Facts
Teno AG and City-Umbau AG complained against a judgment of the High Court of the Canton of Zurich, which declared a statutory mortgage lien of the City of Zurich for the real estate capital gains tax admissible with priority over their contractual mortgage liens. The property Zehntenhausstrasse 8 in Zurich was encumbered with mortgage deeds in rank 1a and 2. In the realization of these, the tax lien claim of the City of Zurich pursuant to § 1941 lit. e of the Introductory Act to the Swiss Civil Code (EG ZGB) was placed ahead of all contractual liens.
The Federal Supreme Court had initially set aside the High Court's judgment and referred the matter back to the High Court to examine whether § 1941 lit. e EG ZGB violates the guarantee of property ownership. In its final judgment, the High Court dismissed the action of Teno AG and City-Umbau AG, as the priority of the statutory mortgage lien for the real estate capital gains tax was justified by a sustainable public interest.
Considerations
The Federal Supreme Court states that the rank of a civil law mortgage lien constitutes a private property right protected by the guarantee of property ownership. However, according to the Swiss Civil Code (ZGB), this rank is subject to the reservation of statutory liens, including those of cantonal public law.
The Canton of Zurich has introduced a…