[The plaintiff chartered a Rhine barge, The Avanti, belonging to the first defendant and captained by the second defendant, to carry a load of sheet metal from Basel to the Ford Works in Cologne. The metal was owned by Cornigliano, which had sold it to Ford and had arranged with Panalpina to take it to Cologne. Panalpina entrusted the arrangements for the Rhine journey to the Schweizerische Reederei AG, its parent company, who had the plaintiff, another daughter company, effect it.

The cargo was damaged en route owing to unseaworthiness and bad stowage. Cornigliano allowed Ford to deduct the amount of the damage from the purchase price, and then passed this loss to Panalpina, whence it passed through Schweizerische Reederei to the plaintiff; along with the debit in each case went an assignment of all claims in respect of the damage. The plaintiff was thus exercising, inter alia, the rights of Cornigliano, the owner.

The plaintiff's claim was dismissed by the Landgericht, but the Oberlandesgericht allowed it, and the defendants' appeals were unsuccessful.]

I. ...

II...

1 The appellant contests the view of the Court of Appeal that Cornigliano (the vendor and principal of the forwarding agent) could claim for the harm suffered by Ford (the purchaser and consignee) under the doctrine of Schadensliquidation im Drittinteresse. We need not take a position on this question for, as we shall see, the decision does not depend on it.

The risk of damage to property is normally borne by its owner. However, when there is a contract for sale and delivery, ownership and risk are split. The vendor owns the thing, but the purchaser bears the risk, the vendor having shifted to him any damage which may be caused to the thing. Suppose the object sold is destroyed or damaged during the carriage. One thing, at any rate, ought to be crystal-clear, namely that the person who causes the harm should not benefit from the split between title and risk. Only sheer conceptualism could lead to the unacceptable conclusion that the person responsible is liable neither to the vendor, because the vendor, who is still able to claim the price from the purchaser, has suffered no loss, nor to the purchaser, although he has suffered economic loss, because he has no ownership to be protected by para. 823 par. 1 BGB. It is common ground that whereas the vendor as owner is entitled to sue for damages, the purchaser is not. What is disputed is whether in such a suit the owner may claim for his own loss or for the loss suffered by the purchaser. The view that the owner is claiming for his own loss rests on the consideration that since the tortfeasor has nothing to do with the special legal relationship between vendor and purchaser, the owner can claim for his loss as if the risk had not passed to the purchaser. On this view, the purchaser's economic loss cannot be relevant because para. 823 par. 1 BGB does not protect the purchaser's contractual right to have the property transferred to him. But there is another view. It would allow damage tortiously caused to the object of a contract of sale and delivery to be recovered under the doctrine of Liquidation im Drittinteresse, a theory which was first deployed in cases of breach of contract, for example in the case of indirect representation. In the present case we need not decide which view to adopt. The difference of opinion is only important when the purchaser's loss exceeds the loss the vendor would have suffered had it not been shifted. But that does not arise in this litigation. Cornigliano, the vendor, has indemnified the purchaser, Ford, by allowing a reduction of the purchase price. So the loss in suit is the loss suffered by Cornigliano itself, the loss of part of the purchase price (the deduction for the damage suffered by the sheet metal). The facts do not suggest that the agreed price was out of line with the market value of the damaged cargo.

Although Cornigliano was under no duty to make any allowance to Ford for the loss Ford suffered it was not, in so doing, in breach of its duty to mitigate its loss (para. 254 par. 2 BGB). If the loss in suit were Ford's loss - as it is under the doctrine of Schadensliquidation im Drittinteresse which the Court of Appeal applied - para. 254 par. 2 BGB would be irrelevant because that loss was immitigable; and on the assumption that Cornigliano is claiming for its own loss, para. 254 par. 2 BGB does not apply, because the legal relations between vendor and purchaser (here the transfer of the risk) are res inter alios acta quoad the wrongdoer.

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