PURLE, I.—R'ulatiileke v. mercantile Sank of India
– 1957.. PresentBasnayake, C.J., and Pulle, J.
KULATILLEKE, Appellant, and MERCANTILE
BANK OF INDIA, Respondent-
-. '. S. C. 91—J). G. Colombo, 1690-1/M
Cheque—f raudulent alteration—Payment by drawee—Inability of drawee to drawer.
Two choques drawn by tho plaintiff for Hs. 93-50 and Es. 43-S3 were'subsequently fraudulently altered by the plaintiff’s clerk to Bs. 9,000-50 andRs. 4,000-85 respectively. The cheques were presented to tho drawee bankby the collecting bank with whom the clerk had just opened an account. Intho present action instituted by tho plaintiff against tho drawee bank, it wasfound that tho defendant in good faith and without ncgligoneo paid to thecollecting bank tho amounts which appeared on tho face of the cheques at thetime of presentment for payment. It was also established that tho plaintiffwas in breach of tho duly ho owed the bank to exorcise duo caro in tho mannerin which tho cheques were drawn.
Held, that the defendant, the drawee bank, was absolved from liability foraccepting tho forged chequos for payment.
A.PPEAL from a judgment of the District Court, Colombo.
II. W. Jdyewardene, Q.G., with G. T. Samcrawickrame and N. II. M.
Dalu watte, for the p 1 a in ti ff- app e 11 a n t.
S. Nadesan, Q.G., with G. Iianganathan and Sirimevan Amerasinghe,
for the defendant-respondent.
Cur. ado. vult.
November 14, 1957. Pulle, J.—
This is an appeal by the legal representative of a customer of theMercantile Bank of India, Limited. The action was originally filed bythe customer against the Bank for a declaration that his account was •improperly debited with two sums of Rs. 9000’50 and Rs. 4000-85.It is not disputed that a cheque drawn by the customer, dated the 19thJanuary, 1944, forRs. 93'50 had been fraudulently altered to Rs. 9000-50by a clerk employed under the customer and a second cheque dated 2ndMay, 1944, for Rs. 43-85 had been similarly altered to Rs. 4000"85 bythe same clerk. The substantial defence to the claim was that thecustomer acted negligently in drawing or issuing the cheques and the losssustained by him was due to such negligence and not to any negligenceon the part of the bank.'■'
The customer was not able to write out in English the amounts andother particulars on the cheques. All he was able to do was to signthem. On the first cheque the amount in words was written as “ ninethree and fifty cents only ” and on the second the amount in words waswritten as “ four three and cents eighty five only ”. It is obvious that
Thomishamy v. Karonchihamy
the clerk who wrote out the body of each cheque did so deliberately inorder to carry out with ease the fraudulent alterations which he madesubsequently. The cheques were presented to the defendant by thecollecting bank with whom the clerk had just opened an account. Thelearned trial Judge has found on the evidence, which was the identicalevidence led in an action filed by the customer against the collecting bank,that the defendant in good faith and without negligence paid the amountswhich appeared on the face of the cheques at the time they were presentedfor .payment. The trial Judge had evidence before hini on which hewas entitled to hold, as he did, that a person’s suspicions would not bearoused after examining the cheques with ordinary prudence and care.The bank officials in particular support him and I cannot say that thefinding is unreasonable, even though I might not have taken the sameview had I tried the case myself. This finding was nob sufficient byitself to absolve the defendant from liability for accepting the forgedcheques for payment. It had further to be established that the customerwas in breach of the duty he owed the bank to exercise due care in- drawing the cheques. On this part of the case I am in agreement withthe finding of the trial Judge. The reasons for the finding are set outfully in the judgment under appeal and I need not repeat them all here.The strikingly unusual feature in the drawing of the cheques is that thecustomer signed the first cheque containing the words “ nine three ” tomean “ninety three” and the words “four three” in the second tomean “forty three ”. Had the words “ninety three ” and “ fortythree ” been written instead, the forgeries raising the amounts by. Es. 8,907 and Rs. 3,957 respectively would not in all probability haveescaped detection at the time the cheques were presented at the bankfor payment. The spacing of the words and the figures also renderedthe forgeries easy.
In my opinion the appeal fails and should be dismissed with costs.Basn^yake, C.J.—I agree.
KULATILLEKE, Appellant, and MERCANTILE BANK OF INDIA, Respondent