Obligations of a guarantor in halacha

Rabbi Max Sutton, Rosh Bet Din Aram Soba in Jerusalem, published an article in the May 2010 issue of Community on the halachot of loan guarantors and sureties.  Rabbi Sutton writes:

There are two basic types of guarantee arrangements. The first is known as an ordinary guarantor (arev). An ordinary guarantor is a third party that agrees to be responsible for a debt only if the principal debtor defaults. Hence, the creditor is required to attempt to collect from the debtor, and only after he fails to pay is the guarantor held responsible. The second type of a guarantee relationship is known as a surety-ship (arev kablan). This arrangement enables the creditor to demand payment from either the debtor or the surety, whichever he chooses. The creditor need not exhaust any legal remedies against the principal debtor before holding the surety responsible for payment. Even if the debtor can make payment, the creditor has the right to collect from a surety the moment the debt is due. Once the debt is paid by either a guarantor or a surety, they may then pursue all legal remedies to collect from the debtor the money they laid out to the creditor on his behalf.

The article presents three cases which illustrate the following difficulties:

1. Where the creditor made multiple loans, only some of which were guaranteed, how are partial payments by the debtor allocated between the loans?
   
2. Where there are multiple guarantors for a single loan, how are partial payments by the debtor allocated between the remaining obligations of the guarantors?
   
3. Are oral guarantees enforceable?

After discussing the issues, Rabbi Sutton concludes by summarizing the Bet Din’s ruling on each case.  The full article can be read here.

Arkaos: Litigation in non-Jewish courts

In an earlier post I discussed a teshuvah of Rav Ovadiah Yosef as to whether a non-yoresh (e.g., a daughter if the decedent leaves a son and a daughter) may claim a portion of an estate in court under local law. After summarizing Rav Ovadiah Yosef's ruling that dina demalchuta dina does not apply, I wrote the following:

The remainder of the teshuvah addresses the serious prohibition of litigating disputes in non-Jewish courts (See Rambam, Yad Hachazakah, Sanhedrin 26:7). Rav Ovadiah Yosef writes that this applies even if the results under halacha and civil law are the same, and even if the decedent instructed his children to resolve the estate under a civil court’s jurisdiction. In a lengthy footnote, he writes that it is also prohibited to appear before a Jewish judge who will apply secular law – in fact, in such cases the disregard for the Torah is even more pronounced.

One reader objected that although I provided a citation to the Rambam, I did not quote him in context. So here it is in full, with my approximate translation, and a few comments:

כל הדן בדייני עכו"ם ובערכאות שלהן אע"פ שהיו דיניהם כדיני ישראל הרי זה רשע וכאילו חרף וגדף והרים יד בתורת משה רבינו שנאמר ואלה המשפטים אשר תשים לפניהם לפניהם ולא לפני עכו"ם לפניהם ולא לפני הדיוטות. היתה יד העכו"ם תקיפה ובעל דינו אלם ואינו יכול להוציא ממנו בדייני ישראל יתבענו לדייני ישראל תחלה. אם לא רצה לבא נוטל רשות מבית דין ומציל בדיני עכו"ם מיד בעל דינו

One who litigates before non-Jewish judges or in their courts, even if their laws correspond to Jewish law, is an evil person, and it is as though he blasphemed God and raised his hand (in arrogance) against the Torah; for it says, "And these are the laws that you should place before them" -- before them (i.e., the elders of Israel), not before non-Jews; before them, not before judges who are not ordained.

When under non-Jewish rule, if one's adversary is powerful and will not cooperate with a ruling of a Bet Din, he must first attempt to sue his adversary in Bet Din. If his adversary refuses to appear in Bet Din, he may obtain the Bet Din's permission and sue in non-Jewish court.

The Rambam's source is Gittin 88b, which derives the prohibition from the pasuk quoted by the Rambam, "ואלה המשפטים אשר תשים לפניהם" -- "and these are the laws you should place before them." Interestingly, however, the Gemara does not compare litigation in non-Jewish courts to blasphemy and high-handedness, and the commentators on the Rambam do not point to the Rambam's source for such strong condemnation.

The language the Rambam uses appears to be derived from the following pesukim, said with regard to idolatry:

וְהַנֶּפֶשׁ אֲשֶׁר תַּעֲשֶׂה בְּיָד רָמָה מִן הָאֶזְרָח וּמִן הַגֵּר אֶת ה הוּא מְגַדֵּף וְנִכְרְתָה הַנֶּפֶשׁ הַהִוא מִקֶּרֶב עַמָּהּ
כִּי דְבַר ה' בָּזָה וְאֶת מִצְוָתוֹ הֵפַר הִכָּרֵת תִּכָּרֵת הַנֶּפֶשׁ הַהִוא עֲוֹנָה בָהּ

A person who shall act high-handedly, whether native or convert, he blasphemes God; that person shall be cut off from among his people, for he scorned the word of God and broke His commandments; that soul shall surely be cut off, its sin is within it. (Bemidbar 15:30-31)

The similarity between our subject and intentional idolatry is apparent in the reason provided for the punishment -- "for he scorned the word of God." Clearly, the Rambam does not mean that litigating in a non-Jewish court is a transgression as serious as idolatry -- it is not explicitly prohibited by the Torah and it does not carry the same punishment as idolatry. Nevertheless, by resolving a monetary dispute outside of the system of the Torah one turns his back on the Torah's system of justice.

Another point worth mentioning along these lines: Rashi in Mishpatim cites a Midrash which states that we learn from the proximity of the laws of the altar to monetary laws that during the time of the Temple, the Sanhedrin were to be situated near the altar. Keli Yakar in Mishpatim discusses at great length the conceptual relationship between the altar and justice. Such connections also seem to indicate that a litigant's abandonment of the Sanhedrin by resorting to non-Jewish courts is on some level also an abandonment of the altar, reinforcing the Rambam's comparison of litigation in non-Jewish courts to idolatry and blasphemy.

The Rambam writes that one may only bring suit in non-Jewish courts if his adversary refuses to appear in bet din, and after obtaining bet din's permission. There may be other exceptions that should be discussed if and when they arise, such as bringing suit to recover against a defendant who is insured -- the insurance policy would be unavailable in bet din, and any chillul Hashem may be mitigated by the understood objective of the lawsuit.

So why is it that there are so many reported cases involving Orthodox Jewish litigants fighting their battles in state and federal courts? If there is a heter that I'm not aware of, I hope someone clues me in. If it's out of ignorance, then more people need to read this blog, because we do occasionally raise the issue.

We posted on HAFTR's appeal of a Bet Din award to a teacher. Right or wrong (and the Appellate Division said HAFTR was wrong), HAFTR had, so far as I can tell, no business seeking to have a bet din award vacated in state court.

I have no idea how the Satmar factions justify their drawn-out legal battles in state court. As I noted in a comment to Avrohom's post on a recent decision in the Satmar litigation, something is seriously wrong when the chillul Hashem rises to the level that a state court judge feels compelled to write:

This is an enormously difficult case, involving as it does a bitter battle between two factions whose differences are extremely hard for outsiders to understand. It has produced, as Justice Barasch tells us in an epilogue to his opinion, attempts by people claiming allegiance to one faction or the other "to discredit, intimidate and improperly influence" the Supreme Court, with the result "that there are judges who would prefer to decline any assignment involving members of this group of litigants" (5 Misc 3d 1023[A], 2004 NY Slip Op 51515[U], *13, *14). I join Justice Barasch—as, I am sure, do all my colleagues—in saying that this behavior is intolerable, and in expressing the hope that the proper authorities will deal with it.

Just the other day, Judge Demarest of the Brooklyn Supreme Court issued an opinion of great interest that we'll hopefully get to soon.

The Importance of Custom, Usage and Course of Conduct in Jewish Monetary Law

This week's Parsha email from the Bais HaVaad Institute of Talmudic Law includes a brief discussion of the concept that Jewish Law recognizes the accepted business of the time a place and place in which a transaction occurs.

In Choshen Mishpat 201:1-2, the concept of situmta is explained. A situmta was a kind of mark placed on a barrel of wine by a customer indicating his irrevocable agreement to the purchase of the barrel. That was the prevalent custom in the wine industry back then, similar to the way saying "mazel and bracha" finalizes a sale in the New York diamond trade. While making a situmta should have no real halachic significance because it is not one of the methods of acquiring an object recognized by the Torah, in reality, it has a great deal of significance. In fact, a customer who makes a situmta actually becomes the halachic owner of the barrel!

The concept of situmta is probably the best example that can be brought to illustrate the importance that Jewish monetary law places on the prevailing understandings and customs of the marketplace. A situmta creates halachic ownership solely because that is how people think of it. The Torah understands that any marketplace transaction is fundamentally shaped by the underlying assumptions and operating principles of the people who are making the transaction. Therefore, if the custom is to consider a situmta to be legally binding, then it is as if the Torah says, 'So be it.'

Wild salmon debate

In connection with the debate over the kashrut of wild salmon, Rabbi Gil Student has an interesting post outlining three possible approaches to halacha when current scientific knowledge appears to contradict the scientific premise of settled halacha. The article can be read here.

Opinion of Rav Ovadiah Yosef on yerushah and intestacy

Rav Ovadiah Yosef, in his collection of responsa, Yehaveh Daat, volume 4, responsum 65, addresses the following question: May a family member who is not a yoresh (halachic heir), but is legally entitled to a share of a decedent’s estate, claim a portion of the estate in civil court under the doctrine of dina demalchutah dina?

Before turning to his analysis, it should be noted that the teshuvah (responsum) involves the distribution of the estate of a decedent who died without a will. It does not address whether a will would be recognized by halacha or whether any halachic workaround, such as reliance on what the Rama refers to as “shtar chatzi zachar,” is appropriate.

I. Scope of Dina Demalchutah Dina

Source

The source for the doctrine of dina demalchutah dina (literally, “the law of the kingdom is the law”) is a Gemara (Gittin 10b) which discusses the validity of contracts executed in non-Jewish courts. The Gemara states that a contract that merely records the terms of an independent transaction is valid and is admissible as evidence in halacha. However, there is a disagreement as to the validity of a contract that effectuates a transaction. One opinion states that the Torah incorporates the law of the jurisdiction under the doctrine of dina demalchutah dina. A second opinion disagrees and holds that contracts executed in a non-halachic manner are not valid according to halachah.

Opinion of the Rambam

The majority of Rishonim, including Rif and Rambam, quote the latter opinion as halacha. They don’t entirely reject dina demalchutah dina, but limit its application to laws that directly benefit the government, such as taxes and customs, and not to the laws of private transactions or disputes. Shulchan Aruch codifies the halacha according to these opinions (Choshen Mishpat 68:1).

Opinion of the Ramban

Other Rishonim, including Ramban, Rashba and Rosh, disagree. They hold that civil laws enacted for good of the general population are recognized by halacha in private transactions. Rama (Ch.M. 68:1) cites this opinion as halacha.

II. Halacha

Rav Ovadiah Yosef, applying strict adherence to the opinion of Shulchan Aruch, writes that the accepted halacha (at least for Sepharadim) is that dina demalchutah dina only applies to tax and other fiscal laws, but not to laws regulating transactions or disputes between private parties. Therefore, halacha does not recognize the legal inheritance rights of a legal heir who is not a yoresh.

Rav Ovadiah Yosef continues – even according to the opinions cited by the Rama, that civil laws are generally recognized by halacha, the doctrine of dina demalchutah dina does not apply to the laws of inheritance. Civil laws are recognized by halacha only if the Torah is neutral on the subject of the law. Dina demalchutah dina does not apply if the local law contradicts halacha. As the Rama writes, “otherwise all of the laws of Israel will be nullified.”

The Bet Yosef quotes a teshuvah of the Rashba in this regard. The Rashba was asked to rule on a dispute over the estate of a deceased woman. The woman’s surviving husband claimed that pursuant to halacha he inherited the assets she had brought into the marriage. The woman’s father claimed that under local law those assets were to be returned to him, and that local law should apply under the doctrine of dina demalchutah dina.

The Rashba wrote that uprooting the laws of yerusha by relying on dina demalchutah dina effectively uproots all of the laws of the Torah. If dina demalchutah had priority over the laws of the Torah, he said, then we would have no need for the Mishnah and Talmud; we would simply teach and apply the law of the land in every situation.

III. Litigation in non-Jewish courts

The remainder of the teshuvah addresses the serious prohibition of litigating disputes in non-Jewish courts (See Rambam, Yad Hachazakah, Sanhedrin 26:7). Rav Ovadiah Yosef writes that this applies even if the results under halacha and civil law are the same, and even if the decedent instructed his children to resolve the estate under a civil court’s jurisdiction. In a lengthy footnote, he writes that it is also prohibited to appear before a Jewish judge who will apply secular law – in fact, in such cases the disregard for the Torah is even more pronounced.

IV. Conclusion

Rav Ovadiah Yosef concludes that it is forbidden for the non-yorshim to appear in secular court to claim a portion of the estate. If the yorshim wish to share the estate with the non-yorshim, they should execute halachic transfers under the supervision of a bet din.

Rabbi Max Sutton on contract performance

Rabbi Max Sutton, Rosh Bet Din Aram Soba in Jerusalem, published an article, "Time is Money," in the February 2010 issue of Community. Using cases that have come before the bet din, the article discusses the halachot of contract performance, the duty to inspect merchandise, and the timeliness of objections to incomplete performance.

Rabbi Sutton writes:

In the world of business, the element of time plays a crucial role. Generally, two parties engaged in a business deal specify the time period allowed for performance. Even when no definite time period is stipulated, an agreement can be terminated after a reasonable amount of time due to non-performance. What constitutes a reasonable amount of time depends on the circumstances and nature of the agreement. Time limitations also apply to buyers seeking to return merchandise after discovering a defect. The following cases and their verdicts display the ability of Torah Law to resolve complex time-related situations accurately and fairly.

Halachic Wills & Estates Conference 2/3/10

The Bais HaVaad Institute of Talmudic Law announced that the fifth telephone/video conference in its Halachic Wills & Estates Series will be held on Wednesday, February 3, 2010, 8:30 PM EST. The topic of the conference is "How to Write a Halachic Will," to be presented by Rav Ari Marburger, Dayan Bais Din Maysharim and author of Business Halacha: A Practical Halachic Guide to Modern Business.

Registration can be done through the Bais HaVaad's website (link).

Meaning of the word "Yerushah"

To follow on yesterday's post regarding Rav Yisrael Moshe Hazan's explanation of the word "nahalah," the following is from Dayan Dr. I. Grunfeld, The Jewish Law of Inheritance:

As to the inner meaning of the other word used by the Torah in connection with inheritance, namely ירושה (yerushah), R. Hazan is not quite sure. He suggests a theory, and expresses the hope that Hebrew linguists will support that theory. Yerushah, he thinks, is derived from the word רש (rash) meaning poor or dispossessed, and indicating the legal fact that after death a person can no longer dispose of his earthly goods which, with his last breath, are transferred instantaneously and automatically to his heirs.

The concept, again, is that yerushah is not a transaction or a voluntary transfer of property from the morish to the yoresh that one can control. The change in ownership is instantaneous, involuntary and happens entirely according to the dictates of the Torah, regardless of the wishes of the deceased.

Inheritance as a natural force in Halacha

In The Jewish Law of Inheritance, Dayan Dr. I Grunfeld discusses at great length the sefer Nahalah LeYisrael and its author, Rav Yisrael Moshe Hazan, the Chief Rabbi of Rome at around 1850. Dayan Grunfeld writes:

R. Hazan's work is one of the most brilliant expositions extant of the Jewish Law of Inheritance and its underlying principals and ideas. It starts by analysing the concepts nahalah and yerushah, both philologically and conceptually. The Hebrew word נחלה (nahalah) is derived from the word נחל (nahal), which means river or stream. A nahalah or inheritance cannot be compared to either a purchase or a gift. In both cases, prior to the legal transaction, the purchaser or donee had no claim or legal relationship whatsoever to the seller or the donor or the objects of the purchase or gift. In the case of nahalah, however, the relative, who is the legal heir according to the Torah, had a claim to the estate ever since he was born. His right to the estate is an original and natural one. The expression used by the author is זכות עצמית שיש ליורשים בגוף הנכסים מעיקרא, that the inheritance is an original right (not a derivative one) which rests on the body of the estate in favour of him who is the legal heir. At the moment of death of the one who transmits the inheritance, that original right flows like a river to the one who possessed it from the beginning. The original right of the heir has always been there, though dormant, and at that moment of death of the one who transmits the inheritance to the heirs, the dormant right revives. As R. Hazan points out in his work, the legal position which is inherent in the Hebrew word נחלה can be symbolically expressed by applying to it the biblical verse כל הנחלים הולכים אל הים, all the rivers run into the sea, the 'sea' being the legal heir to whom the inheritance flows by a natural process as a river flows into the sea.

This is a beautiful example of a Hebrew word carrying the essence of the concept it signifies.

The comparison of the right of yerushah to the natural force of a flowing river stands in sharp contrast to the "freedom of testation," the idea that one has the right to direct the disposition of assets upon death as he or she wishes.

Halachic Wills & Estates Series by the Bais HaVaad

The Bais HaVaad Institute of Talmudic Law is presenting a seven part internet lecture series on halachic wills and estates.

There are four remaining lectures, which will cover the following topics:

- How to Write a Halachic Will
- Trusts and Foundations
- Eldercare in Halacha
- Developmental Disabilities and Guardianships

The first two lectures -- The Torah's Outlook on Proper Estate Distribution and The Halachic Implications of a Civil Will, both presented by Rabbi Ari Marburger -- are available for download from the Bais HaVaad's audio library.

Estate Planning, Halacha and the Jewish Law of Inheritance

The question of whether wills are recognized by Halacha involves some of the fundamental concepts of Halacha (Jewish law) under a secular legal system. Rabbinic responsa regarding specific conflicts between the Jewish Law of Inheritance and the law of the land date back at least 700 years to a famous responsum by the Rashba (Rabbi Shelomo ben Aderet), and likely much earlier than that. The Halachic discussions continue today. One notable work dealing with the challenges of preparing a modern estate plan which conforms to Halacha is The Jewish Law of Inheritance, the final work by Dayan Dr. Isidor Grunfeld of the London Beth Din (Jewish court).

Here’s a quick overview of the issue:

There are two distinct questions regarding the Halakhic status of wills and trusts. First, are wills and trusts recognized as valid instruments by Jewish law? Second, if they are, or if estate plans can be made to be Halakhically valid, should they be used to leave property to someone other than those entitled to inherit under the Jewish Law of Inheritance?

Many, if not most, leading Halachic authorities throughout history consider a will to be an invalid document where it contradicts the order of succession laid out by the Torah. This is because both the will and the Jewish Law of Inheritance become effective at the same instant -- the moment the testator (the person making the will) dies. According to these opinions, the Jewish Law of Inheritance prevails and the will is ignored. In fact, according to many opinions, simply executing a will is prohibited as a diversion of assets from the rightful Halachic heirs (the Talmudic prohibition of ha’avarat nahala) in a manner enforceable in a secular court.

A common solution to the problem is for the testator to separately sign a note of indebtedness to the non-Halachic heirs in an amount in excess of the estate. The note states that the debt is satisfied if the halachic heirs accept the terms of the will, essentially forcing the Halachic heirs to choose between the will and the note, with the will obviously being the better alternative for the Halachic heirs. Halacha allows a debtor to create an enforceable debt without an underlying reason for the debt. The note probably has no validity in a U.S. court.

There are many other related Halakhic issues to deal with. Does dina demalkhuta dina (the law of the land is the law of the Torah), itself a complex question, apply to the Jewish Law of Inheritance? While one can distribute estate assets during life by giving gifts, according to many opinions such distributions may be limited to assets already owned by the person making gifts. Furthermore, regardless of whether the methods are Halachically sanctioned, at what point does providing for non-Halachic heirs rise to the level of diversion of assets?

I’d be happy to discuss this topic further, so long as it is understood that there are divergent opinions at every step of the way, and that one must consult a Halachic expert for a practical application of these laws.