Facts

The first plaintiff had a continuous business relationship with the defendant, a forwarding agent, since November 1976. In accordance with an agreement from 26 January 1978 the first plaintiff stored goods in one of the defendant’s storehouses. The second plaintiff owned the goods. The first plaintiff is the parent company of the second plaintiff. On 19 December 1979 the first plaintiff discovered that some of the goods had been stolen. The plaintiffs seek to obtain declaratory judgments to the effect that the defendant is liable in damages for the loss of the goods ... The Court of First Instance and the Court of Appeal have rejected the claim. The appeal against these decisions was allowed.

Reasons

…

II. 2. The Court of Appeal denied the first plaintiff’s entitlement to a contractual action on the following ground. The second plaintiff had direct rights of action founded on a contract for the benefit of a third party and on delict. In the view of the Court of Appeal it followed that the promisee could not recover damages in respect of the third party’s loss (Drittschadensliquidation). The reasoning of the Court of Appeal is flawed.

(a) Only the contracting party to that contract, i.e. the first plaintiff as promisee, can enforce the contractual right of action derived from the agreement from 26 January 1978. The fact that the second plaintiff suffered the loss and not the first plaintiff is not a bar to that right of action. In cases like the present, where a bailor enters into a contract with a bailee whereunder the bailee undertakes to store and guard the goods the promisee or bailor is entitled to recover damages in respect of the loss suffered by the third party owner of the goods [references omitted].

(b) The second plaintiff could have enforced the rights under the agreement from 26 January 1978 instead of the first plaintiff only if the first plaintiff had assigned his contractual rights against the defendant to the second plaintiff or if the contract between the first plaintiff and the defendant from 26 January 1978 had been one for the benefit of the second plaintiff or at least with protective effects towards the second plaintiff. However, this is not the case here.

...

(c) Therefore the second plaintiff’s claim is exclusively founded on the law of delict. This direct right of action of the second plaintiff does not prevent the first plaintiff from pursuing his contractual claim founded on Drittschadensliquidation against the defendant. The first defendant may sue in addition to the action brought by the second plaintiff. The fact that the first plaintiff’s claim flows from the same acts or omissions of the defendant as that of the second plaintiff does not indicate otherwise. The claims pursued by the plaintiffs in contract and tort respectively are independent from each other in that each right of action follows its own rules, they are also equally valuable each in its own right [reference omitted]. It follows that the contractual claims can be brought in addition to and independently from an action in delict. The fact that the plaintiff is exposed to both claims does not amount to a double recovery prohibited for reasons of the law of civil procedure.

...

To allow the first plaintiff to sue on the basis of third party loss compensation does not prejudice the defendant debtor in any interest that needs protection. The promisor does not lose the right to invoke limitations of liability, contributory negligence, limitation periods or other defences. This is true also for an extinction of the obligation by performance. If the promisor fulfils his obligations towards one of the creditors his obligations towards the other creditor cease to exist as well (see § 428 BGB; RGZ 170, 246, 250).

...

Back to top

This page last updated Thursday, 01-Dec-2005 11:04:42 CST. Copyright 2007. All rights reserved.