Pesachim 31 – Loan Secured by Whiskey

Imagine that a Jew borrowed money from a non-Jew and left some chametz (think whiskey or vodka) in the non-Jew’s house as collateral. If after Passover the Jew defaults on the loan, the non-Jew keeps the chametz as a repayment. We can say that the chametz was already in non-Jewish hand on Passover retroactively, and now it is permitted for use.

By contrast, imagine a non-Jew who borrowed money and left his chametz in the Jew's house. Now, if after Passover the non-Jew defaults on his loan, the chametz becomes Jewish retroactively and is therefore forbidden for use, as chametz owned by a Jew on Passover.

In general, Abaye says that when one defaults on a loan, the lender acquires the collateral retroactively, from the first minute of the loan. Why? Since he did not repay, it is now clear that the collateral belonged to the lender all along. If he did something with it earlier, such as selling it, it now transpires that he had the right to do so.

Rava will say that since the borrower could have paid the money any time, the collateral always remained his. If the lender sold it before the loan was due, he did so illegally. It seems, though, that the rule we started with presents a problem to Rava! There, the lender did acquire chametz retroactively!? – Rava will answer that there it was different: whiskey was left with the lender who did not need to take any action to acquire it.

Art: The Irish Whiskey Still by Sir David Wilkie