Harry and six of his friends borrowed Jack’s van to travel south of New York to a town in South Carolina. When Jack gave the keys of the van to Harry, he was aware of his travel destination and of the other six travel companions. While in South Carolina, the van broke down and the group hired a mechanic to determine the cause of the car’s sudden failure. Upon hearing that the car was not easily repairable, but rather that the engine blew, Harry called Jack, who instructed him to tow the car back to New York. Harry paid for the cost of towing the van back to New York, a sum amounting to $1,750. Thereafter, Harry reached out to each of his six friends to collect $250 to cover the costs of towing. One of the friends was unwilling to participate, and suggested that Jack, the owner, was required to pay for the towing. The young man claimed that since the cause of damage was beyond their control, they are not liable for any of the costs incurred. The parties came before our Bet Din to resolve their dispute.
Who is responsible to pay for a new engine, the cost of towing, and the fee for the mechanic who originally checked the car? Harry? The group of seven friends? Jack? How should the Bet Din rule and why?
According to the ruling of the Shulhan Aruch, a borrower is liable for nearly all damages sustained to the item he borrowed. This includes liability for damages due to circumstances beyond the borrower’s control. The logic behind this ruling is that since a borrower benefits without rendering payment, he is accountable not only in case of negligence or theft, but for accidental mishaps as well.
Nevertheless, according to all halachic authorities, a borrower is not responsible for damages sustained to the item caused by the negligence of the lender. It is considered negligence on the part of the lender if he gives an item that is unfit for the specific usage requested by the borrower. Hence, if the item subsequently breaks or perishes due to it being unfit for the workload it was borrowed for, the borrower is exempt from payment. It is the responsibility of the lender to inspect and evaluate the item he is lending and to determine whether it is fit for usage. If he fails to do so, it is viewed as an act of negligence.
As mentioned, the above ruling is undisputed by all halachic authorities. A further leniency exempting a borrower is suggested by the Shulhan Aruch. If the borrowed item sustains damage by a common and foreseen occurrence during the normal course of use, the borrower is exempt from payment. Since the lender considered the possibility of such an occurrence, he effectively released the borrower from liability when he transferred the item to him.
By rule of the Shulchan Aruch, a buyer that maintains the legal right to return a defective item to a seller is not required to transport the defective item back to the seller’s location. Since the seller was aware at the time of the sale that the buyer’s intent was to travel out of town with the item, he is responsible for transportation costs. Even if the seller was unaware that he had sold a defective item, nevertheless, he is required to provide the cost of transportation to return the item back to his location.
Based on the above ruling, it stands to reason that a lender that provides a borrower with an item that is defective or is unfit for use, is required to pay for the cost of transportation or delivery to return the item back to his location. Lending a defective item that is not fit for use is an act of negligence and clearly does not offer a benefit to the borrower. He is therefore exempt of all liability.
Verdict: At Owner’s Expense
Our Bet Din ruled that Jack, the owner of the van, is responsible for the cost of all damages incurred. Although the group of young men borrowed Jack’s van, they are, nevertheless, not responsible to pay for a new engine. Jack negligently lent them a van that was unfit for use, and by Torah law Jack is responsible to pay for a new engine. Since Jack was aware that the group of six were travelling to South Carolina, he is additionally required to pay the $1750 for the towing of the van back to New York from South Carolina. Finally, the cost of paying the mechanic to determine that the engine blew was Jack’s responsibility as well. The obvious reasoning for this ruling is that Jack failed to inspect or evaluate the condition of his van prior to lending it out. He is consequently the cause for all the damage and expenses incurred.
YOU BE THE JUDGE
Alan, president of an established ladies’ wear corporation, needed a loan to operate his business. He approached his brother-in-law Sam for a $750,000 loan, and although Sam was at first reluctant, he eventually transferred the entire sum. The two agreed on a six percent annual interest rate, which was to be paid in monthly installments over a five-year period. Alan lived up to the terms of the agreement and paid back the entire principal, including nearly $120,000 in interest. Taking the loan proved to be a wise decision, as Alan’s business was once again stable, and the future seemed very promising. Not too long after he finished paying off the loan in full, Alan attended a Torah class in which the topic of the prohibition of collecting interest was discussed. The rabbi teaching the class noted that in many instances a borrower retains the right to recover the interest he paid via a Jewish court of law. Since interest payments are illegal according to Torah law, a lender is required to return collected interest. Alan approached Sam seeking to recover the $120,000 in interest he paid. However, Sam rejected the claim. Sam explained to Alan that he had forfeited earnings from his previous investment, totaling at least the annual percentage he charged Alan, and brought to his attention that he had graciously lent him a very large sum with no guarantee. In Bet Din, Sam expressed that he was insulted by his brother in law’s behavior. Nevertheless, he was willing to comply with Torah law.
How should the Bet Din rule?
Is Alan entitled to recover the $120,000 he paid in interest or not and why?