all obligations are due, or none of the obligations is due, the performance is appropriated in the order of the obligations which are to result in more benefit to the obligor when performed;

if all obligations would have equal benefit to the obligor when performed, the performance is appropriated in the order of the obligations which have, or should have, the earliest due date; or

the performance of obligations which are equal in terms of the particulars stated in the preceding two items is appropriated in proportion to the amount of each obligation.

If the obligor is liable to pay interest and expenses in addition to principal with respect to one or more obligations (if the obligor bears two or more obligations, limited to when the obligor bears these obligations requiring the same kind of payment or delivery to the same obligee), and the person that performs the obligations makes payment or delivery which is not sufficient to extinguish the obligation in its entirety must be appropriated first to expenses, and then to interest and principal, in this order.

The provisions of the preceding Article apply mutatis mutandis in the case referred to in the preceding paragraph in which the person makes payment or delivery which is not sufficient to extinguish any of expenses, interest or principal in whole.

Notwithstanding the provisions of the preceding two Articles, if the person that makes performance and the person that accepts performance agree on the order of appropriation of performance, the performance is appropriated according to the agreed-upon order.

If more than one performance should be tendered to discharge a single obligation, if the person that must perform tenders any performance which is not sufficient to extinguish the obligation in its entirety, the provisions of the preceding three Articles apply mutatis mutandis.

Upon tendering the performance, the obligor is relieved from any and all responsibilities which may arise from the non-performance of the obligation.

The tender of the performance must be made actually consistent with the main purport of the obligation; provided, however, that if the obligee refuses to accept that performance in advance or if any act is required on the part of the obligee with respect to the performance of the obligation, it is sufficient for the obligor to request its acceptance by giving a notice that the tender of the performance has been prepared.

In the following cases, a performer may deposit the subject matter of the performance with an official depository for the benefit of the obligee. In such a case, the claim is extinguished when the performer makes the deposit:

the performer tenders the performance, and the obligee refuses to accept it; or

the obligee is unable to accept the performance.

The preceding paragraph also applies if the performer is unable to ascertain the obligee; provided, however, that this does not apply if the performer is negligent in this respect.

The deposit under the provisions of the preceding Article must be made with the official depository having jurisdiction over the place where the relevant obligation is performed.

If there is no specific provision in laws and regulations with respect to the official depository, the court, at the request of the performer, must designate the depository and appoint a custodian of the thing to be deposited.

A person that has effected a deposit pursuant to the provisions of the preceding Article must notify the obligee of the deposit without delay.

As long as the obligee does not accept the deposit, or the judgment which pronounces that the deposit is effective does not become final and binding, the performer may recover the deposited things. In that case, it is deemed that no deposit has been effected.

The provisions of the preceding paragraph do not apply in cases any pledge or mortgage has been extinguished due to the deposit.

In the following cases, the performer may, with the permission of the court, sell the thing that is the subject matter of performance at public auction and deposit the proceeds of the sales with an official depository:

the thing is not suitable for deposit;

the price of the thing is likely to decline due to causes such as loss and damage;

excessive expenses are required for the preservation of the thing; or

beyond the cases stated in the preceding three items, there are circumstances that make it difficult to deposit the thing.

If the property that is the subject matter of performance or the proceeds referred to in the preceding Article are deposited, the obligee may demand the refund of the deposited thing.

If the obligor is to effect performance in exchange for payment or delivery by the obligee, the obligee may not receive deposited thing without making that payment or delivery.

A person that has performed the obligation for the benefit of the obligor is subrogated to the claim of the obligee.

The provisions of Article 467 apply mutatis mutandis in the case referred to in the preceding Article (unless a person with a legitimate interest in making performance is subrogated to the claim of the obligee).

A person that is subrogated to the claim of the obligee pursuant to the provisions of the preceding two Articles may exercise all rights possessed by the obligee as the effect of, and as a security for, the claim held by the obligee.

The exercise of rights under the provisions of the preceding paragraph is allowed only to the extent that the person that is subrogated to the claim of the obligee is entitled to seek reimbursement from the obligor based on the person's own rights (if one of the guarantors is subrogated to the claim of the obligee in relation to other guarantors, only to the extent that the guarantor is entitled to seek reimbursement from the other guarantors based on that guarantor's own rights).

In the case referred to in paragraph (1), the following provisions apply in addition to the provisions of the preceding paragraph:

a third party acquirer (meaning a person that has acquired from the obligor the property that is the subject of security; the same applies in this paragraph below) is not subrogated to the claim of the obligee in relation to any guarantors or third-party collateral providers;

one of the third party acquirers is subrogated to the claim of the obligee in relation to other third party acquirers in proportion to the price of each property;

the provisions of the preceding item apply mutatis mutandis if one of the third-party collateral providers is subrogated to the claim of the obligee in relation to other third-party collateral providers;

between a guarantor and a third-party collateral provider, the subrogation to the claim of the obligee is effected depending on the number of these persons involved; provided, however, that if there are two or more third-party collateral providers, they are subrogated to the claim of the obligee in proportion to the price of each property with respect to the amount which remains after deduction of the share of the guarantor; and

a person that has acquired from a third party acquirer the property that is the subject of security is deemed to be a third party acquirer, and the provisions of items (i) and (ii) apply thereto; and a person that has acquired from a third-party collateral provider the property that is the subject of security is deemed to be a third-party collateral provider, and the provisions of items (i) and (iii) and the preceding item apply thereto.

If performance by subrogation occurs with respect to one part of a claim, the subrogee, with the consent of the obligee, may exercise the rights of the subrogee together with the obligee in proportion to the value of the subrogee's performance.

Even in a case referred to in the preceding paragraph, the obligee may exercise the obligee's right independently.

The right to be exercised by the obligee in the case referred to in the preceding two paragraphs prevails over the right to be exercised by the subrogee with regard to money to be obtained as a result of the exercise of the rights such as the proceeds from the sale of the property that is the subject of security for the claim of the obligee.

In the case referred to in paragraph (1), the cancellation of a contract based on the failure to perform the obligation may be effected only by the obligee. In such a case, the obligee must reimburse to the subrogee the value of the performance that the subrogee effected plus interest.

An obligee that has received full performance by way of subrogation must deliver to the subrogee the instruments regarding the claim and any collateral that the obligee possesses.

If performance by subrogation occurs with respect to a part of a claim, the obligee must enter the particulars of that subrogation in the instruments regarding the claim and allow the subrogee to supervise the custody of the collateral that the obligee possesses.

If there is a person that has legitimate interest in performing an obligation (referred to as a "person entitled to subrogation" in this paragraph below), and the obligee causes its security to be lost or diminished intentionally or negligently, the person entitled to subrogation is relieved from responsibility to the extent that that person can no longer seek the reimbursement due to the loss or diminution in the security available upon subrogation. If the person entitled to subrogation is a third-party collateral provider, the same applies to a third party that has acquired from the person entitled to subrogation the property that is the subject of security and to its specific successor.

The provisions of the preceding paragraph do not apply if the obligee is found to have reasonable grounds in light of common sense trading practices for causing the security to be lost or diminished.

If two persons bear an obligation to each other that has the same kind of purpose and if both obligations are due, each obligor may be relieved from the obligation by setting off the value of that obligation against the corresponding amount of the obligation of the other obligor; provided, however, that this does not apply if the nature of the obligation does not permit such a set-off.

Notwithstanding the provisions of the preceding paragraph, if a party manifests the intention to prohibit or restrict a set-off, that manifestation of the intention may be duly asserted against a third party only if the third party knew or did not know due to gross negligence it.