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Shabbat Parashat Vayeitzei 5781

P'ninat Mishpat: Losses from Financially (and Morally) Bad Loans part II

(based on ruling 75001 of the Eretz Hemdah-Gazit Rabbinical Courts)

Case: The plaintiff (=pl) and the defendant (=def) were the primary players in a business (=bus) that provided large, high-risk, high-interest loans (=bor); pl ran the business, and def was the silent owner. Bus advanced cash at interest rates of up to 8% monthly in return for much higher post-dated checks. After its own initial investment of funds, bus received cash from another business (=sup) to whom they gave those checks for a lower rate (2.1%) of interest (bus’s profits were from the margin); pl and/or def served as cosigners to sup. Pl got some borrowers to give cash instead of honoring the checks, even when their checks were already given to sup. Several of the borrowers have defaulted, bus has closed, and pl and def now owe sup and other investors many hundreds of thousands of NIS. Pl demands the following: 1. To be released from debts as a cosigner to sup (441,000 NIS) and Mr. P. (400,000 NIS), because he was improperly pressured. 2. To have money he and his mother invested (350,000 NIS) and expenses he outlaid for bus (149,000 NIS) returned. 3. Back-pay for months of work. Def claims that pl caused great losses by surpassing the amount of credit def agreed to, especially for some very large loans. Pl admitted in discussion with Mr. P, who mediated, that he should pay for much of the losses (1.25M NIS plus interest). Def claims to have not promised pl a salary, just 15% of profits.    

 

Ruling: [Last time we criticized the taking of high interest and determined that pl can be held responsible for unauthorized lending and was deserving of salary.]

During the mediation attempts of Mr. P., who invested 900,000 NIS in bus, pl took responsibility for 600,000 NIS of losses. In general, when one singles out witnesses for an admission or it is done in a serious setting such as a beit din, he is held to it (see Shulchan Aruch, Choshen Mishpat 81). There is a machloket Rishonim whether admission in front of one is also valid. The Shulchan Aruch (ibid. 10) rules that it is valid, but the Shach (ad loc. 22) says that one can prevent extraction of money based on the other opinion (kim li). Thus, while there is not a full status of admission, that which was said before Mr. P., which was also recorded, is significant.

Pl claims that his openness to obligation was based on a mistake. In general, admission is fully impactful regarding facts, but when the actual obligation depends on not simple legal/ halachic considerations, the admitter is not assumed to necessarily know the halacha. In general, if one can demonstrate that his admission was based on a mistake, he is not bound by it (Shulchan Aruch ibid. 20). In this case, pl says that had he known the extent to which def was aware of all the loans and took steps to cover himself by working on liens for some of the big loans, he would not have seen himself as responsible. Therefore, we will take the facts agreed upon with Mr. P. as accepted, but not fully accept as binding all responsibility pl accepted then.

We conclude next time.

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Dedication

We daven for a complete and speedy refuah for:

Nir Rephael ben Rachel Bracha
Rivka Reena bat Gruna Natna

Vicki Victoria bat Daisy

Yishai ben Tamar

Meira bat Esther

Orit bat Sarah

Together with all cholei Yisrael

 

Hemdat Yamim is dedicated

to the memory of:

Those who fell in wars

for our homeland

 

Eretz Hemdah's beloved friends

and Members of

Eretz Hemdah's Amutah

 

Rav Shlomo Merzel z”l
Iyar 10 5771

 

Rav Reuven Aberman z"l

Tishrei 9 5776

 

Mr. Shmuel Shemesh  z"l
Sivan 17 5774

 

Mr. Moshe Wasserzug z"l

Tishrei 20 5781

 

R' Eliyahu Carmel z"l

Rav Carmel's father

Iyar 8 5776

 

Mrs. Sara Wengrowsky

bat RMoshe Zev a”h.

Tamuz 10 5774

 

Rav Asher Wasserteil z"l

Kislev 9 5769

 

R'  Meir ben

Yechezkel Shraga Brachfeld z"l

&

Mrs. Sara Brachfeld z"l

Tevet 16 5780

 

R'  Yaakov ben Abraham & Aisha

and

Chana bat Yaish & Simcha

Sebbag, z"l

 

Rav Yisrael Rozen z"l
Cheshvan 13 5778

 

Rav Benzion Grossman z"l
Tamuz 23 5777

 

Rav Moshe Zvi (Milton)

Polin z"l

Tamuz 19 5778

 

R' Abraham Klein z"l

Iyar 18 5779

&

Mrs. Gita Klein z"l

4  Av

 

Hemdat Yamim
is endowed by Les & Ethel Sutker
of Chicago, Illinois
in loving memory of
Max and Mary Sutker

 

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