Article 1.　The purpose of this Law is to endeavour for the sound development of motor carrier business and the growth of transportation by motor vehicles through the enhancement of movables credit with regard to motor vehicles.

Article 2.　In this Law, "motor vehicle" shall mean a motor vehicle which has been registered under the Vehicles for Road Transportation Law (Law No.185 of 1951), exclusive of light motor vehicles and two-wheel small-size motor vehicles.

Article 3.　Any motor vehicle may be made the object of a mortgage.

Article 4.　A mortgagee shall be entitled to receive performance of his obligation in preference to other creditors, out of the motor vehicle which has been given by the debtor or a third person without transferring its possession as security for a liability (hereinafter referred to as "mortgaged motor vehicle" ).

Article 5.　The acquisition or forfeiture and alteration of a mortgage on a motor vehicle shall not be set up against a third person unless the registration therefor is obtained in the motor vehicle register book provided for in the Vehicles for Road Transportation Law.

2　The matters in connection with the registration referred to in the preceding paragraph shall be fixed by Cabinet Order.

Article 6.　A mortgage shall extend to all things which are so connected with the mortgaged motor vehicle as to form one thing with it;provided, however, that this shall not apply in cases where it is otherwise provided for concerning the act of creation, and where another creditor may cancel the act of debtor under the provisions of Article 424 of the Civil Code (Law No.89 of 1896).

Article 7.　A mortgagee shall be entitled to exercise his rights against the whole of the mortgaged motor vehicle, until the obligation is completely performed.

Article 8.　A mortgage may also be exercised against money or other things which the mortgagor is to receive by transfer, loan, loss or damage of the mortgaged motor vehicle.

Article 9.　When a person, who has created a mortgage in order to secure the liability of another person, has performed the liability or has lost the ownership of the mortgaged motor vehicle by reason of the exercise of the mortgage, he shall be entitled to the right of recourse against the debtor in conformity with the provisions concerning the suretyship stipulated in the Civil Code.

Article 10.　When mortgages have been created on the same motor vehicle to secure several obligations, the rank of such mortgages shall be fixed in accordance with the time of registration.

Article 11.　When a mortgage and a preferential right conflicts with the same motor vehicle, the mortgage shall be of the same rank as the preferential right of the first rank provided for in Article 330 paragraph 1 of the Civil Code.

Article 12.　If a mortgagee has a right to demand interest or other payments by instalments, he shall be entitled to exercise his mortgage only for the portion which is due for the last two years.

2　The provisions of the preceding paragraph shall apply also to the portion of the last two years, in cases where the mortgagee has a right to demand the compensation for damages caused by the non-performance of the liability;provided, however, that such amount shall not exceed the portion for two years together with the interest and payments by instalments.

Article 13.　When a third person who has acquired a mortgaged motor vehicle by transfer has paid the price thereof at the request of the mortgagee, the mortgage shall be extinguished in favor of such a third person.

Article 14.　If a third person who has acquired a mortgaged motor vehicle has incurred necessary or beneficial expenses with respect to the mortgaged motor vehicle, he shall have a foremost claim for re-imbursement from the price of the mortgaged motor vehicle according to the distinction mentioned in Article 196 of the Civil Code.

Article 15.　A mortgagee shall be entitled to the performance of his obligation from other property only for the portion which he does not receive of the price of the mortgaged motor vehicle.

2　The provisions of the preceding paragraph shall not apply in cases where the price obtained for other property is to be distributed before the price of the mortgaged motor vehicle.

3　In the case of the preceding paragraph, any other creditor may demand the deposit of the amount to be distributed to the mortgagee, in order that the mortgagee may receive the performance under the provisions of paragraph 1.

Article 16.　The chief of Land Transportation Bureau shall, when he effected a deletion registration under the Vehicles for Road Transportation Law with regard to a mortgaged motor vehicle, notify to the mortgagee without delay. The same shall also apply when the application under the provisions of Article 16 of the same Law has been accepted.

Article 17.　The mortgagee shall, when he received the notice of the latter part of the preceding Article, be entitled to exercise the right immediately with regard to such a motor vehicle.

2　When the mortgagee intends to exercise the mortgage under the provisions of the preceding paragraph, he shall follow formalities within three months from the day on which he received the notice of the latter part of the preceding Article.

3　The chief of Land Transportation Bureau shall not be entitled to effect the deletion registration with regard to the motor vehicle mentioned in paragraph 1, during the period in which the formalities for the enforcement of the mortgage could be followed under the provisions of the preceding paragraph and the period until the termination of the enforcement of mortgage.

4　When the decision admitting the acquisition by auction has been fixed, it shall be deemed that no application under the provisions of Article 16 of the Vehicles for Road Transportation Law was submitted with regard to the motor vehicle referred to in paragraph 1.

Article 18.　A mortgage shall not be extinguished against the debtor and the mortgagor by prescription unless extinguished at the same time with the obligation secured by it.

Article 19.　When a person other than the debtor or the mortgagor obtained possession with the mortgaged motor vehicle under the requisites necessary for acquisitive prescription, the mortgage shall be extinguished as the result.

Article 20.　A motor vehicle shall not be made the object of a pledge.