The District Court ruled that a reasonable and honest bank should know that when it signs guarantees, undertakings and collateral, it must update the signatory regarding the borrower's debts as of the date of signing. It was held that the bank cannot rely on the debtor - whether it is the husband, a relative, or a foreign party - to "take his place in providing the information" to the mortgage party. If the bank had sought to detail the relevant information to the respondent, but the respondent had informed him that it was aware of the existing debts, the bank would have fulfilled its obligation. However, the District Court held as follows:
"... In the present case, I was astonished to hear that the bank is not at all aware of its obligations to the collateral provider, and that it conducts its business while being aware only of its own rights and not of the possibility that the collateral provider also has any rights."
- The court further noted that it was aware of the Magistrate's Court's rulings in the framework of the injunction proceeding, according to which the respondent knew that she and her husband were in debt and that after Union Bank refused to continue making credit available to them, the two submitted advice on how to deal with this refusal; and that the Magistrate's Court "He did not believe the plaintiff [the respondent - M.N.] That Bank Hapoalim paid the money to Union Bank." It can be assumed that the District Court's intention was that the Magistrate's Court did not believe the Respondent's claim that she She didn't know that Bank Hapoalim paid the money to Union Bank, which the Respondent denied the claim that the bank transferred the loan amount to Union Bank for the benefit of repaying the mortgage with the latter, and in fact, this claim served the bank as a defense argument. In any case, The District Court ruled that the Magistrate's Court had not yet decided the case on its merits, and that some of its determinations could be deduced from its determinations for the purpose of deciding the question Did the bank disclose to the respondent the status of the husband's accounts, moving on to signing the mortgage deed?. The District Court ruled that despite the factual findings of the Magistrate's Court, the Bank was incumbent on the A must Clarify to the Respondent the amount of the charges in the account prior to the signature. It was held that In light of the manner in which the husband managed the accounts and transferred money from one account to another, the respondent's knowledge that there was a debt in the account and how much it was in the account is highly doubtful.
- As for the question The third, in the matter Issues of not informing the Respondent about the status of the debts in the account prior to the signing of the mortgage: The court ruled that the application of the law, including the obligations imposed on a bank towards a mortgage borrower, on the facts of the case as described above, leads to the conclusion that the respondent's signature on the mortgage deed should not be given binding effect. It was held that even a woman who entrusts the management of all financial affairs to her husband and trusts him, would have thought twice if she had known that with her signature, "the residence, which is her fortress and that of her four children, already 'owes' the sum of ILS 450,000." It was further determined that the respondent knew of the existence of other properties registered in her husband's name only, so that "an additional application by the bank for a mortgage on the residential house" might have given the respondent a red light or motivated her to conduct further inquiries with her husband and with the bank. The court emphasized that this is a serious transaction, the signatory of which is supposed to know all the relevant details for the purpose of signing, and certainly a debt of this magnitude is one of these things.
- The appropriate remedy, it was held, is one that will bring the respondent to be in the situation it would have been in had it not been for the non-disclosure of the debt that already existed And which was the mortgage It is supposed to be guaranteed. Therefore, it was determined that the mortgage deed would not be considered to have been signed by the respondent and could not be activated against it. At the end of his remarks, the District Court clarified that even if there were contradictions in the respondent's words, "the bank's conduct contrary to the law" would have been more serious, and that if it had not been for the fault that fell in the bank's actions "It is reasonable to assume that the plaintiff would not have signed the mortgage deed, and hence the result is that it is not connected to the mortgage deed, and her signature on it is not binding and cannot be used against her."
The parties' arguments