In our case, as stated, the breach of the duty of disclosure has implications for the validity of the entire mortgage transaction.
Mortgage to Union Bank
- As stated, I accept the bank's argument that the bank is entitled to receive the funds transferred by it to Union Bank for the purpose of repaying the mortgage that the couple had there. I agree with the bank's argument that it is inappropriate for the respondent to be relieved of the mortgage obligation on the residence, while keeping the property in its hands, ostensibly free of mortgages or liens. In this regard, questions arise in fact and questions of law. As may be recalled, the respondent claimed in her summaries submitted to this court that the debt to Union Bank was paid through the sale of assets she and her husband had in the United States, and according to her, 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." The respondent even claimed that "the bank branch manager admitted to this in his interrogation." Is that true? In its ruling, the District Court held:
"On October 10, 2000, the bank gave a loan in the amount of ILS 585,000, most of which was transferred to Union Bank to cover a loan in the joint account of the plaintiff [the respondent - M.N.] and her husband, which was secured by a mortgage on the aforementioned property. The transfer of the money made it possible to cancel the mortgage that was registered in favor of Union Bank on the property that is the subject of the lawsuit, and to register a mortgage in favor of Bank Hapoalim."
In fact, despite the respondent's claim regarding the repayment of the mortgage to Union Bank from the sale of assets abroad, a different picture emerges from her own testimony before the District Court. I will quote the relevant part of her cross-examination:
"Q. Do you know that you took out a mortgage at Union Bank in relation to the security of a loan you took, of $100,000, to finance the purchase of your house or the construction of your house?
- Yes.
- You said that the manager of Union Bank invited you one day and told you that you were not paying the loan and demanded the money for that loan, right?
- True, in 1997 a deputy branch manager at Union Bank approached the two of us, invited us to a meeting, sat down with us and explained that he wanted us to pay the mortgage, a loan, I don't know what, in the sum of $100,000, that we would quickly transfer to Union Bank. At that time we had two houses in the US, my husband and I went out and decided to sell both properties in the US and in fact my husband sold the properties in the US and the money had to go to Union Bank.
- Do you have a reference that it was in 1997 when you paid the mortgage, since I tell you that it was paid in 2000 and I have a reference and you saw it in my affidavit, what is your reaction?
The witness to the court: If you ask me, if I know that the $100,000 loan from Union Bank was repaid by taking another loan from Bank Hapoalim and not by selling our assets from the United States, I answer that I don't know. The meeting at Union Bank was in 1997 or 1998 and until 2000 no one from Union Bank contacted me, and from that I understood that the loan had been paid.