BGH NJW 1982, 2431 IVa. Civil Senate (IVa ZR 312/80)
28 April 1982
Professor B.S. Markesinis
K. Lipstein

The plaintiff, a Danish private bank, claims damages against the defendant because it was induced by an expert valuation made by the defendant and by information supplied by him to the Danish Consul in Munich to grant a credit which could not be recovered later on. The firm of P was the owner of a considerable area of building land. It intended to develop it by building an extensive holiday village. The project had been approved in principle in planning proceedings. No detailed building plans had, however, been drawn up. Only a draft existed which had been prepared by a private architect appointed by the firm of P in agreement with the local commune. At the request of the firm of P the defendant submitted on 10 August 1974 an expert opinion in which he concluded that the area of building land as a whole had a commercial value of DM 200,000,000. On 19 December 1974 the Danish Consul telephoned the defendant and informed him that the Consulate had received an enquiry as to whether the defendant was in fact an officially appointed and sworn expert. Upon receiving an affirmative reply, the Consul asked whether the expert valuation of the area of the holiday village, which the defendant had supplied, was still valid; in so doing he referred to the growing fall of prices in the market of immovables. The defendant replied that he had not heard anything since in this matter. However, in the meantime the proceedings for the approval of the plans should have been advanced. If so, the increased readiness of building operations was a positive factor which balanced the negative development on the market for immovable property. In particular the fact had to be taken into account that according to the practice of planning consent prevailing now, other projects of this kind would no longer receive approval. At the Consul’s request the defendant wrote a letter to the Danish Consulate in which he stated: ‘In supplementation of my detailed expert opinion of 10 August 1974 I confirm that the value of the object mentioned above has remained unchanged to the present time. The negative effects of the general development on the market of immovable properties are balanced by the fact that the land is ready to be built upon. Moreover, no consent for further comparable projects in the German region of the Alps can be expected either at present or in the future.’ On 6 June 1975 the plaintiff entered into a contract for a loan of DM 15,000,000 with the firm of P. The two managers of the firm and the Danish firm of N became independently liable sureties; the Danish Export Council on its part became a surety for the last mentioned firm. In addition the loan was secured by a charge amounting to DM 18,000,000 on the immovable property of the firm of P. On 14 March (August ?) 1975 the net loan amounting to DM 14,305,000 was paid over. Subsequently the project of the holiday village was not pursued and the interest which had fallen due was not paid. Consequently the loan agreement was rescinded. Based on its charge over the land the plaintiff levied execution against it by way of a sale by auction and bought it on offering DM 1,900,000. The plaintiff contends that the firm of P had sought contacts with sources of money in order to obtain a loan of at least DM 15,000,000 for its planned holiday village. In this connection the firm had entered into negotiations with the Danish firm of N. It had held out the possibility of an order for the delivery of 600 prefabricated houses, if N would assist P in obtaining a credit of DM 15,000,000. In a letter of 28 September 1974 P had not set out its financial situation and the state of the project; in this connection P had referred to the annexed expert valuation by the defendant. N had approached the Danish Ministry of Commerce in order to obtain a guarantee by the State; for this purpose it had submitted the expert valuation by the defendant. The Ministry of Commerce had interposed the plaintiff as a bank, which was to be secured by way of reinsurance by a guarantee of the Danish State. In order to ascertain whether the conditions existed for granting the loan the Danish Export Credit Council had instructed the Danish Consul in Munich to obtain details from the defendant; it had been agreed between the Export Council and the plaintiff that the Consul had told the defendant expressly that a Danish enterprise intended to participate in the project by way of a guarantee or by granting a credit.

The plaintiff’s claim was rejected by the courts, below. Upon a second appeal the judgment was quashed and the case referred back for the following


1. The Court of Appeal holds that the plaintiff is not entitled to damages in its own right. In making his enquiry the Consul had not made it clear that he acted as the plaintiff’s agent. The information was not information ‘for those whom it may concern’ which might have the consequence that the defendant was liable in contract ‘to any third party’.

From the point of view taken by the Court of Appeal, it should also have been examined whether the plaintiff was included in the protection sphere of the contract. The practice of the courts—and to a great extent also the literature—acknowledges the admissibility of contracts with protective effects for the benefit of third parties [references]. The articles by Ziegler [reference] and Sonnenschein [reference] to which the defendant refers do not cause this Senate to deviate from this well established legal rule. Since the Consul obviously lacked any personal interest in examining the creditworthiness of the firm of P, it could be assumed, at least if it was denied that the Consul acted in the name of another, that future suppliers of credit were to be included in the protection sphere of the contract. The Court of Appeal should have examined the claim from this point of view as well.

In this connection the Court of Appeal adds: the expert valuation had clearly anticipated and assumed an expected development—namely the award of the necessary consent, division, and sale—although in law the possibility of developing the land had not yet been assured. The estimate of a value which was only expected to materialize could not as such have been of interest to third parties, especially credit institutions. However, on p. 2 of the expert valuation, the defendant stated expressly that he had been instructed to ascertain the ‘commercial value at the relevant time’. It is true that in carrying out the instruction to supply an expert valuation the defendant had to take the future development into consideration. According to the customs of trade the (present) commercial value of an immovable is determined not only by the factual circumstances at the time when the valuation is made, but also by the expectation of future events (e.g. that it will be capable of development as building land). It is obvious that a credit institution which intends to secure a future loan by a mortgage of charge will be interested in the commercial value of the land to be encumbered. As the Court of Appeal has found, the Consul made it clear to the defendant that the information given by him was required for the purpose of deciding whether the loan was to be granted. The Consul was not content with the information given over the telephone, but asked for a written confirmation; thereby he demonstrated to the defendant that his expert opinion was to serve as the basis of a far-reaching decision. The question as to whether the defendant made it sufficiently clear in his expert opinion that the planning permits necessary for the development of the area in issue may be important in assessing the blameworthiness of the defendant and any possible contributory negligence on the part of the plaintiff, but it is irrelevant for determining whether the plaintiff can make any claims at all because the contract for the supply of information has been violated.

2. The Court of Appeal regards it as possible that in concluding the contract for the supply of information the Consul asked as a representative of the Danish State. If this point of view is adopted the question arises as to whether the Danish State can claim damages from the defendant because the contract to supply information has been violated. According to the plaintiff’s pleadings, the Danish Export Council—apparently as representing the Danish State—became a surety for the credit to be granted. The plaintiff contends that the Export Credit Council had assigned to the plaintiff any possible claims for damages by the Danish State against the defendant; by way of a subsidiary argument the plaintiff relies also on this claim for damages. By the reference back the plaintiff is enabled to amplify its pleadings in this respect and especially to set out to what extent the Danish State has suffered damage. It will be useful if in this connection the plaintiff provides some information concerning the legal position of the Export Credit Council, and in particular whether it is an organ of the State which became a surety in the name of the Danish State and also whether on the latter’s behalf it has assigned the claim to the plaintiff.

Back to top

This page last updated Thursday, 01-Dec-2005 11:04:42 CST. Copyright 2007. All rights reserved.