Responsa for Bava Metzia 128:6

Q. A young man lent money to A stipulating that the latter be responsible for the loss of it through theft, but not through unavoidable accident. The former also tutored A's son. In return for both services A paid the young man's living expenses. Is the lending of the aforesaid money considered a legitimate transaction?
A. If while the arrangement was made with the young man to rehearse the lessons with A's son in return for receiving his sustenance, the stipulation was made that the young man lend money to A, the transaction is considered usurious, even though A would have been content to pay the young man's living expenses in return for his tutoring alone. The fact that the money was not given as an actual loan, since A was not to be responsible for its loss through unavoidable accident, does not materially change the situation, since the Talmud considers the renting of money a usurious transaction (B. M. 69b). But, if it is true, what you write at the end of your letter, that the young man gave A his money as an outright gift so that he is at liberty, should he so desire, never to return the money to the young man, the transaction is a legitimate one.
SOURCES: Cr. 257; Am II, 151; Mord. B.M. 316; Tesh. Maim. to Mishpatim, 45; Agudah B.M. 88. Cf. Maharil, Responsa 37; Moses Minz, Responsa 72; Terumat Hadeshen 302.

Q. A young man lent money to A stipulating that the latter be responsible for the loss of it through theft, but not through unavoidable accident. The former also tutored A's son. In return for both services A paid the young man's living expenses. Is the lending of the aforesaid money considered a legitimate transaction?
A. If while the arrangement was made with the young man to rehearse the lessons with A's son in return for receiving his sustenance, the stipulation was made that the young man lend money to A, the transaction is considered usurious, even though A would have been content to pay the young man's living expenses in return for his tutoring alone. The fact that the money was not given as an actual loan, since A was not to be responsible for its loss through unavoidable accident, does not materially change the situation, since the Talmud considers the renting of money a usurious transaction (B. M. 69b). But, if it is true, what you write at the end of your letter, that the young man gave A his money as an outright gift so that he is at liberty, should he so desire, never to return the money to the young man, the transaction is a legitimate one.
SOURCES: Cr. 257; Am II, 151; Mord. B.M. 316; Tesh. Maim. to Mishpatim, 45; Agudah B.M. 88. Cf. Maharil, Responsa 37; Moses Minz, Responsa 72; Terumat Hadeshen 302.

Q. A young man lent money to A stipulating that the latter be responsible for the loss of it through theft, but not through unavoidable accident. The former also tutored A's son. In return for both services A paid the young man's living expenses. Is the lending of the aforesaid money considered a legitimate transaction?
A. If while the arrangement was made with the young man to rehearse the lessons with A's son in return for receiving his sustenance, the stipulation was made that the young man lend money to A, the transaction is considered usurious, even though A would have been content to pay the young man's living expenses in return for his tutoring alone. The fact that the money was not given as an actual loan, since A was not to be responsible for its loss through unavoidable accident, does not materially change the situation, since the Talmud considers the renting of money a usurious transaction (B. M. 69b). But, if it is true, what you write at the end of your letter, that the young man gave A his money as an outright gift so that he is at liberty, should he so desire, never to return the money to the young man, the transaction is a legitimate one.
SOURCES: Cr. 257; Am II, 151; Mord. B.M. 316; Tesh. Maim. to Mishpatim, 45; Agudah B.M. 88. Cf. Maharil, Responsa 37; Moses Minz, Responsa 72; Terumat Hadeshen 302.

Q. A young man lent money to A stipulating that the latter be responsible for the loss of it through theft, but not through unavoidable accident. The former also tutored A's son. In return for both services A paid the young man's living expenses. Is the lending of the aforesaid money considered a legitimate transaction?
A. If while the arrangement was made with the young man to rehearse the lessons with A's son in return for receiving his sustenance, the stipulation was made that the young man lend money to A, the transaction is considered usurious, even though A would have been content to pay the young man's living expenses in return for his tutoring alone. The fact that the money was not given as an actual loan, since A was not to be responsible for its loss through unavoidable accident, does not materially change the situation, since the Talmud considers the renting of money a usurious transaction (B. M. 69b). But, if it is true, what you write at the end of your letter, that the young man gave A his money as an outright gift so that he is at liberty, should he so desire, never to return the money to the young man, the transaction is a legitimate one.
SOURCES: Cr. 257; Am II, 151; Mord. B.M. 316; Tesh. Maim. to Mishpatim, 45; Agudah B.M. 88. Cf. Maharil, Responsa 37; Moses Minz, Responsa 72; Terumat Hadeshen 302.

Q. A borrowed ten pounds of charity-money on the following conditions: a) that he pay three pounds per year out of his profits; b) that should his profit be less than three pounds, he would have to pay only half of that profit; and c) in case there be a loss, A would suffer the entire loss himself. For ten years A paid the three pounds per year regularly and thus has paid thirty pounds to the charity-chest. Now, however, being somewhat depleted in finances he is in no position to return the ten pounds. Since it is forbidden to lend charity-money on condition that the lender share in the profits but not in the losses, the thirty pounds paid by A is considered abak ribbit (shade of usury). Although A can not collect, by judicial process, the abak ribbit he has paid, he ought to be able to retain the ten pounds in exchange for the unlawful interest he has paid. Signed: Hayyim b. Machir.
A. If one lends money on condition that he share in the profits but not in the losses, the terms of this transaction, being unlawful, are void. We must, therefore, substitute other terms in their place. We must choose one of the following alternatives: a) the transaction is a pure loan bearing no profit; b) the lender is liable for his share of the losses and is entitled to his share of the profits. Since a person lends money with the intention of earning a profit, and such profit constitutes the main purpose of the transaction, we prefer the second alternative. Therefore, we must calculate what percentage of the entire profit (earned by A through the use of the ten pounds) the three pounds per year was expected to form, and, then, charge the charity-chest with the responsibility for the same percentage of the losses. If, during the ten year period, the thirty pounds paid by A exceeded the percentage of the total profit, A is entitled to deduct such excess from the principal; otherwise, he must repay the entire principal.
R. Hayyim b. Machir raised objections to R. Meir's decision. He brought proof to the effect that the transaction ought to be changed into a pure loan bearing no profit, and that A be entitled to retain the ten pounds of the principal against the illegal profit he has paid. He even cited (by number) another Responsum of R. Meir wherein the latter decided that a transaction such as the above be considered a pure loan bearing no profit. (Cf. Cr. 62, Pr. 151; Am. II, 169.) He assured Rabbi Meir, however, that he would follow his decision.
R. Meir replied: I was always of the opinion that the aforesaid transaction ought to be considered a pure loan bearing no profit. But, when your query reached me I had just received the book (Code) of Maimomides, and I decided to "ask the Oracle" (see what Maimonides says on the subject). When I discovered that Maimonides requires the lender to share in the losses as well as in the profits, I adopted his view. For all his words are based on tradition. Even if this decision be based on reason, I have to bow to his opinion since my inferior reasoning ability could never compare with that of Maimonides who is a profound master in that art. Moreover, I see the wisdom of his view. For a person who lends money to another does so because he hopes to profit thereby. Were he mainly interested in the safety of the principal (as you seem to infer) he would keep the money in a safe place and never lend it to anybody. Were we to ask a lender who had stipulated that he do not share in the losses, whether he would prefer to change his voided agreement into a pure loan transaction bearing no profit, or choose to share in the profits and the losses, he would certainly prefer the latter. Furthermore, when the active partner lends the money against adequate security, the chances of earning a profit are much greater than the chances of losing part of the principal.
SOURCES: L. 426; P. 477.

Q. A promised ten marks to charity. He gave the money to B for investment purposes on condition that B pay to the poor of a certain community ten quarter-marks per year.
A. B should not give the ten quarter-marks to the poor of that community, since it would constitute unlawful usury. If, however, B earned profit with the ten marks, he must give part of the profit to the poor of another city, since one is not permitted to profit from charity money.
SOURCES: Pr. 999.