Robert successfully accumulated 420,000 miles on his credit card and sold the miles to Simon for $5,000. Simon, a mileage broker, then sold the miles to Lewis, a well-known travel agent. Lewis issued a ticket to his customer using the miles, but he thereafter cancelled the order since he accidentally misspelled the customer’s name. The airline first deducted 420,000 miles when Lewis issued the ticket, only to thereafter credit the account upon the ticket’s cancellation. When Lewis reissued the ticket with the proper spelling, he again used the miles available in the account for the purchase. His customer successfully traveled using the ticket he purchased from Lewis. Much to everyone’s surprise, the airline did not deduct the points from the account after Lewis reissued the ticket. The three contacted our Bet Din, each claiming ownership of the 420,000 miles still in the account. Robert suggested that as the account holder he is clearly the owner of the miles. After all, he performed his end of the deal by giving access to his account to purchase a ticket with his miles. He claimed that since the process does not include the transfer of the miles to a different account, the balance in his account is his property. Simon and Lewis argued that since they paid for the miles in advance, they were the owners of the miles even though the miles were in Robert’s account. The parties expressed that returning the miles to the airline was not an option, as miles can only be deducted by issuing another ticket.
Which of the three is entitled to the miles? How should the Bet Din rule and why?
Torah Law
According to the ruling of the Shulhan Aruch, an employee is entitled to his wages as stipulated by his employer. At times, an employee is hired at an inflated price in order to compensate the employee for a loss he agreed to sustain in order to be available for his employer. By law, an employer is required to pay the stipulated inflated rate even if the employee did not subsequently sustain the expected loss.
In a classic ruling, an employee was awarded inflated wages to abandon his less valuable donkey at the riverbanks, in order to save his employer’s far more valuable animal from drowning. The ruling entitled the employee to collect his inflated wages to offset the expected loss of his donkey, even though his donkey miraculously did not drown. Since the employee performed his duty and saved the employer’s more valuable animal, he is entitled to the stipulated wages.
The fact that the employee did not sustain the loss of his donkey is irrelevant and the animal’s return is viewed as the employee’s good fortune. The employer has no ownership rights to the saved less valuable donkey, even though he paid the employee’s inflated wages to offset that donkey’s expected loss.
The above ruling is applicable to a wide range of cases. The general rule applied is once an employee or contactor performs a service an employer is required to make full payment as stipulated. The employee is entitled to his inflated wages as well to that which the wages were set to compensate for. The good fortune of the saved animal from expected loss belongs to the employee, the animal’s rightful owner.
In a buy-sell agreement, when a product sold is spared, it belongs to the buyer who is the rightful owner. Although the product sold is still in the possession of the seller, the seller may not claim ownership even if he already provided access to the buyer to earn a profit. In short, the buyer is entitled to all profits generated from the product even though it is still in the seller’s possession. When miles are sold, it is the buyer’s good fortune if the miles are not deducted from the seller’s account. He is the rightful owners of the miles.
By rule of the Shulhan Aruch, a sale is considered incomplete unless the product is shipped or transferred to the buyer’s possession. Nevertheless, when a buyer and seller agree to finalize a sale upon payment, leading halachic authorities render the sale as final when funds are transferred.
Furthermore, if by industry standards a purchase is viewed as final with the transfer of funds, halachically the sale is viewed as final upon payment. When an agent purchases mileage from a seller the miles typically stay in the seller’s account until a ticket is issued.
VERDICT: Going the Extra Mile
Our Bet Din awarded Lewis, the buyer, with all of the 420,000 miles in the account. Although the miles were in Robert’s account, nevertheless, they were sold for cash to Lewis. As mentioned in Torah law, when agreed upon, a sale is considered final with the transfer of funds, even before the shipping of the product. Furthermore, by industry standards the sale was final when Lewis paid for the miles. When an agent like Lewis purchases miles, the miles typically stay in the seller’s account until Lewis issues a ticket to a passenger.
Robert’s claim that he is entitled to repossess the miles since he already enabled Lewis to profit from them after issuing a ticket is a claim that is irrelevant. As owner of the mileage, Lewis is entitled to all proceeds available from his purchase. Robert’s claim that he already performed and provided access to his account is rejected as well, since it is his responsibility to provide such access until the count is depleted of all the purchased miles. The good fortune of the miles not being deducted is to the credit of Lewis, the rightful owner of the miles.
In Loving Memory of Vera Bat Carol, A”H
YOU BE THE JUDGE
Short Delivery
Robert requested of Simon, who was traveling to Israel, to take $4,000 to his sister who resided in Jerusalem. Robert placed the money in an unsealed white envelope and gave it to Simon. Simon did not count the money, but rather stipulated that he is not assuming responsibility for the funds. He placed the cash in his wife’s bag, which he stowed in the overhead bin on the plane. Upon arrival in Jerusalem, he took the envelope to Robert’s sister, who counted the cash and found that $590 was missing. In Bet Din, Robert’s sister reprimanded Simon for carelessly stowing the cash in an overhead bin. Simon responded that the $4,000 cash envelope he received consisted of many fifty, twenty, and ten-dollar bills. It was unreasonable to carry the overstuffed envelope in his pocket for the duration of the flight. Simon added that it was irrational to say that someone stole $590 and left the entire balance behind. Simon therefore suggested that perhaps he never received the complete $4,000 from Robert. Robert defended that he carefully counted the money before placing it into the envelope. Robert and his sister suggested that perhaps Simon or his wife mistakenly used the cash for their expenses, thinking the cash was their own. The couple responded that for the duration of their travels they did not use a total sum near the amount missing.
Is Simon responsible for the missing funds?
How should the Bet Din rule and why?