Eule
S a a r b r ü c k e r   B i b l i o t h e k

(http://www.jura.uni-sb.de/projekte/Bibliothek)

Erstveröffentlichung:
Contribution to the
Annual Banking Law Update Conference
at Rand Afrikaans University,
Johannesburg, South Africa, April 2002,
zur Veröffentlichung vorgesehen in:
TSAR - Tydskrif vir die suid-afrikaanse reg /
Journal of South African Law xxx,
Vol. x, S. xxx – xxx (manuscript).



Michael Martinek[*]


Unjust enrichment issues in triangular situations of defective cashless payments -
the German approach in a comparative perspective





Contents

1 Introduction
2 Players and parties
3 The intact credit transfer order
   - the different aspects and their legal meanings
4 The “false” (or “deceptive”) cases
   of defective credit transfer orders
  4.1 Invalid value relationship (and valid cover relationship)
  4.2 Invalid cover relationship (and valid value relationship)
  4.3 The double invalidity cases
  4.4 The unjust enrichment rule for three party relationships
5 The “true” cases of defective credit transfer orders
  5.1 Characterization
  5.2 The totally missing, i.e. non-existing credit transfer order
  5.3 Lack of legal capacity by the orginator
  5.4 The revocation or rescission of the credit transfer order
  5.5 The three rules on defective credit transfer orders
6 Cheques and bills of exchange
7 Comparative aspects
8 Conclusion



__________________


1 Introduction

Ladies and gentlemen, it is pleasure and an honour for me to be with you here today and to participate in and to contribute to this year’s Annual Banking Law Update Conference. Usually I try to commence a speech at a conference with a funny remark or a little joke, imitating our American friends, to pave the ground for a friendly atmosphere and a devoted audience. This time, however, I will abstain from any such attempts. The topic is too sad and too serious. It is a sad topic, because one must regard it as most frustrating and disappointing that after so many years of discussion no consented solution has been developed, neither in one of the various legal systems with a mature banking law, nor in the debate among the comparative lawyers. It is a serious topic, too, because economically lots of money are at stake and the court cases do not always seem forseeable. In all legal systems it is still very much under discussion, how the cases of defective cashless payments are to be resolved. Mistaken cashless payments, particularly credit transfers may be caused, for example, by an erroneously supposed, but missing instruction to execute the transfer, by a revocation of an instruction, or by any elements vitiating the validity of an instruction, to name but the most frequent defects. It is not only one set of cases, showing constantly the same factual pattern, which the lawyer has to deal with, but a range of variety of mistakes or defects, which may occur in the triangular situation encompassing the debtor, his bank and the creditor and which demand for a reversed transaction, because at least one of the players is unjustly enriched. Also in South African law this field is apparently still characterized by some uncertainties; to the South African lawyer catchwords like “the Simms case”[1] or “the rule of Price versus Neal” ring a bell – seemingly even more than one bell causing a sound of disharmony.[2]

My aim is to explain to you this morning the German approach to these three party cases which are located at the intersection of banking law and of the law of unjust enrichment. This task is not easy to pursue. I am fully aware that the German lawyer’s mind and way of thinking is often ridiculed because of its doctrinal conceptionalism. You will soon find, in the course of my speech, reason enough to tune in with that critizism. My hope is, though, to introduce to you, if not a fairly satisfying and overall convincing solution, then at least an alternative legal approach worth to be considered and a helpful systematical terminology to promote the further discussion.


2 Players and parties

Let me make you aquainted with the players in the game, taking as starting point the proceeding of an ordinary credit transfer, which can be considered the practical model and the conceptual basis of a cashless payment transaction, i.e. a banking transaction carried out on the initiative of a payor via a bank to make availabe an amount of money to a payee. Three persons are involved. Legal relationships as well as human relationships undoubtedly tend to become uncontrollable when not two, but three persons are involved. So let us have a closer look at those relationships (see figure no. 1).

Player no. 1 is the payor who owes a certain amount of money to the payee. He may be called “A”. The payor A is the customer of his credit institution, namely the bank “B”. A is the debtor of the payee “C”, and he is the originator of the credit transfer in that he initiates a credit transfer order to his bank B. The credit transfer order is the instruction to execute a credit transfer.

Player no. 2 is the payor’s bank B, the originator’s credit institution which administers a bank account for A in the frame of a giro account agreement which is, by its legal nature, a special form of a contract of mandate, regularly combined with a credit agreement. The individual credit transfer order can be regarded as a specific mandate or directive which is based on and embedded in the giro contract. A is not only the debtor and payor to C, but also originator of the credit transfer, customer and mandator to B. The bank B is mandatee of A. The relationship between A and B is called “cover relationship”, because the credit transfer executed by B is “covered” by A’s mandate and by the contractual relationship between A and B.

Player no. 3 is the payee “C”, who also is the creditor of A, the beneficiary of the credit transfer and the final recipient of the money. The relationship between A and C is called “value relationship”, because the economic value moves from A to C, albeit via B. It is the value relationship where the transaction takes place in the ecomomic sense. The value relationship normaly consists of a sales contract or any other contractual obligation whereby A owes an amount of money to C.

The relationship between B and C is of non-contractual nature and is called “transfer relationship”, because B transfers the money to the beneficiary and final recipient C, hereby performing the instruction given to B by A. It must be noted that in the triangular situation A – B – C, only the cover relationship between A and B, and the value relationship between A and C are of contractual nature, whereas the transfer relationship between B and C is non contractual.

It must not be left unmentioned that the triangular situation with the three players described is an abstract model which, in reality, is enlarged and flanked by other players. Firstly, the payee and final recipient C entertains a relationship to his bank, where the holds a giro account and where the money transferred by B is credited on his account (only in rare occasions A and B hold an account with the same bank thus rendering the credit transfer an internal or inhouse transaction for one bank only). Between C and his bank we also find a giro contract which is, again, by its legal nature a contract of mandate. The payee’s bank or beneficiary’s institution can, in our context, be neglected as special player, since this institution acts only as an agent for C. Secondly, the payor’s bank B executes the credit transfer upon A’s order by making use of the giro system constituted by one or more intermediary institutions which are linked with each other by particular contracts of mandate and/or clearing agreements. These intermediary institutions can also be disregarded in our context, since they do not add anything to the legal framework of the triangular situation between the players. So much as to the three parties involved.
(to be inserted as insert no 1: The triangular situation of a credit
transfer order)

3 The intact credit transfer order – different aspects
and their legal meanings

Before we turn our attention to any mistakes which may occur in the proceeding of a credit transfer, it is usefull, if not inevitable to gain a deeper insight in the legal structure and the juridical meaning of a credit transfer without any defects.[3] While a medical doctor only arrives at a reliable diagnosis of a patient’s desease, if he is fully aware of what the sound and healthy state would be, the lawyer is well advised to judge any deviant developments and pathological defects from the situation where everything is right and fully in order.

When A originates an intact credit transfer by instructing his bank B to transfer the amount of money to C, i.e. to C’s account, then A does so in performance of his duty to pay. It is A who is the payor and who fulfills his duty to discharge his obligation. It is not the payor’s bank B which fulfills any duties towards C as there is no contractual relationship between B and C. It must be emphasized that B, strictly speaking, does not “pay” and is not a “payor” when executing the credit transfer to make available the amount of money to the beneficiary C. B acts according to the mandate given by A to discharge its obligation to A within the cover relationship. I must here emphatically stress this point, because there is much terminological confusion about the role of B-bank in the three party relationship. It seems that courts and legal writers in the anglo-american legal system do not hesitate to designate the B-bank as a “payor” and the credit transfer as a “payment” by B-bank to C. This would be unsustainable for a civilian. It is only A who pays his debt. If B-bank does at all pay then certainly not to C, the recipient of the money, but to A, to whom B-bank owes the money in the context of the giro account: if the account is positive, B-bank enhances the loan which it keeps from A; if the account is negative, B-bank reduces the credit it has given to A.

It is of even greater importance to fully realize the different legal facets of the credit transfer order which usually appears as a standardized piece of paper, a form, which the orginator has to complete and to submit to his bank. In this form all the important details of the transaction are to be stated, i.e. the exact amount of money to be transferred, the name of the recipient, his bank account, the name and/or the identification number of the recipient’s bank and the purpose of the payment. The original of the form is to be kept by the payor’s bank, whereas a copy of the credit transfer order is to be transmitted to the payee. In on-line banking proceedings the same features can be discovered in a digitalized or “virtual” shape. This is what a credit transfer order is practically, but what is it legally?

The modern German doctrine of unjust enrichment law and of performance law (or discharge law) distinguishes three different facets or aspects of a credit transfer order.[4] Firstly, the credit transfer order has the meaning of an instruction by A to his bank B in the frame of their contractual relationship, thus putting into a concrete form an individual mandate. To put it simple: by handing in a credit transfer order A tells B what to do in performance of their contract of mandate, the giro contract, namely to make available the said amount of money to the designated recipient C.

Secondly, the credit transfer order has the meaning of a discharge designation expressed by A and transported through B-bank to the addressee C. The notion of a discharge designation requires probably some explanation for the non-continental lawyer. It is closely connected to the prevalent theory of performance or discharge in some continental European countries. According to this theory the performance of a duty in the sense of the discharge of an obligation (like transfer of property or payment of an amount owed) cannot be achieved just by making the property or the money available to the creditor. It is indispensible, rather, that the transfer of assets is accompanied by an expression of the transferor’s will that the transfer is designated to discharge a particular obligation. The credit transfer order thus incorporates the payor’s expression of will that the amount transferred is designated to discharge a certain debt.

Thirdly, the credit transfer order incorporates a second expression of will by the originator A, namely a receipt authorization for C communicated by A to B. The background is easily explainable: Due to the giro contract between A and his bank B with either a positive account or a negative account and an accompanying credit agreement, B owes the money administered by the account to its contractual partner A. B-bank can only be discharged from its obligation by paying the money to A himself or, upon A’s instruction, by transfering the money to a third party, like C. It is therefore necessary for B-bank to get discharged from its obligation to A, to obtain, together with the instruction to transfer the money to somebody else than A, a receipt authorization according to which the recipient mentioned is authorized to receive the money and according to which the transfer to the recipient is considered a performance of B’s duty towards A.

These three features of a valid and intact credit transfer order must always be kept in mind by a German lawyer when dealing with defective cashless payments. A credit transfer order is not a one-dimensional legal instrument, but possesses a threefold legal meaning.
(to be inserted as insert no 2: The threefold legal meaning of an intact credit transfer order)

4 The “false” (or “deceptive”) cases of defective credit transfer orders

4.1 Invalid value relationship (and valid cover relationship)

When turning the attention to the different conceivable faults or mistakes which can occur in connection with a credit transfer order, it is usefull to look at first on the cases where the cover relationship between payor A and his bank B is fully valid, and so is the credit transfer order with all its legal features, but the value relationship between A and C is void ab initio or annulled later on with ex ante-effect, e.g. because the payee has successfully rescinded the contract with C, after the credit transfer has been executed and the sum of money has been credited to C’s account. This is, of course, a clear case of an unjust unrichment action of A against C and does not pose any serious problems. It is, to leave no doubt, not at all a “true” case of a defective credit transfer order. It is, strictly speaking, not the credit transfer order, but only the underlying value relationship which lacks legal validity. It seems appropriate to call thoses cases “false” or “deceptive” cases of a defective credit transfer order.

The legal systems following the Roman law tradition unanimously grant a condictio indebiti of A against C.[5] It is fair to say that here the credit transfer order and the triangular situation involving B as the payor’s bank does not really matter. The case is treated and resolved exactly like a direct payment from the putative debtor A to the putative creditor C. The involvement of the bank is of no concern in this context. From the B-bank’s point of view, it is its customer A, whose account has been rightfully charged, who can claim the money back only from the recipient of the money C, but never from B, as long as the cover relationship, i.e. the giro contract of mandate, and the instruction to execute the credit transfer order, are valid. After all, the intact credit transfer order incorporates the receipt authorization for C, which entails a discharge of B’obligation towards A by transfering the money to C. Thus, B-bank has acted fully in accordance with the contract of mandate, has fulfilled its duty to A and has rightfully debited his account.

The payment by A to C (albeit through B) must be redone in the relationship which suffers from the fault, namely the value relationship. It does not matter whether the obligation, which A mistakenly wanted to discharge, was void from the beginning or became void later on. The credit transfer order, a copy of which had been communicated by A via his agent B to the recipient and creditor C, incorporated a discharge designation rendering the transfer of money as aiming at a performance of the putative duty of A towards C which, though, could not dicharge a non-existing duty.

This result is certainly consented not only in German law.[6] In particular, the payor’s bank B cannot claim the money back from the final recipient C on the ground of an unjust enrichment action. A condictio indebiti does not lie in the transfer relationship, because this form of action requires a performance without legal cause at the expense of another leading to an enrichment of the defendant. The transfer of money executed by B to C’s benefit did cause, undoubtedly, an enrichment on C’s side in that the credited amount of money increased C’s assets. It constituted, however, not a performance in the transfer relationship, since B-bank did not perform a legal duty towards C, but only towards the mandator A. It was A and not B who performed a (putative) duty. Besides, C is not enriched at the expense of B-bank, since B has already rightfully charged A’s account with the amount of money, hereby getting reimbursed for its (B’s) expenditures as A’s mandatee.


4.2 Invalid cover relationship (and valid value relationship)

Clearly beyond doubt are also the cases where only the cover relationship between A and B-bank, i.e. the giro contract of mandate, is or has become invalid, for example due to a rescission for misrepresentation or duress, whereas the value relationship as well as the credit transfer order as such are valid. It is easily discernable that again a group not of “true”, but of “false” or “deceptive” cases of a defective transfer order is in question. Here the credit transfer led to a performance of the contractual duty of A to C in the value relationship. In particular the discharge designation, incorporated in the credit transfer order, has been communicated by A to C via B. Since B-bank could not perform a non-existing duty to A by transfering the money to C, although C was fully empowered by the valid receipt authorization incorporated in the credit transfer order, it is this cover relationship only where a reversed transaction must take place. This means that B has no right to debit the account of A, because B cannot claim reimbursement of its expenditures as contractual mandatee from A, since the contract of mandate is invalid. B is entitled, though, to claim the sum of money, which B had transferred to C, back from A on the ground of an actio indebiti.[7] The reason is that B wanted to perform its putative duty towards A when transfering the money to C. A is hereby enriched, because his obligation to C has been discharged.

Never can, however, B-bank claim the money back from the recipient C[8]: a condictio indebiti does not lie, since B-bank did not act in performance of a real or putative obligation to C; a condictio sine causa generalis is not available to B-bank, since C has not been enriched at the expense of B-bank without legal cause, but C has only rightfully received the money from A.


4.3 The double invalidity cases

Slightly more complicated are the cases in which the cover relationship between A and B-bank as well as the value relationship between A and C is invalid. These are the double invalidity or double mistake cases.[9] Since the credit transfer order as such remains untouched, this group of cases again constitutes only “false” or “deceptive” cases of a defective credit transfer order.

The prevailing solution of these cases favours a double reversed transaction: A has a condictio indebiti against B and C has a condicito indebiti against A. The legal reasoning is easily conceivable. The transfer of money from B-bank to C in the transfer relationship legally meant an unsuccessfull attempt of A to perform its putative obligation to C (value relationship) and an unsuccessfull attempt of B-bank to perform its putative obligation to A (cover relationship). Both attempts failed and the augmentations of assets without legal causes must be reversed.

It must be noted here that B-bank’s condictio indebiti against A is not only directed at an obligation of A to assign his condictio indebiti against C to B. It is true that this idea had been introduced into the discussion many years ago under the headline “condictio of the conditio”.[10] Today, however, is is widely consented that the risks of defenses and the risks of an insolvency of C must be fully borne by A and cannot be transferred to C. [11] A owes the full amount of money to B-bank, because the transfer from B-bank to C is legally considered a payment by B to A due to the receipt authorization incorporated in the credit transfer order. Dispite any defenses and insolvency risks that A may have to encounter in his quasi-contractual relationship to C, A is fully subject to a condictio indebiti by B-bank claiming the money back from its quasi-contractual partner A. B-bank has only to face the defenses and risks rooting in his relationship to A, but has not to face the defenses and risks stemming from C’s situation towards A.


4.4 The unjust enrichment rule for three party relationships

It clearly transpires now that in the aforementioned “false” cases of defective credit transfer orders the restitutionary remedies are confined to where privity exists between the three parties, namely to the cover relationship and to the value relationship. It is eventually the principle of relativity of obligations which governs the unjust enrichment redress and which claims applicability also in quasi-contractual relationships of putative performances. This leads us to the following unjust enrichment rule for three party relationships: Where one of the agreements, either the cover relationship or the value relationship is void, avoided or fails, restitution must follow the three-parties privity system. No direct condictio in the transfer relationship may disrupt this privity system. The contractual structure upon which the relationships between the parties are based must be preserved, hereby allocating appropriately the insolvency risks as well as protecting the pertinent parties’ rights to set-off, to withhold its own performance and to other defenses. On the basis of this rule the “false” cases of defective credit transfer orders can be clearly solved. (to be inserted as insert no 3: The three party system of performance
and of unjust enrichment redress)

5 The “true” cases of defective credit transfer orders

5.1 Characterization

The “true” cases of defective credit transfer orders, which you are waiting for, are characterized by mistakes which relate directly to the different elements constituting a credit transfer order, i.e. to the contractual instruction, to the receipt authorization or to the discharge designation.[12] The mistakes only possibly, but not necessarily (and in fact not very frequently) affect also the value and/or cover relationship. The decisive point is that the mistakes concern immediately the credit transfer order as such and render one or all of the legal features it incorporates invalid, be it the contractual instruction, be it the receipt authorisation, or be it the discharge designation.


5.2 The totally missing, i.e. non-existing credit transfer order

In some cases the credit transfer order does not even exist.[13] For instance, B-bank has transferred a sum of money to C’s account as if there were a credit transfer order by A, whereas in reality a credit transfer order was totally missing, since A never had originated one at all. B-bank may have been induced to transfer the money because of some organizational confusion[14] or because of a forgery[15], due to which it wrongfully assumed such an order given by A. Examples are also the cases where the amount transferred by B was ten times as high as ordered by A[16] or where it was credited to the wrong person.[17]

Well, this constellation does hardly pose any insurmountable problems for the lawyer who is aware of the different features embodied in a valid credit transfer order: Because of the lacking receipt authorization for C, the credit transfer by B-bank to C cannot be considered a performance by B-bank to A in the cover relationship. Likewise, due to the lacking discharge designation by A to C via B-bank the transfer of money could not result in a discharge of A’s obligation to C. It is, therefore, fully acknowledged that, in the absence of a credit transfer order, B-bank can claim the transferred money back from C by way of a condictio directa.[18] This is the fact even if there is an existing debt of A to C in the value relationship.

In particular, no double-pace reversal of the transfer from C to A and from A to B takes place. A cannot have a condictio indebiti against C, because no performance in the value relationship could be achieved, since there was no discharge designation by the debtor A to the creditor C. A cannot have a condictio sine causa generalis against C, because C is not enriched at the expense of A, who does not suffer any loss. Customer A has no loss to bear, since the bank has no right to debit its customer’s account. B-bank cannot have a condictio indebiti against A, because no performance in the cover relationship was feasible, since no receipt authorization for C has been communicated by A to B. B-bank cannot have a condictio sine causa generalis against A, because A is not enriched at the expense of C, in particular he is not discharged from his debt to C. Thus, the reversal of the triangular transaction takes place by a direct condictio of B-bank against C, which is, of course, never a condictio indebiti, but a condictio sine causa generalis: C is enriched at the expense of B-bank and must return the amount of money which he has unlawfully received. This condictio directa does not, as one may suspect at the first glance, interfere with the protection of the three-parties privity system, respectively the principle of quasi-contractual relativity. Since the transfer from B-bank to C did not touch any actual or putative contractual relationships between A and B (cover relationship) or between A and C (value relationship), the condictio directa of B-bank against C does not disrupt any party’s privity.

It is particularly noteworthy, that the unjust enrichment claim of B-bank against C is not foreclosed by a valid value relationship between A and C and by an existing debt owed by A to C.[19] Even if A actually owes the same amount of money to C like the one transferred by B-bank, the credit transfer does not lead to a discharge of A’s obligation, since A did not communicate a discharge designation. It does, moreover, not even matter, if the recipient C was in good faith with regard to the reception of the money by B-bank and if he was understandably of the opinion that his debtor A had originated a valid credit transfer order to discharge the debt. This good faith is not considered worth to be protected, as long as the credit transfer order has not even been originated by A.

I must emphasize that it would simply be false to assume that C had a right to retain the money in thoses cases where he was entitled to receive it. The explanation is, that C has not received the money from A, but from B. To put it in other words: A credit transfer which has not been originated by the debtor A can never be considered a payment and a performance by A to the recipient C. It must be recalled that, according to the widely acknowledged German theory of performance, the pure and isolated reception of assets by the creditor C does not constitute a performance by the debtor A, even if those assets are exactly the ones owed by the debtor, as long as the latter has not initiated and designated the transfer as performance to discharge a special debt. A performance of a duty by the debtor A and thus the creditor C’s right to retain the assets depends from an autonomous and legally valid disposition on the debtor A’s side or at least - as we will see shortly - from the appearance of such a disposition attributable to the debtor. The unauthorized credit transfer which can not be attributed to the customer, though, can never discharge the debt, despite a good faith of the recipient in the appearence of a valid performance. There is no performance without a valid “discharge designation”. A valid discharge designation is indispensable for a performance and is more important than the protection of the bona fide recipient’s trust in the performance.

It is also perfectly consistent with this notion that the debtor and payor A cannot claim the money back from the recipient and creditor C despite a invalid cover relation. The reason is that the recipient C is not enriched at the expense of the A. The customer A has no loss, since the bank has no right to debit its customer’s account. C is infact enriched, and he is infact enriched without justification. The debt of A to C in the value relationship does not constitute a justification, since A has not authorized the reception of the money. C is enriched only at the expense of B-bank and subject to a condictio directa.


5.3 Lack of legal capacity by the orginator

Another group of cases of “true” defective credit transfer orders is constituted by situations where the originator A fully lacks legal capacity, because he or she is a minor or mentally ill, whilst the cover relationship as well as the value relationship is nevertheless valid, because of a consent of A’s guardian or parents or agent.[20]

It comes as no surprise that these cases are treated exactly in the same way like the aforementioned cases of a totally missing credit transfer order. The reason is that a credit transfer order originated by a person fully lacking legal capacity to act in private law matters is considered legally non-existing. The discharge designation as well as the receipt authorization are invalid expressions of will. The good faith of the recipient C cannot matter at all, because the protection of the minor or the mentally ill person prevails. Again, only a condictio directa of B-bank against C is the appropriate solution.

A different treatment, though, is required where not a total, but only a partial lack of legal capacity, or - to put it the other way round - a limited legal capacity must be assumed in the person originating the credit transfer order. This for instance the case where the originator A is between seven and eighteen years of age. This circumstance does not render the discharge designation invalid, since it is an expression of will without detrimental effects for A. The performance of A’s duty to C leads only to the advantageous legal consequence of a discharge of A’s obligation, but not to a loss of any assets. The receipt authorization, though, remains invalid since this expression of A’s will is legally detrimental for him in that it leads to a right of B-bank to get reimbursed for its expenditures. The consequences lie at hand: C can retain the money as valid performance by A, but B-bank has no right to debit A’s account with the expenditures since the receipt authorization is not valid and therefore B-bank could not perform its obligation to A; B-bank has, though, a right to claim the money back from A on the basis of unjust enrichment in the form of a condictio sine causa generalis. A is enriched by the discharge of his debt to C at the expense of B-bank.


5.4 The revocation or rescission of the credit transfer order

The most intricate group of cases is constituted by the situations where the originator A has revoked the credit transfer order which was nevertheless executed by B-bank mistakenly overlooking the countermand. It is clear that the receipt authorization has collapsed by the revocation and B-bank transferred the money without an instruction. Thus, the transfer of money could not entail a discharge of B-bank’s obligation to A. The discharge designation is also invalidated by the revocation of the credit transfer order, since B-bank was no longer empowered to communicate to C the former declaration of A’s intention to discharge the duty by the transfer of money through B-bank.

It is exactly this situation where the good faith of C comes into play, who trusts in the validity of the discharge designation. In fact, here the recipient’s good faith can indeed matter under the theory of an attributable legal appearance (Rechtsscheintheorie). Under this theory a person acting in a legally relevant environment and causing attributably (not necessarily negligently) the appearance of a legal circumstance can be held liable by someone who reasonably trusts in the appearance of the circumstance, provided that his trust merits protection. Related to our context: The bona fide creditor C trusting in the appearance of a valid discharge designation is protected, if the appearance is attributable to the originator. In sharp contrast to the cases discussed earlier, where no credit transfer order at all has been originated by A, it is now A who has attributably set a cause for the appearance of a valid performance on which C can rely.

The result can only be that C can retain the money as valid performance by A, but B-bank has no right to debit A’s account with the expenditures since the receipt authorization is not valid and therefore B-bank could not perform its obligation to A; B-bank has, though, a right to claim the money back from A on the basis of an unjust enrichment in the form of a condictio sine causa generalis.[21]

It might be added that in thoses cases in which the value relationship as such is invalid (e.g. the sales contract between A and C is void), A has not obtained a discharge from any obligation to C by the transfer of money, but A has obtained a condictio indebiti against C and is insofar again enriched. Here B-bank can claim by its condictio sine causa generalis the assignment of A’s condictio indebiti against C.[22] Of course, B-bank has to bear the risk of defenses and of an insolvency of C – which is perfectly in order, since, after all, it was B-bank which neglected A’s revocation of the credit transfer order.[23]

As one can easily imagine, the same mechanism applies where the credit transfer order has been rescinded by A later on, for instance because of an error. The reasoning behind the reversal of the transfer is also the same: if the appearance of a valid discharge designation is attributable to A and if the recipient C is in good faith and merits protection, this is sufficient for the assumption of a valid performance in the value relationship. A can protect himself very simply by informing C in time about the rescission or revocation of the credit transfer order. If A wants to destroy the appearance of a valid discharge designation and wants to make sure that the credit transfer by B-bank does not result in a discharge of his debt to C, then it is not sufficient to rescind or to revoke the order, but it is is only a reasonable demand that A must also announce the revocation or rescission to his contractual partner C.

The decisive feature for this group of cases is that from the recipient C’s point of view the reception of the money appears as performance by the debtor A and this appearance is caused by and attibutable to the debtor A. Here it depends on the good faith of the creditor whether or not the transaction can be reversed again. If the creditor is in good faith and relies on the reception of the money, not knowing about any mistakes on the debtor’s side and not suspecting a fault attributable to the debtor, then the credit transfer is a legally valid performance and the debtor A cannot claim the money back from the recipient C. In case, however, the creditor C positively knows about the defective credit transfer, or grossly negligently does not know about it, thus being not in good faith, the situation is the same as in the cases of a defective credit transfer order not attributable to the debtor A: The B-bank can claim the money back from the recipient C on the ground of an unjust enrichment action (condictio sine causa generalis; not condictio indebiti).


5.5 The three ruless on defective credit transfer orders

One could add and discuss more cases of defective credit transfer orders like the one where B-bank, having previously and rightfully executed the credit transfer order, later on transferred the same amount of money mistakenly a second time, or like the one where the recipient’s wife completed the credit transfer form in A’s name to allot a sum of money to her husband C. We can, though, make an attempt to formulate the rules governing the “true” cases of defective credit transfer orders. In fact there are three rules which are today widely acknowledged in the German case law and in the German legal writing.

Firstly, when dealing with a defective credit transfer order it is imperative to clearly identify the defects and the effects it has on the contractual instruction, on the receipt authorization and on the discharge designation. It can hereby be determined whether or not a performance has been executed in the cover relationship A – B and/or in the value relationship A - C. According to this determination the consequences for a reversed transaction on the ground of unjust enrichment can easily be drawn paying respect to the three parties privity system. This first rule is the “minute scrutiny rule”.

Secondly, where a credit transfer has been made by B-Bank to the recipient C without customer A having originated a pertinent transfer order at all, a performance can result from this payment neither in the value relationship A – C nor in the cover relationship B – C. Here B-bank can claim the money back from C by a condictio directa. The three-parties privity system remains untouched, since the transfer from B-bank to C did not touch any contractual relationships between A and B (cover relationship) or between A and C (value relationship). This second rule is the “non-orginator’s freedom rule”.

Thirdly, the theory of an attributable legal appearance can modify the aforementioned rules. The bona fide creditor C trusting in the appearance of a valid discharge designation is protected, if the appearance is attributable to the originator. Here the mere appearance substitutes reality and is sufficient for the assumption of a valid performance in the value relationship. This third rule is the “attributable appearance rule”.


6 Cheques and bills of exchange

With regard to payments by cheques, the legal situation resembles very much the one analysed before concerning credit transfer orders.[24] The cheque incorporates an order of the drawer A to the drawee B-bank to transfer an amount of money to the beneficiary and recipient C. Whereas a credit transfer order contains an internal instruction to transfer the money, the cheque represents an external instruction, communicated from A to B-Bank via the holder and beneficiary C. It incorporates also the receipt authorization for the recipient C which renders the transfer of money a performance by B-bank to A. Moreover, the cheque also incorporates the discharge designation by A to C according to which the transfer of money by B-bank to C aims at a discharge of A’s obligation to C. In addition, the cheque represents the incorporation of an abstract claim of C against A, i.e. abstract from the underlying contractual claim.

If B-bank honours a cheque without a signature by A and transfers the amount of money to C, both the discharge designation and the receipt authorization are missing. The forged cheque is invalid. B-bank can claim the money back directly from C by way of a condictio directa which is a condictio sine causa generalis.[25] In the case of a countermanded cheque similar rules apply like in the cases of a revoked or rescinded credit transfer order. One important difference must not be left unmentioned, however. If A revokes the cheque, he can only remove the receipt authorization for C, but not the discharge designation which has been incorporated already in the original cheque. The transfer of money from B-bank to C is not a performance by B-bank to A, but it is and remains a performance by A to C, irrespective of any good or bad faith of C’s side. Consequently, B has an unjust enrichment action (condictio sine causa generalis) against A, who has gained the discharge of his debt to C.

The bill of exchange is characterized also by an external instruction to transfer the money, by a receipt authorization and by a discharge designation.[26] Likewise, the performance situation in the cover relationship and in the value relationship is identical with the credit transfer order. The special feature of a bill of exchange is, though, that the beneficiary has a direct and abstract claim against the drawee B-bank. This additional claim possesses, however, only auxiliary nature and does not modify the structural basis of the cover relationship and the value relationship.[27] In all cases of defects of a bill of exchange it is again the minute scrutiny of the relationships and of the instruments involved which leads to a fully convincing and systematically structured reversal of the transaction in the triangular situation of the drawer A, the drawee B-bank and the recipient C.


7 Comparative aspects

Perhaps it is in order to add some comparative remarks. The approach which I have tried to outline has been developed by German legal scholars and courts about two or three decades ago and has continuously gained support since then also in other countries belonging to the German legal circle.[28] The situation is different, though, in the Romanic systems of France, Italy, Spain and Portugal, which so far do not sympathize with this approach.[29] In particular, French courts openly treat the bank executing a credit transfer order as a true “payor” and tend to grant restitution under art. 1376 and 1377 code civil (repetition de l’indu) to the bank “paying” another person’s debt under mistake.[30] Restitution has been frequently denied, however, if the recipient was in good faith. A bank having mistakenly paid to a bona fide creditor when its client had not instructed it to do so, or when the client previously had revoked the instruction is usually not entitled to recovery. Unlike the German approach the Romanic legal systems do not draw the distinction between the case of complete absence of instruction and the case of subsequent revocation. In both cases the “paying” bank is likely to be considered as having been negligent with regard to the payment.[31] Not the theory of an attributable legal appearance with regard to the originator, but simply the notion of a negligent behaviour of the “paying” bank seems to be prevalent. In all due respect, the impression is very strong that the Romanic approach is relatively unsophisticated.[32]

The ways and means of the Anglo-American common law are shaped completely differently with regard to the issue here in question.[33] To begin with: The Anglo-American law regularly permits recovery for payments under mistake on the ground of unjust enrichment only in cases of mistake of fact (as opposed to mistake of law) - a distinction entirely unknown to continental legal systems in this context. Moreover, for German law and also for the Romanic law systems it matters most whether or not a particular payment was due or not and whether or not it was a performance and a discharge with regard to a particular debt. By contast, in Anglo-American law the emphasis is almost exclusively on the issue of whether or not a mistake of fact lies. The common law tries to achieve the balance between the interest of the mistaken payor and that of the bona fide creditor by the doctrine of discharge for value. Also the defense of change of position can be relevant to the mistaken payments of another’s debt.[34] What is lacking, though, is - in Anglo-American as well as in Romanic legal orders - a coherent and systematically structured theory for the treatment of the triangular unjust enrichment situations of defective payments.[35]

The new European directive of 1997 on cross-border credit transfers[36] which has been implemented meanwhile in all of the European member states does not contribute too much to the subject matter treated here.[37] This directive focuses the consumer protection and has a very restricted scope of application. Besides, the directive concentrates on some restitutionary remedies made available mainly to the orginator against his transfering institution, but does not aim at an overall systematical analysis of the triangular situation concerning the three parties involved.


8. Conclusion

Usually I try to conclude a speech at a conference with a funny remark or a little joke, imitating our American friends, to prepare the ground for a devoted audience and a friendly acceptance. This time, however, I will abstain from any such attempts. We know now, and it has been demonstrated again, that the topic of unjust enrichment issues in triangular situations of defective cashless payments is so sad and so serious that it simply spoils the fun. Among law students it is a common notion that the three party situations of unjust enrichment belong to the trickiest and most intricate fields of private law. I am convinced, though, that the key to the solutions is the minute analysis of the contractual instruction, the discharge resolution and the receipt authorization, those forming the three parts of a credit transfer order. My aim was to demonstrate for you the German approach which is very much being discussed also in other European countries. One thing is for sure: A harmonized or at least compatible treatment of the unjust enrichment issues in triangular situations of defective cashless payments is most desirable, if not inevitable in a globalized world of banking transactions. The discussion among comparative banking and unjust enrichement lawyers will go on - hopefully not endlessly.



[*] LL.B. (Berlin), Ass.iur. (Hamburg), Dr.iur. (Berlin), Dr.rer.publ. (Speyer), M. Comp. Jurispr. (New York). Michael Martinek holds a chair for Civil and Commercial Law, Business Organisation Law, Comparative Law and Private International Law at Saarland University in Saarbrücken, Germany, and is a director of the Institute of European Law. He is a frequent visitor to Rand Afrikaans University. This contribution represents a speech which he has delivered to RAU’s Annual Banking Law Update - ABLU on April 24, 2002. The form and style of his presentation have been upheld for this publication.
[1] These are both English cases which have found a worldwide discussion particularly in all Common Law jurisdictions: Price v Neal (1762) 3 Burr 1354; 97 ER 871; Barclays Bank Ltd v WJ Simms, Son and Cooke (Southern) Ltd (1979) 3 All ER 522.
[2] See FR Malan “The rule in Price versus Neal” (1978) 11 CILSA 276; FR Malan “Price v Neal revisited” (1992) Unjustified Enrichment – Essays in Honour of Wouter de Vos 131; FR Malan and JT Pretorius “Enrichment in Triangular Situations, Interest and the in duplum Rule, and Personal Liability and Company Names” (1996) 8 SAMercLJ 399; FR Malan and JT Pretorius Bills of Exchange, Cheques and Promissory Notes in South African Law (3rd ed 1997) 358 - 371; JC Sonneskus “Regspraak – Ook verrykingsretensieregte behoef bewese ongeregverdigde vermoensverskuiwing” (1996) 3 TSAR 583, 588 No. 9.3; DV Cowen “A bank’s right to recover payments made by mistake: Price versus Neal revisited” (1983) 16 CILSA 1; AN Oelofse “Die toepassing van die reël in Price v Neal in Suid-Africa” (1981) 3 Moderne Besigheidsreg 120; DH van Zyl “Unauthorised Payment and Unjust Enrichment in Banking Law” (1998) Restitution and Bank Law (ed. by F Rose) 1, 12 sqq; CJ Pretorius “Payment by a Bank on a Countermanded Cheque and the Condictio Sine Causa” (1995) 58 THRHR 733; see also B & H Engineering v First National Bank of SA Ltd 1995 (2) SA 279 A.
[3] For the development of the German doctrinal thought regarding triangular unjust enrichment situations in banking law see Staudinger/Lorenz Kommentar zum Bürgerlichen Gesetzbuch (Bearbeitung 1999) § 812 Ann 49 – 57; Reuter/Martinek Ungerechtfertigte Bereicherung (1983) 407 – 417; Kupisch Die Voraussetzungen für Bereicherungsansprüche in Dreiecksverhältnissen: „Rückgriffskondiktion“ und „Kondiktion gegen den Drittempfänger“ (1968) 43; Kupisch Gesetzespositivismus im Bereicherungsrecht (1978) 116; Hassold Zur Leistung im Dreipersonenverhältnis (1981) 69; Canaris „Der Bereicherungsausgleich im Dreipersonenverhältnis“ 1973 Festschrift für Larenz 799; Köndgen „Wandlungen im Bereicherungsrecht“ (1975) Dogmatik und Methode, Josef Esser zum 65. Geburtstag 55; Lopau „Gutglaubensschutz und Bereicherungsausgleich bei Zuwendungen durch einen Putativschuldner auf Veranlassung eines Dritten“ 1975 Juristische Schulung 773; Lorenz „Bereicherungsrechtliche Drittbeziehungen“ 1968 Juristische Schulung 441; Schnauder Grundfragen zur Leistungskondiktion bei Drittbeziehungen 1981.
[4] Kümpel „Zum Bereicherungsausgleich bei fehlerhaften Banküberweisungen“ 2001 Wertpapier-Mitteilungen 2273 - 2280, 2274.
[5] Cf Bundesgerichtshof, BGHZ 66, 362, 366; BGHZ 66, 372, 377; BGHZ 67, 75, 79; Medicus Bürgerliches Recht (17th ed 1996) Rn 677; Staudinger/Lorenz Kommentar zum Bürgerlichen Gesetzbuch (Bearbeitung 1999) § 812 Ann 49; Larenz/Canaris Lehrbuch des Schuldrechts II/2 (13th ed 1994) § 70 IV 2 b, c; Staudinger/Lorenz Kommentar zum Bürgerlichen Gesetzbuch (Bearbeitung 1999) § 812 Ann 49; Lieb Münchener Kommentar zum Bürgerlichen Gesetzbuch (3rd ed 1997) § 812 Ann. 31; dissenting Flume „Die Zahlungs-Zuwendung im Anweisungs-Dreiecksverhältnis und die Problematik der ungerechtfertigten Bereicherung“ 1984 Neue Juristische Wochenschrift 464; Flume „Zum Bereicherungsausgleich bei Zahlungen in Drei-Personen-Verhältnissen“ 1991 Neue Juristische Wochenschrift 2521, 2523; Flume „Zum Bereicherungsausgleich im Mehrpersonenverhältnis“ (1999) 199 Archiv für civilistische Praxis 1, 12.
[6] See e.g. Bundesgerichtshof, BGHZ 102, 152, 167.
[7] Staudinger/Lorenz Kommentar zum Bürgerlichen Gesetzbuch (Bearbeitung 1999) § 812 Ann 50; Canaris “Einwendungsausschluß und Bereicherungsausgleich im Girovertragsrecht” 1972 Betriebs-Berater 774; Canaris “Der Bereicherungsausgleich im bargeldlosen Zahlungsverkehr” 1980 Wertpapier-Mitteilungen 354; Möschel “Fehlerhafte Banküberweisung und Bereicherungsausgleich” 1972 Juristische Schulung 297, 301; see e.g. the legendary Postanweisungsfall, decided by Reichsgericht of January 12, 1904, RGZ 60, 24; see also Bundesgerichtshof, BGHZ 88, 232, 236.
[8] An exception can be made, however, if the assets have been transferred to the recipient C free of any charge (without consideration) according to § 822 BGB.
[9] Cf Lorenz „Zur Frage des bereicherungsrechtlichen ‚Durchgriffs’ in Fällen des Doppelmangels“ 1968 Juristenzeitung 51; HP Westermann „Doppelmangel bei Bereicherungskette und Dreiecksverhältnis“ 1968 Juristische Schulung 17.
[10] Krawielicki „Unentgeltlichkeit im Bereicherungsrecht“ (1931) 31 Jherings Jahrbücher 257, 313; Wilhelm Rechtsverletzung und Vermögensentscheidung als Grundlagen und Grenzen des Anspruchs aus ungerechtfertigter Bereicherung (1973) 116 sqq, 122.
[11] See Staudinger/Lorenz Kommentar zum Bürgerlichen Gesetzbuch (Bearbeitung 1999) § 812 Ann 54 and 55; von Caemmerer „Bereicherungsansprüche und Drittbeziehungen“ 1962 Juristenzeitung 385, 388; Lorenz „Zur Frage des bereicherungsrechtlichen ‚Durchgriffs’ in Fällen des Doppelmangels“ 1968 Juristenzeitung 51; Bundesgerichtshof, BGHZ 48, 70, 72.
[12] Cf Kümpel „Zum Bereicherungsausgleich bei fehlerhaften Banküberweisungen“ 2001 Wertpapier-Mitteilungen 2273; Canaris „Der Bereicherungsausgleich im bargeldlosen Zahlungsverkehr“ 1980 Wertpapier-Mitteilungen 354; Kupisch „Bankanweisung und Bereicherungsausgleich“ 1979 Wertpapier-Mitteilungen, Beilage 3; U Meyer Der Bereicherungsausgleich in Dreiecksverhältnissen 1979; Meyer-Cording Das Recht der Banküberweisung unter besonderer Berücksichtigung der steckengebliebenen Überweisungen 1951; Möschel „Fehlerhafte Banküberweisung und Bereicherungsausgleich“ 1972 Juristische Schulung 297; Putzo Erfüllung mit Buchgeld und die Haftung der Beteiligten wegen ungerechtfertigter Bereicherung 1977; Stierle Der Bereicherungsausgleich bei fehlerhaften Banküberweisungen 1980; Seiler, Der Bereicherungsausgleich im Überweisungsverkehr, 1998.
[13] Pfister „Zum Bereicherungsanspruch im Dreiecksverhältnis bei Fehlen einer Anweisung“ 1969 Juristische Rundschau 47; Wieling „Drittzahlung, Leistungsbegriff und fehlende Anweisung“ 1978 Juristische Schulung 801.
[14] Reichsgericht, 1932 Juristische Wochenschrift 735.
[15] Reichsgericht, RGZ 60, 24; Möschel „Fehlerhafte Banküberweisung und Bereicherungsausgleich“ 1972 Juristische Schulung 297, 302.
[16] Bundesgerichtshof 1987 Neue Juristische Wochenschrift 185 = 1987 Juristenzeitung 199 with note by Canaris.
[17] Bundesgerichtshof, BGHZ 66, 372.
[18] An instructive case is Landgericht Stuttgart 1994 Neue Juristische Wochenschrift 2626.
[19] See Bundsgerichtshof, BGHZ 66, 362, 366; BGHZ 66, 372, 377 and BGHZ 67, 73, 79; Medicus Bürgerliches Recht (17th ed 1996) Ann 677; Larenz/Canaris Lehrbuch des Schuldrechts II/2 (13th ed 1994) § 70 IV 2 b, c; Staudinger/Lorenz Kommentar zum Bürgerlichen Gesetzbuch (Bearbeitung 1999) § 812 Ann 49; Lieb Münchener Kommentar zum Bürgerlichen Gesetzbuch (3rd ed 1997) § 812 Ann. 31; dissenting Flume „Die Zahlungs-Zuwendung im Anweisungs-Dreiecksverhältnis und die Problematik der ungerechtfertigten Bereicherung“ 1984 Neue Juristische Wochenschrift 464; Flume „Zum Bereicherungsausgleich bei Zahlungen in Drei-Personen-Verhältnissen“ 1991 Neue Juristische Wochenschrift 2521, 2523; Flume „Zum Bereicherungsausgleich im Mehrpersonenverhältnis“ (1999) 199 Archiv für civilistische Praxis 1, 12.
[20] Staudinger/Lorenz Kommentar zum Bürgerlichen Gesetzbuch (Bearbeitung 1999) § 812 Ann 51; Reuter/Martinek Ungerechtfertigte Bereicherung (1983) 431; Bundesgerichtshof, BGHZ 111, 382, 386.
[21] Bundesgerichtshof, BGHZ 61, 289; BGHZ 87, 93; BGHZ 87, 393, 400; cf also Canaris “Der Bereicherungsausgleich im bargeldlosen Zahlungsverkehr” 1980 Wertpapier-Mitteilungen 354, 356 sqq; Reuter/Martinek Ungerechtfertigte Bereicherung (1983) 392, 432.
[22] Bundesgerichtshof, BGHZ 89, 376, 382.
[23] Staudinger/Lorenz Kommentar zum Bürgerlichen Gesetzbuch (Bearbeitung 1999) § 812 Ann 53; Bundesgerichtshof, BGHZ 89, 379, 382.
[24] Wilhelm „Die Zurechnung der Leistung bei Widerruf einer Anweisung, insbesondere eines Schecks“ (1975) 175 Archiv für die civilistische Praxis 304; Reuter/Martinek Ungerechtfertigte Bereicherung (1983) 448, 451.
[25] Bundesgerichtshof, BGHZ 66, 362; BGHZ 61, 289; BGHZ 87, 93.
[26] Reuter/Martinek Ungerechtfertigte Bereicherung (1983) 485; Staudinger/Lorenz Kommentar zum Bürgerlichen Gesetzbuch (Bearbeitung 1999) § 812 Ann 56; Koppensteiner/Kramer Ungerechtfertigte Bereicherung (2nd ed 1988) 30 sqq; ff., Medicus Bürgerliches Recht (17th ed 1996) Ann 679; Lieb Münchener Kommentar zum Bürgerlichen Gesetzbuch (3rd ed 1997) § 812 Ann 43; Pinger „Was leistet der Leistungsbegriff im Bereicherungsrecht“ (1979) 179 Archiv für civilistische Praxis 320.
[27] Reuter/Martinek Ungerechtfertigte Bereicherung (1983) 486: „Hilfsfunktion“.
[28] For the situation in Austria cf Schwimann/Honsell/Mader Praxiskommentar zum Allgemeinen bürgerlichen Gesetzbuch (2nd ed 1996), § 1431 Ann 37; Rummel Kommentar zum Allgemeinen bürgerlichen Gesetzbuch Vol II (2nd ed 1990) § 1431 Ann 16; Koziol/Welser Grundriß des bürgerlichen Rechts Vol I (10th ed 1996) 429; Oberster Gerichtshof 1981 Juristenblatt 324 = 1981 Zeitschrift für Rechtsvergleichung 224 with note by Schwind; Oberster Gerichtshof 1982 Juristenblatt 372 citing extensively German legal literature and German court decisions; for the situation in Switzerland cf. Schulin Kommentar zum schweizerischen Privatrecht – Obligationenrecht Vol I (2nd ed 1996) Art 62 Ann 68 sqq; Bundesgericht, BGE 116 II 686, 691; BGE 117 II 404, 407; Staudinger/Lorenz Kommentar zum Bürgerlichen Gesetzbuch (Bearbeitung 1999) § 812 Ann 51.
[29] See D Friedmann and N Cohen cf « Payment of Another’s Debt » 1991 International Encyclopedia of Comparative Law Vol X Chap 10 54, 63, 56, 57.
[30] Cf Malauri Les restitutions en droit civil (1991) 53 sqq.
[31] Cass com 23.04.1976, Bull civ 1976 IV 114 no 133, DS 1977.562 with note by Vermelle; here the court denied the right of recovery for a bank, which had paid a cheque signed by an agent whose authority had been revoked, from the bona fide recipient; Cass com 22. 11. 1977, J.C.P. 1978 II 18997 with note by Gégout; here the claim of the bank against a bona fide recipient was denied, to whom the bank had paid a bill without its customer’s authorisation; Cass com 23.01.1978, Bull civ 1978 IV 22 no. 28, DS 1979 IR 273 = JCP 1980 II 19365 with note by Cabrillac; here the bank’s claim against the debitor was allowed, since there can be no recovery of the payment from the recioeint; Cass civ 18.07.1979, JCP 1979 II 19238 with annotation by Avocat Général Gulphe; Cass civ 17.07.1984, DS 1985 J 298 with note by Chauvel; Cass com 12.01.1988, Bull civ IV No 22 p 15; Cass civ 18.05.1994, Bull civ I no 179 p 132 with critical remak by Mestre in 1995 Revue trimestrielle de droit civil 373; cf Mestre “Répetition de l’indu et erreur du solvens” 1987 Revue trimestrielle de droit civil 545; Cabrillac and Rives-Lange “Crédit et titres de crédit” 1979 Revue trimestrielle de droit comparé 274 sqq, 278; Mestre « Contre qui l’action en repetition de l’indu doit-elle etre exercée? » 1985 Revue trimestrielle de droit civil 728.
[32] There is, however, one decision where a claim by the bank against the customer had been granted: Cass com 23.01.1978, D 1979 IR 273 = JCP 1980 II 19365 with note by Cabrillac.
[33] See Ellinger/Lomnicka and Hooley Modern Banking Law (3rd ed 2002) 414 – 459; Goode “The Bank’s Right to Recover Money Paid on a Stopped Cheque” (1981) 97 Law Quarterly Review 254; Friedmann “Payment of Another’s Debt” (1983) 99 Law Quarterly Review 534.
[34] See e.g. Barclays Bank Ltd v W J Simms Son & Cooke (Southern) Ltd (1980) 1 QB 677.
[35] For U.S.-American Law cf the stop-payment order case Central National Bank of Cleveland v International Sales Co 87 Ohio App 207, 91 NE 2d 532; see also Friedmann and Cohen “Payment of another’s Dept” 1991 International Encyclopedia of Comparative Law Vol X Chap 10 54, 63; see also § 4-407 Uniform Commercial Code (1995) allowing for a claim (applying a subrogation) of the bank having transferred the money despite a revocation against the customer.
[36] Directive 97/5 EC of the European Parliament and of the Council of 27 January 1997 on cross-border credit transfers, Official journal L 043, 14/02/1997, P. 25 – 30.
[37] See Hooley “EU Cross-Border Credit Transfers – The New Regime” (1999) 9 Journal of International Banking and Financial Law 387.

 


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