Beit Midrash

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based on ruling 78063 of the Eretz Hemdah-Gazit Rabbinical Courts

Money Given for Shemitta Observant Farms - Part III


Beit Din Eretz Hemda - Gazit

Elul 11 5780
Case: The plaintiff (=pl) gave 480,000 NIS, for which he needed to take a mortgage, to the defendant (=def), an unregistered partnership of neighboring farms, to enable them to work their fields during Shemitta according to the otzar beit din system (without a heter mechira). Def was supposed to return the money plus 40% of net profits, which were expected due to an agreement with an otzar beit din (=obd). The obd did not keep their deal, causing def to do a late harvest and produce less than expected. Def ended up losing for the season, despite receiving some compensation from their insurance. Def returned a small amount to pl and admitted to owing another 307,000 NIS; their representative had stated in a text message that they owe 338,600 NIS. Pl demands a return of all of the loan plus compensation for pl’s mortgage payment and what he could have earned elsewhere with the money. Pl claims that since def acted negligently, pl and def’s contract is null. They should not have allowed obd to lower the price, but should have harvested on time, forced the produce onto obd, cashed obd’s guarantee check, and started working according to a heter mechira. Instead, def signed a compromise agreement with obd. The contract’s provisions for a breached contract award pl significant compensation (we omit details). Def claims to have done the best possible under the circumstances, which include the actions of obd (which was not directly obligated to def but to their yishuv), and the impact of following the halacha on the growing process. The sides also differ if their agreement was of a loan or an investment.

Ruling: [We have found that pl was an investor, that def had mostly not been negligent in the investment’s failure, but will pay 15,000 NIS as a compromise for not discussing with pl switching to heter mechira earlier. We now deal with some final points.]

While def’s representative at one point admitted to owing more money, he claims that that calculation was a mistake. A claim of a mistaken admission is acceptable in a case where there is a migo, i.e., he could have gotten out of paying in a different way. Regarding an admission in a text message, which is no stronger than a written note, there are several ways to be exempt (see S’ma 126:41). There are also indications of mistake, as several calculations were presented, and it is not logical to take the highest one and say that it is the correct one.

Def’s delay in paying what they admitted caused pl to have to pay extra interest on the mortgage. While this is indirect damage, def accepted upon themselves to pay even for moral obligations for which beit din does not usually obligate. Therefore, we will obligate according to an accountant’s calculation of unnecessary interest payment. Regarding pl’s lost profits, one pays usually only when the plaintiff could have used them for certain profits, which is rare nowadays. However, the money withheld was helpful to def in their [post-Shemitta] operations, and that should be shared with pl. To avoid further expense of hiring an expert, we estimate that value at 20,000 NIS.
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