Mr. Mandel lent Mr. Lewin $5,000 and recorded it on a proper loan document. A year later, he approached Mr. Lewin with the document and demanded payment.
“I repaid you three months ago,” Mr. Lewin said. “Don’t you remember?”
“That money was for a different loan,” replied Mr. Mandel. “The loan connected with this document remains outstanding.”
“I borrowed only once and repaid you,” Mr. Lewin insisted.
“No, I lent you money twice,” insisted Mr. Mandel. “That’s why I’m still holding this document.”
Mr. Lewin refused to pay, so the two wound up before Rabbi Dayan.
“Do you have a record that you repaid Mr. Mandel,” Rabbi Dayan asked Mr. Lewin. “A copy of the check, proof of transfer, or a receipt?”
“No,” replied Mr. Lewin. “I paid Mr. Mandel cash and didn’t bother to get a receipt.”
“In that case, Mr. Mandel is believed that there was another, undocumented, loan,” Rabbi Dayan said.
“Why?” asked Mr. Lewin.
“The Gemara [Kesubos 85a; Shavuos 42a] addresses our case,” answered Rabbi Dayan. “A lender holding a loan document acknowledged that he received payment, but claimed that the payment was for another, undocumented, loan. The Gemara concludes that if there is evidence of the payment, the lender is not believed. But if there isn’t, the lender is believed that there is another loan, based on migo.” [Choshen Mishpat 58:1]
“Remind me, what’s migo?” asked Mr. Lewin.
“Migo is the Aramaic equivalent of ‘mitoch,’ and means ‘due to the fact,’ or ‘since,'” explained Rabbi Dayan. “When a person can make a winning claim, but instead claims something else which is questionable, he retains many of the rights he would have had had he made the winning claim. Simply stated, if he were lying, he would have advanced the winning claim and won the case. Since he didn’t, we assume he’s telling the truth and believe his current claim.
“Returning to the case at hand: If Mr. Mandel were lying, he could have just denied receiving the $5,000 and collected on the basis of his loan document. Since he didn’t, we assume he’s telling the truth and believe his more questionable claim that there was a second loan. If there were evidence of payment, though, Mr. Mandel could not claim that he didn’t receive the money, and so the migo logic wouldn’t apply.”