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INDEMNITY:

That by which a surety who has been compelled to pay the debt of his principal is reimbursed, either by the principal or from other sources. The rabbinic law recognizes the surety's right to reimbursement (B. B. 174a, b), and also, in certain cases, his right to take steps, before the maturing of the debt, to secure himself against loss. The surety can not recover in case of dispute, unless he has witnesses to the fact that he has paid a debt on behalf of the principal; the production of the joint bond is not sufficient, unless a receipt by the creditor is attached showing that the bond was satisfied by the surety. Where the fact of debt depends for proof upon oral evidence, there must be also proof, by witnesses or by the debtor's admission, of the fact of suretyship.

The right to recover from the debtor's land, sold or encumbered after the date of the bond (see Deed), does not pass by subrogation to the surety upon payment alone; the bond which carries this right must be formally assigned and delivered to him by the creditor, unless the surety has a separate bond of indemnity from the debtor in which he (the debtor) subjects himself and his estate to the surety upon the surety's payment. Should the surety pay the joint bond, but leave the document in the hands of the creditor, he can not recover from the principal, for he is guilty of gross neglect toward him.

Should the surety pay the debt and the principal debtor die before the surety can recover from him, in order to recover from the principal's heirs the surety must show that the principal has not paid the debt himself. He may show the admission of the debtor shortly before his death; or he may show that the debtor actually died under the ban for non-payment (see Execution).

Should the surety pay the debt after the principal has paid it, he has no remedy; but if the creditor brings proof that he has not been satisfied, and the surety pays under compulsion, the debtor, as the cause of the loss, must reimburse the surety. The law on this subject is, however, full of exceptions and disputed points, and is of little practical value.

What applies to the surety holds good in the case of the "ḳablan," or "undertaker" (one who in form is the principal contractor, though the consideration moves to another; as when A buys in his own name goods that are delivered to B). It also holds good of joint contractors or joint sureties; for each of them is to the extent of half (or some other share, proportionate to the number of sureties) the surety of the other or others, and has therefore the right to reimbursement for whatever he is compelled to pay beyond his just share.

A surety, or ḳablan, who finds that the debtor is wasting his estate can, even before the maturity of the debt, apply to the court for indemnity against the debtor, so as to be secured against the latter's default. A remedy of this sort (an attachment for a debt not due) is wholly unknown to the Talmud, and, like Foreign Attachment, grew up in the age of the Geonim to meet the necessities of times when the Jews were no longer farmers and land-owners, but acted as money-lenders and traders. Whether the surety can, upon the maturity of the debt, call upon the creditor to collect from the principal, and whether the surety is exempt from liability in the event of the creditor's refusal to bring suit, are matters nowhere discussed in the Talmud, and are subjects of dispute among the later authorities.

Bibliography:
  • Maimonides, Yad, Malweh we-Loweh, xxvi. 6;
  • Shulḥan Aruk, Ḥoshen Mishpaṭ, 130-132.
S. S. L. N. D.
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