Responsa for Bava Metzia 143:13

Q. Several Jews lent twenty-one pounds to the dean (Dechant), the overlord of the Jews of the city, on condition that he repay them thirty pounds. The dean asked the Jewish community to go surety from him and pay his creditors the thirty pounds, when the next payment of the taxes would be due. The community leaders agreed and gave a writ of indebtedness, bearing their signatures, for thirty pounds to A and B. The dean was deposed before the next payment of the taxes became due and the community was faced with the loss of this money. The community, therefore, refuses to pay the nine pounds interest to the creditors, claiming that since the community became responsible for the original debt contracted by the dean, the payment of the nine pounds, in addition to the twenty-one pounds borrowed by the dean, would constitute usury.
A. Since the creditors settled the interest on the dean as a loan, the dean became obligated to pay his creditors the full thirty pounds, which obligation was governed by the law of the country. The community leaders took over the dean's obligations in the presence of the three parties involved in the transaction, and became obligated to pay thirty pounds to the creditors. Moreover, the community is responsible for the full amount because its leaders went surety for the dean. The suretyship is binding in this case for two reasons: a) Although the suretyship was established after the debt was contracted (and should be invalid unless accompanied by a kinyan) the creditors did not free the dean from his obligations until the community leaders went surety for him; b) suretyship established by community leaders is comparable to one made before a Jewish court and is binding even without a kinyan.
SOURCES: Cr. 188; Pr. 38; Mord. B. M. 334. Weil, Responsa 30; ibid. 80; Moses Minz, Responsa 66d; Terumat Hadeshen 303; Ibid. 342.

Q. Several Jews lent twenty-one pounds to the dean (Dechant), the overlord of the Jews of the city, on condition that he repay them thirty pounds. The dean asked the Jewish community to go surety from him and pay his creditors the thirty pounds, when the next payment of the taxes would be due. The community leaders agreed and gave a writ of indebtedness, bearing their signatures, for thirty pounds to A and B. The dean was deposed before the next payment of the taxes became due and the community was faced with the loss of this money. The community, therefore, refuses to pay the nine pounds interest to the creditors, claiming that since the community became responsible for the original debt contracted by the dean, the payment of the nine pounds, in addition to the twenty-one pounds borrowed by the dean, would constitute usury.
A. Since the creditors settled the interest on the dean as a loan, the dean became obligated to pay his creditors the full thirty pounds, which obligation was governed by the law of the country. The community leaders took over the dean's obligations in the presence of the three parties involved in the transaction, and became obligated to pay thirty pounds to the creditors. Moreover, the community is responsible for the full amount because its leaders went surety for the dean. The suretyship is binding in this case for two reasons: a) Although the suretyship was established after the debt was contracted (and should be invalid unless accompanied by a kinyan) the creditors did not free the dean from his obligations until the community leaders went surety for him; b) suretyship established by community leaders is comparable to one made before a Jewish court and is binding even without a kinyan.
SOURCES: Cr. 188; Pr. 38; Mord. B. M. 334. Weil, Responsa 30; ibid. 80; Moses Minz, Responsa 66d; Terumat Hadeshen 303; Ibid. 342.

Q. A trustee loaned money belonging to orphans to A on interest, at the rate of one quarter per mark. A refused to pay the interest. Moreover, A claimed to have repaid part of the loan, which claim the trustee denied. The inquiring judges decided that even money belonging to orphans can not be loaned to a Jew at a definite rate of interest.
A. Your decision was correct and the trustee's stipulation of a definite interest was illegal and, therefore, void. However, under the circumstances, the loan is as if made by the Jewish court — the natural trustee and protector of all orphans — on the usual terms [made when orphans' money is loaned]: "to share in the profits but not in the losses." Therefore, if A earned profits with the money, he must pay to the trustee, the stipulated quarter per mark. If A admits that the money he borrowed belonged to the orphans, but claims to have repaid part of it, the trustee is believed as to the amount he received from A, (in repayment of the loan), and is not required to take an oath since the trustee is a disinterested third party. But if A states his belief that the trustee loaned him his own money, and not the orphans' money, the trustee must take an oath as to the amount he received from A in repayment of the loan, though he is not required to take an oath to the effect that the money he loaned belonged to the orphans.
SOURCES: Pr. 969; Mord. B.M. 332; Agudah B.M. 98.