BusinessCrisisGeneralRestructuring and Insolvency

Payment on another’s debt as a gratuitous act

The ques­ti­on of when a third-party pay­ment on another’s debt is con­side­red gra­tui­tous, which is not always easy to deter­mi­ne in prac­ti­ce, was once again addres­sed by the BGH (Fede­ral Court of Jus­ti­ce) in a decis­i­on dated Febru­ary 23, 2023 — IX ZR 136/22.


The plain­ti­ff is the insol­ven­cy admi­nis­tra­tor of the debtor’s estate. The insol­ven­cy pro­cee­dings were ope­ned on March 2, 2020, fol­lo­wing an appli­ca­ti­on made on Decem­ber 18, 2019. The defen­dant lea­sed pre­mi­ses to a GbR (part­ner­ship). After rent pay­ments were not made, the defen­dant ter­mi­na­ted the lease with a noti­ce dated Sep­tem­ber 20, 2019. Bet­ween Octo­ber 7, 2019, and Janu­ary 17, 2020, the deb­tor made a total pay­ment of €82,681.07 to the defen­dant to sett­le the rent arre­ars of the GbR.

The plain­ti­ff filed a claim against the defen­dant see­king the repay­ment of this amount, initi­al­ly rely­ing on § 131 para. 1 sen­tence 1 of the Ger­man Insol­ven­cy Code (InsO). After the defen­dant argued that this pro­vi­si­on did not apply since she was not an insol­ven­cy deb­tor, the plain­ti­ff alter­na­tively pre­sen­ted the fac­tu­al basis for a dona­ti­on avo­id­ance claim under § 134 para. 1 of the InsO. He argued that the GbR was not able to sett­le the rent arre­ars.

The docu­ment con­tai­ning this state­ment was not made available to the defen­dant by the Regio­nal Court. The defen­dant was sub­se­quent­ly sen­ten­ced as reques­ted, with the Regio­nal Court sta­ting in the fac­tu­al fin­dings of the judgment that it was undis­pu­ted that the GbR was unable to sett­le the rent arre­ars at the time of the con­tes­ted actions. After an unsuc­cessful appli­ca­ti­on for rec­ti­fi­ca­ti­on of the fac­tu­al fin­dings by the defen­dant, she filed an appeal and argued in the second ins­tance that the GbR was not insol­vent at the time of the pay­ments and was still eco­no­mic­al­ly acti­ve. Fur­ther­mo­re, the defen­dant argued that her claim was not wort­hl­ess, pro­vi­ding more detail­ed expl­ana­ti­ons. The appel­la­te court did not admit the defendant’s argu­ment and dis­missed the appeal by reso­lu­ti­on. The defen­dant is now chal­len­ging this decis­i­on with a peti­ti­on for non-admittance to the Fede­ral Court of Jus­ti­ce (Nicht­zu­las­sungs­be­schwer­de).

Decis­i­on: Exami­na­ti­on of Wort­hl­ess­ness is Requi­red

The Fede­ral Court of Jus­ti­ce (Bun­des­ge­richts­hof) allo­wed the revi­si­on becau­se the appel­la­te court’s decis­i­on to dis­miss the appeal vio­la­ted the defendant’s right to be heard. The Fede­ral Court of Jus­ti­ce then set aside the con­tes­ted decis­i­on and refer­red the case back to the appel­la­te court for a new hea­ring and decis­i­on.

The defendant’s sub­mis­si­ons should have been admit­ted in the second ins­tance accor­ding to § 531 para. 2 No. 2 of the Ger­man Civil Pro­ce­du­re Code (ZPO). The Regio­nal Court vio­la­ted the defendant’s right to be heard by using the plaintiff’s sub­mis­si­ons in its decis­i­on, which the defen­dant was una­wa­re of. This was cau­sal­ly lin­ked to the defen­dant not pre­sen­ting argu­ments, espe­ci­al­ly regar­ding the issue of the wort­hl­ess­ness of the claims against the ten­ant. While the fact that the plain­ti­ff initi­al­ly based his claim only on avo­id­ance under § 131 of the Insol­ven­cy Code (InsO) does not pre­clude the con­side­ra­ti­on of the cir­cum­s­tances under dif­fe­rent legal aspects, from the defendant’s per­spec­ti­ve, the lack of the plaintiff’s sub­mis­si­ons on the fac­tu­al con­di­ti­ons of § 134 of the InsO in the docu­ment dated June 4, 2021 meant that she had no know­ledge of any such argu­ments. The defen­dant also asser­ted the tenant’s insol­ven­cy suf­fi­ci­ent­ly sub­stan­tia­ted. A party meets its obli­ga­ti­on to sub­stan­tia­te when making fac­tu­al claims rela­ted to a legal pro­vi­si­on that is sui­ta­ble for making the oppo­sing party’s clai­med right appear non-existent. The likeli­hood of the pre­sen­ta­ti­on is irrele­vant.

The BGH fur­ther explains that in asses­sing the gra­tui­tous­ness of a third-party’s per­for­mance in a three-party rela­ti­onship, it is not cru­cial whe­ther the dis­po­ser recei­ved com­pen­sa­ti­on. What mat­ters is whe­ther the reci­pi­ent of the per­for­mance has to pro­vi­de con­side­ra­ti­on in return. This con­side­ra­ti­on can also ent­ail the reci­pi­ent losing a claim against their deb­tor when recei­ving the per­for­mance. Howe­ver, this only appli­es if the recipient’s claim was valuable. If the claim was wort­hl­ess, the reci­pi­ent has­n’t lost any­thing that can be con­side­red as con­side­ra­ti­on for the per­for­mance. In such cases, the per­for­mance on another’s debt is voida­ble as a gra­tui­tous act.

Due to the vio­la­ti­on of the defendant’s right to be heard, the decis­i­on of the appel­la­te court must be set aside, and the case must be recon­side­red there, taking into account the defendant’s sub­mis­si­ons and any pro­po­sed evi­dence. The bur­den of proof and sub­stan­tia­ti­on for the fac­tu­al con­di­ti­ons of the avo­id­ance cir­cum­s­tance of gra­tui­tous acts rests with the insol­ven­cy admi­nis­tra­tor. If the deb­tor has sett­led a claim against a third party, the insol­ven­cy admi­nis­tra­tor must also prove that the claim was wort­hl­ess.

Legal Assess­ment

In this decis­i­on, the BGH reaf­firm­ed its pre­vious juris­pru­dence on Sec­tion 134 of the Ger­man Insol­ven­cy Code (InsO). The decis­i­on is also con­vin­cing in terms of con­tent. A wort­hl­ess claim can­not serve as con­side­ra­ti­on for a recei­ved per­for­mance. The expl­ana­ti­ons regar­ding the right to be heard are in line with pre­vious juris­pru­dence, empha­si­zing the need for lower ins­tance courts to pro­ceed careful­ly and not overst­retch the requi­re­ments for sub­stan­tia­ti­on.

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