THE JERUSALEM INSTITUTE OF JEWISH LAW 
Rabbi Emanuel Quint, Dean

Lesson # 98 (part 3 of...) - Guarantors and Sureties

If there is no binding obligation on the guarantor. then none of his property is subject to any lien or claim of the lender. This holds true even if after the loan is made the guarantor undertakes in writing to act as guarantor or surety.
If the obligation became binding because of a kinyan:

1. If the kinyan is also accompanied by a valid writing witnessed by two witnesses. it can be enforced even against a purchaser of the real estate of the guarantor.

2. If the kinyan is not accompanied by a written document signed by witnesses who witnessed the writing, it can be enforced only against the assets of the guarantor in his hands when the guarantor is to comply with his obligation as a guarantor or surety. There is also an opinion that if the obligation became binding becauseof a kinyan even if not accompanied by a written instrument it is equivalent to an obligation made with a kinyan and a written document and effects a lien on all of the real estate of the guarantor and can be traced to the purchasers from the guarantor.

If the obligation became binding without a kinyan:

1. If the obligation is contained in a document signed by two witnesses, it may be enforced even against purchasers of the guarantor's real estate.

2. If there is no separate document, but the obligation is contained in the same document in which the borrower becomes indebted to the lender and the document is signed by two witnesses:

a. If the guarantor's undertaking is written after the signatures of the two witnesses, then only the assets still in the hands of the guarantor on the day when the lender makes a levy upon him may be levied upon.
b. If the undertaking is written in the instrument before the signatures of the witnesses:

i. If the undertaking is written in the conjunctive with the borrower's indebtedness, such as "And I will be the guarantor," then the witnesses are presumed to testify to the undertaking and the sold real estate of the guarantor may also be levied upon.

ii. If the undertaking does not contain the word And, then the witnesses are presumed to have witnessed only the obligation of the borrower and the sold real estate of the guarantor is not subject to levy upon by the creditor.

If the type of obligation that is binding is undertaken in the Beth Din, even if there is no kinyan and even if it is not accompanied by a written document, it acts as a lien even on the sold property of the guarantor.

If the binding undertaking resulted from an oral statement to act as guarantor, then only the unsold property of the obligor may be levied upon by the creditor, but not any real estate purchased from the guarantor. Before the lender can demand payment from the guarantor, he must attempt to collect the debt from the borrower. Even if the borrower has only inferior type of real estate it must be levied on first before a levy can be made on the guarantor. If the borrower has no real estate, then attempt must be made to levyon his personal property.

If there is no property. Real estate, or personal property of the borrower upon which to make a levy, then the borrower must take an oath that he has no property on which to make a levy. The oath must also include an oath that the debt is still outstanding. The creditor must then wait at least thirty days before he candemand payment from the guarantor. If the borrower is known to have property in some distant place, the lender need not go to that place to make his levy, but may proceed against the guarantor instead, as if the borrower has no assets to levy upon.

If the borrower is not readily available to enable the lender to collect the debt from him, but he has known assets in the community, then the levy may be made against the borrower's assets in the community. This holds true if he is at least thirty days' traveling time away from Beth Din.

If the borrower does not have any known assets in the community and he is located within thirty days' travel time to Beth Din, the borrower must be notified by the creditor that the time for repayment has arrived and he has to make payment, and failing to do so the lender will sue the guarantor. [What has been said about thirty days was taken from the codes when travel was mostly by coach or on horseback. Each

Beth Din will have to make appropriate changes to this time period.] If the borrower fails to make such repayment, then the guarantor is, notified and he has thirty days to attempt to obtain payment from the borrower.
If the borrower is overseas or if it is not known where the borrower is, or if he is located more than thirty days' travel time to Beth Din, or cannot be notified of the fact that the lender and the guarantor are looking for him, and he has no assets on which to make a levy in the place where the Beth Din is, or else BethDin cannot make a levy on his property because he is very strong and will not adhere to the decree of the Beth Din, the lender may proceed to claim against the guarantor and collect from him. However. if it is not known where the borrower is and the guarantor so requests, Beth Din will give him up to thirty days to tryto locate the borrower so that he can try to bring him to Beth Din. Under some circumstances additional time may be given to the guarantor to attempt to locate the borrower. If it is known where the borrower is, then the guarantor, upon his application, will be given sufficient time to try to bring the borrower to BethDin. If the borrower does appear in Beth Din the guarantor is relieved of responsibility until the borrower pays the debt or swears that he does not have the money or property to pay the debt.

The lender can proceed against the guarantor when the borrower is overseas and cannot be reached, or cannot be reached for any other reason, only if the debt is evidenced by a formal writing signed by two witnesses. But if the debt is not evidenced by such a writing. it has the status of an oral loan and cannot be enforced against the guarantor without notification to the borrower. The danger exists that the borrower may have repaid the loan. However, if it is before the due date of the oral loan this danger usually does not exist and the lender may proceed against the guarantor even under an oral loan.

The laws that apply to a borrower who is overseas also apply to a borrower who has died. However, if the borrower on his deathbed stated that the loan had not been paid, or if the borrower had been placed under a ban for not paying the loan and had died while still under the ban, then the lender may proceed against the guarantor without the requisite waiting period.

At the time of entering into the guarantee agreement, the guarantor may agree with the lender that the mere statement of the lender that he has not been paid will suffice to make the guarantee immediately enforceable against the guarantor. The parties may agree to permit the lender to proceed against the guarantor in the first instance even if the borrower is available and has property upon which to make a levy.

The lender may in the first instance proceed to enforce collection from either the borrower or the surety. However. the borrower may offer to pay first and then the lender must accept his payment. This is true even in the case where the payments are to be made in land and the land of the surety is preferable to the landof the borrower.

When the surety is asked to pay the debt on behalf of the borrower, he can demand the note of indebtedness obligating the borrower be transferred to the surety, together with an assignment in writing of the obligation, so that the guarantor or surety can seek reimbursement from the borrower. If it is not so transferred,the surety can refuse to pay.

This is true even if the lender alleges that he lost the note and the borrower states that he has not paid the note. All the more so is this true if the borrower also alleges that the note was paid.

The choice of collection given to the lender applies even against the purchasers of the liened real estate from the borrower at a time when the surety has property upon which to make a levy. This would not apply to the person above described as the transmitter. In that case the lender must first proceed against the transmitter before he can proceed against the borrower or from the purchasers from the borrower.

In the case of joint guarantors and/or joint sureties, the lender has the choice of proceeding against whomever he wishes, assuming he may proceed against the guarantors as above stated. In the case where the lender has the choice of proceeding against the borrower or the guarantor or the surety, he may proceed against the purchasers of the liened real estate from the borrower, and the purchasers cannot insist that he first collect from the guarantor or the surety.

If the loan is an oral loan and the borrower alleges that he paid the lender and swears a Rabbinic oath to that effect, the guarantor need not pay the lender. If the borrower sells real estate that was subject to the lien of the lender, and the lender participates in the transaction, for example. being a witness on the deed. then the guarantor is relieved of responsibility to the lender.

The subject matter of this lesson is more fully discussed in Vol. IV, Ch.129 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