Liability of the Lessor in Case of Sale of the Leased Property

Facts

On March 2, 1953, Franziska Bruni entered into a lease agreement with Antonio Cavallini for the premises of the Wirtschaft Torino and an apartment, located in her house in Zurich. The lease agreement was valid from April 1, 1953, and could be terminated at the earliest on September 30, 1958. Cavallini secured his contractual obligations by depositing a savings book at the cantonal bank of Zurich.

On July 30, 1953, Bruni sold the property to Gustav Patscheider, who declared in the sales contract that he would take over the existing lease agreements. On the same day, Patscheider 'sold' the patent of the Wirtschaft Torino to the Baugesellschaft Baueg AG for 12,000 francs, with the intention of transferring the patent to another property. On July 31, 1953, Patscheider terminated the lease agreement with Cavallini, but did not insist on the termination after Cavallini objected.

In November 1953, Cavallini learned that Patscheider had sold the patent and contacted the finance department of the canton of Zurich. He received a response indicating that the cantonal government had authorized the buyer of the patent to reopen a business on condition that the Wirtschaft Torino be closed permanently by March 31, 1954. Cavallini requested an extension of the closure deadline until July 31, 1954, which was granted to him.

On June 11, 1954, Cavallini informed Patscheider that he was terminating the lease agreement for the premises of the Wirtschaft due to the decision of the cantonal government. Cavallini then sued Bruni for compensation of 39,500 francs, as well as interest at 5% from September 4, 1954.

Considerations

The Federal Court examined the question of whether the lessor (Bruni) remains liable in case of sale of the leased property (the property) and whether the lessee (Cavallini) can demand compensation for the damages suffered due to the breach of contract by the acquirer (Patscheider).

The Federal Court considered that Article 259 paragraph 1 of the Code of Obligations (CO) provides that the lessor remains liable in case of sale of the leased property, even if the acquirer has taken over the lease agreement. The lessor can only be released from his contractual obligations if the lessee expressly or implicitly releases him.

The Federal Court also considered that Patscheider, as the acquirer of the property, breached the lease agreement by 'selling' the patent…