The B. GmbH H. & Co. (hereinafter 'the developers') was building private dwellings in Sch., and entered into preliminary contracts of sale (Kaufanwärterverträge) with the plaintiffs in 1968. Negotiations with the plaintiffs were principally conducted by the defendant, then an assistant director of the developers, charged, inter alia, with the sale of these dwellings. In the course of the negotiations the plaintiffs had received from the developers a document called 'Instructions for Sale': it gave a detailed description of the properties for sale, referred to the need to take a brokerage fee of 3% into account in the individual prices and stated that any interested party could refer for further particulars to the defendant, who was empowered by the developers to enter into transactions concerning land.

The defendant then, in the name of the developers, concluded preliminary contracts of sale with the plaintiffs. In each case he gave them three copies of the contract for signature, two of which (one for the plaintiffs and one for the defendant) contained the following clause: '6. Financing: the total cost, exclusive of architect's fee, of these ownership apartments is guaranteed as being DM..., plus 3% brokerage fee to be paid to the H.I.-K. GmbH'. The third copy, which the defendant gave to the developers, did not contain the addition about the brokerage fee.

Some time after the contracts were signed, the plaintiffs were billed for payment of the fee on invoices headed 'H.I.-K.' and signed by the defendant. The plaintiffs paid the sums to the account indicated in the invoices, but in fact the firm 'H.I.-K. GmbH.' was a figment, and the sums paid by the plaintiffs passed to the defendant.

Feeling that they had been taken in by the defendant, the plaintiffs had the brokerage agreements rescinded for fraud, and in the present proceedings reclaim the sums they paid to the defendant on the ground that they unjustifiably enriched him.

The Landgericht gave judgment for the plaintiff, but the Oberlandesgericht allowed the defendant's appeal (JZ 1971,424, noted Lorenz). The plaintiff was permitted to appeal, and the appeal was successful.

Reasons

I.

1. The Court of Appeal held that the plaintiffs had no claim under the rules of unjust enrichment (para. 12 BGB) for the return of the sums which the defendant had received. The court inferred from the plaintiffs' own evidence that they were unaware that the defendant was identical with the payee of the brokerage fee, and that their payments were not in purported performance of any brokerage contract between themselves and him. The plaintiffs' duty to pay arose solely from the brokerage clauses in their contracts with the developers, genuine contracts for the benefit of third parties which conferred a right on the third party, here the defendant.

The Court of Appeal of course realised that the plaintiffs had had the brokerage agreements with the developers rescinded for fraud, the defendant having had no authority to make any such contracts. It nevertheless held that in a case such as the present, where the Deckungsverhältnis (or relationship between promisor and promisee) is defective the promisor cannot claim back from the third party what he has rendered, but must turn to the promisee, even in a case of double nullity, as it is called, when he Valutaverhältnis, the link between the promisee and third party, is also baseless. Admittedly, if the promise had intended to make a gift to the third party and the gift was effective in law, the promisor might have an enrichment claim against the third party analogous to that provided by para. 822 BGB, but this was not such a case.

2. ...

3. We cannot agree that the defendant was an obviously inappropriate person for the plaintiffs to sue in restitution.

(a) It sometimes happens where there is a genuine contract for the benefit of third parties, that is, where the third party acquires a claim of his own, that the legal relationship between the promisor and the promisee (the Deckungsverhältnis) proves to be ineffective or defective. It has long been a matter for dispute how the principles of restitution operate in such a case (reference omitted). This is not the moment to resolve all the problems involved or to provide an answer to all the questions.

In a case concerning a credit transfer where the mandate to transfer was invalid this court stated its agreement with von Caemmerer (JZ 1962, 385, 386) that a just and realistic appraisal of the restitutionary significance of situations in which more than two people are involved depends on the peculiarities of the particular case (BGHZ 50, 227, 229). This is true whenever a third party is implicated in the performance, for, as von Caemmerer rightly emphasises, there are many different ways in which obligations and performance may be made dependent on the existence of legal relationships. This applies also to genuine contracts for the benefit of third parties, that is, contracts which give the third party an independent right (reference omitted): it is still critical what purpose the parties had in mind, given the intentions they expressed.

(b) This inevitably determines which party is to be regarded as rendering the performance and which as receiving it under the law of enrichment, for it is now established that by 'performance' (Leistung) para. 812 par. 1 BGB means a conscious act which is intended to increase the wealth of another (BGHZ 40, 272, 277; 48, 70, 73; 50, 227, 230 ff.; other reference omitted). The purpose of the act is inferred from the will of the parties; if there is a mismatch between the intentions of the transferor and the transferee we look at the matter objectively from the viewpoint of the recipient (BGHZ 40, 272, 278), but if the intentions of the parties coincide, their purpose in effecting the transfer alone determines what the 'performance' is in terms of enrichment law.

(c) The Court of Appeal recognised this basic principle but did not apply it correctly.

(aa) The Court of appeal obviously assumed that whenever there is a genuine contract for the benefit of a third party, a transfer made by the promisor to the third party is always intended to constitute both performance by promisor to promisee (in the Deckungsverhältnis) and also performance by promisee to third party (in the Valutaverhältnis): only by taking the exchanges in these two legal relationships together could one explain who, in 'real economic' terms, was eventually to benefit from the performance. Now his may be so in many cases (for example, where there is 'shorthand performance' (abgekürzte Leistung), using the contract for the benefit of a third party), but not necessarily in all. On the contrary, it can make sense, even economic sense, to see the transfer by the promisor to the third party as intended so exclusively for the third party that the transfer constitutes in enrichment law a performance to the third party whose validity depends only on that of the Deckunsverhältnis.

Apart from the example of the life-care contracts covered by para. 330 BGB (see von Caemmerer JZ 1962, 385, 387) one can imagine cases of other kinds in which it would be the intention of the parties that the third party acquire his own claim against the promisor based exclusively on the Deckungsverhältnis between promisor and promisee and entirely independent of any Valutaverhältnis between promisee and third party. The first class of case that comes to mind is those in which (contrary to para. 335 BGB, which is not mandatory) only the third party is to have a claim against the promisor or those in which the creation of such a right exhausts the Valutaverhältnis (reference omitted). In such cases it is quite just to hold that the performance relationship of enrichment law exists only as between third party and promisor.

(bb) The present case shows this peculiarity. The brokerage fee agreement in favour of 'H.I.-K.' (that is, the defendant) was made by the plaintiffs within their preliminary sale contracts with the developers, represented by the defendant. But the parties to the brokerage fee agreement omitted the relevant clauses from the copy of the preliminary sale contracts which went to the developers; this omission symbolised the splitting of the fee agreement from the preliminary sale contract and rendered the one independent of the other.

But the parties' own evidence already showed that they were independent. According to the defendant, the parties acted as they did in order that the legal relationship between the developers and the plaintiffs remain unaffected by the brokerage fee agreement. Again, even the plaintiffs said that they did not suppose that the agreement in question was in satisfaction of any debt owed by the developers to 'H.I.-K.'; they took it that they themselves owed the fee to the beneficiary for services rendered. Indeed, the plaintiffs' only dealings regarding the brokerage fee were with H.I.-K. It was in H.I.-K's name that the defendant invoiced them and received payment from them. With these proceedings the developers had absolutely nothing to do. Thus although the plaintiffs made the brokerage agreement with the developers, its economic centre of gravity lay in their legal relationship with the third party.

On these facts the only possible inference is that the sole purpose of the plaintiffs in paying the defendant was to satisfy as against him their debt to 'H.I.-K.' which arose from the preliminary sale contracts, the sole basis of that debt in law. This was also the defendant's understanding and could not be otherwise. Given such a common purpose, the relationship of the parties was that of party rendering and party receiving a performance in the sense of enrichment law, such that if the sale contracts proved defective an adjustment fell to be made.

(cc) This holding is not in conflict with prior holdings of this court. The case decided by the Fourth Civil Senate on 20 March 1952 (BGHZ 5, 281) is an example of so-called 'shorthand performance' not here in issue. The case before the Eighth Civil Senate of 4 April 1962 (NJW 1962, 1051) did not involve any contract for a third party at all. So far as can be seen, this is the first time that the Bundesgerichtshof has had to decide a case with the features of the present one.

Back to top

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