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By: Rabbi Yosef Greenwald
Did a broken Kinyan (transactional act) work in the first place?
As we discussed last week, breaking a Kinyan Kesef – a transactional act where money was paid or a down payment was made on an item or moveable object – carries with it the Mi ShePara curse. Once a person reneges on a completed Kinyan, there is a discussion among the Poskim if it was considered a viable Kinyan in the first place. In addition to the claim against the person, there is a disagreement of who the money belongs to.
The Tur in Hoshen Mishpat (198) cutes two opinions: The Ramban holds that if a potential buyer and a seller have completed a Kinyan and the buyer goes back on the agreement, the money belongs to the seller (to which the Tur also agrees). The Rif and the Rambam disagree.
For example, Reuven and his wife went out shopping for a piece of jewelry for their anniversary. At the jewelry store, they picked out the perfect watch. The owner said, “This watch in the display case is faulty. I have another one downstairs in the storage room that is perfect. I can’t get it right now, because I have no one else to watch the store.” The owner asked for a down payment, and told Reuven to come back tomorrow to pick up the watch and pay for it in full. Reuven gave the jeweler a 25% down payment for the watch and the couple went home.
In the meantime, Reuven found out about a sale at a different jewelry store. At the second store, Reuven and his wife found the identical watch which they picked out earlier, on sale for a cheaper price. They call up the first jewelry store owner and say that they apologize, but they have changed their mind about the watch.
The Kinyan was already complete, because they gave money for the down payment. But according to Halacha, they do have the right to renege. They can tell the first jewelry store owner, “We are very sorry but we found the watch for a cheaper price and we are cancelling the sale.” Reuven hasn’t actually done a Kinyan Meshicha (transactional act of physically taking item into one’s possession, usually the ultimate Kinyan of moveable property) because the watch he was going to buy was still in the storage room. He decided to go back the next day to pick up the down payment.
Who Owns the Down Payment?
Later that night, the first jewelry store had a robbery, and all the money in the register was stolen. Reuven’s 25% down payment for the watch was also stolen.
The next day, when Reuven and his wife came to pick up their down payment, the seller said, “The watch is not yours because you cancelled the sale. The money I was holding for you is gone, because it was stolen with the rest of my money!”
Reuven argued that the fact they didn’t want the watch meant they would cancel the sale once they got the money back. But until that point, the money was given to the seller. Had Reuven not cancelled the sale, the money would have belonged to the seller. The jewelry store owner lost his money and the 25% payment, but Reuven and his wife can still get the watch by only paying the remaining 75%.
The Tur explains that such a case is the subject of debate between the Ramban and the Rif and the Rambam. According to the Ramban and the Tur, the money was given to the seller and is considered his. The Mahane Efraim (Ribbi Efraim Navon) writes that this means the seller has the right to use the money, even after the customer had called up to cancel the sale.
However, the Tur and the Ramban hold that until the buyer gets back the money, the money belongs to the seller, and is considered a loan. The seller “acquired” the money from the buyer. The next day, the seller will return the money in exchange for the broken contract. But until then, the money belongs to the seller. The seller can take the money, put it in his cash register and use it as change with the next customer. Even after the buyer called up to cancel the sale, the money still belongs to the seller. It was given to him, and it rightfully became his. On the following day, the buyer is in the right. The seller had his cash register cleaned out and he may not be very happy about it, but he’ll have to give other money to the buyer.
However, the Rif and the Rambam do not hold this way. The Rif and the Rambam rule that the money belongs to the buyer. So when Reuven and his wife called up the owner of the first jewelry store to cancel the sale of the watch, the money now reverts back to the original owner. The money sitting in the cash register belongs to Reuven and his wife. He can choose to pick it up right away, or wait until the next day.
The seller has no more responsibility for the money in the register that as a Shomer Hinam – unpaid guardian – who is only liable in a case of negligence. The money was stolen from Reuven’s possession, not from the owner of the store’s possession. Therefore, the loss would be incurred by the customer, and the seller would be exempt from giving back anything to the buyer. This is the way we rule in Shulhan Aruch, Hoshen Mishpat 199, and this is the Halacha L’Ma’ase.