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Case:
BGHZ 23, 61 V. Civil Senate (V ZR 110/56) Bauwerk- decision
Date:
21 December 1956
Judges:
Professor B.S. Markesinis
Copyright:
Mr Raymond Youngs

I. Landgericht Göttingen

II. Oberlandesgericht Celle

The claimant had taken a lease of the defendant's land with an area of approximately 61/2 acres for a period of 9 years for the cultivation of agricultural products as well as the breeding and keeping of small animals. According to the tenancy agreement, the tenant was entitled to erect appropriate buildings on the leased land for the purpose of breeding and keeping small animals. But, with the exception of a poultry hutch, he was only allowed to erect substantial buildings with the express written permission of the landlord. All the small buildings erected had to remain behind on the land after the termination of the leasehold relationship and were to be paid for by the landlord to the tenant according to the increase in value of the leased land, calculated by an expert opinion.

The claimant immediately erected a substantial building. Differences of opinion arose between the parties about its method of construction, form and type of use, and the leasehold relationship was terminated. The leased land was given back to the defendant.

The claimant now claims an appropriate sum of money for the increase in value of the land caused by the erection of the building.

The claim was unsuccessful at all levels.

Grounds:

The appeal court has accepted, in agreement with this senate's decision (as senate for agricultural matters) of the 5th May 1953, that the defendant has, in accordance with §§ 94, 946 of the BGB, become owner of the building erected, because the claimant intended to erect it not for temporary purposes, but permanently. The appeal in law has not put forward any legal objections to this. Admittedly, if the tenancy agreement had provided that, after termination of the leasehold relationship, the claimant would for instance have to remove buildings erected, then it would not have mattered that he intended to erect the building for purposes that were not merely temporary (reference omitted). Such a case is not present here.

The appeal court has rejected the claim to compensation (§ 951 of the BGB) based on the concept of uniting moveables with a piece of land (§ 946 of the BGB). On this issue it explains that the defendant could demand the removal of the building, because it represents a disturbance of his ownership (§ 1004 of the BGB). This real claim took priority over the enrichment claim (§§ 951, 812, 818 of the BGB). The appeal in law puts forward various lines of thought on this subject, which give rise to the following observations:

a) The provision in the tenancy agreement is not inconsistent with a demand by the landlord to remove the building. This is because the landlord is obliged by it only to take over and pay for those small buildings and structures which are within the scope of the tenancy agreement. But that is not the case in respect of the building which is in question here.

b) It is true that § 951 para 1 sentence 2 of the BGB excludes the restoration of the former situation. But this provision refers to a demand by the person who has brought the uniting about in accordance with § 946 of the BGB. He cannot therefore claim the restoration of the former situation from the person who has been enriched, apart from the provision in § 951 para 2 of the BGB. But that does not mean that the person who has been enriched cannot demand the restoration on any legal ground whatsoever. Contrary to the opinion of the appeal in law, the senate did not take a different standpoint in its decision V ZR 38/52 of the 23rd October 1953 (reference omitted). Instead it dealt there with the question of the relationship of the claim under § 951 para 1 of the BGB to the right to take away (§ 997 of the BGB).

c) The view of the Oberlandesgericht that, when a building is erected on the land of another, it is a prerequisite to a claim under § 951 para 1 of the BGB that the person enriched had to tolerate the building on his land (and thus that he does not need to pay compensation if he can demand removal of the building, whether under contract (§§ 556, 581 of the BGB) or on the ground of the provisions about tort, or as owner (§ 1004 of the BGB)), is frequently advocated in the literature on the BGB (references omitted). So far as is evident, the only opinion on this subject in case law is by the Oberlandesgericht Celle, and it was to the same effect (reference omitted). The senate has already stated in its decision of the 17th September 1954, V VR 35/54 (reference omitted) that a violation of property can also be caused by a building erected on the land of another in an impermissible manner. Whether the view of the Oberlandesgericht should be acceded to, and in particular whether, as the appeal in law claims, the objection of impermissible exercise of a right would stand in the way of a possible claim lodged for removal (reference omitted) can however be left undecided. So can the question of whether, as the Oberlandesgericht thinks, the existence of any permission by the building inspectorate which is necessary for the demolition of the building (reference omitted) would only be of importance in respect of the enforcement. An application for removal of the building has not been made so far. At any rate it had to be pointed out that the case dealt with by the senate in V ZR 146/54 concerned a building from which several dwellings were created which were already inhabited. On the other hand the present case concerns a building which, according to the expert's opinion, can only be turned into inhabitable living accommodation with an expenditure of 8000 DM. It has not been alleged by either side that the building was claimed in the intervening period by the registration authority for residential purposes. In considering the question of the permissibility of the exercise of the right, it ought also not to be left out of consideration that the defendant had never permitted the erection of the building. It appears questionable whether in the end result he could be forced to take over the undesired building by means of this defence. The rejection of the claim based on § 951 para 1 of the BGB follows, however, without the questions raised above needing to be answered conclusively, from the following legal consideration:

§ 951 para 1 sentence 2 of the BGB represents a regime made in the interests of the person enriched. It provides protection from a demand by the person who has lost the enrichment to have the old situation restored. But it follows from the necessary consideration of the competing interests that the person enriched can defend himself against the claim to compensation by reference to the possibility of restoring the old situation, at least when a building is to be forced upon him which he can only turn into a profitable asset by the expenditure of substantial cost. In such a case it cannot be described as a violation of good faith if the person who has been enriched, instead of paying, either restores the old situation himself or, if this cannot be expected of him because of the substantial expenditure for restoring the old situation, leaves it to the person who has erected the building. In corresponding application of the rule made in § 1001 sentence 2 of the BGB, it must therefore be granted to the person who owes the compensation for increase in value in any case, under the prerequisite described to substitute for the payment permission for the removal and to claim this by way of defence to an action (references omitted). By having repeatedly demanded from the claimant the removal of the building during the legal dispute, the defendant has thereby referred him to the removal of the enrichment and made use of his power to substitute. As he had never permitted the building, which in this case brings in no profit in its present condition, and for the defendant means a disturbance of his ownership, the reference to removal is also reconcilable with good faith. A claim by the claimant to payment does not therefore exist. It will now be a matter for him to obtain for himself the permissions which may be necessary for the demolition of the building. On the other hand, by claiming the power of substitution the defendant has obliged himself to let the demolition of the building occur.

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