Rambam - 3 Chapters a Day

A stated in several instances within the Mishneh Torah, the prevailing local custom is the foundation of all business dealings. It is considered as if the partners agreed among themselves to sell the article according to these and these conditions (Sefer Me’irat Einayim 176:31).

Although there is a chance that he may make a greater profit in the other place, he also runs the risk of the merchandise being damaged, destroyed or stolen during the journey.

See Chapter 7, Halachah 7.

For giving credit is always a risk, and should not be undertaken without the consent of the other partner (Kessef Mishneh, based on Rabbenu Yerucham).

In such an instance, since this is the prevailing local custom, the partner’s consent is not required (Kessef Mishneh). There must, however, be a significant majority of people who extend credit for that to be considered significant. If some merchants extend credit and some require cash, all partners must consent before extended payments can be offered [Ramah (Choshen Mishpat 176:10).]

See Sefer Me’irat Einayim 176:34, which states that the partner must explicitly consent. Silence is not accepted as consent.

By acknowledging his consent, the colleague waives any claim he has against his partner (Kessef Mishneh).

For a kinyan is not necessary to formalize a colleague’s agreement to waive a right that he possesses (Hilchot Mechirah 5:11).

Compare to Chapter 1, Halachah 5.

Although the partner who took the additional risk is required to suffer a loss alone, it is not considered as if the partnership is dissolved. Thus, if there is a profit, it should be split, for the money was made with the partnership’s assets.

This concept is necessary to state, because one might think that the partner should be penalized for violating the rule stated in the previous halachah, that a partner may not occupy himself with other activities. Since he entered into another partnership, he will surely be involved in that business to a certain extent and will not be able to devote his energies to the first partnership, as desired by the other partners (Kessef Mishneh).

This refers to a heter iska arrangement (see the following chapter), in which one colleague invests money and the other does the work required.

From his own funds. and not funds belonging to the partnership. We do not fear that his personal interest in the same produce will cause him to disregard the partnership’s interests (Kessef Mishneh).

Lest the produce he bought for himself be of slightly lesser quality, and selling the two lots together drag the entire price down (ibid.).

The Turei Zahav (Yoreh De’ah 177:42) and the Siftei Cohen (Yoreh De’ah 177:65) interpret this clause as follows. As will be explained in Chapter 6, half of the money invested in a heter iska is considered as an entrusted object belonging to the investor, and half as a loan granted to the person handling the investment The person handling the investment should not purchase barley with the portion of the money that is an entrusted object, and wheat with the portion that is a loan.

Our translation is based on the commentary of the Kessef Mishneh, which explains that the intent is that if a loss is suffered, it should be suffered by both equally. He questions, however, why the Rambam mentions only a loss and not a profit. He notes that there are other versions of the text, which state bichavilah (“in the same package”), rather than bichabalah (“in case of loss”). He explains that in this way, one will not be more bulky than the other. Kin’at Eliyahu interprets bichavilah as meaning “in the same portfolio” – i.e., that it will be dealt with as one investment.

The Netivot HaMishpat, Chiddushim 176:35 explains that if the place to which the first partner desires to bring the merchandise is close to his locale, and he is willing to accept the entire risk, he is allowed to take the merchandise there.

Since this is the accepted time for the sale of this type of produce, it is considered as if a stipulation has been made for it to be sold at that time.

Since this is not the common practice, the partner’s consent is necessary.

Unfair gain. See Hilchot Mechirah, Chapters 12 and 13, which explain that if the difference between the value of an article and the price paid for it is one sixth, the sale is binding but the difference must be returned. If the difference is more than one sixth, the sale is nullified. In this situation, if the difference between the appraisal and the value of the produce was more than a sixth, the partnership is nullified.

One might think that the partners would waive any claims against each other even if the appraisal was not correct. Therefore, the Rambam teaches that this is not the case, and the evaluation must be fair.

Since the produce was mixed together before it was evaluated, one might think that the partners would certainly waive any claims against each other. Nevertheless, as the Rambam states, this is not the case, and each one is given an appropriate share (Sefer Me’irat Einayim 176:13).

According to the Shulchan Aruch (Choshen Mishpat 178:1), this applies even if one of the partners asks the customs collectors to waive the fee. This is evident from the second clause in this halachah.

According to Sefer Me’irat Einayim 178:1, this applies only when the customs collector makes that statement on his own initiative.

The Rambam’s ruling here echoes his statements in Hilchot Gezelah 12:10.

For all the profits from the efforts of the partners on behalf of the merchandise in the partnership are shared equally.

As the Rambam explains in Hilchot Gezeilah, with this statement he is considered to have dissolved the partnership. Since the other partner did not endeavor to save his share of the merchandise, we assume that he despaired of its recovery. Hence, the partner who saved it is able to acquire it for himself. The Tur and the Ramah (Choshen Mishpat 181:2) differ and maintain that if the other partner could also have saved the property, more stringent rules apply. The partner who saved the property may keep the entire share of the merchandise that belongs to him. Any merchandise that belongs to the other partner must be returned to him, even if the partner who saves the property intends to take it for his own.

By people at large.

This applies even if the article remained in the possession of the one partner for a significant amount of time [Shulchan Aruch (Choshen Mishpat 179:1)]. As long as the partnership continues, the article is assumed to be owned jointly, for we assume that partners are not demanding of each other (Sefer Me’irat Einayim 179:1). Once the partnership is dissolved, however, this principle no longer applies, and the partner who is in physical possession of the article is considered to be its owner unless it is proved otherwise (Kessef Mishneh; Ramah).

The partner in whose domain the article is located may seek to claim it as his own, protesting that that since it is in his possession, his claim should be accepted as true unless proved otherwise by the other partner. We do not accept this argument, because the article in question was known to belong to the partnership, and the fact that it is in his physical domain is therefore of no consequence.

I.e., witnesses who testify according to his position (Kessef Mishneh).

See Chapter 4, Halachah 4, for details regarding when the partnership may be dissolved.

For three people are considered a Rabbinical court.

These criteria are required because in this instance, there is no question of Torah law that must be decided. Instead, the matter concerns the division of property, and what is most important is that the person be capable of evaluating the property’s worth, and trustworthy so that there will be no deception.

It is as if the partnership were never dissolved. Therefore, if he profited on his investment, both panners share in the gain. Similarly, there are opinions that maintain that even if he invests the money and suffers a loss, the partnership must share the loss. See Tur and Ramah (Choshen Mishpat 176:18).

That the division must be made in the presence of three people.

For the quality of produce is dependent on many factors and requires an expert to evaluate. The same applies to any other type of merchandise.

For there is no need for an evaluation. All that is necessary is to divide the money physically.

For in this instance, the money also requires evaluation.

In Hilchot Avodat Kochavim 5:10, the Rambam states that this prohibition is a derivative of the commandment: “Do not make mention of the name of other deities.”
The Hagahot Maimoniot and the Ramah (Orach Chayim 156:1) state that in the present age, leniency can be granted. For in the present age, gentiles no longer swear in the name of false deities. Although they mention the name of their false deity, their intent is to refer to God, Creator of heaven and earth. Although they also associate Him with their false deity, shituf – the association of other entities together with God – is not forbidden to a gentile.
The difference between the Rambam’s ruling and the Ramah’s depends on their conception of the nature of Christianity. In several sources (e.g., the uncensored version of Hilchot Avodat Kochavim 9:4), the Rambam writes that Christianity is considered as idolatry. The Ramah, by contrast, rules more leniently concerning the matter. Seemingly, there would be no difficulty with regard to entering into partnerships with Arabs and others who do not worship false deities. In practice, in the present age, it is frequent – even within the Torah community – for partnerships to be established between Jews and non-Jews.
See also the Shulchan Aruch (Choshen Mishpat 176:51), which states that if one did enter into a partnership with a gentile and the latter is required to take an oath, that oath may be accepted.

See Hilchot Shemitah V’Yovel 6:1.

See Hilchot Bechorot 5:9.

See Hilchot Ma’achalot Asurot 8:16.

See Hilchot Terumah 12:21.

For the money was made with the partnership’s assets.

This expression indicates a conclusion reached by the Rambam for which he does not have explicit support from other sources.

And violated our Sages’ directives. Since doing business with these substances is forbidden, it is considered as if the person departed from normal business practices and thus is required to bear the burden of the loss himself (Sefer Me’irat Einayim 176:39).

Sefer Me’irat Einayim 176:50 explains that both partners have the right to tem1inate the agreement. The surviving partner can say that he was prepared to enter into a partnership with the deceased because he thought that he was a successful businessman, but did not hold that opinion regarding his heirs. The heirs can say that although their father was prepared to do business with the surviving partner, the prerogative is now theirs, and they do not desire to do so.

Who agreed to give the second person a share in the profits because of his professional or business skills.

In contrast to the investment agreement to be discussed, neither partner must be paid a wage. Since they both invest money and work, there is no question of interest involved.

The point of the halachic construct discussed in this chapter - a heter iska - is to enable a person to profit from a business investment with a fellow Jew without transgressing the prohibition against taking interest. For the investor is giving money and receiving more money in return. To prevent that from being considered interest - or even “the shade of interest” - our Sages developed the convention that the Rambam describes.

The Kessef Mishneh notes that in the following halachah, the Rambam adds the phrase “and they made no stipulations between themselves.” Implied is that our Sages ordained these guidelines only when the partners did not come to an agreement beforehand. If they established a partnership arrangement regarding the division of the profits and the losses, it should be followed as long as there is no question of interest involved.

As is the case with regard to any loan. If a profit is made, the profit from this half of the investment may be kept by the administrator - and if a loss is suffered, the administrator must pay for this portion of the loss.

I.e., the administrator is not held liable.

I.e., his liabilities are those of an unpaid watchman. The Ra’avad objects to this ruling, asking: Why – since he receives a wage for his services – is he not considered a paid watchman, who is liable under such circumstances?
In his Kessef Mishneh, Rav Yosef Karo resolves the question posed by the Ra’avad, explaining that the administrator is not receiving a wage for guarding the object, but for doing business with the money of the partnership. Nevertheless, in his Shulchan Aruch (Yoreh De’ah 177:5), he quotes the Ra’avad’s view.

A Rabbinic prohibition enacted as a safeguard for the Scriptural prohibition. According to Scriptural Law, interest is prohibited only when at the time of the loan, a specific amount or percentage was stipulated to be paid as interest. Our Rabbis, however, extended the extent of this prohibition to include other situations where a person received profit. See Hilchot Malveh V’Loveh, Chapter 6.

Since he is being paid a wage for his services, he does not appear to be taking care of the portion entrusted to him in return for the loan of the second portion.

In his Commentary on the Mishnah (Bechorot 4:6), the Rambam explains the meaning of this term:
I have heard many interpretations, but none of them is satisfactory... This refers to a person who is capable and expert in his profession and thus worthy of earning a significant amount. [He] is not paid the sum given to such a worker, but rather that paid to an ordinary worker from this profession... This is the intent of the phrase “as a worker of the trade in which he is employed.’’
“As an unemployed worker of the trade in which he is employed” implies [a further reduction], dependent on the amount of toil or rest involved in performing that profession. For example, there are certain tasks that require strenuous labor - e.g., iron workers or hewers of marble. If a worker in such a profession were given the chance of performing this labor or resting, he would prefer to rest, even though he would receive much less.
Thus, according to the Rambam’s conception, the administrator must make two waivers. He must forfeit the additional money that he would earn if he is more skillful than the ordinary person in his profession. He must also consider it as if he is resting and give up the amount of his wage that he would sacrifice in order to rest.
The Kessef Mishneh quotes Rashi (Bava Metzia 68a), who interprets this as referring to the wage at which a professional of his degree of expertise would be willing to accept work that is easier and not as demanding as the profession in which he is ordinarily employed. He also cites the view of Tosafot and the Tur (Yoreh De’ah 177), which interprets the term as referring to the wage that would be demanded by a worker who is unemployed and would thus be willing to accept a lower wage than usual.
The Shulchan Aruch (Yoreh De’ah) quotes the Rambam’s wording without explaining the term. The Siftei Cohen 177:5 and the Turei Zahav 177:3 cite various different views.

The wording used by the Rambam implies even an occupation that is minimal in time and profit.

I.e., a minor sum.

Since he is not solely involved with caring for the investment, we need not consider the wage he receives for his efforts comparable to what a person would receive for a day’s work.

This extra amount is considered in place of his wage.

If, however, he does not have another occupation, he must be required to bear a lesser share of the loss, as stated in the following halachah.

The Kessef Mishneh interprets this as meaning another investment as the same type he is administering for the investor – in which instance, while he is caring for his own investment, he will also be caring for that of the investor. If, however, he has another profession that is not connected to the investment, it is of no consequence, and the investor must pay him a wage.

The Turei Zahav (Yoreh De’ah 177:7) explains that this refers to an instance when the partners ask how to make the division in the proper manner. If, however, the division was already made and then the administrator asks for his wage, he need not be paid anything more. Since the question does not involve interest as forbidden by Scriptural Law, the court is not empowered to act on the administrator’s behalf.

I.e., it is preferable for the investor and the administrator to come to an agreement between themselves with regard to the division of the profits and losses, that will al o acknowledge a portion due the administrator as his wage. If, however, this has not been done, our Sages set up these ground-rules so that there would be no que lion of interest involved.

One half plus one sixth equals two thirds.

The Rambam’s decision is based on the principle that the administrator must be given an advantage over the investor, both in the event of a profit and in the event of a loss.
The Tur and the Ra’avad differ with this ruling and maintain that the administrator must bear half the loss. They maintain that it is sufficient for him to receive only one advantage over the investor. (See also the following halachah.) The Shulchan Aruch (Yoreh De’ah 177:4) quotes the Rambam’s ruling. The Siftei Cohen 177:14, however, questions his decision, maintaining that the majority of the authorities follow the Ra’avad and the Tur.

One half minus one sixth equals one third.

This opinion can be found in the works of the Baal Halachot Gedolot, one of the early halachic texts published after the Talmud. It parallels the opinion of the Ra’avad mentioned in the previous halachah: that the administrator may be given only one advantage over the investor.
Significantly, from the Rambam’s Commentary on the Mishnah (Bava Metzia 5:4), it appears that the Rambam originally subscribed to this opinion himself.

If, however, a stipulation to this effect is made it is binding. As long as the administrator is given some advantage over the investor, there is no question of interest. The Rambam, however, maintains that unless a stipulation is made, the profits and losses should be divided according to the principles stated in the previous halachah.

This is obviously speaking about a situation where the work performed by the investor is not a major factor, and the profit comes primarily from the initial investment.

Since he is being granted an advantage for performing the work, the work he performs on behalf of the investment is not considered interest given in return for the portion he receives as a loan.

This refers to Rabbenu Yitzchak Alfasi and the Ri Migash.

Unlike the Rambam, who makes a distinction between whether or not a stipulation was made, these authorities maintain that what is of fundamental importance is whether or not the administrator has another occupation. If he has another occupation, as long as he is given a small advantage over the investor, it is acceptable. If he does not have another occupation, he must be given a sizable recompense for his work.

In the previous halachah.

The Rambam does not accept the distinction mentioned above, maintaining that as long as the administrator is granted a certain benefit, there is no question of interest, even according to Rabbinic Law. Therefore, if an explicit stipulation is made between the partners, that stipulation is allowed to stand. Nevertheless, if they do not make a stipulation, the administrator is given a more favorable settlement, as stated in Halachah 3.

I.e., a stipulation was made only in the case of profit, and not in the event of a loss.

This twelfth - one third of one fourth - is granted to the administrator as his wage, so that there is no question of interest involved. The Rambam arrives at this figure because, according to the principles mentioned in Halachah 3, the administrator should be granted one third of the share of the investor as his wage.

The fourth he was supposed to receive, plus a second fourth (one third of the three fourths received by the investor).

The investor is given six sevenths, and the administrator one third of that, two sevenths, as his wage. Thus, when there is a loss of seven dinarim, his wage should be two dinarim. He must then pay one dinar as his share in the loss, leaving him with a gain of one dinar.

Since there is a loss of fourteen, the administrator’s share of the loss is two dinarim, and the investor’s share of the loss is twelve. The administrator should be give one third of twelve, four, as wages. And four minus two is two.

By associating the share of the loss that the administrator must bear with the portion that he himself would receive - rather than the portion that the investor would receive - the Rambam ensures that in the event of a loss, the administrator will always be forced to bear a share of the loss, although that share will be smaller than the share of the profit he would receive (Kessef Mishneh).

In this regard, he accepts the approach suggested by his teachers.

One fourth is three twelfths. Two thirds of three twelfths is one sixth.

His fourth plus one third of the three fourths to be received by the investor.

The approach of the Rambam’s teachers is accepted by the Shulchan Aruch (Yoreh De’ah 177:27-28).

I.e., neither a wage nor a percentage of profit was stipulated; see Halachah 3 of the previous chapter.

But a wage is not mentioned; see Halachah 2 of the previous chapter.

See Halachot 4 and 5 of the previous chapter.

One third of the loss.

The 30 dinarim that remained and the 30 that Shimon paid. This is one half of his original investment.

I.e., one third of the loss.

The 15 that remain, and the 35 to be paid by Shimon.

For 60 was given as a loan, and that loan must be repaid.

As mentioned in Chapter 5, Halachah 11, when one of the partners dies, an investment agreement is terminated.

For, as explained in Hilchot Malveh V’Loveh 14:1, whenever a person desires to collect a claim against the estate of a deceased person, he must support his claim with an oath.

But only that. The heirs need not, by contrast, pay for the portion that was considered an entrusted object, for the reason the Rambam explains.

I.e., if there was an argument that could be used to excuse an heir from liability, we advance the argument on the heir’s behalf, even if the heir himself is not certain that this argument is true. For example, in the instance at hand, since the administrator would not be liable for the portion of the investment that was considered an entrusted article if it was destroyed by forces beyond his control, we advance this argument on behalf of the heirs and do not hold them liable.
The rationale is that the heirs are not expected to know the details of the property that they inherit. Therefore, we give them the benefit of the doubt and advance any arguments that might possibly be accepted on their behalf.
The Shulchan Aruch (Choshen Mishpat 108:4) mentions the Rambam’s view, but also mentions a slightly different opinion that explains as follows: Generally, the administrator’s word would be accepted if he claimed that he had returned the entrusted article, on the grounds that had he claimed that it was destroyed by forces beyond his control, his claim would have been accepted (migo). Therefore, we advance this claim on behalf of the heirs.
If, however, the heirs would not be able to claim that the administrator returned the money that was considered an entrusted article – e.g., he admitted not returning it or he died before it was time for him to return it – we do not claim that it was destroyed by forces beyond the administrator’s control, for it is infrequent that articles are destroyed by forces beyond one’s control. (Significantly, the Siftei Cohen 108:8 justifies the view that we mentioned first.)
See also Halachah 5, which states that if property or money that is known to belong to the partnership remains, the investor may collect his portion without taking an oath.

The Rambam is explaining that the sole reason our Sages ordained that the administrator be paid a wage was to prevent their investment arrangement from appearing as interest. There is no fundamental obligation to pay him a wage. Hence, in this instance, where the portion of the investment considered an entrusted article is not returned, there is no obligation to pay him a wage.

For, as explained in Chapter 6, Halachah 5, the percentage of the profit received by the administrator determines the portion of the investment that is considered a loan.

The portion of the loss that – according to the Rambam’s opinion – he is required to bear, as stated in Chapter 6, Halachah 5.

I.e., this consideration is granted to him as his wage.

At the end, once he has already made the profit. If after suffering the loss he informs the investor, and the investor desires to continue investing with him, he can divide the loss and then the profits in the manner the Rambam suggests [(Kessef Mishneh; Ramah (Yoreh De’ah 177:34)].

This would provide him with a benefit. For example, if he was given $100 to invest, at first lost $30, and then worked until the worth of the investment was $115, netting a profit of $15. According to the ordinary division of the profits, the administrator would receive $10. If, however, the loss was first calculated, it would be considered as if he had been given $80 to invest (for the investor is required to bear 2/3 of the original loss, and 100 - 20 equals 80). Afterwards, the profit would be considered as $35 (115 - 80), in which case, the administrator would be due $21 2/3. As the Rambam explains, we do not make such calculations.

If the administrator makes a profit of 24 dinarim on one contract and suffers a loss of 15 on the other, when the contracts are calculated individually, the investor would receive a profit of 8 dinarim for the first contract, and suffer a loss of 10 dinarim for the second contract. Thus, all told, he would lose 2 dinarim. If, however, the two were considered a single investment, there would have been a total profit of 9 dinarim, of which the investor would have received 3.

If the administrator had had two separate contracts written up, he would have been able to profit more than by combining the two in the same contract. For as the Rambam continues to explain, he receives a greater profit when the profits and the losses are tallied separately.

In this way, he will rationalize, the investor will not suffer a loss.

And in this way, give the investor a chance of making a profit.
When quoting this law, the Shulchan Aruch (Yoreh De’ah 177:30) also mentions the converse of this principle. The administrator cannot take the portion he was given as a loan and use it for his private purposes and do business solely with the portion that is considered an entrusted article.

Of the half with which he continued to do business.

Chapter 6, Halachot 3-4.

For the money or the goods were given to invest and not to be given away as presents.

We have based our translation on the gloss of the Siftei Cohen (Yoreh De’ah 177:60). Since the administrator was the one who caused the loss, he is responsible. If, however, the administrator is unable to pay, the person who received the article from him is liable. If, however, that person gave the article to a second person, that second person is not held responsible if the article no longer exists. (See Nekudot HaKessef.)

See Halachah 1.

As stated in Chapter 5, Halachah 11, if one of the partners in a business dies, the other may dissolve the partnership; he need not continue the arrangement with his partners’ heirs.

These goods are not considered part of the estate of the deceased [in which instance they would not be under lien (Hilchot Malveh V’Loveh 11:8)], because they are always considered to belong to the partnership. Therefore, once that fact is established, they are returned to the investor. They may be expropriated even if the heirs are below majority and incapable of representing themselves in court (Siftei Cohen 177:57).

Although the creditors may collect any debts due them, and the wives may collect the money due them by virtue of their ketubah (prenuptial agreement) from the deceased’s estate before it is granted to his heirs, this merchandise never became part of the estate.

I.e., he does not have a monetary claim against him.

The Shulchan Aruch (Yoreh De’ah 177:40) states that his claim must be substantiated by the testimony of witnesses.

The Kessef Mishneh states that the investor must prove that the administrator purchased the produce with the money given him as an investment. If, by contrast, he purchased the produce with his own money, he is allowed to keep the money. He is, however, considered a deceiver. (See Hilchot Mechirah 7:11.)

Since he has already paid him the principal, all that is necessary is for him to pay him his share of the profit.

I.e., any entity that is not produce. For this would be violating the conditions of the original investment (Kessef Mishneh).
When quoting this law, the Shulchan Aruch (Yoreh De’ah 177:38) states that he may even purchase livestock, for livestock is occasionally called “the fruit of the womb.” The Shulchan Aruch also explicitly excludes “utensils.”
See also the Siftei Cohen 177:66, which understands the Rambam to be excluding garments and wood because they are not profitable merchandise. He thus infers that in a place where they would be considered profitable merchandise, they could be purchased.

For his partner could wait on the customers at that time.

I.e., merchandise not belonging to the partnership. By doing so, he will take his attention away from the business of the partnership.

But not the loss. If there is a loss, the storekeeper must suffer it alone. See Chapter 5, Halachot 1 and 2.