THE JERUSALEM INSTITUTE OF JEWISH LAW 
Rabbi Emanuel Quint, Dean 

Lesson # 87 • Lien Created by a Written Loan (part 2)

There may be times when the creditor may levy on transferred realty even when the debtor has realty where he is. The debtor, Naftali, sells realty to lien. The realty is located in the city of Haifa, where both Naftali and Yehudah reside. Naftali has realty in another city, Tel Aviv. Yehudah may trace the realty sold to Reuven in Haifa where he resides; or Yehudah may ask Beth Din to attempt to sell the realty in Tel Aviv and give the proceeds to Yehudah. If Yehudah traces the realty to Reuven in Haifa, Reuven, if his deed contains a warranty, may ask Beth Din to turn over to him the realty in Tel Aviv. All the laws in this paragraph are subject to the discretion of the Beth Din, which has to ascertain the hardship and expense involved in having the creditor receive the realty in the other city in payment of the debt.

A purchaser, Reuven, at the time that he purchased the liened realty from the debtor, Naftali. left Naftali with sufficient assets to pay Yehudah, the creditor. The assets that remained with Naftali became ruined by flood or erosion or some other natural calamity. Yehudah may trace the realty to Reuven, the purchaser. However. if Yehudah by kinyan waived his rights to enforce collection from the remaining assets of the debtor, Naftali, then he may not trace the realty purchased by the purchaser, Reuven.

A debtor, Naftali. sells one of his parcels of realty to Reuven and at the time of the sale the debtor still had sufficient assets to pay his creditor, Yehudah. Thereafter, the realty remaining in the hands of Naftali is seized by Jewish bandits. Yehudah may not levy on the assets of realty purchased by Ruven from Naftali, since it is assumed that the debtor will soon retrieve the realty seized by the Jewish bandits. However, if the acts of the debtor Naftali make it impossible for Yehudah to levy on the remaining assets left in Naftali's hands by Reuven, then Yehudah may trace the assets to Reuven.

For example, if Naftali, the debtor, lost the realty to a Gentile in a Gentile court and the lien of Yehudah is no longer enforceable against the Gentile, or if Naftali lived in a society where if one became assimilated into the local religion, he could no longer be sued in Beth Din if he did not want to submit to its jurisdiction, the secular law in that society was that the creditor cannot levy on the assets in the hands of a Jew who became assimilated. In such case the creditor may levy on the realty purchased by the purchaser. 

A creditor, Yehudah. was not diligent in enforcing his rights against the debtor, Naftali. On the date on which the debt had to be repaid, Naftali had adequate assets to pay Yehudah, and had Yehudah acted diligently and enforced his rights at the time when the loan was due, he could have collected the amount due. Naftali's property subsequent to the date on which he had to pay Yehudah became worthless because of some natural calamity.

Yehudah may trace the realty sold by Naftali to Reuven whether the sale was before or after the loan from the debtor to the creditor became due.

A debtor receives a gift on condition that it not be subject to any liens, debts, or kethubah obligations owed by the debtor, whether incurred before or after the gift is made. The condition is valid and will be recognized by Beth Din and no lien or levy will attach to such gift. This applies even if the instrument creating the debt stated that it would lien after-acquired property and the gift was after-acquired. This law does not apply to property purchased by the debtor, that is, if the seller states that the property shall not be subject to any lien or debt of the purchaser, the condition is not recognized and the creditor may levy on this property.

A father gave a gift of property to his only son on condition that it not be subject to any lien or levy. The father died. The creditors of the son may levy on the property. 

A debtor has many creditors, all of whom have a lien on his parcel of real estate. Beth Din sells the parcel of real estate pursuant to a levy made on behalf of the earliest creditor. The other creditors cannot thereafter make a levy on the real estate in the hands of the purchaser at the sale. The sale by Beth Din cuts off the liens of subsequent creditors. However, if a debtor voluntarily sells the realty to pay the earliest debtor, then the other creditors can trace the realty in the hands of the purchaser, since there was no levy made by Beth Din that cuts off the liens of subsequent creditors. The result is the same if the property is sold by a guardian for infants. 

If the heirs of the debtor still have some of the assets they inherited from their father, the creditor must look to those assets and he does not have the option of tracing realty the heirs inherited from the debtor and sold. The same applies to purchasers or donees who have a claim against the decedent.

Reuven. on his deathbed, instructs that $100 be given to Shimon. After the death of Reuven but before Shimon collected the $100, the heirs of Reuven sold all of the assets they inherited from Reuven, including some realty. Shimon may trace the realty to the purchaser from the heirs. 

The debtor, Naftali, gave a gift to Reuven before he borrowed money from Yehudah, the creditor. The gift was for a fixed time and was to be returned to Naftali. Between the time of the making of the gift and the time the gift was returned, Naftali borrowed money from Yehudah with a written instrument being executed and delivered. In spite of the fact that the realty was not owned by Naftali on the date of the making of the loan, Yehudah has a lien on the realty. Since the gift that was prior to the making of the loan was for a specified period of time, the gift will remain with the recipient of the gift until the specified time. If there was no specified time for the gift, the recipient can always state that he wants to delay the return of the gift. The creditor may compel the recipient to return the gift to him when he is ready to return the gift under the rule of being able to collect from the debtor's debtor.

The last law above stated that the creditor may make a levy on the debtor's debtor. The result will be similar in the following fact situation: On January 1 Reuven loaned money to Shimon by an oral loan, which loan was due on June 1. On February 1 Shimon loaned money to Levi evidenced by an instrument in writing that resulted in Shimon having a lien on parcel #1 owned by Levi on February 1, the date of the loan. This loan was also due on June 1. On March 1 Levi sold parcel #1 to Yehudah. On une 1 Levi does not have any assets to repay the loan to Shimon and Shimon does not have any assets to repay the loan to Reuven. Reuven may trace the realty to Yehudah.

Reuven loaned money to Shimon and when the time for repayment came Shimon had no assets except for an instrument of indebtedness. The note of indebtedness evidenced a loan that Shimon had made to Levi, and which note of indebtedness created a lien in favor of Shimon on Levi’s realty, parcel #1. Reuven may collect from Levi on this note in the role of a creditor of the debtor's debtor, whether Shimon received the instrument of indebtedness from Levi prior to his borrowing from Reuven or after he borrowed from Reuven. The law is the same whether the instrument of indebtedness is still in the hands of Shimon, or if Shimon died and the instrument is in the hands of Shimon's heirs. When Reuven levies on Levi, he may levy on assets in the hands of Levi that he acquired before or after the loan was made from Reuven to Shimon. 

The subject matter of this lesson is more fully discussed in Vol. IV, Ch.111 of A Restatement of Rabbinic Civil Law by E. Quint, published by Jason Aronson, Inc. and on sale at local Judaica bookstores. Questions to quint@inter.net.il