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Case:
BGH NJW 1988, 2599 Bundesgerichtshof (ninth civil senate) IX ZR 245/86
Date:
07 June 1988
Translated by:
Raymond Youngs
Copyright:
Professor B.S. Markesinis

Facts:

The defendant claims by way of counterclaim against the defendants in the counterclaim on the basis of guarantees which they have undertaken in respect of an obligation to pay compensation on the part of M (the principal debtor). The claimant had first by an action for a negative declaration claimed that the guarantee undertaken by her was ineffective; after the raising of the guarantee counterclaim, this claim for a declaration was declared closed in the main claim by agreement. The counterclaim alone remains the object of the proceedings. The principal debtor is the claimant's husband and the first defendant to the counterclaim. The son is the second defendant to the counterclaim and the son-in-law is the third defendant to the counterclaim. The principal debtor was employed by the defendant as deputy manager of the payroll office. From 1975 to 1981 he continuously embezzled money belonging to the defendant by faking payments of wages, and he appropriated the money. He was therefore dismissed without notice in September 1981 and later, amongst other things, punished for embezzlement and falsification of documents. After the defendant had discovered part of the principal debtor's manipulations with losses amounting to about 300,000 DM, it demanded compensation from him for the first time on the 14th September 1981. The principal debtor thereupon acknowledged a debt of 350,000 DM on the 16th September 1981 in a notarial document and arranged a land charge of 200,000 DM on his house plot in the defendant's favour. The defendant, who at this point in time already possessed indications of more extensive loss, demanded additional security for its claims. On the 17th September 1981 the defendants to the counterclaim therefore each signed, on the basis of separate negotiations with the defendants' representatives, a guarantee declaration by which they undertook in favour of the defendant absolute guarantees for the principal debtor's obligation to pay compensation. The claimant provided a guarantee to an unlimited amount, the second defendant to the counterclaim to a maximum sum of 600,000 DM and the third defendant to the counterclaim to a maximum sum of 700,000 DM. The defendant later established that, as a result of the embezzlements, it had suffered a loss of more than 1 million DM. The defendants to the counterclaim contested the guarantee declarations on the ground of unlawful threat, in the case of the second and third defendants to the counterclaim by lawyer's letter of the 6th September 1982. The defendant who, taking into account repayments, has calculated a remaining demand for compensation at 356,362.63 DM, considers the avoidance to be unfounded. It demands from the defendants to the counterclaim as joint debtors the payment of an appropriate guarantee sum together with interest.

The Landgericht rejected the counterclaim. The Oberlandesgericht declared the counterclaim against the claimant to be justified in principle and in this respect referred the legal dispute back to the Landgericht for decision about the amount. The defendant's appeal was unsuccessful against the second and third defendants to the counterclaim. The senate declined to accept the claimant's appeal in law. The subject of the appeal in law proceedings is now only the defendant's appeal in law by which it pursues the counterclaim against the second and third defendants to the counterclaim. The defendant's appeal in law led in this respect to quashing and reference back to the appeal court.

Grounds:

I.

The appeal court is of the view that the second and third defendants to the counterclaim had effectively avoided their guarantee declarations, so that these were to be regarded as void from the start.

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Serious legal objections exist to these observations.

1. A person who has been unlawfully induced to give a declaration of will by a threat can avoid the declaration under § 123 (1) of the BGB. The findings of fact by the appeal court do not reveal that the second and third defendants to the counterclaim had been induced by threat to give their guarantee declarations. The observations of the appeal court on unlawfulness and observance of the period for avoidance are therefore not relevant.

a) Threat is the announcement of a future evil, the occurrence or non-occurrence of which the person making the threat claims to be able to influence and which will be realised if the person threatened does not give the declaration of will desired by the person making the threat (references omitted). The evil announced can be the reporting of a criminal offence, even if this report is not to be made against the person threatened himself, but against a near relative (reference omitted). The threat does not have to be expressly stated, but can instead be hidden (e.g. by a warning or a reference to disadvantageous consequences); it can also arise from conclusive conduct (references omitted). The appeal court correctly proceeds on this basis.

b) The appeal court assumes that the defendant's representatives did not expressly refer the second and third defendants to the counterclaim to the possibility of reporting the principal debtor for a criminal offence. It is necessary to proceed on this basis in the appeal in law proceedings. An express threat to report of a criminal offence was therefore not present.

c) The appeal court has also not established any other statements (hints, warnings, expressions or suggestions) by the defendants' representatives from which the second and third defendants to the counterclaim could have deduced that the defendant would report a criminal offence if the second and third defendants to the counterclaim did not sign the guarantee declarations. Instead, the defendant's representatives, according to the findings of the appeal court, in response to a question by the second and third defendants to the counterclaim as to whether the principal debtor would now be imprisoned, expressly stated that for them it was a question of compensation, and they had no interest in criminal prosecution. According to this, a hidden threat is excluded.

d) The appeal court considers that the threat arose logically from the behaviour of the defendant's representatives as a whole before the signing of the guarantee declarations. The established facts do not however support this assessment. The findings of fact only reveal that the defendant objectively had the opportunity to report a criminal offence against the principal debtor, that the second and third defendants to the counterclaim wanted to save the principal debtor from the reporting of a criminal offence by giving guarantee declarations and that all the participants in the contractual negotiations were aware of this. The appeal court on the other hand has not established any conduct by the defendant's representatives from which a statement could unambiguously be deduced that the defendant would report a criminal offence if the second and third defendants to the counterclaim did not sign the guarantee declarations. Neither the circumstance that the defendant's representatives visited the second and third defendants to the counterclaim in their home nor the fact that they pressed for an immediate decision can be understood as an unambiguous indication to the second and third defendants to the counterclaim that, in the case of a refusal of the guarantees, a report of a criminal offence was threatened. That is all the more so as the defendant's representatives expressly stated that for them it was a question of compensation and they had no interest in criminal prosecution.

From the context of the appeal court's observations, it follows that the court did not sufficiently distinguish threat from exploitation of a predicament. Threat consists in the announcing of an evil and thus requires that the person making the threat somehow holds out the prospect of the evil. It does not suffice if the person seeking to avoid his declaration of will merely expected on giving the declaration that the other party would inflict an evil on him if he did not do it, if this fear only arises from the objective state of affairs, and is not caused or confirmed by the other party (reference omitted). Then mere exploitation of the declarant's predicament by the other party falls to be considered and this does not fulfil the definition of a threat in the sense of § 123 of the BGB, as the appeal court has itself stated in another context (references omitted). According to the findings of the appeal court, the defendant's representatives cannot be accused of more than such an exploitation of the fears of the second and third defendants to the counterclaim. A threat as a result of conclusive conduct is accordingly not present.

2. In the literature the view is held that even a declaration of will which the declarant had been caused to make by exploitation of a predicament could be the subject of an avoidance by application by analogy of § 123 (1) of the BGB, because the provision has the purpose of protecting the free activity of the will, which would also be restricted on the exploitation of a predicament (references omitted). That however contradicts the case law of the Bundesgerichtshof and also the prevailing view in legal doctrine that only a predicament caused by illegal threat gave entitlement to an avoidance under § 123 (1) of the BGB. The senate adheres to this case law. Only a decision of the will which is not illegally influenced is to be understood as included within the free decision of the will which § 123 (1) of the BGB protects (reference omitted). The freedom of the individual to decide in relation to legal transactions thus does not have general protection against every kind of restriction by a predicament but only against unlawful influence by deceit and unlawful threat (reference omitted). Legal transactions are often based on real or supposed economic or personal compulsion. Certainty in legal affairs would be severely restricted if declarations of will could be avoided simply because the declarant was induced to give his declaration by a predicament which was known to the other party.

II.

The appeal court states as a subsidiary reason that it shared the subsidiary view of the Landgericht that the duties of the second and third defendants to the counterclaim were also contrary good morals "on the grounds explained" and accordingly were ineffective under § 138 (1) of the BGB. This also does not stand up to legal examination.

1. Whether a legal transaction violates good morals must be examined from a legal point of view by the court dealing with the appeal in law itself on the basis of the facts established by the appeal court (references omitted).

2. For the reasoning behind the appeal court's view that the guarantee declarations of the second and third defendants to the counterclaim were void under § 138 (1) of the BGB, the court refers to findings from which it has deduced the presence of an unlawful threat by the defendant's representatives. That does not suffice for a finding of a breach of good morals. Unlawful threat has found a special legal regime in § 123 of the BGB. According to this, the legal transaction is only voidable, and not void under § 138 of the BGB, if its objectionableness is based exclusively on an impermissible influencing of the will by unlawful threat (references omitted). § 138 (1) of the BGB can only be applicable as well as § 123 of the BGB if special circumstances are added to the influencing of the will by unlawful threat which cause the transaction to appear according to its total character as contrary to good morals. The appeal court does not highlight any such special circumstances not covered by the definition of unlawful threat. The Landgericht (whose view is endorsed by the appeal court) had regarded the fact that the second and third defendants to the counterclaim, although not debtors to the defendant, had been compelled by it to enter into guarantee obligations at a level threatening and in fact destroying existence as a special circumstance not covered by the requirements for avoidance under § 123 of the BGB. The appeal court judgment cannot support this idea. "Compulsion" is part of the definition of threat. The fact that the guarantee duties exceeded the assets of the guarantors has been regarded by the appeal court as an element establishing the unlawfulness of the threat. Even taking into consideration the deliberations of the Landgericht, the appeal court judgment consequently shows no special grounds going beyond § 123 of the BGB which could justify an application of § 138 (1) of the BGB.

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