Facts
The dispute opposes the company E. Revisions- and Treuhand AG (the defendant) to R. (the plaintiff). The plaintiff had entrusted the defendant, in 1978, with the management of his assets, consisting of 3.1 million francs, with the primary objective of preserving his assets. The defendant invested the money on the stock market and charged the plaintiff a fee of 25% on the profits made. However, the defendant took out Lombard loans and took excessive risks, which resulted in significant losses for the plaintiff.
The plaintiff brought an action against the defendant and its administrator, W., before the district court of Lenzburg. The court dismissed the claim against W. and ordered the defendant to pay the plaintiff 684,992.50 francs with interest. The defendant appealed to the higher court of the canton of Aargau, which upheld the judgment.
The defendant then filed an appeal with the Federal Court, which dismissed the appeal and upheld the judgment of the higher court.
Considerations
The Federal Court considered that the contract between the parties was an asset management contract, subject to the provisions of Article 398 para. 2 CO. The court estimated that the defendant had breached its duty of care and loyalty by taking out Lombard loans and taking excessive risks, without informing the plaintiff of the dangers of speculative management.
The court also considered that the defendant had failed to fulfill its obligation to inform and advise the plaintiff, by not providing him with clear and accurate information on the management of his assets. The court estimated that the defendant had acted…