Rigby J:

The following facts are taken from the judgment of Rigby J:

On 20 May 1957 the plaintiff paid a cheque for $3,243.87 to the credit of his account with the defendant Bank. The cheque, dated 13 May 1957, was drawn on the Hongkong & Shanghai Banking Corp. by the American International Assurance Co. Ltd., (hereafter referred to as the Assurance Co.") and made in favour of one Yeo Wee Yang. It was endorsed with the name "Yeo Wee Yang" and that endorsement was guaranteed by the signature "Lim Swee Beng" purporting to sign as Secretary on behalf of the "American International Assurance Co. Ltd. (Penang Branch)". The only other markings on the bank of the cheque are the stamped words "Endorsement Guaranteed" appearing over the signature of the plaintiff, Ho Chooi Soon. Finally the cheque was specially crossed by the defendant Bank itself after it had received it from the plaintiff for collection.

According to para. 4 of the Statement of Claim, on the same day, 20 May the defendant Bank collected payment on the cheque and credited the proceeds to the plaintiff's account with the said Bank.

On 26 June 1959 the defendant Bank debited the amount of the said cheque in the plaintiff's account and drew out the same amount. On 22 September 1959 the plaintiff accordingly instituted proceeding against the defendant Bank claiming damages for wrongful conversion; in the alternative, he claimed a repayment of the money as money had and received by the defendant Bank to the use of the plaintiff.

On 30 September the defendant Bank entered an appearance in the action.

On 6 October the plaintiff took out a Summons under O. 14 duly supported by the requisite affidavit, asking for leave to sign final judgment on the ground that there was no defence to the action.

On 10 October the defendant Bank filed their defence to the action, and on 12 October the Penang, Manager of the defendant Bank filed an affidavit showing cause why the application for leave to enter final judgment should not be granted.

The defence put forward by the defendant Bank was that on 4 June 1959, they had received a letter from a firm of Solicitors in Singapore, acting on behalf of the Assurance Co., claiming that the endorsement on the cheque of the payee, Yeo Wee Yang, was forged, and demanding repayment of the proceeds of the cheque as the true owners thereof.

On 7 September the defendant Bank received a further letter from the Solicitors repeating the claim of their clients, the Assurance Co. for repayment of the proceeds of the cheque as the true owners, and stating that the endorsement by the payee, Yeo Wee Yang, on the cheque had been forged in the following circumstances. Yeo Wee Yang had held a life or endowment insurance policy with the Assurance Co. The policy matured due for payment on 1 July 1957. In May 1957, Yeo Wee Yang applied for payment of the policy. The Assurance Co. discounted a small amount by reason of the application for payment being made before the due date of payment, and forwarded to Yeo Wee Yang, through their Penang Agent, one Lim Swee Beng, a cheque payable to Yeo Wee Yang or order. Yeo Wee Yang, refused to accept the cheque, returned it to Lim Swee Beng, the Assurance Co.'s Penang Agent, and demanded full payment. On 28 June a further cheque for the full surrender value of $3,270 was duly forwarded to Yeo Wee Yang from the Assurance Co.'s Singapore Office and be, in due course, collected payment thereon. In the meantime, however, the original cheque for $3,243.87, which Yeo Wee Yang had refused to accept, had been misappropriated by Lim Swee Beng in Penang. It was alleged in the letter that Lim Swee Beng had forged the signature of Yeo Wee Yang and endorsed it to a third party. Apart from the signature "Yeo Wee Yang" appearing as an endorsement on the cheque, and the guarantee of that endorsement by Lim Swee Bang, the only other endorsement on the cheque was the signature of the plaintiff appearing immediately below the stamp