BREACH OF TRUST:
Violation by fraud or omission of any duty lawfully imposed upon a trustee, executor, or other person in a position of trust. It is thus a branch of criminal law, and under this aspect will be considered in the present article.Moral Basis.
Moral basis for the laws against breaches of trust may be found in such texts as: "Ye shall not steal, neither deal falsely, neither lie one to another" (Lev. xix. 11); "Thou shalt not withhold anything from [A. V., "defraud"; R. V., "oppress"] thy neighbor, neither rob him" (ib. 13); "Ye shall not afflict any widow, or fatherless child" (Ex. xxii. 21 ); "Thou shalt not see thy brother's ox or his sheep go astray, and hide thyself from them; thou shalt in any case bring them again to thy broher. . . . In like manner shalt thou do with his ass . . . and with any lost thing of thy brother's, which he hath lost and thou hast found" (Deut. xxii. 1, 3). In these texts may be found the germs of the law relating to the duties of bailees, trustees, and guardians; and in the law of trusts, the later Talmudic and rabbinical law was somewhat hampered in its logical development by the dominance of these ethical views. For instance, instead of compelling the guardian to render an account at the end of the term of his administration of the orphans' estate, the law required nothing of him except the delivery to the orphans of the balance of the estate in his hands. If they doubted the integrity of their guardian they could not compel him to account, but appealed to his religious sentiment. In such cases, instead of giving a legal account, he was required to take the rabbinical oath of purgation "that he had not stretched forth his hand unto the goods." And with this oath he was discharged (Maimonides, "Yad," Sheluḥin, ix. 1; Naḥalot, xi. 5, 12; Shulḥan 'Aruk, Ḥoshen Mishpaṭ, 93 1; 290, 17). There is no doubt that this appeal to the good faith of the guardian has resulted in the conscientious administration of orphans' estates under the Jewish law (Frankel, "Der Gerichtliche Beweis," pp. 64, 65).
The only Biblical laws on the subject of breach of trust are those in relation to bailees (see Bailments).
As stated above, the trustee, at the end of the term of his administration, is not obliged to account. When orphans attain their majority, they are entitled to receive their inheritance; and the guardian, without accounting, gives them the balance of their estate left in his hands after his maintenance of them during their minority. If the guardian was appointed by the court, and the heirs have reason to suspect that he has been guilty of a breach of trust, he must take the oath of purgation. If he was appointed by the father of the orphans and is what in modern law would be called a testamentary guardian, he can not, in case of mere suspicion of malfeasance, be compelled to swear (Mishnah Giṭ. v. 4; "Yad," Naḥalot, xi. 5; Ḥoshen Mishpaṭ, 290, 16). Later authorities are of the opinion that, inasmuch as the testamentary guardian need not take the oath, he may be compelled to render an account (gloss to Ḥoshen Mishpaṭ, ib.); and if the guardian is appointed by the non-Jewish court, he must render an account of his trust "because that is their law" (ib. 17).Oath of Purgation.
By analogy with the case of the guardian, all otherpersons in positions of trust are obliged, at the end of their administration of the trust estate, to take the oath of purgation if suspected of having been guilty of a breach of trust. This applies to partners (at dissolution of the partnership); to those who rent farms, paying the rent with a portion of the products; to women having charge of their husbands business; to a "son of the house" who manages the father's affairs (Mishnah Shebu. vii. 8; "Yad," Sheluḥin, ix. 1; Ḥoshen Mishpaṭ, 93, 1); to agents appointed to buy or to sell for their principals (ib. 93, 4; "Yad," Sheluḥin, ix. 5); and to the committee of an idiot or a deaf-mute (Ket. 48a; Yeb. 113a; "Yad," Mekirah, xxxix. 4; Naḥalot, x. 8; Ḥoshen Mishpaṭ, 290, 27). A son of the house, unless he really manages the father's estate, can not be compelled to take the oath to clear himself of a suspicion of breach of trust (Shebu. 48b), nor a guardian appointed by the father see above), nor a woman who was not a guardian during her husband's lifetime and who had no charge of his business after his death (Mishnah Ket. ix. 6; "Yad," Sheluḥin, ix. 4).
Biblical sanction for employing the oath of purgation to clear the trustee of the charge of breach of trust is found in the text: "If a man deliver unto his neighbor an ass, or an ox, or a sheep, or any beast, to keep; and it die, or be hurt, or driven away, no man seeing it: an oath of the Lord shall be between them both that he hath not put his hand unto his neighbor's goods" (Ex. xxii. 9  et seq.). The rabbinical reason for extending the oath to other persons standing in a fiduciary position is stated by Maimonides (l.c. 1) as follows: "Because these [various kinds of trustees] excuse themselves [for their breach of trust by the plea] that what they take of the property of the owner is due to them because they were doing business for him and were put to much trouble, hence the sages ordained that they were liable to take an oath to meet a charge of doubt [as to whether they had faithfully accounted for the property in their possession] so that they should perform all their duties in righteousness and good faith."
The oath of purgation was not administered unless the amount with which the trustee was charged exceeded the value of two silver meahs (Shebu. 48b). The predecessors of Maimonides decided that the heirs of a dead partner could not compel the surviving partner to take the oath, because they could not be certain as to the amount which the deceased suspected his partner of misappropriating. But Maimonides himself was of the opinion, following other authorities, that in such cases of doubt the heirs could compel the surviving partner to take the oath ("Yad," Sheluḥin, l. c. 3; followed in Ḥoshen Mishpaṭ, 93, 3).Punishment.
The punishment for breach of trust on the part of a bailee guilty of theft is thus stated in the Bible: "Whom the judges shall condemn, he shall pay double to his neighbor" (Ex. xxii. 8 ). If he is guilty of lying or deceit concerning the bailment and swears falsely concerning it, "he shall restore it in the principal and add the fifth part more thereto . . . and shall bring his trespass-offering unto the Lord" (Lev. v. 24, 25 [vi. 5, 6]).
The distinction between the two cases is thus stated in the Mishnah (B. Ḳ. ix. 7, 8): If the bailee, upon being asked to account for the property entrusted to him, pleads that it is lost, and swears to it, and witnesses then prove that he himself consumed it, he must pay the value of the principal only; but if there are no witnesses and he admits that his oath was false, he is obliged to pay the principal plus one-fifth, and to bring a trespass-offering. If he pleads that it was stolen from him and swears to it, and it is then proven that he himself stole it, he must double its value. If there are no witnesses, and he admits that his oath was false, he is obliged to pay the principal plus one-fifth, and to bring the trespass-offering (for further details see Bailments).
In those cases in which an oath of purgation cannot be imposed in spite of suspicious circumstances, the court may try to bring pressure to bear upon the bailee's conscience by proclaiming a general ban of excommunication on all persons who may be guilty of unlawful conduct in connection with the estate under consideration. This is implied in the Talmud where R. Ashi says, concerning the appointment of a guardian for orphans: "The court selects a man whose property is not under dispute, and who is of good repute and law-abiding, and who fears the ban of rabbinical excommunication, and gives him the money of the orphans to administer it" (B. M. 70a). It is clearly expressed by Alfasi (in Shebu. vii., end), Maimonides ("Yad," Sheluḥin, ix. 9), and Bet Joseph, citing R. Simon ben Adret (gloss to Ḥoshen Mishpaṭ, 290, 16).
If a bailee having the bailment in his possession, denies having it, and his deceit is proven, he is rendered incompetent to act as witness and to take an oath (B. Ḳ. 105b et seq. ; Ḥoshen Mishpaṭ, 92; 294, 1). See Bailments,
- Maimonides, Yad, Genebah, iv.;
- Gezelah, iii.;
- Sheluḥin, ix.;
- Naḥalot, x., xi.;
- B. Ḳ. pp. 105-107;
- Shulḥan 'Aruk, Ḥoshen Mishpaṭ, §§ 290, 292.