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R’ Yaakov Yitzchak Rabinowitz, also known as the Yid Hakadosh, was the founder of the Peshischa sect of Chasidim in Przysucha, Poland. He was a disciple of the Chozeh of Lublin, and the teacher of R’ Simcha Bunim of Peshischa, to whom was passed the helm of his movement. Peshischa Chassidus continued and transformed itself through many different branches-Kotzk, Ger, Alexander, and many others.
The Sefas Emes says that the Yehudi Hakadosh (Yid Hakadosh) from Peshischa was called so because he grew and elevated himself daily like the level from a non-Jew to a Jew. The difference of the old level to the new one each day was the same difference of a non-Jew to a Jew.
The Yid Hakadosh would go to the Mikva after Chatzos at night when it was cold. Following that he would learn throughout the night.
Earlier in his life when he was in Peshischa and very sick, his son went to the Chozeh of Lublin for his father. The Chozeh told him that the Yid Hakadosh is sick because he fulfilled his purpose in this world and he is now ready to leave this world. He said, however, that there is something that can be done: שלח לך אנשים ויתרו- send him men (that will be his Chassidim) and then he will get years added (ויתרו) onto his life. That is, he will have a new purpose- to be a leader. Also, ויתרו is related to the word תורה, meaning he will develop a new Derech in Torah and Avodas Hashem. That is what happened and he lived longer. The Yid Hakadosh passed away on the 19th of Tishrei in 1813 at the age of 48. The Ruzhiner remarked he died younger than us all but he was greater than us all.
 Bamidbar, ט"תרל
 Another reason he was called so is because he was a spark of the Neshama of Mordechai Hayehudi (Yid).
 Bamidbar 13:2