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Mr. Lander sued Mr. Braun in beis din. They stood before Rabbi Dayan and his colleagues.

Rabbi Dayan turned to Mr. Lander. “You are the plaintiff. What do you claim?”

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“I lent Mr. Braun money on two occasions,” replied Mr. Lander. “I lent him $1,000 before Rosh Hashanah. On Chanukah I lent him another $2,000. He has not repaid either of the loans. Thus, he owes me $3,000.”

Rabbi Dayan turned to Mr. Braun. “What do you say about these claims?”

“I indeed borrowed $1,000 before Rosh Hashanah,” replied Mr. Braun.

“What about the $2,000?” asked Rabbi Dayan.

“I deny that completely,” said Mr. Braun. “I borrowed only once. I did not borrow any money on Chanukah.”

“Have you repaid any of the money?” asked Rabbi Dayan.

“No, I haven’t,” replied Mr. Braun. “I admit that I owe $1,000, but only that.”

Rabbi Dayan turned again to Mr. Lander. “Do you have any evidence of the loan on Chanukah that you claim?” he asked.

“We did not draft a loan document,” replied Mr. Lander, “but I have two witnesses who can testify to the loan. They are present in the waiting room.”

“Please usher in the witnesses, one at a time,” Rabbi Dayan instructed the beis din‘s secretary. “We will hear their testimony.”

Each of the witnesses, in turn, testified that they saw Mr. Lander lend Mr. Braun $2,000 on Chanukah. Mr. Braun’s advocate cross-examined them, but their testimony stood intact.

“The issue is very simple,” said Rabbi Dayan. “You admit $1,000 and there is valid testimony about the other $2,000. You must pay the full amount, $3,000.”

Mr. Lander and Mr. Braun left the beis din.

A week later, the two appeared again before Rabbi Dayan.

“Mr. Braun refuses to pay me the $3,000,” claimed Mr. Lander.

“What do you have to say?” Rabbi Dayan asked Mr. Braun.

“I paid him the $3,000 the day after we were here,” replied Mr. Braun.

“Do you have evidence that you did?” asked Rabbi Dayan.

“No, I paid him cash,” replied Mr. Braun. “But I can show that I withdrew $3,000 cash from my account.”

“Maybe he withdrew money, but he did not pay me a penny!” Mr. Lander stated emphatically. “He lied last time. Are you going to believe him now?”

“Mr. Braun is believed about the $1,000 that he admitted,” ruled Rabbi Dayan. “However, he is not believed without proof about the $2,000 that he previously denied falsely.”

“Why is that?” asked Mr. Lander.

“The Gemara [Bava Metzia 17a] teaches that if a person denied in court that he owes money, and witnesses testify that he does owe money, the person is presumed a liar henceforth regarding that money (huchzak kafran),” explained Rabbi Dayan.

“Therefore, he is not believed subsequently that he paid the money unless he brings proof of payment. Furthermore, although he claims definitively that he subsequently paid, there is no need for Mr. Lander to swear that he did not receive the cash since Mr. Braun was a proven liar regarding the $2,000.” [Choshen Mishpat 79:5]

“What about the other $1,000?” asked Mr. Lander.

“Mr. Braun is presumed a liar only regarding the money that he denied falsely,” replied Rabbi Dayan. “He does not lose his credibility regarding other money, and he is believed like any other person.”

“A person who borrowed money without a loan document is believed when he says he paid,” continued Rabbi Dayan. “Similarly, a person who admitted in court that he owes money, and beis din instructed him to pay, is believed when he says he paid.” [Choshen Mishpat 79:12]

“However, if beis din gave a written ruling to the plaintiff,” concluded Rabbi Dayan, “the borrower is not believed without proof since the plaintiff now holds a document.”

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Rabbi Meir Orlian is a faculty member of the Business Halacha Institute, headed by HaRav Chaim Kohn, a noted dayan. To receive BHI’s free newsletter, Business Weekly, send an e-mail to subscribe@businesshalacha.com. For questions regarding business halacha issues, or to bring a BHI lecturer to your business or shul, call the confidential hotline at 877-845-8455 or e-mail ask@businesshalacha.com.