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Case:
BGH X ZR 117/02 X. Civil Senate X ZR 117/02
Date:
10 February 2004
Translated by:
Tony Weir
Copyright:
Sir Basil Markesinis

§§ 528(1), 822 BGB
If the donee of a thing is released from his restitutionary obligation as a result of donating it to a third party, the liability of the third party is not to restore the object itself but rather its value, a liability he can satisfy by returning the object.

In April 1995 G. and his wife gave the defendant's mother the proceeds of a bank account, part of which she used to buy a Nissan Serena car. This she gave to her son on 28 April 1995. G. and his wife then needed to be cared for, and the claimant local authority met part of their needs until their death in 1998. The local authority now sues the son in respect of the car as assignee of G. and his wife [who were entitled to recall their gift under §528 BGB (which refers to the rules on unjustified enrichment), since they had become unable to maintain themselves].

[The court below held that the defendant must return the car...]

The defendant's appeal must be allowed. His liability is a monetary one for the value of the vehicle at the relevant time, with the option, as the Landgericht correctly held, of returning the vehicle.

Reasons:

a) If a recipient donates what he has received to a third party, then to the extent that the recipient's liability to restore his enrichment is thereby excluded, the third party is bound to make restitution as if he himself without any legal justification had received the benefit directly from the transferor (§822 BGB). §822 BGB looks in the first instance not to what the third party (for example, the second donee of successive gifts) himself acquired but what was acquired by the original recipient (the first donee). What is "acquired" here includes any collateral benefits and surrogates of what was originally acquired: this is the apparently unanimous view of the writers regarding the effect of §818(1) BGB, either directly or by analogy. [authorities] Accordingly, if the first donee has obtained something as a substitute for the gift, the situation in the triangular relationship between donor, first donee and second donee is the same as in the straightforward case under §822 BGB.

b) In principle the same must be true when the first donee cannot return precisely what he received and his liability is transmuted under §818(2) into a purely monetary one. This has attracted some criticism because the first donee may have transferred funds of his own as well as the value of the gift he received and it may be difficult to disentangle the two. This is not, however, a good enough reason to exclude from the ambit of the rules relating to valuation a case which falls within their coverage.

c) If a substitute for the property or its value is transferred to a third party, the third party is bound as if he had received the substitute or the value from the person entitled to restitution. (We can leave aside the question whether §822 BGB creates an independent claim based on unjustified enrichment or simply extends to the third party the claim that lay against the original debtor, for in any case the third party is in principle bound to the same extent as the original recipient would have been, had he not gratuitously transferred to the third party what he himself owed.) [Here the car was bought by the mother with the money she had received]. According to the caselaw of the Bundesgerichtshof the counterpart of a transfer for value is not a substitute in the sense of §818(1) BGB, so the car given to the son was not a surrogate for the money received by his mother, and his liability, like that of his mother, is purely monetary.

d) But we must take account of the case where what the third party is given is not money but its value in the form of a thing or a right, for while the claim under §822 BGB starts out as a claim for what the first recipient acquired, it survives only to the extent that what was acquired or its value was transferred to the third party. The third party must therefore not be burdened by the need to realise the thing in order to meet his monetary obligation. He must be given the option, as the Landgericht held, of discharging that obligation by handing over the thing. The result is that while the creditor cannot demand an object which the defendant obtained from someone else the defendant need restore no more than what he has actually gained.

4. ... The court below held that the claimant was entitled to the fruits of the thing, but this is an error. The restitutionary claim under §818(1) BGB applies only to fruits which the party enriched obtained from the very thing he acquired without legal justification or from a surrogate in the sense of §818(1) BGB. This cannot be applied by analogy to the fruits of things bought with funds acquired by the party enriched. The same must be true of the person whose liability under §822 BGB is for a sum of money.

But actual or potential fruits must be taken into account when measuring the extent to which the defendant is still enriched. To this extent, all the benefits and costs inherent in the event leading to the enrichment must be weighed up together. Thus the depreciation of the vehicle during the time it was used goes to reduce the amount of the defendant's original enrichment, to be offset against the monetary value of the use which the defendant had or could have had during that period. This does not of itself affect the quantum of recovery [since these sums will commonly be equal]....

5. In any case when the value of the use of the vehicle is being considered the defendant can--at any rate until he received notice of the assignment on 12 March 1999 and so became more strictly liable under §§818(4) and 819(1) BGB--point to the fact that had he not been given the car he would have kept a car he could more easily afford. ....

6. As the court below, unlike the Landgericht, made no findings as to the residual value of the vehicle, this court is in no position to determine the amount of the claim and must therefore remand the matter. In making its determination the court below must remember that under the decision of the Landgericht, not challenged by the claimant, the defendant must not be held liable in an amount greater than €8,817.23 less such amount as may be attributable to the vehicle, should the defendant opt to return it.

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