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Case:
BVerfGE 2, 237 1 BvR 102/51 Equalization of burden Balancing the burden of property loss Art. 153 WRV
Date:
24 April 1953
Judges:
Dr.Dr.Höpker-Aschoff, Ellinghaus, Dr.Scheffler, Dr.Scholtissek,Dr.Drath, Dr.Stein, Wessel, Ritterspach, Lehmann.
Copyright:
© Nomos Verlagsgesellschaft

HEADNOTES:

  1. Until 1 April 1952 a constitutional complaint could also be lodged against laws enacted before entry into force of the Basic Law.
  2. Article 153 (2) of the Reich Constitution (RV) of 11 August 1919 (expropriation) continued after the collapse of the National Socialist regime to apply as a simple law of the Reich, without constitutional rank. Acts of the Economic Council and of the Länder in the United Economic Area could depart from Article 153 (2) RV.
  3. No supra-legal norm that would simply bar the legislator from ordering or allowing an expropriation without compensation in the service of the general good can be found to exist.
  4. The First Implementing Order under the Mortgage Guarantee Act issued by the Administrative Council of the United Economic Area with the assent of the Economic Council and the Council of the Länder did not have the rank of law.
  5. The legislator of the Administration of the United Economic Area was in the period between the entry into force of the Basic Law and the convening of the Bundestag bound by the fundamental rights in the Basic Law.
  6. The statutory charging of a conversion land charge on real estate is not expropriation and does not infringe the principle of equality.
  7. The order that the Mortgage Guarantee Act and its amending act should have retroactive effect was admissible.


Order of the First Senate of 24 April 1953 — 1 BvR 102/51 —
in the proceedings on the constitutional complaint by M. et al.

DECISION:
The constitutional complaint is rejected.

EXTRACT FROM GROUNDS:

I.

1. The complainants are owners of urban housing property severely damaged during the war by air bombing. They have lodged a constitutional complaint.

a) The complaint is directed firstly against the Act to Secure Claims for the Equalization of War Burdens of 2 September 1948 (WiGBl. p.87; Mortgage Guarantee Act) and the Act to Amend the Act to Secure Claims for Equalization of War Burdens of 10 August 1949 (WiGBl. p.232; Amending Act). The complainants see the charging of a conversion land charge on their property introduced by statute as expropriation without compensation and therefore as inadmissible (Article 14 Basic Law). They further see their fundamental right to equality before the law (Article 3 Basic Law) as infringed…(further detailed argumentation).

b) The constitutional complaint is further directed against the Fourth and Twelfth Proclamations of the Bavarian State Ministry of Finance for the enforcement of the order on implementation of the Act to Secure Claims for Equalization of War Burdens of 23 February 1949 (Bavarian State Gazette no.9) and of 16 April 1959 (Bavarian State Gazette no.16), insofar as they concern remission of due payments because of inequitable severity pursuant to para.5(4) of the First Implementing Order of 7 September 1948 (WiGBl. p.88).

The complainants contend that an unequal standard is being applied here, in breach of Article 3 Basic Law….

c) Finally, the complainants make voluminous statements about alleged injury by German authorities, without pointing to individual acts of the public authority.

2. The Federal Constitutional Court has given the Bundestag, the Bundesrat and the Federal Government an opportunity to state their opinions, pursuant to para.94 BVerfGG. The Bundestag and Bundesrat declined to give an opinion. The Federal Government, represented by the Federal Minister of Finance, regards the constitutional complaint as not well founded…

II.
1.a) The constitutional complaint is admissible insofar as it is directed against the Mortgage Guarantee Act and the Amending Act….

2. Insofar as the constitutional complaint is directed against the Fourth and Twelfth Proclamations of the Bavarian State Ministry of Finance, it is inadmissible…(further detailed argumentation).

3. Insofar as the complainants generally allege injury by German authorities, the constitutional complaint is inadmissible by para.92 BVerfGG since no individual acts or omissions of particular agencies or authorities are indicated….

III.

The admissible constitutional complaint against the Mortgage Guarantee Act and the Amending Act is not justified.

1. The Mortgage Guarantee Act of 2 September 1948 was promulgated on 13 September 1948 and took effect retroactively from 1 July 1948. It takes as its basis — in accord with the later enacted Fortieth Implementing Order under the Currency Conversion Act (Bundesanzeiger, 18 October 1949, no.11) — that by para.16 of the Third Currency Reform Act (Currency Conversion Act [UG]) of 20 June 1948, mortgages, land charges and annuity charges were converted at the same rate as the underlying Reichsmark claims, that is, in principle in the ratio of 10:1.

Accordingly, the debts in rem up to the amount by which the nominal figure in Reichsmarks exceeds the conversion figure to German Marks are extinguished. To the amount of this "currency gain", conversion land charges arise pursuant to para.1 of the Mortgage Guarantee Act, ranking immediately after the converted mortgages, land charges and annuity charges, to which by para.2 the administration of the United Economic Area is fiduciarily entitled. By para.3 the rights established by the Act serve exclusively to guarantee any claims arising from profit accruing to debtors, taking the equalization of war burdens into account.

The Amending Act of 10 August 1949 was promulgated on 24 August 1949 — that is, following the entry into force of the Basic Law — and likewise took effect retroactively from 1 July 1948. Its provisions of interest here, in Article I, provide for analogous application of para.1 of the Mortgage Guarantee Act also to indemnification burdens which secure a loan for indemnification of the Buildings Disencumberment Tax pursuant to the order of 31 July 1942 (RGBl. I p.501); Article II allows conversion land charges to be waived to a certain extent in favour of debtors, insofar as the property encumbered has been affected by war damage or damage arising in consequence of measures by the occupying power, in particular dismantling or restitution.

2. The complainants’ view that the burdening of their property with conversion land charges is inadmissible as being expropriation without compensation within the meaning of Article 14(3) Basic Law is mistaken.

a) Even were the burdening of a property with land charges expropriation, it would have been accomplished directly by the Mortgage Guarantee Act of 2 September 1948, that is, before the Basic Law came into force. At the entry into force of the Basic Law, the administration of the United Economic Area was already the (fiduciary) holder of the land charges, so that the property owners could not, against the property charge that had been made, appeal to protection of their property under Article 14 Basic Law (cf. RG in Warneyer R.24 no.122 and RGZ 109, 11 [15] on expropriations before the entry into force of the Weimar Constitution). This may not be rebutted on the ground that the obligation to pay current interest and amortization payments is a continually renewed measure of expropriation operating within the area to which the Basic Law applies. The decisive procedure of expropriation would be the justification for the original right, that is, the statutory land charge. Interest and amortization payments would result from this original right as legally independent payments. Clearly, a precondition for this is that the "expropriating" act was legally effective and therefore in particular that the legislature of the United Economic Area could enact expropriating acts for the purpose of assessment of profits accruing to debtors. This is the case.

aa) The provisions of Proclamation no.7 of the American and Order no.126 of the British military governments, underlying the legislative powers of the administration of the United Economic Area, contain no explicit provisions on expropriating legislation. In Article III they regulate the competence of the Economic Council to legislate only in particular fields, providing in Article III (5) for the general power to "adopt and enact acts on other matters, subject to agreement by the Bipartite Board". The German High Court deduced from this, in its decision of 13 April 1950 (DOG 2, 164 [172], that "the Economic Council is not empowered to enact legal norms on expropriation. Its powers to regulate certain matters by enactment therefore did not include the right to pronounce expropriations in its enactments in departure from expropriation law in force which was outwith its legislation". This cannot however apply to the Economic Council’s power to legislate on the assessment of profits accruing to debtors in the currency reform. The preamble to the First Currency Reform Act (Currency Act) of 20 June 1948 conveys "to the German legislative bodies… the regulation of equalization of war burdens as a priority task, to be carried out by 31 December 1948". By para.16(3) of the Currency Conversion Act, "the utilization of profits accruing to debtors for equalization of war burdens is incumbent on German legislation", and by para.29 of the Currency Conversion Act, "the resources needed to implement equalization of war burdens are to be raised by special property levies, the proceeds of which are to be allocated for this purpose to an extra-budgetary Equalization of Burdens Fund". Accordingly, while general procurement of funds for equalization of burdens was to come about in the form of "special property levies", there is no such limitation as regards the special objective of utilizing profits accruing to debtors. Instead, it was the nature of the gain involved in each case that was decisive. If in formal terms it consisted in partial cessation of a charge on property, then in accordance with the comprehensive content of the empowerment this could also be covered by means of an appropriate new burden, even should this objectively constitute expropriation.

The Acts of the military government are not explicit as to whether by "German legislative agencies" the administration of the United Economic Area or the Länder are meant. However, Orders no.2 of the American and British military government, based on Article III (5) of Proclamation 7/VO 126 (WiGBl. 1949, Annex 1, p.18) establish the sole competence of the Economic Council.

bb) Nor was the legislature of the United Economic Area prevented by Article 153 (2) of the Reich Constitution of 11 August 1919 (RV) as a paramount norm from ordering expropriations without compensation. For Article 153 (2) RV lost its constitutional rank, in the sense of greater difficulty of amending it, during the period of National Socialist rule, and did not re-acquire it even after the 1945 collapse.

After 1933 case law even gave differing answers to the question whether Article 153 (2) RV at all continues to apply. The Seventh Civil Division of the Reichsgericht puts the view, in its decision of 1 December 1933 (RuPrVerwBlatt 1934 p.169), that the Order of the Reich President to protect Nation and State of 28 February 1933 (RGBl.I p.83) had according to its purpose as set out in the preamble voided Article 153 RV of effect only insofar as was "necessary to ward off acts of Communist violence endangering the State". By contrast the Fourth Civil Division, in its decision of 22 October 1934 (RGZ 145, 369 [373]), stresses that Article 153 RV was, according to the tenor of para.1 of the order, which is solely decisive, "simply abrogated", with the sole proviso that this was to apply "only until further notice". The Special Chamber for Civil Matters, in its decision of 16 November 1937 (RGZ 156,305 [309]), left the question undecided, with explicit reference to those previous divergent decisions. Even were the interpretation put forward in RGZ 145, 369, to be correct for the period of National Socialist rule, then nevertheless the abrogation "until further notice" would have come to an end at latest with the ending of the National Socialist regime.

There is no doubt that Article 153 RV had already lost its formal constitutional rank in the National Socialist period. The National Socialist regime eliminated formal constitutional force as such: first of all, Hitler secured by compulsion the Empowerment Act (Act to Alleviate the Distress of Nation and Reich of 24 March 1933 - RGBl. I p. 141 -) formally authorizing the Reich Government to enact statutes amending the constitution for a period of four years up to 1 April 1937. Though the empowerment was bound up with the existence of the then Reich Government, even after its transformation in summer 1933 all subsequent "government acts" were based on the Empowerment Act. The Act on the Restructuring of the Reich of 30 January 1934 (RGBl. I p. 75), "unanimously" adopted by Reichstag and Reichsrat, further empowered the Reich Government to "make new constitutional law", and "unanimous" acts of the Reichstag of 30 January 1937 (RGBl. I p.105) and 30 January 1939 (RGBl. I p.95) extended the Empowerment Act of 24 March 1933 initially until 1 April 1941 and then until 10 May 1943. By order of 10 May 1943 (RGBl. I p. 295) Hitler then ordered autocratically that "the Reich Government" was to continue "to exercise the powers conferred on it by the Act of 24 March 1933". Even earlier, the Reich’s Ministers had on the basis of the Act on the Oath by Reich Ministers and Members of Länder Governments of 16 October 1934 (RGBl. I p. 973) been sworn to loyalty and obedience to "the Führer of the German Reich and Nation", so that Hitler as head of government combined all legislative power in his own person. Admittedly, alongside him, the Reichstag was still formerly active as legislator from time to time. It was not, however, a legislative body with its own legislative will, but a mere acclamatory body which had to follow the dictator’s orders and had the "new task" of giving Hitler’s decisions and proclamations its "wholehearted assent" (thus Poetzsch-Heffter-Ule-Dernedde in JöR vol. 22 p.81). Article 76 RV, providing for a more difficult procedure in the Reichstag and Reichsrat for constitutional amendments and thus guaranteeing all constitutional provisions enhanced validity, was thus at the time set aside and all protection for the Reich’s Constitution against amendments or departures removed.

Following the capitulation, those provisions of the Reich Constitution that continued to apply after that date did not get their earlier constitutional force back again. The assumption of supreme governmental power by the occupying powers and the installation of the Control Council as the "supreme power in matters concerning Germany as a whole" (Control Council proclamation No. 1) and the setting up of special military governments for the individual occupation zones ushered in a new constitutional position. In principle it allowed existing Reich law to continue to apply, but excluded the reapplication of the organizational provisions of the Reich Constitution, including provisions on simple and more complicated legislative procedures, because of the incapacity to act of the German State as a whole. Equally, the provision of Article 13 (1) RV, whereby Reich law overrides Länder law, could not continue to apply, as being directly connected with the organization of the former Reich. For it was obvious even in 1945 that a rebuilt Germany would not take over the demarcation of power between Reich and Länder unchanged, and that therefore a future German overall State would not be competent in the whole area of existing Reich legislation. In particular, during the transition from the dictatorship to the new democratic structure, the German legislative power could not for an unforeseeable period be deprived of all possibility of adapting the law to the changing needs of the life of the State in decisive areas (for the transitional period between the entry into force of the Basic Law and the convening of the Bundestag, see Bayer VGHE.n.F. Vol.5 II p.120). This applied in particular to those provisions of Reich law that concerned the fundamental relationship between individual and State. Here too, following the experience of National Socialist rule, a new order was called for.

The legislation of the military government, which in the area of the American and British occupation zone set up German legislative power again, first of all in the Länder and later in the United Economic Area, confirms these conclusions from the new constitutional position by binding the German legislator solely to the paramount law of the Control Council and the Military Government, but not to existing Reich law.

In the American occupation zone, the Länder had by Article II of Proclamation No.2 full legislative powers to abrogate existing German law, including German Reich law, and in this legislative power they were "free saving the paramount powers of the military government insofar as its exercise is not in contradiction with past and future measures taken by the Control Council or a central German authority set up by it". According to the later proclamation No.4, the Länder in the American occupation zone had "full legislative power…in accordance with their constitutions", which was "limited solely by the…reservations made by the Deputy Military Governor in the notes confirming these constitutions". These reservations related to international agreements of the United States, Four-Power legislation and certain special powers of the military government.

In the British occupation zone, Order No.57 of the military government gave the legislative bodies, subject to legislative measures of the control power and the powers of the military government, exclusive legislative powers for their Länder, without binding them to former Reich law. It was only in particular areas which on the British view would presumably be reserved to the future overall State to be reorganized that legislative powers of the Länder were ruled out.

For the administration of the United Economic area, Article IV of proclamation No.5/VO 88 — which were decisive for the legislative powers of the Economic Council in its original composition — provided that enactments of the Economic Council "may not be in contradiction with the legislation of the Control Council, but with this restriction take precedence over German legislation". According to Article IX of Proclamation No.7/VO 126, "acts of the Economic Council and of the Council of the Länder…take precedence over German law not in keeping with them".

In keeping with this legislation of the military government, all Länder constitutions introduced in the territory of the American and British occupation zone before the Basic Law came into force confirmed the admissibility of amendment of former Reich law by Länder law: Article 186 (2) of the constitution of the Free State of Bavaria of 2 December 1946 repeals all enactments and orders in opposition with it, without drawing any distinctions between Reich law and Länder law; the Bavarian Constitutional Court therefore presumes in consistent case law that former Reich law before the entry into force of the Basic Law is to be measured against the criterion of the Bavarian constitution and does not itself take precedence over the law of that Land (cf. Bayer, VGHE.n.F. Vol.1 II p.81; Vol.5 II p.119,166 [189], 225 [231]). Article 150 (1) of the Land Constitution of the Free Hanseatic City of Bremen of 21 October 1947 and Article 27 (3) of the Provisional Constitution of the Hanseatic City of Hamburg of 15 May 1946 provide for a more difficult legislative procedure by the Land legislator for departures from former Reich law.

Article 153 (2) of the Constitution of Land Hesse of 1 December 1946 stresses that only "future law of the German Republic" overrides Land law, and Article 165 of the Constitution of Württemberg-Baden of 28 November 1946 regulates the abrogation of Land provisions which "contradict [a] future German constitution".

Above all, the Basic Law itself confirms that neither the administration of the United Economic Area nor the Länder were bound in the framework of their legislative powers by former Reich law; for Article 125 (2) Basic Law presupposes legally effective amendments to former Reich law after 8 May 1945 by German legislators, even in partial areas within an occupation zone, and therefore necessarily also in the individual Länder (as did the Herrenchiemsee draft of Article 139 (3), second sentence, of the master version and Clause 2 of the secondary version).

The fact that in all these cases no distinction is drawn between Reich laws and Reich constitutional law confirms the assumption that the provisions of the Reich Constitution of continuing validity on the basis of the new constitutional position following the collapse of the National Socialist regime have not regained their constitutional rank, at any rate insofar as that provided special protection against amendment in the legislative procedure of the overall State or against amendment or departure by Länder legislators.

This view is also put forward wellnigh unanimously in the literature on constitutional law…(references).

cc) The assumption is also to be rejected that in the period in consideration here all expropriation without compensation was inadmissible because of paramount law. A paramount norm simply forbidding the legislator from ordering or allowing an expropriation without compensation in the interests of the general good cannot be found. Anyone who assumes the existence of such a paramount norm must necessarily come to the conclusion that Article 153 RV was null and void to the extent that it allowed expropriations without compensation on the basis of Reich enactments. But this conclusion has not yet been drawn by anyone.

The Mortgage Guarantee Act is accordingly valid even were the charging of conversion land charges on the property to be regarded as expropriation without compensation. Accordingly, in deciding the constitutional complaint against this Act, there is no need for any examination of the question whether it is an expropriation at all.

b) By contrast, this examination is indispensable as regards conversion land charges arising on the basis of the Amending Act, that is, following the entry into force of the Basic Law; for here the legislator was bound by the fundamental right of Article 14 Basic Law.

The Amending Act creates further conversion land charges. The complainants are affected by these insofar as these are conversion land charges following indemnification charges which guarantee a loan for indemnification of building disencumberment tax pursuant to the order of 31 July 1942 (RGBl. I p.501). According to this order, an indemnifying mortgage could be registered for a credit institution granting a loan for commutation of the building disencumberment tax, which was by para.16 of the Currency Conversion Act to be converted. On such a mortgage entered in the Land Register conversion land charges were due, even according to the original version of para.1 of the Mortgage Guarantee Act. If however the credit institution had — as in the complainants’ case — not caused an indemnifying mortgage to be registered, then all that encumbered the property was merely a public indemnification charge not subject to registration, that is, neither a mortgage nor a land charge or annuity land charge. The original version of the Mortgage Guarantee Act did not provide for conversion land charges on such a public indemnification charge not ranking for inclusion in the Land Register.

They arose only with the Amending Act.

aa) It is true that para.4 of the First Implementing Order on the Mortgage Guarantee Act contained a provision of similar content, but this is ineffective because the underlying empowerment is exceeded. The legislative will to create new conversion land charges following mortgages, land charges and annuity land charges could not be "implemented" by ordering conversion land charges to arise also on other land burdens, namely public indemnification charges. Para.4 of the order was therefore not an implementing regulation but a supplementary regulation and therefore null and void.

The legal nature of the First Implementing Order is not altered by the fact that it was enacted on the basis of para.4 of the Mortgage Guarantee Act by the Administrative Council with the assent of the Economic Council and the Council of the Länder. Such "assent orders" do not lose their character as orders through the involvement of the legislative body. Apart from the smaller influence by comparison with legislative procedure that the assenting body has on the substantive form of such orders, in formal respects it should be borne in mind that by para.49 (2) of its rules of procedure the Economic Council gave its assent to orders of the Administrative Council in one reading, whereas it handled its own draft orders, in accordance with para.49 (1), in two readings and draft laws — following Decision no.11/2 of 24 February 1948 — in three readings (See Der Wirtschaftsrat des Vereinigten Wirtschaftsgebietes 1947 bis 1949, ed. Büro des Wirtschaftrats, August 1949, p.43;GStrau~, Entwicklung und Aufbau des Vereinigten Wirtschaftsgebietes, Festgabe zur Juristischen Tagung in München vom 1.bis 4. Juni 1948, p.46). Moreover, the Economic Council — the most important legislative body of the United Economic Area — had less influence on the assent procedure than on legislative procedure; in the latter case it could disallow any objection by the Council of the Länder pursuant to Article III (9) of Proclamation 7/VO 126 by absolute majority, whereas it could not substitute for absent assent by the Council of the Länder in the case of assent orders. Finally, by Article X (1) of Proclamation 7/VO 126 all enactments of the Economic Council required explicit assent from the military government, whereas this applied to implementing orders only where the military government had explicitly reserved the right to review and authorize them. The implementing order on the Mortgage Guarantee Act was therefore not authorized by the military government but merely taken note of (see Drucksachen des Wirtschaftrats 1948 no.541, 23 September 1948). It was therefore also — by contrast with enactments of the Economic Council and the Council of the Länder — subject to judicial review (Id. Articles V and VII of Proclamation 8/VO 127).

The fact that an enactment of the Economic Council could as such bind empowerment to exercise the power to issue orders up with mere assent of the legislative body and that therefore the content of the empowerment as such was admissible has not been subject to any legal objections. The doubts in this connection deriving from Article 80 Basic Law (see the minutes of the Ninety-Third Meeting of the Bundestag Committee for Legal Affairs and Constitutional Law of 19 March 1951 and the majority report produced by Professor Wahl of 4 April 1951 — Committee document no.26; also Wolff in AöR 78 p.217) do not at any rate apply to the legislation of the United Economic Area.

If accordingly the implementing order of 7 September 1948 did not despite assent from the Economic Council and the Council of the Länder have statutory rank, then para.4 is null and void as being ultra vires. There is therefore no need to discuss the further question of whether the whole order might have been ineffective because it had already been issued on 7 September 1948 i.e. before the promulgation on 13 September 1948 of the empowering act and therefore at a time when a legally effective empowerment to issue the implementing order was not yet legally in existence (on this question cf. Jacobi, HdbDStR II 245; Wolff in Aör 78 p.221).

Equally, there is no need to consider whether something else must apply here because the empowering act promulgated along with the order attributed retroactive force to itself.

bb) If para.4 of the First Implementing Order is null and void, then it follows that the conversion land charges on public indemnification charges did not arise until the provision of the Amending Act with the same content as para.4. Since this Act was promulgated on 24 August 1949, that is, after the entry into force of the Basic Law but before first convocation of the Bundestag, the question arises whether an act of the Economic Council adopted during that period was bound by the fundamental rights provisions of the Basic Law. The answer is in the affirmative.

The legislative power of the Economic Council was based not on German law but on the military government provisions of Proclamation 7/VO 126 and therefore, pursuant to Act no.25 of the American military government and VO 201 of the British military government, continued in being until first convocation of the Bundestag. The Basic Law too, in Article 122, assumes this legal position created by the legislation of the military governments. Now Article IX of Proclamation 7/VO 126 provides that enactments of the Economic Council take precedence over German law not in keeping with them. This applies without restriction to German law at Land and zone level; by contrast, at inter-zonal level it can logically apply only to former German law. The subsequently enacted fundamental rights provisions of the Basic Law were therefore binding as from its entry into force on 23 May 1949 for all German legislators in the territory to which the Basic Law applies, and therefore also for the legislator of the United Economic Area. The military governments explicitly stressed through Act no.25/VO 201 that the legislative and administrative powers of the administration of the United Economic Area had to be brought into accordance with the Basic Law. If they did not explicitly specify that the fundamental rights applying as from 23 May 1949 were also to be binding for legislation of the Economic Council, this was apparently only because this bindingness was taken as a matter of course and was not affected by Article IX of Proclamation 7/VO 126.

cc) The Economic Council was accordingly bound by the fundamental rights of the Basic Law and therefore prevented by Article 14 from making an expropriation without compensation. However, the charging of conversion land charges under the Amending Act of 10 August 1949 is not an expropriation.

The real property which had become free of encumbrances in rem to the amount of the devaluation was encumbered with the conversion land charges that had newly appeared when the Amending Act came into force and thereby placed under restriction; for a particular sum of money was to be paid from the property (para.1191 BGB) in favour of the creditor. Admittedly, a number of special provisions applied to conversion land charges, restricting payment "from the property"; in particular, they could by para.1 of the Mortgage Guarantee Act not be terminated, and by para.6 of the Second Implementing Order of 8 August 1949 the capital — except for the redemption payments from amortizable mortgages — was not due even where the capital of the converted right would have been due without termination; further, until definitive settlement of the equalization of war burdens enforcement could not be made by compulsory auction on the property because of interest and redemption payments due on the conversion land charge.

There is no need to verify whether in view of these special provisions it was still a case of genuine land charges (denied by Heseler, Die UmstellungsgrundschuldA[1951] p.12). For it is beyond question that through the conversion land charges the property was encumbered, and in particular that the owners were restricted as to the free economic realization of the property.

Nevertheless, there is no expropriation. The Mortgage Guarantee Act and Amending Act serve exclusively to secure the profits accruing to debtors for the equalization of war burdens. Insofar as an "entitlement to compensation pursuant to para.16 (3) of the Currency Conversion Act" (see para.3 of the Mortgage Guarantee Act) did not arise against the debtor, the right has to be conveyed to him; interest and redemption payments have to that extent to be reimbursed. Interest and redemption payments were by para.24 (1) of the Immediate Aid Act of 8 August 1949 (WiGBl. p.205) reckoned against the Immediate Aid Levy and by para.133 of the Equalization of War Burdens Act against the levy on mortgage (revaluation of currency) profits and — where they could not be set off in calculation of the equalization of war burdens — repaid. They therefore constituted provisional payments in advance of a future levy and collateral security for it.

Such advance payments on a levy to be definitively settled in future have themselves the nature of a levy. The fact that interest and redemption payments are under the Mortgage Guarantee Act formally payments by a debtor to his mortgagee which where necessary, must be claimed before the Ordinary Courts, in no way alters the fact that in economic meaning the payments are levies. This follows from the Revenue Board’s competence to waive on grounds of equity and from the form of the appeal procedure in para.5 (4) of the First Implementing Order.

The encumbrance in rem too cannot — despite the ownership restriction bound up with it — be regarded as expropriation, at any rate where, as here, it is nothing other than the discontinuance of a corresponding burden in rem by a statutory measure that is the legal basis and the economic motive for the formation of the liability levy and the encumbrance serves merely to secure a future levy.

For para.16(3) of the Currency Conversion Act has provided, in direct connection with the conversion, that profits accruing to debtors be made use of for the equalization of war burdens. It was only the currency conversion that had made the part of the property now covered by the encumbrance with conversion land charges "free". But it was "free" only on the proviso that it would, as a profit accruing to a debtor, be made use of for the equalization of war burdens. They impose on the owner a restraint on disposal with effect in rem only until such time as the equalization of war burdens had been generally settled and the final amount of the levy liability could be determined. The technical legal form chosen for this therefore does not mean any genuine new burden on economically free property and on that ground alone cannot be regarded as expropriation.

Furthermore, the charge has no independent significance but was aimed only at securing the future levies for the equalization of war burdens. It was therefore neither possible nor necessary to extend the "restraint of disposal" only to the proportion of the value of the new property that did not exceed the value of the later levy for the equalization of war burdens; instead, provisionally, disposal of the entire property gained from the conversion could be restrained. The complainants therefore cannot assert either that their exemption from 90 % of the public indemnification charge was not a currency gain for the reason that one of their properties had already been destroyed in mid-1943 and was therefore improperly charged with the full indemnification charge. The complainants further fail to see that on the basis of the order of 31 July 1942 abrogating the Building Disencumberment Tax (RGBl.I p.501) the indemnification charge had effectively come into being as an una tantum indemnification payment to the amount of 10 times the annual value and had already become due on 31 December 1942. Changes to conditions of the property encumbered could by para.5 (2) of the order be taken into account only if they had arisen by 30 November 1942. It was only for reasons of equity that in his circular of 31 July 1942 (RStBl.828) the Reich Finance Minister empowered revenue boards to extend this period to 31 December 1942. If therefore the complainants could not or would not pay off the debt due from their own funds by the end of December 1942, they were legally effectively charged with the indemnification charge for a genuine liability, without subsequent war damage to the property being able to influence the amount of the liability (cf. BGH NJW 1953, 61). Accordingly, the amount of indemnification charge eliminated by the currency conversion does constitute a genuine gain. It was not until para.100 (3) of the Equalization of War Burdens Act that it became to a certain extent possible to take account of war damage arising after 1942 for purposes of the levy for equalization of war burdens.

There is no need, finally, to verify whether indemnification of the Building Disencumberment Tax itself constitutes, because of the charge in rem associated with it, expropriation without compensation, because any such expropriation had already been brought about, with legal effect under the law at the time, before the entry into force of the Basic Law.

For these reasons, the charging of conversion land charges and the obligation to pay current amounts is not an expropriation. The question of principle, whether the concept of expropriation in Article 14 (3) Basic Law is to be interpreted in the same broad sense as was used before 1933 in the Reich Supreme Court’s case law on 153 (2) RV, therefore need not be discussed in the present case.

3. Again, the complainants’ view that their fundamental right of equality before the law has been infringed by the charge on their property is incorrect. The legislator of the administration of the United Economic Area was certainly bound by the principle of equality; Article I of Control Council Proclamation No.3 of 20 October 1945, which explicitly lays down that all persons are equal before the law, could in view of the abuses of National Socialist legislation be understood only as meaning that the legislator too was bound; and it was indeed so understood, as the post-1945 Land Constitutions show (Articles 1, 2, 123 of the Constitution of Land Baden; Article 118 of the Constitution of the Free State of Bavaria; Articles 1, 2, of the Land Constitution of the Free Hanseatic City of Bremen; Articles 1, 26 of the Constitution of Land Hessen; Article 17 of the Constitution of the Rhineland Palatinate; Article 2 of the Constitution of Württemberg-Baden; Article. 6 of the Constitution of Württemberg-Hohenzollern). Examination shows, moreover, that charging conversion land charges did not infringe the principle of equality, irrespective of whether they arose upon public indemnification charges or upon other burdens in rem.

a) As explained under III 2b, cc, the charging of conversion land charges under the Mortgage Guarantee Act and Amending Act does not constitute a definitive arrangement but a provisional subjection to levy accompanied by provisional security. This special arrangement of currency gains on property is justified by the special nature of real property, for it is only here that the gain in property resulting from the currency reform could have its amount immediately determined without great additional administrative work. Additionally, specifically in the area of charges in rem, the possibility presented itself of preventing use of the property by the debtor for his own purposes with certainty pending definitive regulation of the equalization of war burdens, since any later land charges could not impair the conversion land charges that had arisen under the Act. The legislator would thus have been ignoring the possibility of easy, secure control over possible currency gains had it not acted immediately. These objectively rational considerations in principle justify the Mortgage Guarantee Act and Amending Act, since they take account of the special position with the conversion of liability in rem.

b) The complainants’ indication that the method of determining their "currency gain" infringes the principle of equality before the law because it excludes balancing with losses and damage overlooks the fact that the Act aims merely at securing any currency gains for later use in equalization of war burdens, but does not definitively establish the amount of currency gain or of levy liabilities. Likewise, the interest and indemnification payments from the conversion land charges constitute only provisional and offsetable levies. The Mortgage Guarantee Act has therefore not answered the question either whether a profit accruing to a debtor to the amount of 90 % of the Reichsmark amount has arisen in the case where the underlying claims were established only after 1945 or whether any creditor losses are to be taken account of in whole or in part by way of balancing. Finally, the complainants cannot ask to be equated with those debtors who had already paid off their real liabilities before the currency reform. These situations would, precisely because of the intervening currency reform, be entirely different from an economic viewpoint. Such inequalities could not be treated equally by a law that was directly connected with the currency reform.

c) The fact that the property owners were, over and above the security objective, compelled to pay a provisional special levy does not contravene the principle of equality because real property has always had a special position as a source of taxation (see the reference by JellinekAin 36.DJT [1931] I p.304).

The decisive point is that this levy is merely an anticipation of a similar general levy; moreover, its form does not depart so decisively from the prospective general levy as no longer to be justifiable by the special nature of real property in general economic transactions.

d) The Act’s provisions on waiver of payments due and of conversion land charges do not infringe Article 3 Basic Law either. The fact that the waiver takes account only of war damage, dismantling damage, occupation and restitution damage but not other currency damage is justified by the fact that the former relate directly to the encumbered property, acting as a source of taxation. On the other hand, in the case of waiver of current payments on grounds of equity it is only just for the personal and financial circumstances of the debtor to be taken into account, having regard to his overall social position.

For all these reasons the complainants have not had their fundamental right to equality before the law infringed by the Acts impugned.

4) The complainants also complain that particular rights based on the Goldmark did not receive any special treatment at the currency conversion. However, the currency legislation of the occupying powers is not subject to any judicial review. Moreover, the complainants overlook the fact that equating the gold-value mortgages with the Reichsmark mortgages had already come about through the order on rights of stable value of 16 November 1940 (RGBl.I p.1521).

5) Since both the Mortgage Guarantee Act promulgated on 13 September 1948 and the Amending Act promulgated on 24 August 1949 entered into force retroactively on 1 July 1948, the question finally arises whether the complainants have thereby had a fundamental right infringed. The problem of the admissibility of retroactive enactments has recently been thoroughly discussed in the case law and the literature. Numerous objections have been raised against the hitherto prevailing view that the legislator was not prevented from making enactments retroactive outside the penal law (cf.esp. Tietz NJW 1951 p.468; Köster BB 1952 p.93; Meyer-Cording JZ 1952 p.161;GGro~ BB 1953 p.93; Ballerstedt in a note on the OGH Judgement in SJZ 1949 p.407; esp. Klein,AZulässigkeit und Schranken and the references given therein; among more recent case law cf.esp. OGH DV 1948 p.20; SJZ 1949 p.407; BGHZ 3, 84; BFH BB 1951 p.550; Bayer.VerfGHE n.F. Vol.3 Part II p.129 [137], Vol.4 Part II p.90 [100], Vol.5 Part II p.1 [11],p.166; OVG Hamburg JZ 1952 p.416; OVG Lüneburg NJW 1952 p.1230). Nevertheless, the Federal Constitutional Court in principle keeps to the hitherto prevailing case law (cf. BVerfGE 1, 264 [280]).

Leaving aside the criminal law, there is no provision in positive law which would exclude all retroactiveness; even a paramount norm of this content cannot be assumed, as emerges specifically from the legal development described by the Hamburg Higher Administrative Court.

Grounds of legal logic do not simply impose the imadmissibility of retroactive norms. It is therefore irrelevant whether the retroactivity is supposed to create the fiction as regards facts and circumstances lying in the past that the norm already existed in the past, or else facts and circumstances of the past are to be treated in such a way as if they had arisen only within the period of application of the new norm (cf. Klein op. cit. p.25). A ban on retroactivity does not derive either from the concept of legal norm, even if it is a matter of course that the legislator cannot retroactively proscribe particular conduct in the past, that is, call for something impossible. Finally, it seems questionable to seek to derive a ban on retroactivity generally from Article 2 Basic Law, as do Meyer-Cording and the Hamburg Higher Administrative Court. For it may still be doubtful whether the individual — beyond the limits set in Article 19 (2) Basic Law — can on the basis of Article 2 (1) Basic Law assert a constitutional right to compliance with particular legal limits for the development of his personality against the legislator itself (on this see Klein op. cit. p. 41 and Wernicke BGG Article 2, note II 1a). However, this special question need not be resolved definitively. For Article 2 (1) Basic Law could not possibly oppose retroactivity of an act if enactment of such retroactive provisions was to be expected from the outset (cf.BVerfGE 1, 264 [280]; likewise Meyer-Cording and Köster). This was the case here. The Currency Conversion Act had already provided for profits accruing to debtors to be covered. The German legislator thus did no more than act in accordance with this basic legal decision in making the security measures covering the currency gain operative from an earlier point in time, justified by the objective situation.

The charging of conversion land charges on property, as already explained, infringes neither the fundamental right to property nor the principle of equality. But then the retroactive establishment of the land charges cannot contain an infringement of these fundamental rights either.

6) The constitutional complaint is therefore unjustified insofar as it is directed against the Mortgage Guarantee Act and the Amending Act.