After the debtor's death, the creditor can recover the debt directly from the heir — Supreme Court
The Supreme Court upheld the decision to recover nearly 40 thousand US dollars of debt from the heir, which her father did not repay under the loan agreement. The court reminded that after the debtor's death, his property obligations that did not terminate due to death pass to the heirs, but their liability is limited to the value of the inherited property. At the same time, the Supreme Court clarified that Article 1282 of the Civil Code of Ukraine does not limit the creditor only to the possibility of enforcing collection on the inherited property: he has the right to choose another effective method of judicial protection, including demanding debt recovery directly from the heir.
Circumstances of the case
The dispute arose from a loan agreement concluded in 2012. The borrower received 39,680 US dollars but did not return the funds by the established deadline and later died.
Even before the debtor's death, the original creditor assigned the right to claim to another person under a cession agreement. After the inheritance was opened, the new creditor timely applied to the notary with claims to the inherited property and later filed a lawsuit.
The plaintiff requested to recover a total of 49,680 US dollars and to enforce collection on the inherited property. However, the courts concluded that only the debt of 39,680 US dollars under the loan agreement was confirmed by proper and admissible evidence, while claims regarding the additional 10,000 US dollars were not properly proven.
The court of first instance recovered the debt of 39,680 US dollars from the heir with the reservation that her liability is limited to the value of the inherited property. The appellate court left this decision unchanged.
In the cassation appeal, the heir argued that the fact of the loan was not proven, the originals of the agreement and documents confirming the transfer of funds were not provided, documents drawn up abroad should have been legalized, and the lender allegedly had no right to transfer funds in foreign currency according to Russian Federation legislation.
What the Supreme Court decided
The Civil Cassation Court as part of the Supreme Court dismissed the cassation appeal and left the decisions of the lower courts unchanged.
The court noted that the case materials 522/12004/15-c confirm the conclusion of the loan agreement, the actual receipt by the borrower of 39,680 US dollars, the transfer of the claim right to the new creditor under the cession agreement, the timely presentation of claims to the inherited property by the creditor, and the acceptance of the inheritance by the defendant.
The Supreme Court also rejected the claim about the absence of original documents, noting that the court of first instance examined the originals of the loan agreement and documents confirming the transfer of funds, and the authenticity of the borrower's signature on the agreement was not disproved.
The court also disagreed with the argument regarding the application of Russian Federation legislation on currency operations. The panel of judges emphasized that these circumstances do not refute the existence of loan relations between the parties and the fact of the borrower's receipt of funds.
Legal position of the Supreme Court
In its ruling, the Supreme Court confirmed that the inheritance includes all rights and property obligations of the decedent that existed at the time of the opening of the inheritance and did not terminate due to death. Accordingly, the obligation to repay the loan passes to the heirs. Each heir is personally liable to the creditor proportionally to their share in the inheritance and only within the value of the inherited property.
The Supreme Court also reminded that the creditor has the right to present claims both directly to the heir and through a notary at the place of opening of the inheritance within the terms defined by Article 1281 of the Civil Code of Ukraine. If the heir disputes the claims, it is the heir who must prove the size and value of the inherited property, since their liability is limited to this value.
The Supreme Court paid special attention to the methods of protecting the creditor's rights. The panel of judges noted that enforcement on the inherited property, provided for by Article 1282 of the Civil Code of Ukraine, is a special method of protection but not the only one. This provision does not exclude the application of other methods of civil law protection, including compulsory performance of the obligation in kind. A different interpretation would deprive the creditor of effective judicial protection, for example, when the property transferred to the heir no longer exists. That is why the creditor has the right to choose the method of protection that is most effective for restoring his violated right.
Thus, the Supreme Court confirmed the legality of recovering 39,680 US dollars from the heir with the reservation that liability is limited to the value of the property she inherited, and finally left unchanged the decisions of the courts of first and appellate instances.
Subscribe to our Telegram channel t.me/sudua and to Google News SUD.UA, as well as to our VIBER and WhatsApp, pages on Facebook and on Instagram to stay informed about the most important events.
