The VII Civil Senate of the Federal Court of Justice (BGH), which is responsible, inter alia, for appeals concerning the general prerequisites of compulsory enforcement, had to decide the question, which arose as a result of increasing sales of loan claims to financial investors, whether the owner of a property encumbered with a land charge, who has submitted to immediate compulsory enforcement of his entire assets, can invoke in the proceedings of the clause reminder that the declaration of submission is invalid due to a violation of section 307 (1) BGB.
The debtor challenges the granting of an enforcement clause for a notarial deed from which the creditor, a trustee of an American financial investor, is pursuing enforcement under assigned rights.
In order to secure a loan debt, the debtor had created a land charge (Sicherungsbuchgrundschuld) on his property in favour of his bank granting the loan and in the deed of appointment submitted to immediate execution against all his assets. After the loan claim and the land charge had been assigned to another German bank, which had merged with another German bank and changed its legal form, the claim and the land charge were assigned to the creditor. The creditor was granted an enforcement clause by the competent notary public in her name as legal successor, from which she pursued enforcement.
The district court dismissed the debtor's enforcement appeal challenging the legality of the enforcement clause. On appeal, the district court declared the enforcement of the deed inadmissible because the pre-formulated declaration of submission constituted an unreasonable disadvantage within the meaning of section 307 (1) sentence 1 of the German Civil Code (BGB) if the bank could assign the loan claim to any third party, including financial investors who were not subject to banking supervision.
The Senate reversed the order of the Regional Court and dismissed the debtor's immediate appeal against the order of the Local Court.
According to established case law, the debtor can only raise objections to an enforcement clause granted to the creditor with the enforcement reminder pursuant to section 732 of the Code of Civil Procedure, which concern errors of a formal nature. The notary who grants the enforcement clause must examine according to general rules whether there is a formally effective title with enforceable content and, in the case of legal succession, whether this is proven by public or publicly certified deeds, insofar as it is not obvious. The notary is not entitled to a further-reaching examination authority. The notary is therefore not authorised to examine whether a declaration of submission unreasonably disadvantages the debtor contrary to good faith. He must grant the clause if there are no reservations in the formal examination.
§ Section 732 (1) of the Code of Civil Procedure:
Any objections by the debtor concerning the admissibility of the enforcement clause shall be decided by the court from whose office the enforcement clause is issued. The decision shall be made by order.
§ Section 307 (1) sentence 1 BGB:
Provisions in general terms and conditions are invalid if they unreasonably disadvantage the contractual partner of the user contrary to the requirements of good faith.
Order of the Federal Supreme Court of 16 April 2009 VII ZB 62/08
Lower courts:
Hamburg-Wandsbek District Court - Decision of 26 August 2007 - 711 C 101/07
LG Hamburg - Order of 9 July 2008 - 318 T 183/07
Source: BGH press release of 16 April 2009
Goldberg Attorneys at Law
Lawyer Michael Ullrich, LL. M. (Information Law)
Specialist lawyer for inflation technology law (IT law)
E-mail: indo@goldberg.de
