Bank Can Use Jewish Marriage Document as Loan Collateral, Israeli Judge Rules

Ex-husband had sought to stop Mizrahi Tefahot Bank from claiming the NIS 1 million he had pledged his wife in the marriage contract.

Can a woman in the process of getting divorced use the money pledged to her by her husband in her marriage contract as collateral for a loan?

Tel Aviv District Court Judge Mordehai Ben-Haim said yes in a ruling he issued recently. "I see the signing over of the sum specified in the ketubah as legitimate," he wrote.

A ketubah, which is required under Jewish law for a couple to be married, details the husband's obligations to his wife while married and in the event of divorce.

Ben-Haim ruled in response to a suit against Mizrahi Tefahot Bank, in which the plaintiff claimed the lender was illegally taking for itself the NIS 1 million he had pledged to his wife in their ketubah in case of divorce.

The case began in 2006, as the couple was divorcing, when the Netanya Rabbinical Court ordered the man to pay his wife the NIS 1 million he promised her in the ketubah. Immediately afterward, he received a notice from Mizrahi Tefahot instructing him to give it the money.

In his suit against the bank, the man asked the Tel Aviv District Court to disallow the use of the ketubah as collateral and asked for NIS 250,000 in damages. "Transferring the rights listed in the ketubah is illegal; it exceeds the bank's authority and the norms of doing business," he asserted.

Mizrahi Tefahot responded that it hadn't appropriated the rights accorded his wife in the ketubah; rather, the woman herself had transferred the rights.

"There is nothing in the law to prevent or limit transferring the rights contained in a ketubah," it said, contending that a ketubah is like any other IOU that can be transferred to another party.

Ben-Haim, in ruling for the bank, said he relied on Jewish law to conclude that assigning any rights contained in the ketubah to a third party was legitimate. In any case, he wrote, "I reviewed the agreement [between the bank and the wife] over and over, and failed to find anywhere in it the word ketubah. The agreement applied, according to its wording, to any and all rights and money the woman was entitled to or would be entitled to pursuant to any lawsuit."

Meanwhile, however, the husband also appealed the Netanya Rabbinical Court's ruling to the Rabbinical Court of Appeals, and the latter termed the NIS 1 million an "excessive" amount that didn't have to be paid at all. It said the amount should not have exceeded NIS 120,000, and termed the sum appearing in the document a way of "honoring" the bride rather than a legal obligation.

"One has to take into account the pressure the bridegroom feels minutes before he goes to the chuppah [wedding canopy], and his desire to make an impression on everyone in attendance, including the bride's family, which is urging on the groom and his family," the appellate court wrote.

"More than once I've heard them tell the groom: 'Why trouble yourself about the obligation - it's only a matter of honoring [the bride].'"

Gil Cohen-Magen