Complicity and Status: A Deep Dive into Japan's 1957 Embezzlement Ruling

Japanese Attorney at Law - Bengoshi L.L.

07 Jun 2025 • 9 min read

Case Title: Gyōmu-jō Ōryō Hikoku Jiken (Case Concerning Embezzlement in the Course of Business)
Court: Supreme Court of Japan, Third Petty Bench
Date of Judgment: November 19, 1957
Case Number: 1955 (A) No. 3640

Introduction: The Intricacies of Complicity in Japanese Law

In criminal law, the question of how to treat an accomplice who lacks a specific "status" required by a criminal statute is a classic legal conundrum. If a law criminalizes an act only when committed by a person with a particular characteristic—such as a public official taking a bribe or a custodian misappropriating funds—what is the culpability of a "non-status" individual who aids or conspires in the act?

This issue is governed in Japan by Article 65 of the Penal Code. A landmark 1957 Supreme Court decision involving embezzlement by a village mayor and deputy mayor provides a crucial and enduring interpretation of this article. The case delves into the fine distinctions between different types of "status crimes" (mibun-han), the interplay between the two clauses of Article 65, and the fundamental principles of attributing criminal liability. This analysis explores the facts, the court's reasoning, and the rich legal debate ignited by this pivotal judgment.

Factual Background

The case unfolded in Shibasaki Village, Inashiki District. The key players were:

Defendant X: The mayor of Shibasaki Village and the chairman of the village's New Junior High School Construction Committee.
Defendant Y: The deputy mayor of the village and the vice-chairman of the same construction committee, serving as X's subordinate.
Z: The village treasurer. In this capacity, Z was responsible for the village's accounting and financial affairs. Crucially, Z had also been formally entrusted by the construction committee with the specific duty of receiving and holding donations for the new school.

Between April and October 1949, Z, in his official capacity, collected a total of JPY 231,550 in donations for the school construction project. These funds were held by Z "in the course of his business" (gyōmu-jō), a key element for the crime of professional embezzlement.

The prosecution alleged that defendants X and Y conspired with Z to misappropriate these funds. From July to December 1949, on numerous occasions, they used a total of JPY 81,647 from the donation pool to pay for personal expenses, such as food and drink.

The central legal issue arose from the status of the defendants. Only Z, the treasurer, was formally tasked with the "business" of handling the funds. Defendants X (the mayor) and Y (the deputy mayor) did not have this specific professional duty to receive and safeguard these particular donations, even though they held senior positions in the village and on the committee. They were involved in the decision to misuse the funds, but they were not the designated custodians.

The District Court, and subsequently the High Court on appeal, found X and Y guilty as co-principals in the crime of embezzlement in the course of business under Article 253 of the Penal Code. The defendants appealed to the Supreme Court, arguing that Article 253, which carries a heavier penalty, could not apply to them as they lacked the requisite professional status.

The Supreme Court's Judgment

The Supreme Court overturned the lower courts' decisions and issued its own judgment. While it agreed that the defendants were criminally liable, it disagreed on the specific crime and the applicable punishment.

The Court's reasoning proceeded in two steps, meticulously applying both clauses of Article 65 of the Penal Code.

Article 65 of the Penal Code:

When a person collaborates in a criminal act which is constituted by the status of the offender, that person is an accomplice even without the status.
When the gravity of the punishment depends on the status of the offender, a normal punishment shall be imposed on a person who does not have such status.

First, the Supreme Court acknowledged that embezzlement is a "status crime." To commit embezzlement, one must have the status of a "possessor" of another's property. The more serious crime of "embezzlement in the course of business" (Article 253) requires an additional status: that the possession is part of one's professional duties.

The Court affirmed that only Z, the treasurer, had the professional duty to handle the funds. Defendants X and Y were not the designated professional custodians. However, by conspiring with Z, they participated in Z's criminal act. The Court applied Article 65, Paragraph 1. This clause establishes the principle of "shared complicity." It states that even if you lack the status that defines a crime, you can still be an accomplice to it. Therefore, the Court concluded that X and Y could indeed be held liable as co-principals in the crime committed by Z, which was embezzlement in the course of business (Article 253). On this point, the Court established the "crime" for which they were responsible.

Second, the Court turned to the question of punishment. This is where it departed from the lower courts. The Court noted that Article 253 (embezzlement in the course of business) does not create a wholly new crime but rather prescribes a heavier penalty for simple embezzlement (Article 252) when the offender has the status of a professional custodian. The "business" or "professional" element is a status that specifically aggravates the punishment.

For this situation, the Court applied Article 65, Paragraph 2. This clause addresses cases where a status doesn't create the crime but only affects the severity of the sentence. It dictates that a non-status accomplice should receive the "normal punishment"—that is, the punishment for the base crime without the aggravating status.

Therefore, although X and Y were deemed co-principals in the act of professional embezzlement, their punishment had to be determined based on the crime of simple embezzlement (Article 252), as they lacked the aggravating "business" status.

The Supreme Court found that the lower courts had erred by simply applying Article 253 to the defendants without considering the distinct roles of the two clauses in Article 65. The failure to apply Article 65(2) to mitigate the punishment for the non-status defendants was deemed an error of law that constituted a grave injustice, necessitating the reversal of the original verdict.

Consequently, the Supreme Court quashed the lower court judgments. It found X guilty of simple embezzlement and sentenced him to six months in prison, and Y to four months, both with a two-year suspended sentence. This was a more lenient outcome than a conviction under Article 253 would have allowed.

Legal Analysis: Deconstructing "Status Crimes"

The Supreme Court's decision is a masterclass in the application of Article 65 and rests on a sophisticated understanding of "status crimes" (mibun-han). In Japanese criminal law, these are broadly divided into two categories, both of which were at play in this case.

1. Genuinely Constitutive Status Crimes (Shinsei Mibun-han)

These are crimes that can only exist if the perpetrator possesses a specific status. The status is a core element of the crime's definition (the actus reus). Without the status, the act itself is not a crime under that specific statute.

Example: Bribery of a public official (Article 197). The act of accepting a bribe is only a crime if committed by a "public official." A private citizen accepting money is not guilty of this crime.
Application: Simple embezzlement (Article 252) is considered a genuinely constitutive status crime. The required status is that of a "possessor" (sen'yū-sha) of another's property. If you do not possess the item on behalf of another, you cannot, by definition, embezzle it.

For these crimes, Article 65(1) is paramount. It allows a non-status person (e.g., a private citizen who masterminds the bribe) to be charged as an accomplice to the status-holder (the public official).

2. Non-Genuinely Constitutive Status Crimes (Fushinsei Mibun-han)

These are crimes where a base offense exists for everyone, but a specific status makes the crime more (or less) severe, leading to an aggravated (or mitigated) punishment. The status doesn't create the crime but rather modifies its penalty.

Example: Habitual Gambling (Article 186). Simple gambling (Article 185) is a crime for anyone. However, if a person with the status of a "habitual gambler" commits the act, they face a much heavier punishment under Article 186.
Application: Embezzlement in the course of business (Article 253) is a classic example. The base crime is simple embezzlement (Article 252). The additional status of a "person who possesses the object in the course of business" (gyōmu-jō no sen'yū-sha) aggravates the punishment.

For these crimes, Article 65(2) comes into play. It dictates that a non-status accomplice (e.g., a casual gambler who joins a game run by a habitual gambler) should be punished according to the "normal" penalty for the base crime (simple gambling), not the aggravated one.

The Duality of Embezzlement in the Course of Business

The brilliance of the 1957 ruling lies in its recognition that professional embezzlement is a dual-status crime.

Relative to a complete outsider (a non-possessor), it is a genuinely constitutive status crime. One must first be a "possessor" to even enter the realm of embezzlement.
Relative to a simple possessor, it is a non-genuinely constitutive status crime. The "business" element is an additional layer of status that aggravates the penalty.

The Supreme Court navigated this duality by applying Article 65 sequentially:

Step 1 (Establishing the Crime): It used Article 65(1) to bridge the "possessor" status gap. Because defendants X and Y conspired with Z (the possessor), they became accomplices in the criminal act of embezzlement. Since Z's act was professional embezzlement, the name of the crime they were complicit in was "embezzlement in the course of business."
Step 2 (Determining the Punishment): It then used Article 65(2) to address the "business" status gap. Because X and Y lacked the aggravating status of a professional custodian, their punishment could not be based on the aggravated statute (Article 253). Instead, it reverted to the "normal punishment" found in the statute for simple embezzlement (Article 252).

This approach, while reaching a just result, led to a controversial outcome: the separation of the crime's name from its punishment. X and Y were found to be co-principals in "embezzlement in the course of business" but were sentenced under the provisions for "simple embezzlement."

The Academic Debate

This separation of offense from penalty has been a major point of discussion among legal scholars, leading to several competing theories on how to interpret Article 65.

1. The Formal Nexus Theory (Keishiki-teki Rentai-setsu)

This theory, which aligns with the Supreme Court's conclusion, reads Article 65 as a unified whole. It posits that Paragraph 1 establishes the principle of shared complicity for all status crimes, whether constitutive or aggravating. Paragraph 2 then functions as a specific carve-out for punishment in the case of non-genuinely constitutive status crimes. This view accepts the separation of the crime's name and its penalty as a necessary consequence of the statute's structure.

2. The Formal Distinction Theory (Keishiki-teki Kubetsu-setsu)

This theory seeks to avoid the awkward separation of crime and punishment. It argues for a clean division of labor:

Article 65(1) applies only to genuinely constitutive status crimes.
Article 65(2) applies only to non-genuinely constitutive status crimes.

Under this view, in the 1957 case, one would first look at embezzlement as a genuinely constitutive crime (requiring a "possessor"). Applying Article 65(1), the non-possessing defendants X and Y would become accomplices to simple embezzlement (Article 252). The aggravating "business" element, which is a non-genuinely constitutive status, would only apply to the status-holder Z. The end result is the same—a conviction for simple embezzlement—but it avoids naming the crime as professional embezzlement, thus maintaining consistency between the offense and the penalty.

3. The Substantive Distinction Theory (Jisshitsu-teki Kubetsu-setsu)

This is the most influential modern theory. It moves beyond the formal structure and asks why a status matters. It distinguishes between:

Illegality Status (Ihō Mibun): A status related to the wrongfulness of the act itself, often tied to the harm caused. For example, the status of a "possessor" is an illegality status because it creates the very possibility of the harm (betrayal of trust, property rights violation). This theory suggests that illegality is shared among all participants. Illegality status is governed by Article 65(1).
Culpability Status (Sekinin Mibun): A status related to the blameworthiness of the individual offender. It reflects a higher or lower degree of personal reproach. This theory argues that culpability is personal and not shared. Culpability status is governed by Article 65(2).

The debate then shifts to classifying the "business" status in professional embezzlement.

If "business" is seen as a culpability status (reflecting a greater personal betrayal of trust and thus higher blameworthiness), then it should not be imputed to non-status accomplices. This would lead to a conviction for simple embezzlement, aligning with the outcome of the Formal Distinction Theory.
If "business" is seen as an illegality status (because business-related embezzlement often involves a greater scale of harm or a more significant breach of social and economic duties), then one could argue it should be shared under Article 65(1). However, many scholars who favor this view are still hesitant to apply the aggravated punishment, citing principles of legality and proportionality.

Conclusion

The 1957 Supreme Court judgment remains a cornerstone of Japanese criminal law on complicity. It established a durable precedent for handling complex dual-status crimes by applying both paragraphs of Article 65. The ruling ingeniously acknowledges that a non-status person can be party to the entirety of a criminal act (professional embezzlement) while ensuring their punishment is proportionate to their individual status (as a simple embezzler).

While the theoretical neatness of this approach is debatable—leading to decades of scholarly discussion—its practical wisdom is clear. It provides a nuanced framework that holds all conspirators accountable for the crime they jointly undertook, while simultaneously upholding the principle that heightened punishment based on a special personal status should be reserved for those who actually possess that status. The case serves as a timeless illustration of the law's effort to balance collective responsibility with individual culpability.