Facts
The City of Zurich transferred the construction of a primary school building on municipal property to Systembau AG. Contrary to the contractual provisions, Systembau AG concluded a contract for work with Umberto Bonomo Söhne AG (the plaintiff) in the name of the City of Zurich. After the completion of the school building, the plaintiff demanded payment of the outstanding balance from the City of Zurich (the defendant). The District Court and the High Court dismissed the claim. The plaintiff appealed to the Federal Supreme Court.
The Federal Supreme Court overturned the judgment of the High Court and remanded the case to the lower court for supplementation of the record and a new decision. The plaintiff has a fundamental claim for compensation against the defendant pursuant to Art. 672 of the Swiss Civil Code (ZGB), as it has built with its material on the property of the defendant.
Considerations
Art. 672 ZGB provides for compensation for the material owner if his material passes into the ownership of the landowner without a contract with the landowner. The landowner must pay the material owner appropriate compensation.
The amount of compensation depends on the good or bad faith of the parties. In the case of bad faith on the part of the landowner, the court can award full damages; in the case of bad faith on the part of the material owner,…