Shabbat Parashat Chayei Sara 5786

P'ninat Mishpat: A Seller with Questionable Rights to the Property – part III

Case: Multiple plaintiffs (=pl), each paying different amounts, bought land from a company (=def1), owned by def2, dealing with land sold by Arabs, in the periphery of a yishuv. Years went by without the deal being completed, so pl demanded their payment back according to par 5.6 of their contract. Although a different document states that pl cannot get their money back, it was never signed, and the signed contract says that it supersedes other agreements. Pl claims that def violated their agreement by not advancing it over years. More fundamentally, the sale should be void because pl was misinformed, as def has not provided any proof they own the property they purported to sell. [We saw that pl was able to nullify the sale because of misrepresentation.] Pl claims that the money he invested should be returned, linked to inflation and with interest because this is standard business procedure and because occupying pl’s money with a fraudulent sale damaged pl’s ability to earn money during this time.

Ruling: The claim that return of the money with interest should be considered standard cannot be applied here because the contract discusses cases of return of money and says that it will be without increase. Although beit din accepted pl’s claim that the contract is to be voided, we still see that the sides did not work with an assumption that there would be more than a nominal return. Even linking to the inflation rate is not a standard assumption in an era of modest inflation, where the money’s basic value remains intact.

There is a machloket whether there is a damage payment when Reuven keeps Shimon’s money away from him. Although the Rama (Choshen Mishpat 292:7) says there is no payment, many accept the Chatam Sofer’s (CM 178) distinction that when there is near certainty that Shimon would have earned profit with the money, he is entitled to damage payment. However, in this case, pl invested his money in a purchase of a speculative nature, where profits could not be assumed. Furthermore, it is apparent from many halachic discussions of sales that were nullified due to a variety of flaws that only that which was paid is returned and no more (Bava Batra 93b is one example).

In addition to the above, it would also be a problem of ribbit for pl to receive more than he gave. This applies even to linking to inflation in an era of moderate inflation. It is true that one can learn from the Rama (CM 192:7) that when one steals, if he returns more than he took, it is not ribbit, as ribbit classically applies to loans. However, the money returned from a nullified sale is considered like a loan in this regard (Shulchan Aruch, Yoreh Deah 174:7). The Maharam Shick (YD 161) says that in cases of severe deception, the money received can be considered like theft, but pl did not prove that the misinformation in this case rose to that level.

Therefore, def must return to pl all the money pl paid but not more than that.

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