Commencement of limitation period in the event of improper use of funds in the contract

According to a recent ruling by the Federal Court of Justice, if an agent uses funds provided for investment at a bank for an improper purpose, the client's claim for restitution against him only becomes due when it is established between the parties that the funds were not invested in accordance with the order and the agent is therefore no longer in a position to do so. The mere improper use does not start the limitation period if the client has no knowledge of this.

The judgment of 01.08.2024 (case no. III ZR 144/23) was issued in response to a lawsuit filed by an investor who had entrusted a tax consultant friend with a total of € 50,000.00 for investment at a bank in 2007 and 2008 after the latter had claimed to have received very good interest conditions due to a previous job at the bank. For this purpose and following the payment, the tax consultant commissioned sent the plaintiff several alleged letters and interest confirmations from the bank by fax, which were completely forged. It was not until November 2021 that the plaintiff learned from the bank where the money should have been invested that the letters submitted to him by the agent were obvious forgeries with incorrect content. The plaintiff then filed a claim against the wife of the deceased representative for repayment of the funds transferred for investment purposes.

The Federal Court of Justice (BGH), like the court of first instance, affirmed the plaintiff's claim for repayment of the funds to be invested under Section 667 Alt. 1 BGB. According to this, the agent must return what he has received for the execution of the order if he has not used it in the execution of the order. For the assessment of the contractual relationship between the parties as an order, it is irrelevant whether the agent was to invest the plaintiff's money as a fixed-term deposit in his name or whether he himself was allowed to conclude a fixed-term deposit agreement with the bank on a fiduciary basis.

The agent bears the burden of presentation and proof that the funds were invested as intended. For the repayment claim, it does not matter whether the money demanded is still available in the defendant's assets.

The due date of the claim for restitution under § 667 BGB is determined by the agreements of the parties, in the absence of such agreements according to the circumstances of the individual case. As a rule, the claim under § 667 BGB only becomes due when the purpose of the transfer has either been achieved or has finally failed, at the latest when the assignment ends (through completion, termination or revocation of the assignment or the death of the assignee). The claim is therefore not time-barred, whereby the standard limitation period pursuant to §§ 195, 199 BGB applies.

According to § 672 S. 1 BGB, the contract was only terminated upon the death of the agent. According to the BGH, nothing else resulted from an alleged oral reclaim some time before this. Only with the death of the agent was it clear that the objective of the contract was no longer achievable. This was because it had not been disclosed to the plaintiff beforehand that the money had not been invested and could no longer be invested due to the improper use. The long period between the investment and the termination of the order did not lead to an earlier start of the limitation period either, as the plaintiff was unaware of the improper use and had allowed the supposedly low-interest investment to continue. The mere improper use of the transferred property by the agent does not start the limitation period.

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