THE JERUSALEM INSTITUTE OF JEWISH LAW
Rabbi Emanuel Quint, Dean 

Lesson # 66 - Was the Debt Paid before its Due Date? 

Reuven, the lender, sues Shimon, the borrower, for his money before the due date. Most creditors will be quite happy if they are paid on the due date. There may be any number of reasons why a creditor will sue for payment before its due date. For, example, it may be that Reuven hears that Shimon does not intend to repay, or is secreting or disposing his assets, or is about to leave the country, or is doing some other things that would leave the creditor without a remedy. Shimon can of course plead that the debt is not yet due and there is no reason for Reuven to fear that he will not be repaid on the due date. 

When Reuven sues before the due date of repayment, Shimon pleads that he paid the debt. Unless Shimon can prove payment or one of the other exceptions listed below, Shimon’s plea will be dismissed by the Beth Din and judgment will be entered in favor of Reuven, since there is a presumption that a debt is not paid before its due date. 

The presumption against repayment before the due date also applies to merchandise sold on credit if the price is to be paid on a specific date and the seller demands payment before that date. It also applies to wage claims or to payments to be made to contractors. 

Where the presumption applies, the defendant cannot even demand that the plaintiff take an path that the debt was not paid. The defendant can have a ban placed on all those who sue for payment although they have already been paid. 

The defense of payment before the due date will be dismissed only if the plaintiff pleads with certainty that the money is due. If, however, his plea is not certain, the defendant can plead repayment even before the time specified for repayment, and the defendant does not have to take an oath to support his plea. The plaintiff pleads ‘perhaps you did not repay the loan that is due next month’. The defendant may plead repayment even though the time for repayment had not arrived. The defendant does not have to take an oath, because an oath is not required to set-off a plea made without certainty. 

All that has been said regarding a presumption against payment having been made before the due date also applies if the plaintiff sues before the due date and the defendant pleads that the plaintiff forgave the debt before the due date. The plea that the plaintiff forgave the debt is generally a weaker plea than the plea of payment. 

The plaintiff sues before the due date and the defendant pleads repayment before the due date and his pleading is dismissed, based on the presumption that one does not repay a debt before it is due. Thereafter after the due date, the plaintiff sues again (when judgment was not completed the first time) and the defendant again pleads repayment, this time that he repaid after the due date. The reasons for a second lawsuit may arise from any number of reasons, such as the Beth Din failed to write down the judgment of the prior trial, or a judge died before the trial was terminated. Since the defendant’s second plea is in conflict with his prior plea of repayment before the due date, his second plea will also be dismissed as fraudulent. There are authorities who question this last statement. They hold that the defendant can now plead that he did repay after the due date since he saw that the Beth Din did not accept his plea that he paid before the due date. 

The presumption does not apply: 

If he defendant can prove payment whether by witnesses or by receipt. 
If the money is not due on a specific date. A loan made without specifying the date of repayment is presumed to be for thirty days. If the lender would sue within the thirty day period and the debtor pleaded repayment, the presumption that a person does not repay within the specified time would not apply, since the loan did not have a specified time of payment only a presumed time of repayment. The difference is as follows: When there is a specified time for repayment, the reason for the date selected is that the borrower knows that the needs the money until that date. If no date is specified, then the Rabbis of the Talmud have arbitrarily stated that a loan without specification may not be sued upon in less than thirty days. But in reality the borrower may not need the money for such a long time, and he may have prepaid the loan in less than thirty days.

If the plaintiff cannot prove the loan the defendant may plead payment even before the due date, since he could have denied the entire transaction. A denial of the transaction is a stronger plea than payment, since payment admits that the transaction did take place.

If the plaintiff sues after the due date and the defendant pleads that he paid before that due date, the defendant is believed since he could have pleaded that he paid after the due date. 

When it can be shown that it was for the benefit of the borrower to repay before the due date of the loan. For example, the lender suddenly needs the money and told the borrower that if he repaid part of the loan before the due date he would extend the due date for the balance of the loan.

In cases of wages where the work to be performed and payment is made on an individual product basis. For example, the employer hired the employee to write pamphlets for him and he would pay $100 a pamphlet. As soon as he finished the first pamphlet, the due date of the wages for that pamphlet was on the date of completion and not the date when the last pamphlet will be completed. If, however, he hired him to write ten pamphlets for a total of $1,000, then the due date is the completion of all ten pamphlets and the presumption would apply until the last pamphlet is completed. The employer would not be able to plead payment until the last pamphlet was finished. 

If a note of indebtedness is lost and found by a third party before its due date, and therefore there is a flaw in the note. It is assumed that if the note was not paid the lender would have taken better care of it. Thus when it was lost it became flawed. 

The borrower can allege that the note was returned to him after he repaid it and that thereafter he lost it, not the creditor. 

If the bailor deposited the bailment with a bailee for a specified period and the bailor, before the end of the period, demands return of the bailed article, the bailee can raise the defense of return of the bailed article.

However, in business transactions that are part loan and part investment for a specified time, since the presumption does apply to the loan part it does apply to the investment part. 

The subject matter of this lesson is more fully discussed in Volume III, Chapter 78 of A Restatement of Rabbinic Civil Law by E. Quint and on sale at local Judaica bookstores. Questions to quint@inter.net.il