Borrower At Work
- Zevulun lent Yissochor $1000. He gave him a cheque, but asked him to make
repayment in cash. Does this involve a problem of ribbis?
- Chayim asked Meir for a loan. Meir replied that he has no spare cash,
but does have plenty of goods in his warehouse. He is prepared to let Chayim
sell some of the goods and the proceeds will become a loan. Chayim will have
to go to the trouble of selling the goods. Is this considered the equivalent
of an interest payment?
In Choshen Mishpot (74:1), the Shulchan Oruch rules that a lender can demand
that repayment of a loan be made anywhere. Even if the loan was given in town,
he can demand that the borrower make repayment in the desert, if he meets him
there. The Shach (Note 1) quotes the Shiltei Giborim who discusses the possibility
of the lender having the right to expect the borrower to incur expenses in delivering
the payment to a place of the lender's choosing. The Shach states that it is
clear to him that the lender has no such right. Rav Blau (Bris Yehudah, Chapter
11, Note 36, infers from the Shach's statement that it would be permitted for
the borrower to incur such expenses voluntarily. The fact that he ends up paying
a total sum which is more than he borrowed does not constitute ribbis, since
the extra expenses are incurred in performing his duty – repaying the loan.
Rav Blau brings further proof from the law that the lender can demand that the
borrower return the money to his home town (Choshen Mishpot 14:1). Even if the
borrower happens to meet the lender in his own town, the lender stills retains
the right to refuse payment at the borrower's convenience. He can still demand
that the borrower make the extra journey to his town, for whatever reason. By
the same token, the lender can demand that the borrower deposit the loan repayment
in his bank account, which is considered his "hometown" under present day conditions.
A cheque in local currency is not worth more or less than cash. Any extra effort
involved in procuring the cash is viewed as the borrower doing his duty. Thus,
in question (1), Zevulun is entitled to demand repayment in cash. Not only is
there no ribbis problem, but it is also Yissochor's duty to accede to this request.
However, the situation in question (2) is very different. In Yoreh Deah (173:15),
the Shulchan Oruch rules that if Reuven owns goods which are sold locally for
a cheap price but are more expensive elsewhere, Shimon may transport the goods
to another town and use the proceeds as a loan only if he receives payment for
his services. To perform work which is usually paid for free in exchange for
a loan is considered a form of interest payment. The Shach quotes the Beis Yosef,
who is of the opinion that full payment must be made for the work as well as
reimbursement of expenses. The Taz (No.24) points out that this ruling is in
accordance with the opinion of the Tosafos and the Rosh. However, the Mordechai
holds that the potential borrower may do the work for free. The lender never
made the loan conditional on performing the work. It is therefore considered
to be a mere act of kindness on the part of the borrower. The Taz is not satisfied
with this argument. He offers a different reason. The borrower is not really
working for the lender. His concern is to procure a cash loan, selling the goods
in another town being the means of attaining his goal. The fact that the lender
gains through having his goods sold at a higher price is incidental. Nevertheless,
he concludes that the borrower should receive some token payment for his efforts.
Meir should also pay Chayim (at least) some small sum for his work.