Samuel Sarmiso v. Zerihun Tsegaye.

• Date of Decision: Hamle 27, 2012 E.C..
• Applicant: Ato Samuel Sarmiso.
• Respondent: Zerihun Tsegaye.

Interpretation of Law:

The Bench emphasized that a check is an unconditional mandate to pay and is intended to circulate with a character similar to cash. While an issuer is generally liable for the amount on a check, this liability is predicated on the presumption that the check was issued voluntarily. If an issuer can prove the check was stolen or lost, they may be relieved of liability. Crucially, the holder of a check is not required to prove the underlying cause or reason (e.g., a loan agreement) for the check's issuance; the burden of proof for any defense under Article 717 lies with the issuer.

Reasoning:

The applicant claimed the check was stolen and that there was no legal reason for him to pay the respondent. However, forensic analysis confirmed that the signature and writing on the check were indeed the applicant's. The Court reasoned that because the signature was proven to be his, and because the applicant did not argue that he had signed a blank check which was then lost, it must be concluded that the check was transferred voluntarily. Furthermore, the applicant's argument that the respondent failed to prove the existence of a loan was rejected because, under negotiable instruments law, the holder is not obligated to prove the underlying consideration for the check.

Ruling:

The decisions of the Hawassa City High Court and the SNNPR State Supreme Court were affirmed. The stay of execution previously granted was lifted.

Cited Provisions:

• Commercial Code: Articles 640, 717, 827(a), 854, and 868.
• Civil Procedure Code: Articles 246(1) and 348(1).