Statute of Limitations for a Claim Contingent on Termination or a Condition Precedent

Facts

By publicly notarized contract dated November 24, 1971, Willy Schuchter sold a plot of land to Ulrich Steinemann AG, which was part of a site intended for commercial use. The purchase contract stipulated that the buyer (Ulrich Steinemann AG) must construct and make available for shared use the main track on its portion of the land at the first request of an adjacent landowner, at its own expense. Around 18 years later, on March 12, 1990, Willy Schuchter demanded that Ulrich Steinemann AG construct the main track. Ulrich Steinemann AG acknowledged the claim in principle but made the construction contingent on Schuchter's participation in the costs of a water remediation project. On September 30, 1992, Willy Schuchter filed a lawsuit against Ulrich Steinemann AG, primarily seeking to compel the latter to construct the main track at its own expense.

The defendant (Ulrich Steinemann AG) subsequently argued that the plaintiff's claim for performance was time-barred under Art. 127 CO. The District Court fully upheld the claim. The defendant then appealed to the Cantonal Court of St. Gallen, which dismissed the plea of limitation and ordered the defendant to construct the track on its property at its own expense.

In its appeal to the Federal Supreme Court, the defendant requested that the Cantonal Court's judgment be overturned and the claim dismissed. It argued that the plaintiff's claim was time-barred, as the ten-year limitation period under Art. 127 CO had begun to run upon conclusion of the purchase contract on November 24, 1971 and had expired without being used.

Considerations

The Federal Supreme Court held that the plaintiff's claim is subject to the ordinary rules of limitation and cannot be considered an ancillary performance obligation within the meaning of Art. 730(2) CC, which could not be subject to limitation like the easement itself.

Furthermore, the Federal Supreme Court determined that the contractual agreement constituted an unconditional obligation of the defendant to construct the main track on its property at its own expense, contingent on a call or termination. Since a claim contingent on termination begins to lapse under Art. 130(2) CO on the day the termination is permissible, the ten-year limitation period under Art. 127 CO had already expired when the…