The appellant concludes from the statement of Adv. Tulchinsky that the respondent understood very well that the mortgage deed on which she signs is a complete and absolute encumbrance of her rights in favor of the appellant. According to the appellant, after it was determined that the respondent was aware that she was signing a "mortgage deed", there was no room at all to raise, at the initiative of the court, the question of whether the respondent knew the purpose underlying the mortgage, and there was also no room to examine the appellant's conduct. It was argued that these questions are not relevant to the dispute that is the subject of the appeal and that they contradict the fact that Attorney Tulchinsky confirmed that he explained to the Respondent everything that required an explanation before her signature. The appellant emphasizes that contrary to the court's ruling, the bank did not rely on the husband reporting to the respondent about the status of his debts, but on an external lawyer, who, as stated, explained to the respondent what she was signing. The appellant argues that according to Real Estate Regulations (Management and Registration), 1969 (hereinafter: Real Estate Regulations), he was entitled to rely on the approval of Adv. Tulchinsky, who testifies that he explained to the Respondent the essence of the transaction and its legal consequences, and also testifies that the Respondent understood his explanations. According to him, the District Court's rulings change customary procedures and are contrary to the legislature itself, since they mean that "all real estate lien transactions that are signed by lawyers in Israel no longer fulfill what is required." The appellant also complains about the court's attitude to the fact that Attorney Tulchinsky was an external lawyer and therefore could not update the Respondent regarding the credit status in the bank accounts held by the Appellant. This, the appellant argues, was of no importance, since the mortgage deed expressly stated that it was intended to guarantee "all sums without limitation in the amount... those who come and/or who will come from the mortgage and/or the borrower jointly and separately." This means that all the credit taken from the appellant is secured by means of the mortgage deed. For the same reason, according to the appellant, there is no importance to the purpose that underpinned the taking of the mortgage. Finally, the appellant argues that there was no room to give weight to the respondent's claims regarding her lack of knowledge that it was a "mortgage deed", when these were argued orally and were confronted by a written and explicit document.
- On the factual level, the appellant complains about the District Court's disregard of the significance of the Magistrate's Court's determination that the Respondent was aware of the debts created by her husband, on the basis of a direct impression of the evidence and documents presented to him. Once positive factual findings were established regarding this awareness of the Respondent, it is irrelevant whether the Appellant was obligated to update the Respondent regarding the credit status of the account, or not - since in any case, according to the Appellant, these are data that were known to the Respondent. Even the fact that the husband used to manage the financial affairs of the household was not given any weight, according to the appellant, since this matter does not concern him and in any case all the mail on his behalf was sent to both spouses. According to the appellant, the respondent must bear the burden of the debts created by her husband, just as she was a partner in the fruits of his business over the years. In addition, if the Respondent had indeed been "out of the picture" with regard to the entirety of the financial matters, in any case, so the Appellant claims, the Respondent would not have shown interest in the credit situation in the bank account. The appellant further argues that the court did not give proper weight to the change that occurred in the respondent's versions, between what she said in the statement of claim and her statements before the court and in her summaries. First, the respondent claimed that the mortgage was made in order to secure the balance of the credit in the joint account. On the other hand, in her later version, she claimed that she did not understand that she was signing a mortgage deed at all and that she thought it was in "documents to increase credit." According to the appellant, in view of the respondent's unreliability and lack of cleanliness, there was no reason to grant her declaratory relief, which is an honest remedy. The appellant seeks to draw conclusions about the respondent's duty also because of her refusal to summon two witnesses - attorney Tulchinsky and her husband. According to the appellant, not only did the respondent refuse to testify before the District Court of Attorney Tulchinsky, she even refused the appellant's request to testify, and the District Court accepted her refusal, sufficing with the testimony given by the latter in the Magistrate's Court. The appellant protests against his failure to be summoned to testify before the court, as requested by him, as well as the respondent's refusal to testify against her husband, in order to clarify to the court exactly why the respondent was aware and why she was not.דובר
- According to the appellant, a number of legal doctrines lead to the same result. First, the appellant claims that he has a right to exchange the previous mortgage that was registered on the property, in favor of Union Bank, in accordance with the provisions Sections 13(b) and14 of the Pledge Law, 5727-1967 (hereinafter: The Pledge Law). According to him, the repayment of the mortgage to Union Bank by means of the money he lent to the couple is equivalent to making a fortune at his expense, since the respondent is exempt from repaying the mortgage on the one hand, and the real estate is not encumbered to the appellant on the other. The appellant further argues that the respondent was negligent in refraining from conducting any checks before signing the mortgage deed. Had she wished to clarify any details prior to the signature, the appellant would have provided the respondent with all the information she needed to make an informed decision. According to the appellant, he relied in good faith on the respondent's signature on the mortgage deed and changed his situation for the worse in light of this reliance. The appellant argues that, at the very least, the respondent's conduct constitutes contributory fault and that the court should have taken this into account when it nullified the validity of the mortgage deed.
- In light of the above, the appellant seeks to annul the judgment of the District Court declaring that the mortgage deed will not be considered to have been signed by the respondent and will not be able to be exercised against it; Alternatively, the appellant wishes to order the transfer of the total mortgage that was lying on the property in favor of Union Bank and which was repaid from the loan money given by the appellant, in the sum of approximately $119,000, to him.
The Respondent's Arguments
- The Respondent relies on the judgment of the District Court - on its factual and legal determinations - and is of the opinion that there is no reason to intervene in what was ruling. In general, according to the respondent, many of the appellant's objections to the judgment are directed against factual findings determined by the court, and these, as is well known, the appellate court does not usually intervene. On the legal level, it was argued that the appellant was trying to evade his obligations under the law and to pass on his own responsibility. It was further argued that the appellant bases his arguments on findings of reliability determined by the Magistrate's Court in the framework of a proceeding Temporary As a result, the appellant does not deal with the court's findings District Court in the judgment that is the subject of the appeal.
- The Respondent wishes to detail the circumstances that were behind the signing of the mortgage deed and the manner in which her life together with her husband was conducted. The Respondent claims that she is a loyal housewife who has stood in the shadow of her husband for about twenty years and devoted most of her time to raising her children and taking care of the household. In recent years, she has been in a sharp dispute with her husband, and she claims that her husband is a businessman who carried out extensive business activity at the bank, with all of his accounts serving as the sole account holder and signatory. According to the Respondent, she never met with the branch manager and the latter did not update her on matters related to the bank accounts. The Respondent emphasizes that this is a debt that was taken in the framework of the Respondent's accountInvestigation It belongs to the husband only. According to her version, in October 2000, the respondent was asked by her husband to accompany him to the bank branch to sign documents for increasing credit in their joint account - an account whose condition she was indeed aware of. Later she found out that the signed documents included a "mortgage deed" that was not limited to the amount of the mortgage of her residence, for the benefit of her husband's accounts. She claimed that she was not familiar with "the bank's laws" or her husband's business, who managed the family unit's finances exclusively, and she signed the documents out of trust in her husband and the bank, without understanding what it was about.
- The Respondent deals with the main fault on the appellant and claims that we are dealing with "a particularly sad case in which the bank acted with gross negligence and gross bad faith, while concealing and non-disclosure of material details, deception and blatant breach of almost all the obligations imposed on a party to the negotiations, a bank account in its relationship with its customers, guarantors and/or its neighbors". From the moment the appellant admitted to failing to provide information regarding the credit status in the bank account to the respondent, the conclusion is, according to the respondent, that the appellant did not meet his duty and she should not bear the consequences of this fault. The respondent claims that the appellant is trying to evade his responsibility by pointing the finger at an external lawyer for the bank, who has no information regarding the credit status in the bank accounts. According to the law, according to the legal norms enshrined in law and case law, a bank's debts do not dissipate after signing the mortgage deed in front of a lawyer, and this proceeding does not exempt the bank from the disclosure obligations that apply to it. The Respondent argues that the bank's duty and the duty of the lawyer in whose presence the mortgage deed is signed are complementary and do not overlap: the lawyer explains the legal significance of the transaction, while the bank explains the economic risks, their nature and scope, by informing the mortgagee about the status of the bank accounts, loans, debts, the borrower's financial situation, and more. According to the respondent, the appellant's approach is "so unfounded, so much so that if it had been accepted, Attorney Mortgage signatories were required to have direct and unrestricted access to private and confidential banking information, otherwise they would have been subject to negligence." The Respondent emphasizes the District Court's determination that the appellant did not bother to inform her of the existence of a debt in the amount of ILS 490,000 that existed in the account prior to the signing of the mortgage, as well as regarding the loan in the amount of ILS 585,000 that the husband took after signing the mortgage. In addition, according to her, the appellant concealed from the respondent the "problems that arose in the bank accounts". Since these were debts, accounts and loans that did not belong to her, she was unable to conduct inquiries and demand information from the bank about them, and the branch manager even admitted to the District Court that he would not have provided information to the respondent, even if she had requested the information on her own initiative. The respondent claims that the bank worked only with her husband and that in practice the husband's actions were concealed from her, even though they were in enormous sums. In addition, according to her, the warning letters sent by the appellant were addressed to the husband only, with the exception of one letter addressed to both spouses, but it had no connection to the debt that is the subject of this case. In summary, the respondent claims that she did not know and could not have known the risks involved in her signature, because the appellant refrained from informing her of any detail whatsoever, both at the time of her signature and afterwards.דובר
- According to the Respondent, the Bank breached "almost every possible obligation" towards it, including the duty to negotiate in good faith and the duty to maintain and execute an agreement in good faith. The concretization of the duty of good faith leads to the conclusion that the bank should have met a certain disclosure standard. She emphasizes that these are not two ordinary parties to the agreement, but rather a bank and a mortgage. It was further argued that the scope of the duty of disclosure is graded according to the expectations of the callers and that the relationship of trust between the bank and the customer, and even between the bank and someone who is not its customer, creates a very high level of expectations. According to the Respondent, the breach of the duty of disclosure is one of the most common grounds for cancellation of mortgages. The Respondent argues that according to the District Court's ruling, a bank's debt is sharpened where it is placed in a lien in favor of a spouse's debts. דוברדובר
- As to the factual findings of the Magistrate's Court, the Respondent argues that this is only a decision on temporary relief and that the full picture was raised only before the District Court. Moreover, according to the respondent, the Magistrate's Court determined findings of reliability at the stage when only prima facie evidence was presented and before the full evidentiary basis was presented to it. On the other hand, it was argued, the District Court relied mainly on the admission of the branch manager that the bank did not inform the respondent of the existence of any debts, neither at the time of signing nor afterwards. Moreover, the respondent argues that there is no basis for the argument raised by the appellant, according to which it was agreed between the parties that the hearing of the interim relief would form part of the hearing of the main action on its merits.
- As to the husband's failure to testify in court, the respondent claims that the appellant filed a request to summon him as a witness, but abandoned this request later in the proceeding. As for Attorney Tulchinsky, it was argued that the appellant's claim is "puzzling", since the appellant himself refrained from summoning him until the middle of the investigation process by the branch manager on his behalf. It was argued that the court rightly rejected the request to summon him as a witness, since the request was filed "3.5 years late", with reference to the date of the proceedings before the Magistrate's Court. According to the respondent, in the course of his testimony before the Magistrate's Court, it was clarified that Attorney Tulchinsky did not have information regarding the status of the bank accounts, debts or loans, and therefore his testimony was no longer needed. In addition, according to the Respondent, since the court had at its disposal a broad evidentiary basis to support its claims, which is even supported by the confession of the branch manager, the testimony of Attorney Tulchinsky was of no importance.
- Finally, the respondent rejects the claim of unjust enrichment and claims that at the time she understood from her husband that the debt to Union Bank was paid through the sale of assets that were in the United States, and that this claim "was proven to be true by means of a document presented to the bank's branch manager during the hearing and marked A/2, which constitutes evidence of the transfer of $130,000 to the bank from the United States." In other words, according to the respondent, the debt to Union Bank was covered by consideration received from the sale of the couple's assets in the United States, and according to her, "this is what the respondent knew, and thus the bank branch manager admitted in his interrogation."
The Appellant's Response
- The appellant argues that the respondent's response to the appeal reflects an attempt to evade the responsibility imposed on her for acts that she committed knowingly and in accordance with her interests at the time. As a rule, the appellant reiterated his argument that the signature before an attorney creates a presumption as to the explanation given, according to which all the information required for the mortgage was transferred to him prior to his signature, especially when the lawyer declares this in the presence of the resident. According to the appellant, the respondent's version that her signature on the mortgage deed was given as a guarantee of credit in the joint account is "a mockery of the wealth", since it was proven that this account never had a significant debit balance and in any case there was no need to pledge a residence of such a considerable value to secure it. The appellant wishes to give weight to the determinations of the Magistrate's Court regarding the respondent's unreliability and argues that contrary to the respondent's version in her summaries, it was never "proven" by her that the transfer of funds from the United States was made to repay the debt at Union Bank, and there is no wonder that this figure is not reflected in the judgment that is the subject of the appeal. As to the respondent's claims regarding the debt that arose after the signing of the mortgage deed, in the sum of ILS 585,000, the appellant claims that the respondent signed a mortgage to secure any credit that would be made available to her husband, and that in any case it was not possible for her to be informed of this debt at the time of signing the mortgage. In addition, the appellant claims that it was not his job to summon attorney Tulchinsky to testify, since the mortgage deed - a written document signed by the respondent - speaks for itself; Moreover, as stated, according to him, he asked for his summons, but the respondent objected.
Discussion and Decision
- The decision in the present appeal is derived, in my opinion, from the combination of two main factual elements: First, the fact that the bank did not inform the respondent of the scope of the debt that existed in theInvestigation Moves on to signing the mortgage by her. Second, the fact that the loan given by the bank in the amount of ILS 585,000 was used, at least for the most part, to repay the mortgage that the couple had at Union Bank. As will be detailed below, on the one hand, the amount of the debt is a material figure and failure to bring it to the attention of the Respondent means a breach of the duty of disclosure that applies to the Bank. The bank's failure to comply with the duty of disclosure is a disadvantage, in the sense that it is not possible to honor the mortgage deed "literally", as the bank requested. On the other hand, when it was proven that the loan given by the bank after the mortgage was signed was used to repay the mortgage Previous of the couple at Union Bank - it is not appropriate to cancel the mortgage deed as if it had not existed, and thereby leave the bank without a source of repayment even for the purpose of this debt. The conclusion is, as hinted at at the outset, that The Appeal Should Be Partially Accepted, in the sense that the bank will be able to realize the mortgage that is the subject of the appeal up to the amount that it transferred to Union Bank, in order to repay the mortgage that the couple had there. However, I am of the opinion that the mortgage deed should not be given full validity, which means that the respondent should be charged "all amounts without limitation in the amount ... which are due and/or will come from the mortgage and/or from the borrower jointly and severally to Bank Hapoalim Ltd.", as written in the deed. The reason for this, as stated, lies in the fact that the bank did not meet the disclosure obligation that applies to it. I will detail the reasons that underlie these conclusions.
- On October 4, 2000, the Respondent and her husband signed a form bearing the title "Mortgage Deed" in large cap and after it was written:
"This deed testifies to the guarantee of all amounts without limitation in the amount together with interest, commission fees, linkage differentials and other expenses - all as detailed in the special conditions below, which are due and/or will come from the mortgage and/or from the borrower jointly and severally to Bank Hapoalim Ltd., hereby mortgage H.H. Martin Yehuda [the husband - M.N.], Martin Michal [the respondent - M.N.] their right in the land described in the list below and they will constitute a guarantee for the payment of the 'promised sums' as defined in the special conditions below..."