Mr. Miller had lent a significant sum of $100,000 to a business associate, Mr. Rubin. Unfortunately, Mr. Rubin was only able to repay half the sum. “I have no available cash,” he said, “nor assets that I can liquidate now.”
“I’m willing to give you additional time, if you need,” replied Mr. Miller.
“B’ezras Hashem, when business picks up,” said Mr. Rubin, “I will pay immediately every penny that I owe you.”
“Agreed,” said Mr. Miller. “May Hashem bless you with success!”
Some time later, Mr. Miller saw Mr. Rubin walk into a jewelry store. Mr. Rubin handed the store owner a thick wad of bills and received a diamond ring. Mr. Miller waited until he came out.
“How’s business going?” Mr. Miller asked.
“Still not well,” Mr. Rubin sighed.
“Sorry to hear…” said Mr. Miller. “I’m just wondering…”
“Wondering what?” asked Mr. Rubin.
“You remember that you still owe me $50,000,” said Mr. Miller. “You also promised that if business picks up you will pay immediately every penny that you owe.”
“Of course,” replied Mr. Rubin. “Unfortunately, business hasn’t picked up yet.”
“Then how did you buy that diamond ring with a wad of bills?” asked Mr. Miller.
“That’s what you’re wondering?” laughed Mr. Rubin. “That ring is not mine at all. A relative gave me money to buy it for him.”
“Who is that relative?” asked Mr. Miller.
“He asked that I not reveal his name,” said Mr. Rubin.
“Why not?” asked Mr. Miller “Is it such a secret to buy a diamond ring?”
“I don’t know why,” said Mr. Rubin. “That’s his business. All I know is that a relative asked me to buy the diamond ring for him.”
“This sounds very fishy,” said Mr. Miller. “Why such secrecy?”
“Believe me or not,” said Mr. Rubin, “that’s the truth.”
“I’d like to believe you,” replied Mr. Miller, “but you owe me money, and you’re holding expensive property, bought with cash! It seems my right to demand payment unless you can verify whose it is. I’d like to go with you to discuss the matter with Rabbi Dayan.”
“Why should I have to tell you?” responded Mr. Rubin. “The ring is not mine and that’s it! But I’m willing to speak with Rabbi Dayan.”
The two came before Rabbi Dayan. “Mr. Rubin owes me $50,000 and is holding a diamond ring, which he claims is not his,” said Mr. Miller. “Is he to be believed?”
“A borrower who is unable to pay but is known to hold property is not believed without evidence if he says it belongs to another,” replied Rabbi Dayan. “This is based on the presumption that whatever is in a person’s hand is his – chazakah kol ma shetachas yado shel adam shelo hu. We are concerned that the borrower is in cahoots with the other person to evade repaying the lender.” (C.M. 99:1; Maggid Mishneh, Malveh V’loveh 1:4)
“What is the source for this statement?” asked Mr. Rubin.
“This phrase does not appear explicitly in the Gemara; it appears in the Ramban and literature of the achronim,” replied Rabbi Dayan. “In a similar vein, though, the Gemara in Kesubos 19a teaches that when a borrower who is unable to pay admits that a loan document he possesses from a third party is void, the borrower’s admission is not accepted to exempt the third party at the expense of the lender.”
“Are there cases where this rule does not apply?” asked Mr. Rubin.
“In cases where the borrower holds property that beis din is not aware of,” replied Rabbi Dayan, “the question arises whether he is believed if he says it belongs to others on account of the principle of migo, since he could hide the money or give it away. The Ramban maintains that the chazakah overpowers the migo and he is not believed, while others disagree. The Rama cites both opinions.”