THE JERUSALEM INSTITUTE OF JEWISH LAW 
Rabbi Emanuel Quint, Dean 

Lesson # 92 •Laws of Powers of Attorney

As seen in the last lesson, if the debtor sends the repayment of the debt with the creditor's agent but after the death of the creditor, the debtor bears the risk of loss in the event the agent loses the money whether through his own acts or through an act of God. For example, on January 1 the creditor/principal appoints Reuven his agent to collect the $100 that the debtor owes to him. The creditor dies on January 2. Neither the debtor nor Reuven knows that the creditor died. On January 3 the debtor pays the $100 to Reuven. On January 4 Reuven is on his way to the creditor's home and he is robbed of the $100. The risk of loss is on the debtor, and he is still liable to the heirs of the creditor for the $100. The heirs of the creditor are not responsible for the acts of Reuven, since he is not their agent. When the creditor dies, his agents are automatically terminated and are no, longer his agent or that of his heirs. The debtor, to avoid the pitfalls of this situation, may insist that he will not pay Reuven unless Reuven has a power of attorney from the creditor. The person to whom the power of attorney is given , in this case Reuven, is called an attorney-in-fact. Unlike an agency, a power of attorney does not automatically cease when the principal dies. 

That is not to say that the principal cannot terminate the power of attorney. It means that his death does not in and of itself terminate the power of attorney. The principal may terminate the power of attorney in the same manner as he may terminate an agency. A power of attorney differs from an assignment of the claim in that the attorney-in-fact does not own the claim. The proceeds of the debt still belong to the principal. In the event of an assignment of a claim, the claim belongs to the assignee.

In this lesson, the power of attorney refers to one given by the creditor or plaintiff. There is an opinion in the Talmud that the power of attorney is not something to be desired. 'And he did that which is not good among his people (Ezekie128:18): Rav said this refers to one who comes with a power of attorney" (Shebu'oth 31a). The attorney-in-fact is held in low esteem because only a litigious person accepts to act as an attorney-in-fact. He is usually uncompromising, whereas the principal might have compromised his own claim. A few of the scores of commentaries and codes on the subject are here set forth. Maimonides (1135-1204) quotes the Talmudic text without any exceptions (Laws of Agent and Partners, chapter 3, paragraph 5).

R. Abraham ben David (1125-1198) in his disputations on Maimonides (ibid.) states that the Talmudic statement should be seen as referring to a situation where the principal and the defendant are in the same city and thus there is no reason for the principal to appoint an attorney-in-fact to represent him in his lawsuit against the defendant. R. Jacob Tur (1274-1340), in Hoshen haMishpat, chapter 123, continuing in the vein of R. Abraham ben David, states that if the principal and the defendant are in different communities it is indeed praiseworthy by the attorney-in-fact to pursue the matter against the defendant, for otherwise debtors will flee with their creditors' moneys to faraway places. R Yosef Karo (1488-1575), in Shulhan Aruch Hoshen haMishpat, chapter 123, states: "He did that which is not good among his people refers to a person who appears with a power of attorney. When does this apply? when the plaintiff and the defendant are in the same city. But if the defendant is in one city and the plaintiff in another city, then the actions of the attorney-in-fact are praiseworthy." R. Moses Isserles (1520-1562), in his glosses to R. Karo, adds: 'There are those who hold that there is no distinction between the situation when the parties are in the same city or not. If the attorney-in-fact is overpowering, litigious, and seeking controversy, then he should not act. But if he is acting to save that which is stolen by the robber, then his action is praiseworthy."

Some of the commentaries on R. Isserles state that if the defendant is overpowering, in such a situation, if the plaintiff can still sue by himself, he should not appoint an attorney-in-fact; otherwise he should. The commentaries on R. Karo and R. Isserles vary but accept the distinction between the situation where the plaintiff cannot retrieve his money without appointing an attorney-in-fact and where he can. In the former case it is not improper for him to appoint an attorney-in-fact, and in the latter case it is. In all events the halachah has developed, to the point where it is now common to appoint an attorney-in-fact and to appoint lawyers to protect the interests of the parties. 

The attorney-in-fact need not be present when he is appointed.

If the power of attorney authorizes the attorney-in-fact to deal with business matters of the principal or to collect a chattel of the principal, then the principal may appoint the attorney-in-fact by a written power of attorney, made effective with a kinyan.

If the power of attorney includes the authority to collect debts or otherwise engage in litigation on behalf of the principal, then there are four formalities that must be complied with: ( 1) The power of attorney must be in writing; the writing should in essence state that the attorney-in-fact may "Go forth, take legal action so that you may acquire title to and secure the claim for yourself," or words of a similar nature. The Beth Din should be liberal in construing the exact language of the power-of-attorney so that it should give effect to the intent of the principal and the attorney-in-fact. If the power of attorney does not contain such words, the debtor may refuse to deal with him. However, if the debtor pays the money to the attorney-in-fact, and the principal is alive when the debtor gives the repayment to the attorney-in-fact, the debtor is free of liability. It is customary to include the date of the power of attorney. (2)The power of attorney must be accompanied by an assignment of some sliver of real estate by the principal to the attorney-in-fact. (3) The power of attorney must assign to the attorney-in-fact a percentage interest in the principal's claim against the debtor. For example, if it assigns 15 percent of the principal's interest in the moneys owed by the debtor to the attorney-in-fact, and retains the balance of 85 percent to the principal, it is valid. Since the attorney-in-fact may sue for his own 15 percent of the claim, he may sue for the additional 85 percent pursuant to the power of attorney.

However, if instead of the power of attorney assigning a percentage of the claim to the attorney-in-fact it assigned a definite amount, then the attorney-in-fact may sue for only that amount. For example, if the debt was for $100 and the power of attorney assigned $15 to the attorney-in-fact, then he may sue only for the $15 and may not sue for the remaining $85 due to the principal. ( 4) Although it is not required, the written power of attorney also usually includes a statement that all of the expenses of the litigation are to be borne by the principal. If the power of attorney is silent as to the expenses, then the principal is still liable for the expenses. Unless the power of attorney limits the amount of expenses that the attorney-in-fact may expend in pursuing the claim, then there is no limit, and the principal remains liable even if the expenses exceed the amount collected, or if nothing is collected. 

All of the proceeds of the debt not assigned to the attorney-in-fact belong to the principal. The power of attorney gives the attorney-in-fact the right to collect the debt for the principal when he collects his percentage for himself. 
The halachah gives the husband certain rights in the profits of the real estate owned by the wife. The profits may consist of the crops growing on the real estate and/or grown by the husband on the real estate. If a third party is possessed of the real estate that the wife claims belongs to her, and she wishes the husband to sue the third party to recover the real estate, he requires a power of attorney from the wife to sue.

However. if the husband sues for the crops presently growing on the real estate, he may sue without a power of attorney and his lawsuit will also be valid to carry over to recover the real estate without a power of attorney from the wife.

Any adult, male or female, Jew or Gentile, may be appointed an attorney-in-fact. The principal may appoint his wife attorney-in-fact.
A principal may terminate the power of attorney that he has delegated to his attorney-in-fact or may, instead of terminating the attorney-in-fact, delegate another power of attorney to another attorney-in-fact to act in the same matter. 

However, the debtor may deal with the attorney-in-fact until he finds out that the power of attorney has been terminated. If after the principal has terminated the power of attorney but before the debtor knows of the termination, the attorney-in-fact sues the debtor and the Beth Din finds in favor of the debtor, the principal is bound by the decision of the Beth Din. 

The subject matter of this lesson is more fully discussed in Vol. IV, Ch.122 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