JUDAICA - Wisdom In Torah

ter with her own private funds, as well as garments or jewelry
expressly purchased by the husband for his wife, are clearly
excluded from the levy (ḥM 97:26 and Sma 63).
Plurality of Creditors – Preferential Rights
In the case of a written obligation (shetar or deed), the creditor
in whose favor the obligation was first established takes preference
in levying payment on the debtor’s land, whether still
in the latter’s possession (i.e., the free property) or whether
already acquired from the debtor by a third party (i.e., “encumbered
and alienated” property; Ket. 94a; Yad, Malveh,
20:1; Sh. Ar., ḥM 104:1). This preferential right upon recovery
of a debt is the result of an attitude of Jewish law which gives
the creditor, upon the creation of the debt and over and above
his personal right of recourse against the debtor, a lien on the
latter’s land. This lien, which is in the nature of a right, takes
precedence over any similar right acquired by a subsequent
creditor. If a later creditor forestalls an earlier one in levying
on the debtor’s land, some scholars hold that what he succeeds
in recovering cannot be taken from him by an earlier creditor
despite the right of a creditor by deed to seize a debtor’s
“encumbered and alienated” assets – since a later creditor still
takes precedence over a regular purchaser, so that “the door
shall not be bolted before a borrower” (Ket. 94a and Tos. to
ibid.). Other scholars (ibid), followed by the majority of the
posekim (Alfasi and Asheri to Ket. 94a; and Codes), hold that
in these circumstances the levy of the later creditor is not valid
and the earlier creditor may seize from the later one whatever
the later may have recovered. However, if the later creditor
forestalls the earlier one and levies on the beinonit land, but
leaves the debtor with zibburit, the levy will be valid since the
earlier creditor is still able to recover his debt from the zibburit
(Sh. Ar., ḥM 104:1).
So far as the debtor’s chattels are concerned, the earlier
creditor takes no precedence in recovering his debt from such
chattels, since there is no lien over movable property. In the
case of two creditors simultaneously claiming the debtor’s
chattels, some scholars hold that the earlier creditor takes precedence
but the majority opinion of the posekim is that there
is no preferential right and the debtor’s assets are shared between
the two creditors (see below; Ket. 94a; and Codes). Even
in respect of land there is no preferential right unless the land
was in the debtor’s possession prior to establishment of the
debt; and if the debtor, at the time the debt was established,
charges in favor of two or more creditors any land which he
may acquire in the future (see *Lien), the earlier creditor will
have no preferential right in respect of such land, since when
the debtor acquires the land it is automatically charged in favor
of both creditors (BB 157b; and Codes).
In the case of a mere oral obligation there is no preferential
right between creditors, neither over land nor chattels,
and two creditors seeking to levy payment at the same
time must share the debtor’s property (Rif. Resp. no. 197; see
also Sma to Sh. Ar., ḥM 104 no. 3 and 31). According to some
scholars, however, there is an order of preference in respect
execution
of land in the debtor’s possession (ḥM 104:13 and Sma), even
in the case of oral debt.
The posekim dispute the method of dividing the debtor’s
property amongst his creditors when there is no preferential
right. One opinion is that each creditor takes a share of the
property in proportion to the size of his debt, since it would
be inequitable to divide the property equally in proportion to
the number of creditors (Rabennu Hananel, in Tur ḥM 104:11;
Yad, Malveh 20:4 quoting the Geonim); whereas others hold
that the debtor’s property is shared equally amongst the creditors
according to their number, provided that no creditor receives
more than the due amount of his debt, since the small
creditor is thereby afforded greater protection (Ket. 94a; Alfasi
and Rashi ad loc.; and Codes).
Preferential Rights and Insolvency
A consequence of the law of preference as described above
is that Jewish law does not recognize some of the laws of insolvency
customary in other legal systems. Thus, it does not
recognize a concurrence with regard to division of an insolvent
estate, whereby all the debtor’s assets – save for those
specifically charged in favor of a particular creditor or creditors
– are divided among his creditors on a concurrent basis
in proportion to the size of each creditor’s claim. Because of
the lien over the debtor’s land afforded in Jewish law to each
of the creditors, the order of precedence in recovering a debt
follows the order of the establishment of the various liens, in
similar manner to the order of preference in other legal systems
regarding specifically charged assets. Even in cases where
there is no prescribed order of preference, for example, in respect
of the debtor’s chattels or land acquired by him after the
establishment of the debt, the assets are distributed amongst
the creditors in proportion to the number of creditors and not
to the size of each claim.
In post-talmudic times the law was supplemented, within
the above-mentioned framework, by a number of rules very
similar to the familiar insolvency laws. Some of these rules
were aimed at protecting all the creditors. Thus, for example,
it was laid down that in cases where the law afforded no preferential
right, a proportional share of the debtor’s estate had
to be reserved for those creditors who had not yet claimed
repayment and even for those creditors holding claims that
were not yet due for payment. (Teshuvot Maimoniyyot, Mishp.
no. 41; Rashba, Resp. vol. 1, no. 1111; Keẓot ha-Ḥoshen ḥM 104,
s.s. 2). It also became customary to announce in public that
anyone failing to lodge his claim against a particular insolvent
within a specified period would lose his right (Rashba,
Resp. vol. 1, no. 893).
In different periods, when economic crises led to an increase
in cases of insolvency, various takkanot were enacted to
deal with the situation (see Elon, Ḥerut ha-Perat 172ff.). These
provided for the appointment of a trustee (ne’eman) over the
property of an insolvent (a bore’aḥ or “fugitive” as he is called
in the halakhic literature and takkanot of Poland, Germany,
and Lithuania in the 17th and 18th centuries: see Elon, Ḥerut ha-
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