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Case:
BGHZ 52, 194 VI. Civil Senate (VI ZR 45/67) Art. 1, 3 Warsaw Convention (1929)
Date:
24 June 1969
Note:
Translated German Cases and Materials under the direction of Professors P. Schlechtriem, B. Markesinis and S. Lorenz
Translated by:
Tony Weir
Copyright:
Professor B.S. Markesinis

As general agents for Europe, the defendant sold H. installations, produced by company S. in M. (USA), and used for simplifying the feeding of animals. In order to advertise for these installations, he had organised a working trip to the USA in the summer of 1960 to inspect the installations operating on American farms. He had invited mainly farmers and agricultural consultants. For the flight out and back he chartered a plane from an American airline. In September 1961, he organised a second similar fact-finding trip for which he had gathered 74 participants. For this trip he had again chartered a plane from the "P.A." company. The overall flight costs were charged to the participants. On 9 September 1961, the participants departed from Düsseldorf for the USA in a plane belonging to the chartered airline. After a stopover in Shannon (Ireland), the plane started to cross the Atlantic. A few minutes later it crashed. All passengers were killed.

Under the Warsaw Convention for the Unification of Certain Rules Relating to the International Carriage by Air of 12 October 1929 (in the following : WC) (RGBl. 1933 II, 1039), their surviving dependents, amongst them the plaintiff, received from the third-party insurer of the "P.A." the maximum sum of liability insurance. However, the dependants were not satisfied with this sum. They brought an action for a judicial declaration that the defendant was liable to compensate them for current and future losses from the death of their breadwinners.

The Landgericht (High Court) rejected the claims, the Oberlandesgericht (Court of Appeal) found in their favour. The defendant's further appeal resulted in the latter decision being quashed and the matter being referred back to the court of appeal for the following

Reasons

The appeal court interprets the contract concluded by the defendant with the participant to the effect that the defendant had personally become liable for transporting the participants by air to the USA and back. Since he had thus become an air carrier in the sense of the Warsaw Convention, and the transportation had not been free of charge (Art.1 WC), he was liable under Art. 17 WC. He could not rely on the maximum amount set out by Art.22 WC. The appeal court did not decide whether or not the plaintiff could deduce the defendant's unlimited liability from Art. 25 WC, since the court held such liability already to be founded by the defendant's breach of Art.3 II 2 WC, as he failed to issue air tickets. His letter to the participants could not be construed as air tickets.

There are fundamental legal doubts in respect of the appeal court's decision (VersR 1968, 583) declaring the defendant unrestrictedly to be liable under Art.3 II 2 WC.

(.......)

B. I. The appeal court's findings are correct that the defendant acted as air carrier and is thus liable under the Warsaw Convention.

1. The application of the Convention presupposes that this is a case of international air transport in the sense of its Art.1 (see para. 51 of the Air Transport Act -LuftVG), and that the defendant acted as air carrier in the sense of the Convention. The decisive question is whether the participants had concluded a transport contract with the defendant o whether the latter had only been bound by the participants' mandate to arrange for their transportation by an airline, whereby only that carrier, i.e. the "P.A." was liable.

a) The appeal court rightly proceeds from the letter of invitation which the defendant sent on 4 July 1961 to numerous farmers, agricultural consultants, etc as possible purchasers or advisors on purchases of the ensilage installation. This letter, accompanied by a registration form, stated:

" The great interest which active farmers, scientists and professional journals show in the H. process for rationalising the feeding of animals has caused us to organise a second working trip to the USA this autumn to which we cordially invite you.

We shall probably leave Düsseldorf on 8 September 1961 and fly to Chicago. The return flight will take place on 30 September 1961 from New York.

The costs, including bus trips and accommodation, will probably run to DM 1,900. All in all there will be 76 participants.....
In Germany, the trip will be organised by us and in the USA by the S. company..."

The appeal court rightly finds that this letter is not yet an offer to conclude a contract but rather an invitation to apply to the defendant for participation in the trip. The deceased passengers did so by filling in and returning the registration form and by sending DM 1,900. By his letter of 23 August 1961, the defendant accepted the offers. It said:

"Concerning: Second H. study trip to USA
Dear Mr.. (followed by name)!
We confirm with thanks receipt of DM 1,900 and inform you that we have made a firm booking for you for the second H. study trip to the USA. Attached you will find a circular with further instructions regarding the trip."

The appeal court holds that the participants could only understand this letter to mean that the defendant wanted to be liable for organising the air transport although by using an airline (para. 278 BGB), since the defendant retained the right personally to select the participants. All applications needed to be directed to the defendant who was to receive payment. The trip was an advertising trip organised by the defendant for his own purposes. Although he instructed the participants that a Lockheed was to be used, he did not indicate with which airline the participants needed to conclude a contract. They knew that the defendant himself was not an airline and that he did not own a plane. However, in 1961, it was already customary that companies organised air transport on planes which they chartered from airline companies.

b) The further appeal submits that the appeal court's reasoning infringes general rules of interpretation and fails to consider vital circumstances. There are, however, no such indications.

The assessment of the contents of the contract, which the appeal court reached after interpreting the parties' expressed and tacit declarations of intent (paras 133, 157 BGB), is feasible. It infringes no principles of logic or experience. The further appeal incorrectly submits that the case concerns an interpretation of typical clauses of model contracts. The fact that the defendant concluded identical contracts with all participants does not alter the fact that individual declarations needed to be interpreted.

The court of appeal investigated the defendant's allegation that he did not intend to be personally liable for transportation but rather only intended to arrange the conclusion of a contract for transport between the participants and an airline company enlisted by him. The appeal court does not wish to rule out that the defendant intended merely to act as intermediary, but it holds that he should have clearly expressed this intention to the participants.

aa) As repeatedly submitted by the defendant, his legal position in relation to the participants was not that of a travel agent. Normally, when air transport is offered, a travel agent merely intends to act as an agent. It is not the travel agent but rather the airline, whose ticket he sells, who is eventually liable as air transport operator (Schleicher/Reymann/Abraham, Das Recht der Luftfahrt, 3. ed., Art.1 WC, n. 28, p. 274; Riese, ZLW 1962, 8; Bodenschatz, VersWi 1957, 358; Georgiades, RFDA 1953, 16 et seq.; decision of the Court de Cassation, Paris, RFDA 1956, 217).The same applies where several air passengers get together (group travel) and one of them deals with an airline with whom he then concludes a group transport contract, so for instance the chairman of a sports club, or a company acting for its employees. In such cases it is the operating airline alone who acts as air carrier and not the chairman or the company owner (see Schleicher/Reymann/Abraham, op.cit., Art.1 WC, n. 26; Bodenschatz, op.cit., p. 360; Riese, ZLR 1958, 7; Meyer ZLR 1957, 328, at 330). The case before the court cannot, however, be compared to those cases. Contrary to the position of a travel agency, this case concerns a trip organised by an enterprise which is part of a worldwide corporation and which could be trusted to be able to organise its own air travel in respect of a trip which benefited its own commercial interests.

bb) The defendant's liability as carrier of his air passengers would be excluded, if he merely intended to be and indeed acted as agent of an air carrier. The appeal court correctly rejects the submission that this was the case.

The defendant made no submissions as to how the participants had commissioned him in their name to conclude a contract with an airline. The fact that, when concluding the charter contract, he did not name the participants speaks against such interpretation. Above all, the appeal court's reasoning is strengthened by the fact that the defendant never informed the participants with which airline they were to fly, i.e. with which contractual partner the defendant should conclude the contract in their name...

The "agent-clause" in Art. 17 of the charter-party concluded between the defendant and the airline does not point out that the defendant intended, and was expected, merely to act as the participants' agent. Although this clause, used by many companies which are members of the IATA (International Air Traffic Association) when planes are chartered, states that the charterer concludes the contract "both on his own behalf and as agent for all persons carried in the aircraft" (see to this point Sundberg, Air Charter, 1961, 359 et seq.), it is doubtful whether the word "agent" used in this clause means an agent in the sense of para. 164 BGB or merely an intermediary, as will be shown below (see Grönfors, Air Charter and the Warsaw Convention, 1956, 115, n.4; Schweickhardt, ZLW, 1964, 13). This question does not need to be answered in this context. No inference to the participants' detriment can be drawn from the contract concluded by the defendant with the airline, for instance that they, by returning the completed application forms, had given the defendant power of agency.

cc) In detailed submissions the further appeal tried to substantiate the fact that the defendant, when concluding an air charter-party with the chartered company for his participants, merely acted under a mandate from the participants (contract for services - Geschäftsbesorgungsvertrag). As a result and as against the participants, he was not liable for transport. Like a forwarding agent (see para. 407 BGB) who arranges transportation through a carrier, he simply undertook carefully to select the company chartering out the plane.

The further appeal correctly holds that such a construction is possible (see Guldimann, Internationales Lufttransportrecht, 1965, Art. 1 WC, n. 8; Schweickhardt, ZLW 1964, 23; Riese, ZLW 1962, 8; Rudolf, ZLW 1960, 146) and could have been envisaged for these particular circumstances. But, in the sphere of commercial law, the answer to this question already poses grave difficulties, i.e. the point whether an agent who concludes a contract with a third person in the interests of his principal does so as an agent only (commission agent, forwarding agent) or whether he acts on his own account (own business). The present case presents the same difficulties. Its solution depends entirely on the circumstances and on the interpretation of the statements made by the parties (Schleicher/Reymann/Abraham, op. cit., Art.1 WA, n.28; Schweickardt, Schweizerisches Lufttransportrecht, 1954, 50/51).....

Decisive here is the general principle according to which any interpretation of declarations of intent is not governed by what the party possibly intended to declare but rather by what was in fact declared. The recipient is not responsible for any uncertainties; their effects need to be borne by the person who failed clearly to express himself. The appeal court applied this principle. In so far as it concludes that the defendant was not merely a "forwarding agent" but had rather undertaken to carry out transportation himself, this result cannot be faulted. The defendant had fixed the price at DM 1,900. There was never any mention of the fact that he needed to provide his "principals" with an account on how these sums had been spent. The participants had not approached him with the order to arrange for them a trip to the USA. It was he who advertised a working trip to be organised by him and in his interests.

The further appeal alleges that this was "merely" a contract in favour of third persons (para. 328 BGB). This allegation misses the vital point. It is possible that the "Aircraft Charter Contract" concluded between the American airline (chartered company) and the defendant (charterer) was also concluded in favour of the "group" listed in the contract as persons to be transported (so Art. 8 of the contract), as is often the case in such charter contracts (see Drion, Limitation of Liabilities in International Air Law, 1954, No. 120, n.3). However, the decision in this case does not hinge on the relationship between the defendant and the airline (the covering contract) but rather on the underlying debt relationship (Valuta-Verhältnis") between the defendant and the participants. As held by the appeal court, in case of a transport charter this can again take the form of a transport contract, i.e. a sub-contract on transportation, which the charterer concludes with the travellers whom he has attracted, and for the performance of which contract he has concluded a further transport contract with the operating airliner (von Bodenschatz, VersWi, 1957, 358 so-called "real charter contract; similarly Pelichet, Responsabilité Civile en Cas d'Affrètement et de Location d'Aéronef, 1963, 40). Where such a triangular relationship exists, the chartere is the air carrier in relation to his passengers and liable under Art.17 WC (Schleicher/Reymann/Abraham,op.cit., Art.1 WC, n.26; Riese, ArchLuftR, 1939, 138; Bodenschatz, op. cit., 360; Goedhuis, National Airlegislations and the Warsaw Convention, 1937, 134; Shawcross/Beaumont, on Air Law, 2. ed.,1951, n. 513 = 3. ed., 1966, 603). Contrary to the further appeal's opinion, the "agent-clause" in Art. 17 of the charter-party is not the decisive point which is decisive. This clause intends to create a direct legal relationship between the chartered company and the passengers assembled by the charterer, so that the chartered company, as against the passengers, acts as air carrier in the sense of Art. 1 WC with the result that when claims for damages are brought against him, he can draw upon the restrictions on liability set out in Art. 22 WC, even where initially he did not know who his passengers were ("undisclosed principal"; see Sundberg, op. cit., 360; Shawcross/Beaumont, op. cit., 2. ed., No. 351 = 3. ed., 480; Drion, op. cit., No. 120; Rudolf, ZLW 1960, 146; Dutoit, La Collaboration entre Compagnies Aériennes, 1957, 101). Thus, this "agent" clause can have the effect that the passengers also acquire a personal, direct claim for transportation against the chartered company (para. 328 BGB). This does not, however, change the fact that the passengers first and foremost have concluded a contract for transport with the charterer acting as their "agent". An interpretation of this internal relationship between charterer and air passengers does not depend on the interpretation of the outer relationship between charterer and chartered company, i.e. the contents of the charter-party. The decisive question is whether or not the defendant concluded the contract not only in his own name but also for his own interests and as air carrier for the passengers gained through advertising. The appeal court has correctly answered the question in the affirmative.......

II. The court of appeal correctly ascertained that the defendant is basically liable under Art. 17 WC.........

III. (But) the facts on which the appeal court bases its decision only justify the finding that the defendant's liability is limited by the maximum amount set out in Art.22 WC. But since "P.A."'s insurance company has already paid the maximum amount, additional liability requires the existence of other claims.

1. The plaintiffs submit that the defendant's liability is unlimited under the rules on breach of contract (para. 325 BGB, positive breach of contract, contract with protective effect in favour of the surviving dependants) and on tort under paras 823 et seq. BGB. This is not correct. Once it has been ascertained that the defendant acted as air carrier,i.e. was liable under Art. 17 et seq. WC; all other bases for liability are thereby excluded (Art. 24 WC).

2. Thus, the claim for unrestricted liability can only be well founded if the dependents' allegation is correct that the defendant or the "P.A." company and its staff acted so negligently that their behaviour amounted to intentional breach of contract (Art. 25 WC). The appeal court has not answered this question. Since this point can only be ascertained by a court which considers the facts, this case is referred back to the appeal court for further deliberations and decision.

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