One of the aspects of the economic crash of 2008 I most remember was the concern/fear among policymakers lest the credit markets freeze. Although the economy today probably depends on credit more than in the times of Chazal, they, too, wanted to ensure borrowers could find lenders and knew lenders had to have confidence they would be able to collect their loans when due.

Liens on Properties of a Borrower

One significant tool was shi’abud, the lien applied to all a borrower’s real estate owned at the time of a loan. Any land the borrower sells after the loan took place is still encumbered to the loan, if the borrower cannot repay otherwise. It will be up to the purchaser of the land to try to recoup his/her money if the lender repossesses it to collect the loan. [Shi’abud might be de-oraita, Biblical, but that isn’t discussed in our chapter of Aruch HaShulchan, Choshen Mishpat 43.]

At the same time, we don’t want purchasers ambushed by liens they had no way to know about, find their purchase repossessed when they had reasonably thought it unencumbered. [A few years ago, I had a car repossessed because of a clerical error by the leasing company; it was distressing!] We avoid such mishaps by writing a shetar, a loan document we believe publicizes the loan sufficiently to alert all buyers, who can evaluate the risks and make their choice about whether to purchase the land.

[Today, we have title searches for similar reasons. In general, and worth keeping in mind whenever we discuss financial rules, the laws of Choshen Mishpat are more amenable than most to change over time. First, because halachah permits tenai she-be-mammon, making a condition to apply a different rule or framework to a monetary transaction than the one the Torah set up. Second, where a society’s system achieves the exact goals of halachah in other ways, there is also room for poskim to accept those as sufficient. Here, I am just reviewing the rules of shetar as presented in this siman.]

The Shetar Evidences the Shi’abud and the Loan Itself

The date on the shetar/ loan document thus matters greatly, se’if one tells us, because from then on, purchasers should have known the land they were buying might be taken from them. The date matters less to the borrower, because the lender can take any of his/her assets to satisfy a debt (the assets still in the borrower’s possession are known as benei chorin, free, because no one is being hurt if they are taken), regardless of when s/he came to own them.

For the lender, the date can matter even when collecting from benei chorin, if there are multiple lenders and limited assets—the earlier ones collect first, and if one lender’s shetar has a date and another’s does not, the one with a date will collect first, since s/he can plausibly claim this loan happened first (in siman 104, AH tells us, we will see the rule that earlier lenders collect before later ones).

We might also date the shetar from when it was executed, given to the lender to retain as proof of the loan. A shetar with no date might still have witnesses who establish the lender received it on a certain date. That sets up the lien from at least that date, and those who buy from the borrower after would be expected to know of it.

[Today, where purchases are registered in a central office, the existence of witnesses to the shetar’s delivery could be a point of contention, future purchasers insisting they had no responsibility to track down those witnesses.]

The Shuvar, the Receipt

The borrower who repays a loan receives a document attesting to it (I think this is where we cannot destroy the original shetar, but AH doesn’t address it here). AH says the shuvar does not need a time written on it, since it simply counteracts whatever shetar the lender will present, and the lender will no longer be able to repossess lands the borrower sold.

We still prefer it have a time on it. AH points us to siman 54, where we will see that if the participants do not know the shetar’s date, the shuvar can be written without a date lechatchillah, because, again, it is about protecting the borrower/purchasers from a shetar.

What Counts as a Date

In se’if two, AH tells us scribes often omitted the thousands in writing the year of a shetar [for example, instead of writing 5786, our year, they’d write 786; his example is 5637, 1877, the year he wrote this first volume of AH, when he was 48, a reminder of how much more he accomplished in his first 48 years than we have. At least all those of us who haven’t written the Aruch HaShulchan].

Some write only the tens and ones [86 in our example, 37 in his], or even just the ones, but AH thinks there is no custom to write the thousands and skip the hundreds and/or tens. (Shach permits). Days of the week are not necessary, although they are often written, and can save a shetar’s validity if the scribe mistakes the day of the month. For example, a shetar dated the twentieth of a month actually written on the twenty-first will be invalid (because it is mukdam, a concept AH explains in se’if 3, see below).

Should it have the day of the week of the 21^st, however, we will know the scribe made a mistake with he date, because people are more likely to know what day of the week it is than date of the month (AH tells us many authorities limit that to one day, are sure people will not be two days off on the date). Nesivos allows this even if the scribe wrote “on the fourth day,” without “be-Shabbat,” of the week, because that’s what the fourth day means.

A Handwritten Shetar

We said earlier that a lender whose shetar has a date will collect from the borrower before a lender without a date, or with a loan with no written documentation (a milveh al peh, a purely oral loan). Shach argued this was not true for a handwritten, non-witnessed piece of writing, for fear the borrower gave the lender an advantage by pre-dating the shetar (called a kenunya, where two parties hatch a scheme to advantage themselves financially).

AH says other authorities disagree, see no reason to suspect a kenunya when there are other effective ways to give one lender an advantage over another, if the latter lent the money with just an oral agreement.

The Problem of Mukdam

The shetar’s role in repossession means dating it earlier than it really happened can make it possible to collect from buyers whose purchase had no lien: Cillian buys a field from Murphy on the 20^th of the month, and on the 21^st, Murphy borrows from Flanagan, but writes the shetar for the 19^th; Flanagan now has a shetar that lets him grab Cillian’s field, unlawfully, should Murphy be unable to repay the loan [welsh on it is the term, but I didn’t use Welsh names for our example].

To punish those who make such shenanigans possible, Chazal negated completely this shetar’s power to support repossession [even from Callam, who bought from Murphy on the 29^th]. Sema understood Chazal to have invalidated the shetar even if a court confiscated the shetar and could police its use, ensure it was presented only to later buyers, or even if a court writes on the document it was mukdam, only has effect from the twentieth.

The solutions are to tear up the shetar and write a new one, or to write on this shetar it can only be used to collect from the borrower. On the other hand, if Flanagan sued Murphy for repayment, and received a judgment from a beit din, Shach says the court order allows him to collect from any fools who purchase land from Murphy after that court’s ruling.

A shetar mukdam does have some practical effect. It forestalls a borrower from claiming s/he had already repaid the loan, and would establish the borrower as a kafran, a denier of the loan (with other ramifications), if s/he claims the loan never occurred.

The Witnesses to the Shetar Mukdam

Se’if four tells us the consequences for witnesses who knowingly sign a pre-dated shetar, they lose their court credibility, are considered false witnesses. They can still avoid this opprobrium if they can plausibly claim they thought the loan would happen then, and it was delayed after they signed the shetar, or say they didn’t pay attention to the date, assumed the scribe had written the correct one. If they claim some unusual error, an expert court will have to judge the matter carefully before deciding.

For witnesses to say a shetar they signed had been improperly signed early is a more complicated endeavor because of the principle ein adam meisim atzmo rasha, people cannot incriminate themselves in court. Should the witnesses explain their signatures in the ways we thought plausible in se’if four, and we have no other way of verifying their signatures, we can believe them, because they are not incriminating themselves.

Otherwise, we will need further evidence before we treat the shetar as mukdam. Tur thinks we believe these witnesses even if we can verify their signatures without them, where Rambam does not, unless the error they claim to have made is very common.

Much more to discuss, such as how these rules apply to a shetar matanah, a document establishing a gift, and a shetar me’uchar, a post-dated document. Next time, God willing.

Adapted from articles previously published on Torah Musings