Mr. Levine was purchasing a house from Mr. Hyman. He had transferred money for the purchase to an escrow account, and the parties were near closing. However, an issue arose between them regarding certain repairs to the house. Each party claimed that according to the contract, the cost for these repairs was to be covered by the other party.
The two were litigating the disputed repairs in Rabbi Dayan’s beis din. The sum in dispute was not large, but the litigation was taking time, and both parties were interested in closing already, even before the dispute was resolved.
They agreed to follow through with the closing, while the disputed sum would remain in escrow, and would be handled in accordance with the halachic ruling, whenever it would be issued.
After hearing the sides, beis din concluded that the liability for the repairs was subject to an unresolved dispute between the poskim. Therefore, following the principle of hamotzi mei’chaveiro alav ha’reayah – the burden of proof is on the plaintiff – they ruled that the questionable sum should remain with whoever was in possession (muchzak).
This led to a new dispute between the parties: Who is considered muchzak in this case?
“I should be considered in possession,” claimed Mr. Levine, the buyer. “I initially entrusted the money in the escrow account, so that in cases of doubt, the questionable sum should be returned to me.”
“I disagree,” said Mr. Hyman, the seller. “The money was placed in the escrow account to be given to me and was being held on my behalf, so I should be considered in possession, especially since the sale was closed.”
A third possibility was raised, that perhaps neither party should be considered in sole possession, since the money was being held by the escrow attorney, in which case the disputed sum should be divided.
The two turned to the beis din, and asked:
“Who is considered in possession (muchzak) in this case?”
“Regarding money and movable items, whoever physically holds it is considered muchzak in situations of doubt,” replied Rabbi Dayan. “This is in contrast to real estate, regarding which the previous established owner (mara kama) is usually considered the one in possession.
“In the case of two parties who both entrusted money to a third party, so that neither physically holds it, Tosafos (B.M. 2a, s.v. v’yachloku) writes that the third party holds it on behalf of both, and the two parties are considered equally in possession.
“However, when only one party entrusted the money in escrow, there is a dispute between the Acharonim who is considered in possession (Pischei Choshen, Shtaros 13:[4]; Divrei Ge’onim 107:3).
“Mishneh Lamelech (Hil. To’en V’nit’an 15:9) writes that since neither litigating party holds it physically, we resort to the last established owner (mara kama) also regarding movable items that are in the hands of a third party. Therefore, whoever entrusted the money to the third party is considered in possession, regarding doubt.
“However, Beis Meir (E.H. 53:2) writes that even when entrusted by one party, we consider the money as being held on behalf of both parties. We do not consider the mara kama in possession and so they should divide the money.
“This issue revolves around a discussion in the poskim regarding a father-in-law who entrusted money to a third party to be given to his son-in-law as dowry under certain conditions, which is the subject of a dispute between the Rishonim” (see Rama, E.H. 53:4; Chelkas Mechokek 53:13-14).
“Beis Shlomo (C.M. #73) rules like Mishneh Lamelech,” concluded Rabbi Dayan. “He adds that chezkas mara kama applies even to money, against Shach (91:33) who differentiates between money and other movable items. Thus, in this case of doubt, Mr. Levine, who entrusted the money, is considered in possession and it should be returned to him.”
Verdict: In cases of doubt, money entrusted in escrow by two parties is considered in joint possession; if entrusted by one party, he is considered in possession as the mara kama.
