Ribbis in a Loan Document by Rabbi Meir Orlean Mr. Neuman and Mr. Pincus were litigating before Rabbi Dayan. "It's an open-and-shut case," said Mr. Neuman. "I lent Mr. Pincus money, and he hasn't paid me back. He owes me $11,000." "What do you claim?" Rabbi Dayan asked Mr. Pincus. "I don't owe him $11,000," said Mr. Pincus. "Do you have any evidence?" Rabbi Dayan asked Mr. Neuman. "Sure, I have a loan document, signed by witnesses," said Mr. Neuman. "I have reason to believe that the loan document is disqualified," said Mr. Pincus. "What's wrong with it?" exclaimed Mr. Neuman. "Here it is." He presented the document to Rabbi Dayan. Rabbi Dayan examined the loan document. When he read it, he frowned. "The initial loan was only $10,000 two years ago," Rabbi Dayan said. "This agreement calls for an interest payment of 5 percent per annum. This is a prohibited ribbis clause. You are not allowed to collect $1,000 interest." "Mr. Pincus still owes the $10,000 principal," insisted Mr. Neuman. "Do you have other evidence of this loan?" asked Rabbi Dayan. "No," said Mr. Pincus. "I saw no reason for additional proof when I had the loan document." "What do you say?" Rabbi Dayan asked Mr. Pincus. "Did you borrow the money?" "I did," acknowledged Mr. Pincus. "However, since the loan document is invalid, I shouldn't have to repay the loan." "Where's the logic in that?" argued Mr. Neuman. "Even if the ribbis clause is invalid, the rest of the document remains intact. You should certainly pay the $10,000 principal, even without your admission. The signed witnesses testify to that!" "Once the document is problematic," replied Mr. Pincus, "those witnesses are meaningless." The two turned to Rabbi Dayan to hear his ruling. "There is a dispute between the Tanna'im (B.M. 72a) regarding a loan document that includes ribbis," replied Rabbi Dayan. "Rav Meir maintains that we fine the lender and he does not collect even the principal, whereas the Sages maintain that he collects the principal based on the document. "Many Rishonim, followed by the Shulchan Aruch, explain that is the case when the ribbis is listed separately," continued Rabbi Dayan. "However, if the ribbis were not listed separately, but rather included in the lump sum, the Sages concede that the document is completely disqualified lest the lender collect the ribbis as well based on it. Even so, if the borrower admits the loan, he must pay the principal according to almost all authorities, since we do not fine the lender, according to the Sages" (C.M. 52:1; Shach 52:4; Y.D. 161:11). "Even when the ribbis is distinct, how can we rely on the document?" asked Mr. Pincus. "Don't the witnesses become disqualified?" "It is true that witnesses of ribbis also transgress," replied Rabbi Dayan. "Nonetheless, Tosafos explains that the witnesses do not become disqualified on account of this, since most people are unaware that they violated a mitzvah by signing such a document. Alternatively, Ketzos (52:1) explains that the witnesses do not become disqualified until after they sign, so that this document remains valid" (Y.D. 160:1; Pischei Choshen, Shtaros 3:34-36). "Shach quotes other Rishonim who explain the Gemara's case the opposite way, that the ribbis was not listed separately," continued Rabbi Dayan. "Thus the witnesses are not disqualified since they were unaware of the ribbis, but if it was listed separately, they and the document become disqualified. Shach concludes that it is a sefeka d'dina (unresolved dispute). Thus, if the borrower does not admit, and we would need to rely on the document, it is questionable whether we would able to extract from the borrower who is in possession (muchzak)" (Sma and Shach 52:1; Mishneh Lamelech, Malveh V'loveh 4:6). "Thus, in this case, when the borrower admits the loan," concluded Rabbi Dayan, "the lender can collect his principal. If the borrower were to deny the loan, it is questionable whether the lender could collect the principal based on the loan document." | 
