The Concealed Bequest in the Light of the Egyptian Civil Code and the Civil Transactions Law

In principle a transaction should express the truth of what has been done, and not appear in a form differing from what the parties meant to carry out. Where two persons conclude an agreement transferring ownership of a thing from one to the other, the contract of sale should in principle express that transaction, and the price should be paid by the buyer to the seller. Practice, however, testifies that matters do not always run so. Parties may agree upon a transaction whose truth differs from what is displayed before the world — as where a father sells a thing to one of his children while retaining ownership of the thing sold for the whole of his life. On that hypothesis the father meant to cast a disposition deferred until after death — a bequest — in the form of a sale. Since this bears upon the rights of others, the civil codes — the Egyptian Civil Code and the Civil Transactions Law of the Kingdom of Saudi Arabia among them — have laid down a particular rule for it, as Islamic law has done before them.

Ibn al-Qayyim writes in I'lam al-Muwaqqi'in that among the void stratagems is this: where a man wishes to single out some of his heirs for part of the inheritance, knowing that a bequest to an heir is not permitted and that a gift made during his final illness counts as a bequest, he says that he had given him such and such while in health, or acknowledges a debt owed to him so that it takes precedence. This is void. An acknowledgment made during a final illness is invalid, in the view of the majority, because of the suspicion attaching to it; indeed Malik rejects it even in favour of a stranger where suspicion appears, and his view is the sound one.

The concealed bequest

Article 917 of the Egyptian Civil Code provides that "where a person makes a disposition in favour of one of his heirs and retains, by whatever means, possession of the thing disposed of and his right to enjoy it for the whole of his life, the disposition is treated as deferred until after death and the rules of bequest apply to it, unless evidence to the contrary is adduced". Article 648 of the Civil Transactions Law provides that "where a person makes a disposition in favour of one of his heirs and retains possession of the thing disposed of and the right to enjoy it for the whole of his life, the disposition is treated as deferred until after death and the rules of bequest apply to it, unless evidence to the contrary is adduced".

The Egyptian Civil Code and the Civil Transactions Law follow Islamic law in providing that a bequest takes effect only within one third of the estate, and have drawn from this a number of questions, among them the deceased's concealment of a bequest in a legal form, which converts it into a bequest taking effect only within the limit of one third of the estate once a presumption to that effect is made out.

The presumption of a concealed bequest

A presumption may be legal, that is, contained in a text of the law; or judicial, drawn by the trial judge from the circumstances of the dispute. Most often it is simple, that is, rebuttable. Such is the presumption contained in Article 917 of the Egyptian Civil Code and Article 648 of the Civil Transactions Law. Those articles contain not legal rules but a rebuttable legal presumption: once the party relying on it proves its elements, he is relieved of proving what the presumption indicates, and the burden passes to his opponent to prove the contrary.

The effect of this presumption, as set out above, is that an heir impugns his predecessor's disposition as concealing a bequest and relies on what has been provided, namely:

a disposition in favour of one of the heirs, with the disposer retaining, by whatever means, possession of the thing disposed of and his right to enjoy it for the whole of his life

He must in that case prove the elements of that presumption, establishing that his predecessor retained possession of the thing disposed of and retained his right to enjoy it for the whole of his life. Once he does so, his predecessor's disposition is treated as concealing a bequest, and he is not required to prove that, since it is the presumption that has indicated the truth of the disposition. As the presumption is rebuttable, the transferee may prove the contrary and show that the disposition was immediate and not deferred until after death; if he succeeds, the action must be dismissed. If he does not, the disposition reverts to its true character and is governed by the rules of bequest.

The conditions of the presumption of a concealed bequest

The Egyptian Court of Cassation has held — it being settled in the rulings of this Court — that the effect of Article 917 of the Civil Code is that the legal presumption there laid down arises only where two conditions are joined: that the disposer retained possession of the thing disposed of, and that he retained his right to enjoy it, both being retained for the whole of his life.

It is not enough for this presumption that the disposer in fact enjoyed the thing until his death, without that enjoyment resting on a legal position conferring on him a right of which he could not be stripped. Cassation, 2 April 1985, appeal 1901, year 51.

The Court has also held that the trial judge has the power to verify whether the two conditions are met, so as to ascertain the true character of the contract in dispute and to inquire into the disposer's intention, under the circumstances of the action surrounding it, so long as he has justified his conclusion in this respect by what leads to it. Cassation, 17 December 1973, appeal 8, year 38.

One: possession of the thing for life

By this condition is meant that the disposer retained, by whatever means, possession of the thing disposed of for the whole of his life, and that his possession was possession as principal on his own account. It is not required that the possession be material, by his own hand upon the thing: legal possession, with its moral element, suffices, even where the material possession is another's, such as a lessee's.

Two: enjoyment of the thing for life

For the presumption of Article 917 of the Egyptian Civil Code to arise, there must first be possession of the thing for life, as we have said, and second enjoyment of it for life. That is, the disposer must remain in enjoyment of the thing over which he made the legal disposition — by sale, gift or the like — for the whole of his life, and must rest in that upon a right of which the transferee cannot deprive him. The court draws the existence of that right from the presence of the two conditions of the presumption. For a bequest is a disposition deferred until after death, which bars the transferee from requiring the testator to carry out the bequest by transferring ownership of the thing bequeathed to him, such a request being bound to be refused. The testator thus rests his enjoyment of the thing upon a right of which the transferee cannot deprive him, and this reveals the truth of the transaction: that it conceals a bequest, and is not a transaction complete in its elements.

The Egyptian Court of Cassation has held that "what is meant by enjoyment under Article 917 of the Civil Code is that the disposer's enjoyment of the thing for the whole of his life rests upon an established right of which the transferee cannot strip him; and this is achieved either by his stipulating a right of usufruct and a prohibition on disposing of the thing, or by a lease for life, or by some similar means. It is therefore not enough for the presumption to arise that the disposer retained possession and enjoyment on another's account, even for the whole of his life, since the right of enjoyment would in that case be established for that other; nor is it enough that the disposer in fact enjoyed the thing until his death without resting that enjoyment upon a legal position conferring on him a right to enjoy it." Cassation, 25 February 1963, appeals 459 and 471, year 26.

Once the two conditions are met, the disposition is treated as deferred until after death and governed by the rules of bequest. The court draws them from the evidence before it, whether the testimony of witnesses or documents. It does not rely in this on the terms of the contract: so long as the contract is impugned for simulation, that simulation is not established or negatived from its own terms. The contract may contain what indicates that it was immediate and the court may nonetheless hold it simulated, without thereby departing from the documents, as the Court of Cassation has held.