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Case:
BGHZ 147, 269 Bundesgerichtshof (sixth civil senate) VI ZR 36/00
Date:
24 April 2001
Note:
Translated German Cases and Materials under the direction of Professors P. Schlechtriem, B. Markesinis and S. Lorenz
Translated by:
Mr Raymond Youngs
Copyright:
Professor B.S. Markesinis

Facts:

The claimant Land (hereafter called the claimant) demands from the defendant, a former lawyer, by subrogated rights from the H Bank, repayment of a sum of 1.3m DM. The H Bank had transferred this sum to a lawyer's client account held by the defendant (who represents S GmbH & Co KG (hereafter called S KG)) with the B Bank (as part of a financing loan of 12m DM altogether) for a building project on the instructions of the borrower, S KG.

It was agreed between the H.-Bank and S KG, as also between the latter and the claimant, that the payment of the loan value to S KG should be dependent upon the claimant's agreement. A land charge on a right to build, which the claimant had reserved to S KG on a building plot in its ownership, served the H Bank as security for the loan. The part sum of 1.3m DM transferred to the defendant's client account was on the basis of an agreement between the claimant and S KG to facilitate (on the basis of a list which had an authorisation stamp by the district mayor of the claimant) the settling of the demands mentioned on it (with each bank arrangement) of the creditors of a local football club. The director A of the complementary company (GmbH) of S KG acted as the sponsor of this club. He effected the payment to the defendant's client account, instead of to the creditor accounts, by asking, by a letter of the 3rd June 1996 to the H Bank, for a transfer to this account and sending with it a photocopy of the authorised list on which the column with the bank arrangements of the creditors was missing because it was covered up on photocopying. On the 10th June 1996, the defendant transferred from a further client account with the C Bank, to which he had in the meantime transferred the money, in accordance with the instructions of S KG to that bank, a part sum of 467,526.45 DM for the payment of wages and salaries; and a further part sum of 275,000 DM to himself for the payment of demands for fees. In relation to the remaining sum, the defendant on the 3rd July 1996 declared to S KG a set off with further claims for fees. Parallel legal proceedings are pending in respect of this part sum, in which the claimant in that case claims against the defendant for payment on the basis of a transferred right of S KG.

After S KG had not paid back the loan until the 31st December 1996, the claimant satisfied the demands of the H Bank and now claims against the defendant on the basis of a transferred or subrogated right of the H Bank.

The claimant has asserted that the defendant already knew, at the time of the transfer of 1.3m DM to his client account, that A had obtained this deviously by means of a manipulated list, contrary to the agreements which had been made. This was because the original list as well as the manipulated photocopy had been sent to him together with enclosures. The H Bank had a claim to repayment of 1.3m DM against the defendant on the basis of unjustified enrichment and on the basis of § 826 of the BGB because of the intentional immoral infliction of harm. These claims had passed to the claimant as a result of a substitution (Einstands) declaration in accordance with § 774 (1) of the BGB which was to be understood as a security; or as a result of a transfer declaration of the H Bank.

The Landgericht rejected the claim. On the claimant's appeal the Kammergericht ordered the defendant to pay (back) 1.3m DM. By his appeal in law the defendant seeks the restoration of the judgment of the Landgericht.

Reasons:

...

II.

2. The appeal in law however correctly claims that the appeal court has granted to the claimant a (direct) claim for enrichment against the defendant, without paying sufficient attention to the principles which the Bundesgerichtshof has developed in constant case law on settlement of enrichment (Bereicherungsausgleich) in the three-person relationship.

a) In a case of performance by virtue of instructions - as is the case here - the enrichment settlement takes place in principle within each performance relationship, and thus on the one hand between the person giving instructions (here S KG) and the person given instructions (here H Bank) in the so-called cover (Deckungs) relationship, and on the other hand between the person giving instructions (S KG) and the recipient under the instructions (here the defendant) in the so-called value (Valuta) relationship. According to the concept of performance in enrichment law, the person given instructions (in accordance with the purpose as correctly understood on all sides, and determined by him by his transfer (Zuwendung) to the recipient under the instructions) achieves first a performance of his own to the person giving instructions and at the same time a perfomance of the person giving instructions to the recipient of the instructions (references omitted).

b) This principle does not however apply without exception. It thus corresponds to the established case law of the Bundesgerichtshof that the person giving instructions has in any case a direct claim for enrichment against the recipient under the instructions if effective instructions are absent and this circumstance is known to the recipient under the instructions on receipt of the subject matter of the performance. This is because without valid instructions, the payment cannot be attributed to the supposed person giving instructions as his performance and the recipient can also not regard the payment from his point of view (on the basis of his knowledge of the absence of instructions) as a performance of the supposed person giving instructions (references omitted). In the absence of attributability of ineffective instructions, an enrichment settlement between the bank and the recipient of the transfer also possibly comes into consideration if the latter did not know of the lack of validity (references omitted).

A further exception from the principle mentioned under a) is accepted, in corresponding application of § 822 of the BGB. This occurs when a legal ground is lacking in the cover relationship, the performance is effected otherwise than in return for payment in the value relationship, and the duty of the person giving instructions to hand over what is obtained - on legal grounds (reference omitted) - is excluded (reference omitted). This is the case if the prerequisites of §§ 818 (4), 819 of the BGB are not present in the person giving instructions and therefore a claim against him for enrichment does not exist. The actual justification for this exception lies in the fact that the recipient of a performance which is made otheriwse than for payment according to the legal concept expressed in §§ 816, 822 of the BGB takes a weaker position even if a legal ground for his acquisition existed; the typical weakness of acquisitions without payment justifies his duty to hand over (reference omitted).

Finally a direct right by the person making the transfer against its recipient has exceptionally been regarded as permissible by the Reichsgericht (references omitted) and by the Bundesgerichtshof (reference omitted) in a case in which a "double defect in the enrichment chain" was present i.e. the cover relationship and the value relationship were both defective. Whether it is necessary to hold to this view, in spite of the fact that as a result the last member of a three-member enrichment chain is deprived of his legal objections (Einwendungen) against his front man (the middle member of the chain) as well as this middle man being deprived of his legal objections against the first member of the chain (reference omitted), does not need to be decided, because in the present case none of the exceptional cases described are present.

c) Contrary to the claimant's view, the transfer of the 1.3m DM by the H Bank to the defendant is based on effective instructions of S KG, so that this payment is to be attributed to S KG in enrichment law as its performance. The instructions as such are not ineffective because of forgery, nor on the basis of deceit, nor because of the absence of fulfilment of a condition. They had been given in this form by A, the competent representative organ of S KG, consciously and intentionally. Only the demand list attached to the instructions as an appendix, and which bore an authorisation stamp by the competent district mayor of the claimant, was manipulated, and this gave the impression that the claimant was in agreement with payment of the loan value in the sum of 1.3m DM to the stated account of the defendant. The director was admittedly mistaken about the entitlement of S KG to retrieve the credit. A mistake of the H Bank caused thereby does not however make any change in the effectiveness of the abstract (i.e. independent of the causal relationship) instructions (references omitted).

Contrary to the claimant's view, the instructions are also not ineffective just because of the non-occurrence of a suspensive condition, consisting of the claimant's agreement. As the instructions are a unilateral declaration of will which needs to be received, only A as the declarant could have made the instructions dependent on such a condition. He did not however do this, but instructed the H Bank unconditionally to undertake the payment to the defendant's stated account. In this connection, as against the H Bank, only the occurrence of that condition was pleaded under which S KG's claim to payment of the loan existed. This is however of no importance for the validity of the intructions - as has been just explained.

The prerequisites for a direct claim for enrichment against the recipient of the transfer in accordance with § 822 of the BGB are likewise not present, because A who gave instructions acted in bad faith in the sense of §§ 818 (4), 819 (1) of the BGB. According to the claimant's own statements, he knew, as the competent representative organ of S KG, that this company had no claim against the H Bank to payment of the loan value in itself, because corresponding agreement by the claimant was lacking.

There are no sufficient grounds for a "double defect in the enrichment chain" (even if this could justify a claim by the person receiving instructions against the recipient under the instructions) either according to the findings of the appeal court or according to the statements of the claimant.

Contrary to the view of the appeal court, a further exception from the principle of dismantling (Röckabwicklung) in each performance relationship where effective instructions are present cannot be assumed simply because there was no fear of the recipient of the transfer, here the defendant, being deprived of legal objections as against the recipient of the performance, S KG. Apart from the fact that the defendant claims such objections, the recipient of the transfer would also, by the permitting of a direct action in such a situation, be exposed without objective justification to the legal objections from the contractual relationship of his contractual partner to a third party (references omitted). Further, the danger would exist that the person giving instructions would be deprived of legal objections against the person to whom the instructions are given (reference omitted).

...

3. The appeal in law also successfully objects to the judgment of the appeal court that the defendant was also under a duty under § 826 of the BGB to pay back the sum received.

a) The appeal in law correctly objects to the fact that the findings of the appeal court do not support its assumption that the defendant had acted intentionally. The appeal court accuses the defendant of having paid out parts of the loan value received to S KG and to itself on the 10th June 1996 even though he - as the appeal court was convinced - at least reckoned on the money not belonging to it. It obviously thereby makes reference to its observations on the state of the defendant's knowledge under no. 2 a) of the reasons for the decision. But there it merely makes a qualified finding that the defendant had considered the non- existence of a claim by S KG to payment of the sum of 1.3m DM as at least possible. The appeal court on the other hand makes no findings on whether the defendant also accepted and approved of this circumstance. This would however have been necessary for the assumption of conditional intention in the sense of § 826 of the BGB (references omitted).

...

4. From all this, the appeal court judgment cannot stand. The appeal court will in its fresh hearing have to investigate in particular the claimant's assertion, subjected to proof, that before the entry of the loan value in his client's account the defendant was "in the know" about the deceitful action by which this was attained...

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