by the pledgor and pledgee that possession has been taken would extinguish the rights of others. For the pledgor may be declared bankrupt, in which case his subsequent acknowledgment that possession had been taken would not be accepted.

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If the pledge were found in the pledgee’s possession after the declaration of bankruptcy, and he claimed to have taken possession before that declaration while the creditors denied this, the matter would be subject to the same disagreement as a charitable gift found in the recipient’s possession after the donor’s death, when the recipient claims to have taken possession while the donor was in good health. Al-Mudawwanah contains evidence for both positions. If, however, no rights of the creditors were involved, the pledgor would have to be believed, and his acknowledgment that the pledgee had taken possession would be accepted. By virtue of that acknowledgment, the pledge would serve as evidence supporting the pledgee’s claim up to its value.

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There is disagreement concerning liability for a pledge that perishes in the pledgee’s possession without his having caused its destruction. One group of scholars said: If the pledge equals or exceeds the debt in value, its loss discharges the debt secured by it. If its value is less than the debt, an equivalent amount of the debt is discharged, and the pledgee may recover the outstanding balance from the pledgor.

Another group said that the loss of the pledge discharges the debt secured by it, whether its value equals, exceeds, or falls short of the debt, and neither party may recover anything from the other.

A further group said that whichever party is owed the difference may recover it from the other: if the debt exceeds the value of the pledge, the pledgee may recover the difference from the pledgor; if the pledge’s value is greater, the pledgor may recover from the pledgee the amount by which its value exceeds the debt. This position is reported from Ibn ʿUmar and ʿAlī ibn Abī Tālib—may Allah be pleased with them both.

Mālik—may Allah have mercy on him—held that if the pledge is something that can be concealed and whose destruction may remain unknown, such as gold, silver, merchandise, food, or other goods, whichever party is owed the difference may recover it from the other. An exception is where evidence establishes that it perished without the pledgee having caused its destruction: in that case, the loss is borne by the pledgor, and the debt remains due in full. It has also been reported from Mālik—may Allah have mercy