Maliks Muwatta Book 036, Hadith Number 013C.

Section : Judgement on Pledging Animals as Security.

Yahya said that he had heard Malik say, "The undisputed way of doing things in our community concerning pledges is that in cases where land or a house or an animal are known to have been destroyed whilst in the possession of the broker of the pledge, and the circumstances of the loss are known, the loss is against the pledger. There is no deduction made from what is due to the broker at all. Any pledge which perishes in the possession of the broker and the circumstances of its loss are only known by his word, the loss is against the broker and he is liable for its value. He is asked to describe whatever was destroyed and then he is made to take an oath about that description and what he loaned on security for it. "Then people of discernment evaluate the description. If the pledge was worth more than what the broker loaned, the pledger takes the extra. If the assessed value of the pledge is less than what he was loaned, the pledger is made to take an oath as to what the broker loaned and he does not have to pay the extra which the broker loaned above the assessed value of the pledge. If the pledger refuses to take an oath, he has to give the broker the extra above the assessed value of the pledge. If the broker says that he doesn't know the value of the pledge, the pledger is made to take an oath on the description of the pledge and that is his if he brings a matter which is not disapproved of."

Malik said, "All this applies when the broker takes the pledge and does not put it in the hands of another."