THE JERUSALEM INSTITUTE OF JEWISH LAW
Rabbi Emanuel Quint, Dean 

Lesson # 65 - PLEADINGS (cont.) 

We continue the topic of pleadings, the claims of the parties, the plaintiff (the person or entity who does the suing) and the defendant (the person or entity who is being sued).

In last week’s lesson we discussed the pleadings when there are two lenders and one borrower. In this week’s lesson there are two borrowers and one lender. 

Two borrowers simultaneously borrow from one lender. Whether the loan is an oral loan (not evidenced by a note of indebtedness) or is evidenced by a note of indebtedness, each partner becomes a borrower as to one-half of the loan and a guarantor as to the indebtedness of his partner to the lender. For example, Reuven and Shimon jointly, simultaneously borrow $100 from the bank. Reuven and Shimon each becomes a debtor to the bank for $50 and Shimon becomes a guarantor for Reuven’s $50 and Reuven becomes a guarantor to the bank for Shimon’s $50. When the bank comes to collect the debt and payment is not made, the bank may simultaneously sue Reuven for $50 and Shimon for $50, or sue Reuven and Shimon separately for $50 each. If Reuven has no assets, then the bank can sue Shimon for the other $50 and thus Shimon would have paid the bank $100. (Before suing Shimon in the last situation, an officer of the bank would have to take an oath in Beth Din that he was unable to collect the moneys form Reuven.) 
If the lender tells Reuven, one of the borrowers, that he forgives his indebtedness under the note or waives his right to sue him under the note, according to the predominant view, Shimon, the second borrower, is still liable for his half of the debt. Similarly, if the creditor forgives the debt against Reuven because he received payment in full or in part from Reuven is still liable for his half. 

If a husband and wife borrow from one lender, each is liable for one-half the loan and each acts as a guarantor for the one-half debt of the other, the same as any other two borrowers. If the wife has assets, the lender may collect her share of the debt from her. She may have assets if she conducts her own business in which the husband does not share in the profits, or has been given or inherited assets that are not given over to her husband for his beneficial use, by agreement between them. If she has no current assets of her own, or conducts a business in which the husband receives the income, the lender collects from the husband the same as any other two debtors. If the husband makes the payment of her half, she owes that amount to her husband. If he dies before she has repaid him, the amount of the debt is deducted from the kethubah payment that the husband’s estate has to pay to her. Ordinarily, when a wife makes purchases on credit for her husband’s business, it is assumed that the husband will make the payments. Unless the seller states that he will collect from the wife, and if she makes payments to the seller, she can collect this from her husband.

Reuven borrows from the lender on behalf of a partnership without the knowledge of his partner Shimon. Shimon will be personally responsible for his half of the debt if: (i) he admits that the borrowing was made on behalf of the partnership; or (ii) if there were witnesses who testify that they witnessed the borrowing on behalf of the partnership. 

Assume that Avraham borrows $100 from the bank and Reuven and Shimon guarantee repayment to the bank. Avraham does not have assets to repay the bank. The creditor bank may sue Reuven and Shimon together or the bank may sue either Reuven or Shimon alone for the full $100. The bank may do this even if the other guarantor has assets to pay his one-half share of the debt. There is also an opinion that the bank must sue both Reuven and Shimon simultaneously, each for one-half of the debt, and that only if one of the guarantors does not have the assets to pay his share of the debt, may the bank pursue the other guarantor for the full amount. When two guarantors guarantee one loan and the creditor forgives one of the guarantors his liability, the creditor can still collect the entire indebtedness from the second guarantor, that is after pursuing the debtor first. 

If one guarantor guarantees the debts of two debtors to the same creditor, and he is called upon to pay the creditor on behalf of one of them, the payment is allocated to one specific debt so that the guarantor will then be able to pursue his remedies against the debtor on whose behalf he made the payment. If there is no certainty which debt the guarantor repaid, then if he sues either debtor, that debtor may plead that the debt you paid is not my debt but rather the other debtor’s debt and go sue him. 

If the creditor will not extend credit to the debtor unless he produces two guarantors, and then the debtor cannot pay and the creditor collects the entire debt from one guarantor, that guarantor may seek reimbursement for half of what he paid from the other guarantor. If there are three guarantors, then if one of them pays the entire amount, he may seek one-third from each of the two other guarantors. If one of the remaining two is not in the country to be sued or does not have the assets to pay his one-third, then the guarantor who paid the full amount may seek reimbursement of one-half from the third guarantor. 

A bank pleads that Reuven and Shimon borrowed from it simultaneously as a single loan. The bank does not have any independent proof of the loan and must therefore rely on the borrowers for their admission or for their testimony against each other. Shimon admits the loan and Reuven denies the loan. Shimon’s admission makes him liable for the full amount, even if Reuven has assets to pay one-half of the debt. The admission of Shimon which is coupled with his testimony against Reuven does not cast any obligations on Reuven. Shimon is an interested witness as far as Reuven is concerned so that he may not testify against Reuven. 

If there are three defendants and two of them admit the loan and testify, the third defendant has no obligations to the plaintiff. If the creditor has a note of indebtedness naming all three as borrowers and if each of them testifies that he and the others repaid the loan, each paying his share in the presence of others, then the testimony of each of the two will serve as proof of the payment by the third defendant and all will be free of liability. For example, the bank sued Shimon, Levi and Judah for $300, alleging that they simultaneously borrowed $100 each and that one note of indebtedness was written to incorporate all there loans but showing that each owed $100. Shimon and Levi testify that they were present when Judah repaid his $100, and Shimon and Judah testify that they were present when Levi repaid his $100, and Levi and Judah testify that they were present when Shimon repaid his $100. There is no suspicion that the three of them schemed to testify falsely so that each of them will be relieved of liability. However, if when Shimon, Levi and Judah borrowed they were partners, then they all have one common interest and their testimony on behalf of one another will not be admissible.

The subject matter of this lesson is more fully discussed in Volume III, Chapter 77 of A Restatement of Rabbinic Civil Law by E. Quint and on sale at local Judaica bookstores. Questions to quint@inter.net.il