In the case of Tal Trading Corp., the precedent established in Other Municipality Applications 333/61 Eliezer Goisky v. Haim Yosef Meir et al., 16 595 (1962) (hereinafter: the Goisky Rule) was repealed, and the Supreme Court ruled that a person who is not in proper possession of the deed cannot overcome the defense of failure of consideration by the drawer or the doer. In his judgment, the Honorable Justice, as he was then called, discussed the purpose of banknote law, while also relating to the physical aspects of banknote law against the background of the changing reality:
"These charges took the physical form of paper. In this way, the obligation gained a property that was reserved for objects but not for abstract rights - "transgressions" (or "formal negotiability"), i.e., the ability to transfer the rights according to the deed from one person to another (see Civil Appeal 1560/90 Moshe Zitiat v. First International Bank of Israel Ltd., IsrSC 48(4) 498, 505 (1994) (hereinafter: The Citiat Matter)). This feature has now lost some of its importance due to two main reasons - the increased status of the legal tender, such as cash, and the possibility of assigning even abstract rights (See Section 1 of the Assignment of Charges Law, 5729-1969; Barak, p. 1266)...".
(My emphasis - to the IRS)
In annulling the Goisky ruling, the Supreme Court took another step to unify the law of banknotes with the rest of the law of civil obligations, and also anchored in the law of banknotes the principle that a person cannot give more than he has, while giving less weight to the institution of commerce by limiting the power of the proper holder.
An additional hearing was held on the judgment in the case of Tal Trading Corp. - Additional Civil Hearing 8447/15 Bank Leumi Le-Israel v. Tal Trading Corp. (published in the databases; September 11, 2017), where the court reiterated the result of the cancellation of the Goisky rule, and incidentally, addressed the issue of the suitability of the Banknotes Ordinance to the changing commercial reality, and the court's role in this process.
- Indeed, in light of the development of the modern economy and in light of the trends discussed above, it seems that there is a consensus on the need to reform banknote law in order to adapt it to the 21st century and the technological developments of recent years (see Lerner 2007, p. 118, Plato-Shinar, Lerner 2013).
The state does not dispute this, either.