Reduction of a mixed gift under Art. 527 para. 1 Swiss Civil Code (ZGB)

Facts

The case concerns the reduction of two contracts between a father and his son pursuant to Art. 527 para. 1 ZGB. The father had sold properties to his son on January 18, 1956 and October 11, 1958 at prices below the prevailing market value at the time. After the father's death, the other heirs sued to have these contracts subject to reduction, as they violated their claims to compulsory portions.

The District Court had declared both contracts subject to reduction and obliged the son to include the acquired properties in the estate. The High Court, however, only declared the contract of October 11, 1958 subject to reduction, but not the one of January 18, 1956. Both parties appealed the High Court's judgment.

Considerations

The Federal Supreme Court first examined whether the contract of January 18, 1956 was subject to reduction under Art. 527 para. 1 ZGB. It concluded that the requirements for this were not met, as the testator had not recognized the disproportion between performance and consideration at the time of contracting.

For the contract of October 11, 1958, which the High Court had declared subject to reduction, the Federal Supreme Court now had to determine the amount of the reduction. It rejected the constant method applied by the High Court and instead opted…