Legal Definitions - titulo lucrativo, qui titulus est post contractum debitum

Titulo lucrativo, qui titulus est post contractum debitum refers to a legal principle concerning the transfer of property or assets. It describes a situation where someone receives an asset without paying for it (a "lucrative title," meaning it's a gain or gift, not a purchase for equivalent value) and this transfer occurs after the person making the transfer has already incurred debts. This concept is often relevant when creditors challenge such transfers, suspecting they might have been made to avoid paying outstanding obligations.

Here are some examples to illustrate this concept:

• Example 1 (Individual Asset Transfer): Imagine a person named Alex who has accumulated significant credit card debt and personal loans totaling $75,000. After these debts are established and he is struggling to make payments, Alex decides to gift his valuable vintage motorcycle, worth $40,000, to his nephew, Ben, for no monetary consideration. Alex's creditors might later challenge this transfer.

  This illustrates "titulo lucrativo, qui titulus est post contractum debitum" because Ben received the motorcycle by a lucrative title (as a gift, without paying for it). This transfer occurred post contractum debitum because Alex had already incurred his $75,000 in debts *before* gifting the motorcycle. The creditors could argue that Alex transferred the asset to prevent them from seizing it to satisfy his outstanding obligations.

• Example 2 (Business Context): A small construction company, "BuildRight Inc.," takes out a large bank loan of $1 million to fund a new project. Shortly after securing this loan and before the project begins to generate revenue, the company's owner transfers a valuable piece of heavy machinery, essential for the business and worth $200,000, to a separate, newly formed company he also owns, for a nominal fee of $100. BuildRight Inc. subsequently defaults on its loan.

  Here, the new company acquired the machinery by a lucrative title because the $100 payment is not equivalent to the machinery's true value, making it effectively a transfer without fair consideration. This transfer happened post contractum debitum as it occurred *after* BuildRight Inc. had taken on the $1 million bank loan. The bank, as a creditor, could challenge this transfer, alleging it was an attempt to move a valuable asset out of BuildRight Inc.'s reach after the debt was incurred.

• Example 3 (Estate Planning/Potential Liability): Sarah is involved in a serious car accident and is facing a potential lawsuit for damages that could exceed her insurance coverage. While the lawsuit is pending and before any judgment is rendered, Sarah decides to transfer ownership of her beachfront condo, valued at $500,000, to her adult son, Mark, as an "early inheritance."

  Mark receives the condo by a lucrative title because it was given to him as a gift, without him providing any payment or equivalent value. This transfer took place post contractum debitum because Sarah had already incurred the potential liability from the car accident and impending lawsuit *before* gifting the condo. If the lawsuit results in a judgment against Sarah that she cannot otherwise pay, the plaintiff might argue that this gift was an attempt to shield her assets from a future claim.