Medan Religious Court Decision No. 967 of 2012 on Financial Responsibility of Estate Beneficiary

The plaintiff was the biological mother and beneficiary of the deceased's estate. Since 2007, the deceased had been a customer of the second defendant, the second defendant being an employee of the first defendant (PT. Bank Sumut Syariah Cabang Padangsidempuan). The deceased had always met his credit repayment obligations to the first defendant. On 26 April 2011, the deceased executed a musyarakah financing agreement with the first and second defendants to obtain IDR 700 million in additional capital for a term of 12 months, leveraging two properties. The co-defendants (also beneficiaries) had also drafted a written statement on 26 April 2011 which, principally, stated that if something ever happened to the deceased and his life insurance had not cleared to cover his financial obligations, that his beneficiaries would not sue the first defendant, and all finances owing would be repaid by his beneficiaries. On 13 July 2011, the deceased passed away due to illness.

The plaintiff submitted that she strongly objected to the third (and final) written reminder from the first and second defendants on 22 May 2012, pursuant to which the first and second defendants sought a repayment of of IDR 752 million. The first and second defendants granted the plaintiff a time allowance given the circumstances, but maintained that if the debt had not been repaid by 25 June 2012, they would have the fourth defendant auction the two properties.

The plaintiff submitted that, pursuant to clause 2 of the agreement, as the deceased's beneficiary, she was not obligated to bear the cost of the agreement. Therefore, the plaintiff requested, among other things, that the court invalidate or postpone the auctioning of the properties, at least until the court had passed judgment. Moreover, that the plaintiff and three co-defendants, as beneficiaries, be released from any financial obligations stemming from the musyarakah agreement, and that the written statement providing the first defendant with immunity, and compelling the deceased's beneficiaries to repay his debts, be declared null and void.

The court acceded to the plaintiff's request to be absolved from financial responsibility with regards to the musyarakah agreement, and to return the two properties leveraged pursuant to the agreement to the plaintiff. It did so on the grounds that the first-third defendants should have had in place an insurance policy to cover themselves in the event the deceased passed away (which he had). The court also declared null and void the written statement.

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