Adam (Criminal Appeal) 17879-09-23 Yaakov Malka v. Muhammad Saadi

Background:

1. I have before me a banknote claim that begins with a request for execution of bills filed by the plaintiff at the Execution Office (Execution Case 503966-08-23). The plaintiff presented for repayment two checks that he allegedly received as part of a transaction for the sale of a used vehicle: one, in the sum of ILS 10,000, withdrawn for a maturity date of April 10, 2023, and the second, in the sum of ILS 10,000, withdrawn for a maturity date of May 10, 2023 (hereinafter: the checks).  The checks were withdrawn from the defendant's account, with the plaintiff's name written on them and two lines (crossed).  The checks were forfeited on the grounds of giving a cancellation order.
2. On September 5, 2023, the defendant filed an objection to the execution of the notes, which was transferred to the Magistrate's Court, in which he claimed that the notes that were given to the plaintiff by a third party were taken from him without permission and authorization, after a checkbook he ordered from the bank was given by the post office in his locality to another person, by mistake, the notebook was not returned to the defendant, and the defendant gave an order to cancel the checks in the entire register.
3. On December 28, 2023, a hearing was held on the objection and the defendant was questioned about his affidavit. A written response on behalf of the plaintiff was placed in the file in accordance with the permission granted, prior to the hearing.  In a decision from that date, the applicant was given permission to defend himself, and the claim was transferred to a speedy hearing track, in view of the amount of the claim.
4. The plaintiff, who is not represented by an attorney in this proceeding, appeared at the pre-trial meeting held on June 24, 2024, and the defendant and the attorney did not appear. At the plaintiff's request, a date was set for oral evidence and summaries, and the defendant was charged with expenses in favor of the plaintiff for his failure to appear.
5. On December 1, 2024, the evidentiary hearing was held, in which the plaintiff, the defendant, and the witness on his behalf, Muhammad Ghassan Saadi, testified. At the end of the meeting, the parties summarized their arguments orally.

The parties' arguments:

6. The plaintiff claimed that on March 14, 2023, he sold a used car to a man named Ahmad al-Asadi, and in return he received the two checks from him, "open", i.e., without mentioning the name of the beneficiary, for different dates. It was argued that the plaintiff received the checks lawfully and in return, and that he did not know and could not have known that these were canceled checks and therefore he was holding them properly.
7. The defendant sought to dismiss the claim and determine that he did not owe the plaintiff any sum according to the notes. The defendant claimed that at the beginning of January 2023, he ordered a checkbook from the bank, where his account is managed.  On January 25, 2023, the checkbook was delivered to the Israel Postal Distribution Center in the settlement of Mukaibela.  When the defendant contacted the post office, the clerk informed him that the checkbook had been inadvertently handed over to another person named Muhammad Ghassan Saadi.  The defendant called the person whose details the clerk had given him, but he claimed to him that after he received the checkbook from the post office, he handed it over to a person named Muhammad Samir Saadi.  The defendant called Muhammad Samir Saadi, who claimed to him that he had returned the checkbook to the post office.  The defendant went back to the post, but was told that they had not received the checkbook.  On February 13, 2023, the defendant gave the bank notice of the cancellation of the checks in the entire checkbook, and also filed a complaint with the police about the loss of the checkbook, on March 13, 2023.
8. The defendant sought to determine that there was no transaction between him and the plaintiff, that he did not undertake the plaintiff to pay him any sum, and that he did not receive any consideration from the plaintiff. It was claimed that the checks came out of the defendant's possession without permission and authorization, while forging his signature, and therefore he canceled them lawfully and is not obligated to comply with them.

Discussion and Decision:

9. After reviewing the pleadings and their appendices, including all the evidence before me, hearing the parties and their testimonies, and considering their arguments, I realized that the claim should be dismissed. In accordance with the provisions of Regulation 82(b) of the Civil Procedure Regulations, 5779-2018, the reasons for this will be summarized below.
10. In a promissory note claim, the burden of proof is on the debtor, the defendant, and not on the holder of the note, the plaintiff, since the note creates a presumption in favor of the holder of the note, that he is in good condition and that he is entitled to consideration for the note. This is the presumption set forth in section 20(b) of the Banknotes Ordinance [New Version].
11. In order to refute this presumption, the burden of proof is placed on the defendant, unless certain conditions such as fraud, coercion and illegality are met, as detailed in section 29(b) of the Banknotes Ordinance:

"Anyone who holds a bill is presumed to be in good standing; However, if they admit or prove in the action that the receipt or expense or the subsequent trading is impaired by fraud, coercion, or violence and fear, or illegality, the duty of proof is replaced, until the holder proves that after such fraud or illegality a value was given in good faith for the note."

12. When a signature on the note and its legality are denied, the burden of proof rests on the plaintiff to prove that it is the signature of the defendant, who denies his signature on the note, or claims forgery or signature in the absence of inspiration - since without a signature, there is no banknote liability (see: sections 22(a) and 23(a) of the Banknotes Ordinance; Civil Case (Safed) 16908-05-18 Muhammad Khotba v. Nevin Contractors WorksCompany in Tax Appeal [Nevo] (January 11, 2022), judgment of the late Honorable Judge Ronen Fine, paragraphs 34-39).
13. In other words, the defendant, who claims a defect in the property right of the holder of the deed, must lay a factual basis as to the circumstances that indicate that the deed went out of his hand and made unlawful use of it. When he has done so, the burden falls on the plaintiff to prove that the note was drawn by the defendant lawfully, since he no longer has the right to hold properly.  In the event of forgery or signature without authorization, the holder of the note will have no right, even if he held the note in good faith and after he gave a value for it - since the note is incomplete.
14. The case law referred to a situation in which a check was taken without permission when it was empty, and then the details were completed and the drawer's signature was forged, as a situation that could impair the property right of the holder, in the absence of an intention on the part of the drawer to remove a note from his possession, and differentiated between it and a situation in which the check was taken away after it was signed, and there was an intention on the part of the drawer to issue it to honor the note per se, in which case the market regulation would be in favor of the holder (Civil Case in Fast Track Procedure (Netanya) 28277-03-20 Time will come and market in a tax appeal v. Yanai Yaakov Asif [Nevo] (23 October 2023), para.  9).
15. In the present case, I was of the opinion that the defendant met the burden imposed on him to prove that the checks came out of his possession without his permission, without signing them, and in the absence of authorization on his part. On the other hand, the plaintiff did not meet the burden imposed on him to show that the checks were drawn by the defendant lawfully.
16. The defendant, whose full name is Muhammad Imad Saadi, testified that he ordered a checkbook from the bank where he manages his account in early January 2023, through an order on the app. On January 25, 2023, the defendant received a text message stating that the ledger had been sent to his account address (a copy of the notice was attached to the objection affidavit), and was supposed to be delivered to him at a distribution point of the Israel Post in the village of Mukaibela.  When the defendant checked his mailbox, and did not find the checkbook there, he waited for a few days and went to check again.  When he found nothing, he approached the employee at the distribution point, who said she had handed the checkbook to another person, Muhammad Ghassan Saadi.
17. The defendant testified that afterwards, he called Muhammad Ghassan Saadi, whom he knew, who stated to the defendant that he had given the checks to Muhammad Samir Saadi, also from Mukaybala, who claimed to him that these were his checks. The defendant called Muhammad Samir Saadi, who told him that he had returned the checks to the post office.  The defendant returned to the post office, where the clerk replied that the register had not been returned to the branch (transcript at pp.  8-9).
18. A few days later, the defendant received a notice from the bank about the use of the check in his account, and then realized that someone had used the lost checkbook (his testimony at p. 9, and at the hearing of the objection).  Subsequently, on February 13, 2023, the defendant contacted the bank and gave an order to cancel all the checks in the register.  The defendant also filed a complaint with the police on March 13, 2023.  A copy of the documents supporting the aforesaid was attached to the objection.
19. In the course of his summaries, the defendant attached a signature on his behalf (P/1). This is evidence that was submitted not in accordance with the rules of procedure and was not disclosed in advance, and there is no room for acceptance.  Admittedly, the plaintiff did not object to its submission, but this is a party that is not represented by an attorney, and therefore I did not find it to be credited to him.  In any event, this is evidence that, if accepted, serves precisely for the duty of the plaintiff's version, and in favor of the defendant, since a clear difference can be seen between the signature on the checks and the signature pattern in B/1.
20. The defendant brought Muhammad Ghassan Saadi to testify on his behalf, who stated that he was indeed acquainted with the defendant and that they both lived in Mukaibela. Ghassan testified that the defendant's checkbook arrived in his family's mailbox, he took the notebook and gave it to another person named Muhammad Samir Saadi, also from Mukaibela.  Since the checks were written only by Muhammad Saadi, Ghassan thought they were his checks, and Samir made him think so, too.  He went to Samir's house and handed him the notebook there.
21. If so, the defendant was able to lay a sufficient factual basis, in accordance with the burden imposed on him, according to which there are circumstances in which the burden of proof as to the correctness of the note shifts to the plaintiff's shoulders, when he testified that a complete checkbook that he ordered from the bank was lost even before it was transferred to him. It is now necessary to examine whether the plaintiff has met the burden imposed on him, and as I noted above, the answer to this is in the negative.
22. The plaintiff testified that he advertised a car for sale and on March 14, 2023, two people came to him. One of them is Ahmad al-Saadi, from Iksal, in whose name the vehicle was registered (a certificate of transfer of ownership from that date in his name was attached by the plaintiff to the execution request).  According to the plaintiff, the other person, also named Saadi, was the one who negotiated with him and gave him the checks for payment of the consideration for the sale of the vehicle (transcript of the minutes of the evidentiary hearing at p.  2).  According to the plaintiff, the same person told him that he had sold a car to the owner of the checks, and had received the checks from him as part of the transaction, and that he had nothing to worry about (ibid., at p.  4).
23. After the checks were forfeited, the plaintiff contacted Ahmed al-Saadi, who stated that he had spoken to "this Ahmad" to bring the plaintiff other checks. When the plaintiff went to the bank, he was told that the person who had given the order to cancel the checks was the owner of the checks, so the plaintiff turned to the defendant, who replied to the plaintiff that the checks had been stolen from him (transcript, at p.  3).  The plaintiff claimed in his testimony that he had recordings of conversations, but did not attach them.  The plaintiff later claimed that he had the phone number of the other person, but he disconnected the phone (ibid., at p.  5).
24. The plaintiff confirmed that he had no prior acquaintance with the defendant, that the defendant was not present at the time of the transaction, did not hand over the checks to him, and did not sign them before him (p. 4 of the transcript; p.  6, paras.  29-30).  The plaintiff was asked if he had asked the person who gave him the checks to present him with an identity card, and he replied in the negative (p.  4).  The plaintiff also noted that when he received the checks they were already signed, and he had to complete the name of the beneficiary, whom he stated in his business name, "Queen of Safety" (p.  7).  The plaintiff did not mention in his testimony who filled out the amount of the checks and the dates of payment.
25. The plaintiff claimed that there was acquaintance between Ahmad al-Saadi or the other person and the defendant, but he did not prove this with any evidence, and the claim was made in vain. The plaintiff's claim that the defendant admitted to such familiarity during his interrogation during the hearing of the objection (the plaintiff's statement in the transcript at pp.  2, 14-17; at p.  5, paras.  29-32; at p.  6, paras.  11-14) is erroneous, and stems from a misunderstanding of the name of the witness on behalf of the defendant - Muhammad Ghassan Saadi, and the other person to whom he referred, Muhammad Samir Saadi.  I have not been persuaded that the defendant admitted that he knew Ahmad al-Saadi or the other person who was present in the transaction, and the plaintiff has no other evidence of the existence of such acquaintance.
26. The plaintiff did not bother to summon the person who took possession of the vehicle, named Ahmad al-Asadi, to testify, even though he has his full details, in order to testify to the circumstances of the delivery of the checks to the plaintiff, and to provide details about the other person who was present in the alleged transaction. The same person, according to the plaintiff's version, was the one who negotiated and gave with him in relation to the consideration and the checks, and gave him the checks, according to him, hence the importance of his testimony in relation to the circumstances in which the checks came into his possession.  Since the burden of proving that the note was drawn lawfully and with permission is on the plaintiff, it is he who should have summoned these witnesses on his behalf, and not the defendant, contrary to his claim at the hearing.
27. The plaintiff also did not petition to order the disclosure of evidence that would shed light on the circumstances of the delivery of the checkbook from the post office or the bank, nor did he request to bring a graphological opinion in order to contradict the defendant's claims regarding the forgery of the signature. In the present case, there was no impediment to the plaintiff bringing appropriate evidence in order to prove his claims, and the fact that he is not represented in this proceeding does not exempt him from meeting the required burden.
28. On the basis of the aforesaid rule, the conclusion is that the defendant was able to prove to the extent necessary that the checks were taken out of his possession illegally, and that the signature was forged in them, and therefore the presumption in section 20(b) of the Banknotes Ordinance does not stand in the plaintiff's favor. In addition, the plaintiff was unable to contradict the defendant's claim that his signature on the checks was forged, and it was proven before me that the checks were canceled by the defendant, even before they were signed and delivered to the plaintiff.  In view of the aforesaid conclusions, the claim should be dismissed.
29. Therefore, I dismiss the claim and order the plaintiff to pay the defendant expenses and attorney's fees in the sum of ILS 3,500, and the reimbursement of the witness's fees in the amount of ILS 400, to be paid within 30 days from the day he receives the judgment, otherwise a shekel interest will be added to them from that date until the full payment is actually made.

I order the closure of the execution file in the heading and the cancellation of all proceedings by virtue of it.  Counsel for the defendant will forward a copy of the judgment to the file.