Rambam - 3 Chapters a Day

Just as it is permitted for a seller to take an order based on the market price; so, too, it is permitted to give a loan of produce without any conditions, to be returned without any conditions, without establishing a time when it must be returned once the market price has been established.

What is implied? If there was a fixed market price for wheat that was known by both the borrower and the lender, when the borrower borrows ten se'ah of wheat from a colleague, he is obligated to return ten se'ah, even though the price of wheat increased. The rationale is that when he borrowed the wheat from him, the market price was known. If he had wanted to, he could have purchased wheat and returned it, since a minimum term of the loan was not established.

If the borrower possesses some of the type of produce that he seeks to borrow, it is permissible for him to borrow this produce without any conditions, to be returned without any conditions, without establishing a time when it is due. Even if he possesses only a se'ah, he may borrow many se'ah because of it. Even if he possesses only a drop of oil or wine, he may borrow several jugs of wine and oil because of it.

If he did not possess any of that type of produce and the market price was not established yet, or the borrower and the lender did not know the market price, it is forbidden to lend a se'ah of produce for a se'ah to be returned at a later date. Similarly, with regard to other types of produce, a person should not lend them out until he establishes a financial equivalent. The following rules apply when a person makes a loan of produce without establishing a financial equivalent, and it decreases in value. The borrower must return the measure or the weight of the fruit he borrowed. If they increased in value, the lender may take only the amount they were worth at the time of the loan.

Even if a person possesses that type of produce, or the market price had already been established, it is forbidden to make a loan of produce that must be repaid on a specific date. Instead, the loan must be made without any stipulation, and it can be repaid whenever the borrower desires to repay it.

A person should not tell a colleague: "Lend me a kor of wheat and I will return a kor to you at the time when wheat is brought to the granaries." He may, however, tell him: "Lend me wheat until my son comes, or until I find the key to my storehouse."

The following rules apply if a person lent out produce until a fixed date: If the produce diminished in value, the borrower should return the produce at the time set. If the produce increased in value, the borrower should pay him the money that it was worth at the time of the loan.

A person may lend wheat to his sharecroppers to be used as seed, in return for wheat to be paid back after the harvest. This applies both before the sharecropper enters the field and after he entered the field.

When does this apply? In a place where it is customary that the sharecropper supplies the seed for the crops. For the owner of the field has the right to remove the sharecropper from the field whenever he does not supply it.

Different laws apply in places where it is customary for the owner of the field to provide the seed. If the sharecropper did not enter the field yet, it is permitted for the owner to lend wheat for wheat to be returned in the future, for he still has the prerogative of removing the sharecropper from the field. Thus, when the sharecropper entered the field, he entered with the intent of returning the wheat the owner lent him.

If, however, the loan was made after the sharecropper entered the field, since the owner can no longer have him removed, he is like any other person. It is forbidden to lend him wheat for seed in return for wheat to be paid back at a later date. He may, however, lend him wheat according to its market value if he does not make any stipulations.

A loan may not be repaid with a loan of produce. To explain: A person owed a colleague money. The lender told the borrower: "Give me my money, because I want to purchase wheat with it."

The borrower responded: "Go out and establish the money I owe you as a debt of wheat according to the present market price."

If the borrower possesses an equivalent quantity of wheat, this is permitted. If, however, he does not have that type of produce, this is forbidden. For our Sages said that it is permitted to place an order based on a commodity's market price, even though the seller does not possess any of that commodity, only when the purchaser is paying money for the acquisition. It is, however, forbidden to transfer a debt of money into a debt of produce unless the borrower possesses the produce.

The concept can be extended when, in the above situation, the borrower did possess wheat and the debt was transferred into a debt of wheat. Similar rules apply if afterwards the lender comes and tells him: "Give me the wheat, because I want to sell it and use the money to purchase wine," and in response, the borrower tells him: "Go out and consider the debt as a debt of wine, according to the present market price of wine." If he possesses wine, it is permitted and it is considered as if he owes him wine. If he does not possess wine, it is forbidden.

If the borrower did not possess the commodity desired, but nevertheless, transgressed and transferred the debt into a debt of that commodity, he is not required to pay the debt in the commodity. Even though he did purchase the commodity afterwards, he should pay the lender the money he lent him.

When a person lends money to a colleague in the presence of witnesses, or a borrower tells witnesses: "Serve as witnesses for me that I owe this person a maneh" or "You are my witnesses that I owe this person a maneh," the obligation established is referred to as a milveh b'al peh, "a loan supported by an oral commitment." Such a debt need not be repaid in the presence of witnesses.' Therefore, if the debtor claims: "I repaid the debt," he is required to take a sh'vuat hesset and is discharged.

When, by contrast, a person lends money to a colleague and has the debt supported by a promissory note, the debtor must repay him in the presence of witnesses. Therefore, if the debtor claims: "I paid this promissory note," his words are not accepted. Instead, we tell him: "Bring witnesses who testify that you paid or "Arise and pay the debt you owe him."

Therefore, when a person tells witnesses: "Serve as witnesses for me that I owe this person a maneh" they may not write down a record of their testimony and give it to the lender, unless the borrower tells them: "Write a promissory note, sign it and give it to the lender." The rationale is that their testimony, which is only oral, should not be given the legal power of a promissory note. Even when the borrower gives such instructions, they should consult with him after they have signed the promissory note. Only afterwards, may they give the promissory note to the lender in his hand.

If they performed a kinyan with the borrower affirming that he owes the lender a maneh, the witnesses may write a promissory note and give it to the lender, even though the borrower did not instruct them to do so. The rationale is that when a kinyan is performed without any further instructions, it is ready to be recorded in a legal document. There is no need to consult the borrower.

When a borrower writes a document by himself and witnesses write testimony upon it and give it to the lender, it is an acceptable promissory note.

Similarly, should the borrower compose a promissory note - even when there are no witnesses who sign it - and give it to the lender in the presence of witnesses, the loan is considered to be backed by a promissory note, provided that it is written with a script that cannot be forged and that the witnesses in whose presence it was transferred read it.

There are Geonim who ruled that the borrower should tell the witnesses in whose presence the promissory note was transferred: "Sign the note or testify that it was transferred in your presence."

If the lender produces a note written by the borrower, which states that he owes the lender money, but there are no witnesses who have signed it, it is considered as merely a loan supported by an oral commitment with regard to all matters. This applies even if the authenticity of his writing was verified.

Hence, if the borrower claims to have paid the debt, and the lender denies receiving payment, the borrower need only take a sh'vuat hesset before being dismissed. Nor may the lender use this note to expropriate property from the heirs, nor from the purchasers.

Whenever a loan is supported by a promissory note, the lender may use this note to expropriate property from the heirs and from the purchasers, as will be explained. When, by contrast, a loan is merely supported by an oral commitment, the lender may expropriate payment from the heirs, but not from the purchasers. The rationale for this restriction is that such a loan does not become public knowledge. Therefore, the lender may not expropriate property because of such an obligation.

A loan supported by a promissory note, by contrast, does become public knowledge. Therefore, it may be used to expropriate property that was sold. The purchaser of such property caused himself a loss, because he did not inquire to the extent that he discovered that the property of the person he purchased it from was on lien because of the loan that person had taken. For according to Scriptural Law, all property belonging to a borrower is on lien to the loan.

When a person sells his field in the presence of witnesses, and a creditor of the seller expropriates the field from the purchaser, the purchaser may expropriate the money due him from property that was on lien to the sale that had been sold to others, as will be explained. The rationale is that whenever a person makes a sale, it is done in public and becomes common knowledge.

A loan that is supported by an oral commitment alone may be collected from heirs only in one of the following three instances:

a) the person who is liable admits his debt, and while mortally ill stated that he still owes so-and-so a debt;

b) the loan was given for a specific time, and the time for payment had not come; we operate under the presumption that a person will not pay a debt until it is due;

c) because of his failure to pay, the debtor was placed under a ban of ostracism until he would make restitution, and he died while under that ban.

In all these instances, the creditor may collect the debt from the heirs without having to take an oath. If, however, witnesses come and testify that the deceased owed a colleague a maneh, or that he borrowed money in their presence, the creditor may not collect anything from the heirs, because it is possible that the deceased repaid the loan. For a person who borrowed money from a colleague in the presence of witnesses does not have to repay him in the presence of witnesses. Similarly, if a person shows heirs a note from their father stating that he owes the claimant money, he may not collect anything because of it, as we have explained.

The following rules apply when a borrower does not own movable property, but does own landed property. If the court is aware that he has deposited his money in the hands of other people, we compel him to sell the landed property and pay his creditor.

If this is not known to them, they issue a ban of ostracism against anyone who knows that the debtor possesses movable property and does not bring it to court. Afterwards, they take possession of property he owns that is of intermediate worth and expropriate it for the creditor, as will be explained.

When does the above apply? When payment is collected from the debtor himself. When, however, a person comes to collect payment from heirs - whether they are above or below majority - he does not have the right to collect from the movable property belonging to the estate even if it was entrusted or loaned to another person. For movable property inherited by heirs is not under lien according to Scriptural Law.

It is a mitzvah for the heirs to pay a debt left by their father from the movable property that he left. If an heir does not desire to make restitution, however, he is not compelled to do so. If the creditor seized property belonging to the debtor in the debtor's lifetime, he may collect his due from it.

If a creditor claims that he seized property during the debtor's lifetime, and the debtor's heir claims that the creditor seized the property after the debtor's death, the heir has the responsibility of proving his claim. Alternatively, the lender must take an oath that he was owed so-and-so much - he can claim up to the value of the property in his possession - and include in his oath that he seized the property in the debtor's lifetime.

If the property that he seized included promissory notes, and the lender claims that he is holding them as security for a debt and that he seized them during the debtor's lifetime, the lender must prove that he seized them during the debtor's lifetime. If he cannot bring proof, he should return them to the heirs. The difference is that with regard to promissory notes, he is not claiming the acquisition of the obligation itself, but rather proof that such an obligation exists.

When heirs expropriated landed property because of a debt that others owed their father, a creditor of their father's can expropriate it from them. The rationale is that this land was in effect their father's.

The above principles can be extended and applied in the following situation. Reuven sold a field to Shimon, accepting financial responsibility for the sale. Shimon did not pay immediately, but instead had Reuven consider the price of the field as a loan. Reuven died afterwards. Reuven's creditor then came to expropriate the field from Shimon. Instead of giving the creditor the field, Shimon appeased him with money, and he departed.

According to the law, Reuven's heirs may come and demand that Shimon pay the debt that he owed Reuven, for that loan is not on lien to Reuven's creditor.

Therefore, if Shimon is clever, he should give Reuven's heirs the land he purchased from them as payment for the debt that he accepted upon himself. He can then expropriate the property from them, because of the money that he gave to Reuven's creditor so that he would not expropriate it from him. This option is available because Reuven took financial responsibility for the field Shimon purchased.

All of the Geonim have ordained, however, that a creditor may expropriate movable property from the heirs in payment for a debt. This judgment is enforced universally in all courts of law.

In the West, however, they would have a provision written in the promissory notes giving the creditor the right to collect the debt from either landed property or movable property in the creditor's lifetime or after his death. Thus, this provision gives the creditor more power to collect the debt than the ordinance of the Geonim.

This is a great safeguard, because it is possible that the borrower will not have known about the ordinance, and thus the property of the heirs will be expropriated unjustly, because an ordinance of the later Sages does not have the legal power to be binding upon heirs.

We do not expropriate payment from heirs unless they are past majority. When the heirs are below majority, by contrast, we do not collect a debt supported by a promissory note from them.

Even if the promissory note contains all the stipulations in the world, the creditor may not use it to collect the debt until the heirs attain majority, lest they have proof that would disavow the promissory note.

If the loan was a debt at interest owed to a gentile, we appoint a guardian, attach the property that the minor inherited, sell it, and pay the debt. The rationale is that the interest consumes the estate.

Similarly, if a woman demands payment of the money due her by virtue of her ketubah - whether she is the deceased's widow or divorcee - we appoint a guardian for the heirs and attach the deceased's property, so that the woman will gain favor in the eyes of others; i.e., so that she will have a minimum of property so that she will remarry. Hence, if the woman hurried and remarried and then came to demand payment of the money due her by virtue of her ketubah from the estate acquired by the heirs, we do not pay heed to her until the heirs come of age. The rationale is that she is no longer entitled to receive her sustenance from the estate of the deceased, and she has remarried.

Several of the Geonim have ruled that if the estate left to the heirs does not have more than the money due the woman because of her ketubah, or it contains less than that amount, we do not pay heed to her. For the heirs will have no benefit from paying the money due the woman because of her ketubah.

According to this opinion, our Sages said: "We attach the estate left to heirs to pay a woman the money due her by virtue of her ketubah from it," only so that the estate would not become devalued because of the need to pay for the widow's sustenance." And in this instance, since the woman takes everything, of what value is it to the heirs who are below majority that the property is attached? These views were not concerned with increasing the favor of the woman in the eyes of others.

If the testator gave a command, saying: "Give a maneh to so-and-so," we pay heed to the claim, after appointing a guardian for the heirs to advance arguments on behalf of the interests of the heirs. If the testator says: "Give this maneh to so-and-so" or "... this field to so-and-so," we make the endowment; there is no need to appoint a guardian for the heirs.

If it is discovered that land in the estate does not rightfully belong to the heirs, but instead, the plaintiff claims that the property was stolen by the person whose property they inherited, we pay heed to the claim and appoint a guardian to argue and enter into litigation on their behalf. If it is discovered that the property was in fact stolen, we return it to its owners.

Similarly, if a minor had his servants mount an attack and enter property belonging to a colleague and take control of it, we do not say that we will wait until he attains majority before the matter is adjudicated. Instead, we expropriate the property from him immediately. When he attains majority, if he has witnesses who support his claim, he should bring his witnesses.

When land is presumed to be the property of minors, the land is not expropriated from them until they attain majority even in the following situation. Another person comes and claims that he had purchased that land from the person from whom they inherited it, and the purchaser has witnesses who will testify that he established his possession of this land and benefited from it for three years in the lifetime of the deceased. The rationale is that we accept the testimony of witnesses only when delivered in the presence of the litigant against whom they are testifying. And the minor is considered as if he is not present.

If, however, the plaintiff produced a deed of sale that states that the field is property that he purchased, he must validate the authenticity of the deed of sale. Afterwards, he may expropriate the property from the heirs after a guardian is appointed for them.

When the court attaches property belonging to heirs for the purpose of selling it, they evaluate the property and then announce the sale for 30 consecutive days or on Mondays and Thursdays over the span of 60 consecutive days. Announcements are made in the morning and the evening, when workers enter the city, and when workers are sent out to their tasks. Whoever desires to purchase the property can bring his workers there to investigate it.

When an announcement is made, the borders of the field are clarified. They make known its yield, the evaluation given by the court and the reason it is being sold - to repay a creditor or to pay a woman the money due her by virtue of her ketubah. For there are some people who desire to repay a creditor and others who desire to pay a woman the money due her by virtue of her ketubah.

When an adrachta is written with regard to property belonging to heirs -whether they are above majority or below majority - the court must write: "And we identified the property as belonging to so-and-so, the deceased." If they did not write this, the adrachta is invalid, and a purchaser may not benefit from the proceeds of the property even though the announcements of the property's sale were completed.

When a court sells property without announcing its sale beforehand, it is considered as if they erred in a matter explicitly stated in the Mishnah. The sale is nullified, and the property is sold again after announcements are made.

When a court sells property, the financial responsibility for it is incumbent on the heirs.

When a court made announcements in the proper manner, investigated the matter thoroughly and carefully evaluated the property, their sale is binding even though they erred and sold property worth a maneh for 200, or property worth 200 for a maneh.

The following rules apply when, by contrast, the court was not careful in evaluating the property or did not compose a notice of evaluation, which details its assessment and the announcement of the sale of the property, and it erred in its appraisal. If they evaluated it at a sixth more than its value or at a sixth less than its value, the sale is nullified. If the error was less than a sixth, the sale is binding.

Similar concepts apply if a court sold landed property at a time when it was not necessary to announce its sale beforehand. If it erred and devalued the property by a sixth or overvalued it by a sixth, their sale is nullified. This applies even if it announced the sale beforehand. If their error was less than a sixth, its sale is binding even though it did not announce the sale. For an announcement was not necessary in these situations.

In which situations is it not necessary to make announcements before the sale of property? When land is sold to bury the deceased, for the sustenance of his wife and his daughters, or to pay the head-tax to the king, it is not necessary to announce the sale, because the matter is pressing.

Similar concepts apply if a court sold types of property whose sale need not be announced beforehand. If it erred and devalued the property by a sixth or overvalued it by a sixth, the sale is nullified. If the error was less than a sixth, the sale is binding.

These are the types of property whose sale need not be announced beforehand: servants, promissory notes and movable property; servants, because they may flee; promissory notes and movable property, because they may be stolen. Instead, these articles should be evaluated by the court and sold immediately. If the market place is close to the city, they should be taken to the market place and sold there.