Conflict Between Mortgages and Criminal Sequestration: The United Sections Provide Clarity
The United Sections of the Court of Cassation, in judgment No. 34681 of 29 December 2025, have resolved a longstanding conflict concerning the priority between a voluntary mortgage (ipoteca volontaria) and a special statutory lien (privilegio speciale immobiliare) arising from criminal sequestration under Art. 316, para. 4 of the Code of Criminal Procedure.
The Court ruled that, given the "transcriptional" nature of the criminal lien, the absolute priority rule under Art. 2748 of the Civil Code does not apply. Instead, the principle of priority in time (prior in tempore, potior in jure) prevails. Consequently, a debt secured by a voluntary mortgage must be satisfied in preference to a claim for criminal damages if the mortgage was registered prior to the transcription of the sequestration.
This landmark decision aligns with established precedents regarding preliminary contracts, bolstering legal certainty and the stability of secured interests for credit institutions within concurrent enforcement proceedings.
Factual Background and Regulatory Framework
The case originated from real estate enforcement proceedings involving two competing claims:
- A bank holding a voluntary mortgage securing a land-purchase loan (mutuo fondiario), registered in 2003.
- An assignee of a claim for damages arising from a criminal conviction for manslaughter, secured by a criminal conservatory sequestration (sequestro conservativo) transcribed only in 2012.
The core legal issue centered on the interpretation of Art. 316, para. 4 C.P.P., which grants claims for damages secured by sequestration the status of a "privileged debt" (credito privilegiato) over immovable property. The appellant argued that such a lien, pursuant to Art. 2748, para. 2 of the Civil Code, should automatically take precedence over a mortgage, regardless of the date of registration.
Legal Question Before the Court
The Supreme Court was tasked with determining whether the general principle—whereby special liens prevail over mortgages—applies to criminal sequestration, or whether a different statutory interpretation is required.
The referring order raised questions as to whether the principles established by the United Sections in 2009 regarding the liens of prospective purchasers (promissari acquirenti) should be extended here. Furthermore, it considered whether the "public policy" nature and the enhanced protection of crime victims—supported by EU directives—could justify a reversal of the temporal priority rule in favour of criminal-related claims.
The Ruling: Priority of Registration
The United Sections dismissed the appeal, confirming the seniority of the prior mortgage. The Court clarified that the lien arising from criminal sequestration is "registration-based" (natura trascrizionale): the preferential status does not arise automatically by operation of law due to the nature of the debt, but requires a specific formal act of public registration.
According to the Court, for this category of "registration-based liens," the rule of absolute prevalence does not apply. In the absence of a specific statutory derogation, a mortgage registered before the transcription of the criminal sequestration maintains its priority in the distribution of proceeds from the judicial sale.
Practical Implications for the Banking and Recovery Sector
This judgment is of paramount importance for financial institutions and debt recovery professionals for the following reasons:
- Protection of Secured Interests: It confirms that lenders can rely on the order of registration (public records), without the risk of subsequent liens "leapfrogging" established mortgages.
- Clarification of Land-Purchase Loans: It clarifies that while mutuo fondiario credit does not constitute a "lien" in the strict technical sense, it benefits from a first-grade mortgage and a "procedural privilege" relevant in insolvency scenarios.
- Uniformity of Distribution Criteria: It harmonises the regime for criminal-related claims with other forms of registration-based liens, preventing asymmetries in the system of statutory priorities (cause di prelazione).
