[Avodah] Legal vs. Moral

[Joseph Kaplan]

> Re: the discussion in Areivim about whther closing a business and  
> not paying off creditors (presumably because the closed business,  
> as opposed to its proprieter, doesn't ahve the money.)  (The  
> moderators asked me to move this to Avodah.)

> RMB argues (in Areivim) that in the various questions I posed about  
> his business =
> closing scenario (Did the debtor borrow the money with the  
> intention to =
> pay it back?  Was he acting in good faith?  Was closing his business =
> that owed money proper under secular law?  etc.) I was acting as a =
> lawyer and trying to answer the question is it legal rather than is  
> it =
> right.  Well, I can't help being, and sometimes acting like a  
> lawyer, =
> but I WAS dealing with the question is it right?  Now, it appears  
> from =
> R' Micha's further responses to my post and that of RZS(all in  
> Areivim)  (with whom, =
> perhaps for the first time, I seem to completely agree :-)) that the =
> debtor acted in bad faith.  If that is the case, then what he did  
> wasn't =
> right (even if it was legal).  But how does RMB know that he acted  
> in =
> bad faith.  Most people, when they go into business, think it will  
> be a =
> success; most, when they borrow money fully intend to pay it back.  =
> Unfortunately, it doesn't always work out that way.  So if the  
> parties =
> were acting on the assumption, as many O businesspeople do in my =
> experience, that secular business law would apply, the lender knew  
> that =
> if the borrower's business was unsuccessful and did not have the  
> assets =
> to repay the loan, then he (the lender) would have to write off the =
> loan.  He knew, going in, that the borrower was not putting his  
> personal =
> assets at risk; if he wanted the borrower to do that he would have  
> asked =
> for a personal guaranty. So it would be unfair for the lender to  
> change =
> the rules of the game and to violate the assumptions and agreements, =
> freely entered into when the loan was made, and think that it would  
> be =
> "right" for the borrower to use his personal assets to pay back a =
> business loan.
>
> I'm not saying that in all cases where the borrower meet all the =
> technicalities of the law it would be "right" for him not to repay  
> the =
> debt personally.  I can envision situations where it would be legal  
> not =
> to repay but morally wrong.  But RMB has not given us enough facts  
> to =
> conclude that.  To the contrary, on the few facts given, not  
> repaying =
> the loan seems to be morally proper.  (Of course, the borrower  
> could act =
> lifnei meshurat hadin and personally repay the loan, but that is a =
> different matter.)
>
> I just saw a further response by RMB (in Areivim) where he writes:
>
> "Wouldn't most suppliers like forewarning? Perhaps work out some kind
> of payment? Especially given the tightness of the old boy network,
> shouldn't he try to pay them before any assets are distributed to
> larger companies that could better afford the loss, or at least
> non-Jewish ones? (If you have to mess up someone's life, why one of
> our own?)"
>
> That's why facts are so important.  Did he treat the one creditor  
> you =
> know worse than others?  Did he pay off bigger companies first?   
> Did he =
> have a legal obligation to do so?  Were their bills due first? Did  
> he =
> pay everybody a part of what he owed?  The SPECIFIC facts are  
> critical, =
> and an off the cuff reaction -- perhaps legal but not "right" -- is =
> shooting from the hip and perhaps being unfair to the borrower.   
> Legal =
> and right aren't always the same, but they often are, and yes,  
> lawyers =
> do know the difference and can deal with both concepts.
>
>
> Joseph Kaplan