Facts
In this case, it involved a bank mortgage that was used as a transfer of title by way of security. Banque A. had received a mortgage bond (mortgage deed) of 655,000 CHF to secure a loan of 715,000 CHF. When the debtors could no longer service the loan, the bank terminated the loan and initiated debt enforcement proceedings.
In the debt enforcement proceedings, a dispute arose as to which interest rate should apply to the mortgage claim. The lower instances had applied the interest rate of the underlying claim, which the Federal Court considered to be incorrect. The Federal Court remanded the case to the lower instance for a new assessment, so that it could determine the agreed interest rate for the mortgage claim and apply it to the principal of the mortgage claim.
Considerations
The Federal Court stated that Art. 818 para. 1 no. 3 of the Swiss Civil Code (ZGB) addresses the interest on the mortgage claim. However, the creditor can only use this interest to be paid for the interest on the underlying claim. The interest on the mortgage claim may not be used to cover the principal of the underlying claim.
According to the legislator's intention, the creditor should only be able to cover the interest on the underlying claim with the interest on the mortgage claim, but not the principal. The Federal Court…