CHAPTER X. PRECEDENTS OF DEBTS AND SECURITIES. CASE I. Q. The heirs of a person, who died involved in debt, have signed a document renouncing all claim to the inheritance and declining to interfere with the estate, in consequence of the incumbrances exceeding the assets; which fact has been proved. In this case, should there be any preference shown in satisfying the claims of those creditors to whom the debts were contracted at an earlier period, over those to whom the debts were contracted at a later period? and is there any difference prescribed as to the order of liquidating the debts of a simple contract creditor, and those of creditors holding bonds or promissory notes of the debtor? are there any circumstances which entitle one creditor to a preference over another, or are they all entitled to equal consideration in the distribution of the assets? insolvent estate to sa claims of se ditors. R. If the assets of the deceased's estate are not suf- Rules for apportioning the ficient to answer all legal demands, and there be many assets of an creditors, they are all entitled to satisfaction, in proportion to the amount of the debts due to them respec- tisfy the tively; in other words, he to whom a greater sum is due veral descripwill obtain a larger proportion of the assets, and he to tions of crewhom a less sum is due will obtain a smaller proportion. Equality will not be observed, where some debts are greater than others; but whether the debt be founded on simple contract or on a promissory note or bond, and whether it has been contracted at an earlier or a later period, are matters which do not at all affect the claims of the respective creditors. The only difference is, that the liquidation of debts contracted or acknow ledged on a death-bed sickness, should be postponed until after the satisfaction of such debts as were contracted by the deceased at a period when he was in health.* A debtor on cannot devise property to of a creditor. CASE II. Q. A person was indebted to his nephew in the sum of forty-one rupees. All his property consisted of ten beegals of land. On his death-bed, being of sound disposing mind, he directed that two and a half beegahs of the land should be set apart in satisfaction of the above debt, and devised the remaining seven and a half to his wives, as a Hibba-bil Iwuz, or gift for consideration, in satisfaction of their claim of dower. The deed containing this disposition of his property was duly signed and attested; but the creditor above-mentioned was no party to it. He died about six hours after the execution of the deed. The provisions of such deed being prejudicial to the creditor, should it, according to the Moohummudan Law, be upheld, or set aside? R. A person during health contracts a debt to his his death-bed nephew, and also to his wives, and that person, duror otherwise ing his last illness, devises, by a Hibba-bil Iwuz, or alienate his gift for consideration, to his wives, in satisfaction of the prejudice their claim of dower, seven and a half of the ten beegahs of land, which constitute his sole property, and sets apart the remaining two and a half beegahs to satisfy his creditor's debt; and having executed a deed to the above effect, dies. Under these circumstances, if the property set apart for the creditor be not sufficient to liquidate the debt due to him, the Hibba-bil Iwuz executed by the deceased will have no validity, according to Law See Prin: Debts and Secur: 2. The land must be sold, and the proceeds proportionally divided between the creditors and the wives, according to their respective claims,* CASE III. Q. A person being involved in debt to an amount larger than his property is capable of satisfying, dies, leaving a wife, who, on his decease, claims her dower out of the estate, and other creditors come forward who claim to have their debts satisfied from the same source. In this case what is the legal course to be adopted? may pay him R. If the property left by the deceased be inadequate A mortgagee to satisfy the demands of all the claimants or creditors, self out of the a pro-ratá distribution must be made among them. The mortgage on the death of Law makes no distinction between a debt of dower his debtor. due to a wife and debts due to other creditors. All debts (contracted in health) are of equal validity, except those of mortgagees or pawnees, that is to say, persons with whom the property of the deceased may have been deposited in mortgage or pledge. The claim of such persons are entitled to priority, and they are authorized to satisfy their own demands out of the property in their possession; after which the surplus (if any should remain) will be divided among the other claimants. It is a rule in Law that debts are claimable before legacies, and that an acknowledgment of a debt in favour of an heir resembles a legacy. In this case the deceased acknowledged a debt to his wives who are his heirs, consequently his special acknowledgment in their favour is of no avail, but they are entitled to a proportional share of the assets in common with other creditors. Had the persons in whose favour the acknowledgment was made been strangers even, still the disposition would not have availed them, nor would they have been entitled to any preference in the liquidation of their claim, because every disposal of property on a death-bed is considered as a legacy, which cannot extend to more than one-third of the estate, and the satisfaction of which must be postponed until after the liquidation of debts. See. Prin: Wills 6. 7. Of necessary debts contracted by a guardian. This opinion is in conformity with the Kifaya and other legal authorities.* CASE IV. Q. A Moosulmaun being on the point of death, nominates a person to be guardian of his minor children and manager of his houses, lands, and other property. The person, so appointed, borrows some money during the minority of the children, for the purpose of defraying the balances of government revenue that had accrued on their estate. During the minority of the children, the debt was not repaid to the lender. If, after their attaining the age of majority, the lender should claim his due from them and from the guardian, from whom will he receive it, from the guardian or from the wards? R. If, in the case stated, the lender claim his debt as due from the wards, that is to say, from those who were minors, and it be proved due without any appearance of fraud or breach of trust on the part of the guardian, he will recover from the wards. It is held in books of Law, that on account of food, raiment, and land-tax, which means the government revenue, due from the estate, it is legal and allowable for the guardian to contract debts, on behalf of his minor ward; because the guardian contracts a debt for the benefit of his ward, and the preservation of the estate, and applies the money to the necessary purposes of the ward. As the debt of the creditor was not liquidated during their minority, and as they have now grown up and are of fall age, this debt must be paid out of the property of the wards, of which they are now seized and in possession.+ See Prin: Debts and Secur: 20. See Prin: Debts and Secur: 6. CASE V. Q. A person sues the widow and son of a landed proprietor for a portion of the estate left by the deceased, in satisfaction of some unadjusted claim. The widow pleads that her husband made over to her by deed and put her in possession of his entire property during his life-time, in lieu of dower. Under these circumstances, is the whole property to be reserved in satisfaction of the dower, or is the claim on this account to be considered on a footing with that on account of other debts? * R. A claim on account of dower and claims on ac- Of a debt acknowledged on a deathcount of other debts are entitled to equal consideration bed. in the order of payment out of the assets, excepting a claim on account of a debt which the deceased may have acknowledged during his last illness, and which he is not known to have bona fide contracted. Such claim should not be satisfied before the other debts are discharged. But if, as appears to be established in the present case, the property was made over to the wife and taken possession of by her during her busband's lifetime, it cannot with propriety be termed the estate of the deceased, or be considered available as such. CASE VI. Q. A debt having been acknowledged in the same bond jointly by two persons, and one of them subsequently deceasing, is the whole debt recoverable from the surviving obligor? of the debtors R. If the parties, who joined in executing the bond, Case of a each participated in the loan, a claim to the whole will joint bond, one not be maintainable against the surviving obliger. will be responsible for his own half share only. He dying. |