Returning an Item to the Lender

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Question

I borrowed an item from a neighbor, returned it to his home, and then someone took it. The lender claims that it doesn't count as a return because he didn't see me return it?

Answer

It is considered that you have returned it, and you are exempt from payment.

Source

Shulchan Aruch, Choshen Mishpat, Siman 340, and Pitchei Teshuva there

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