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Abbott Laboratories v. Bank of London





Appeal by defendant from the Circuit Court of Lake county; the Hon. WILLIAM M. CARROLL, Judge, presiding. Heard in this court at the May term, 1953. Judgment affirmed. Opinion filed July 24, 1953. Rehearing denied October 6, 1953. Released for publication October 6, 1953.


Rehearing denied October 6, 1953

Abbott Laboratories, a corporation, plaintiff-appellee, filed its suit in the circuit court of Lake county, Illinois, against the Bank of London and South America, Limited, a corporation, defendant-appellant. Prior to the filing of the suit the plaintiff's subsidiary corporation had assigned its cause of action to the plaintiff.

On a jury trial a verdict was rendered in favor of the plaintiff for $25,901.71. The court overruled motions for judgment notwithstanding the verdict and for a new trial and entered a judgment on the verdict. The defendant has appealed.

The following facts appear from the record. Abbott Laboratories International Company, a subsidiary of the plaintiff, operated a branch at Managua, Nicaragua, where J.D. Acevedo was branch manager from 1944 to 1950. In 1947 the Abbott Company employed Juan Pablo Solorzano to act as bookkeeper.

The defendant is a banking corporation organized under the laws of the United Kingdom with branches in about sixteen countries. One is at Managua, Nicaragua. The plaintiff's subsidiary had for some years kept two banking accounts in the defendant bank. One was known as a "depositary account" and the other as a "working fund account." This last account was used to defray expenses of the branch and was reimbursed from time to time from the other account. During 1949 and 1950 checks on the depositary account required the single signature of Acevedo. The checks on the working fund account required the single signature of either Acevedo or Solorzano. The bank had knowledge of this authority. In 1949 Solorzano began a systematic program of defrauding the plaintiff's subsidiary by doing what is commonly known as "raising checks." Under banking practices in Nicaragua and throughout South America, banks furnish blank checks with stubs attached, bearing identifying numbers. The bank will not honor a check unless these checks are used. When the check reaches the bank for payment, it is examined by the teller, and if it appears to be regular and with no visible alterations, it is paid and charged against the drawer's account. The bank after payment retains the check but advises the customer from time to time in writing of the balance of his account, and the customer acknowledges receipt of this balance in writing. The form of the checks used is in many respects similar to that used in this country, but that portion of the check used to indicate the payee, the amount, and the signature is blue while the margins and the remainder of the check are white. On the first line in the blue box appears in print in Spanish "Pay to the order of," leaving a half line for the name of the payee. Below appear two complete lines where the amount of the check in letters is to be written. In the lower left corner of the blue box appears a "cordobas" sign where the amount in figures is to be inserted. To the right of this is a signature line.

It appears that the fraud was perpetrated by Solorzano in the following manner: Solorzano would write the checks with the stubs and present them to Acevedo with accompanying invoices. He would sign them and between that time and the time that they were presented to the bank for payment, Solorzano would raise the checks by inserting in a portion of the blank line conveniently left open, letters which would make the check larger. He would likewise insert the corresponding figures in front of those already appearing in the left-hand corner. The checks as raised were paid by the bank and Solorzano received the proceeds therefrom. The fraud involved about sixty checks which were admitted in evidence. In general the plaintiff contends that the checks were visibly altered and this should have been apparent to the bank. The jury by their verdict found that forty-eight of these checks amounting to 130,500 cordobas had been raised. Transposing this at the then rate of exchange, it amounted in dollars to $25,905.71. Four of the checks were drawn on the depositary account and were signed by Acevedo. The remaining forty-four checks were signed by both Acevedo and Solorzano. While it was not necessary for Acevedo to sign these checks, it can be inferred that he signed them to ward away suspicion by the bank, as it appears that Solorzano was the payee on about thirty-five of the checks. Part of the remaining checks were payable to strangers and two or three to subordinate employees of the company.

Solorzano, apparently on account of the crime he committed, is now fugitive from justice. After the discovery of the fraud Acevedo was discharged and defendant's counsel states that they have been unable to locate him.

Alberto Cisneros Pellegrini, herein referred to as Cisneros, over objection of the defendant, was permitted to testify on behalf of the plaintiff as an expert witness. To qualify as an expert witness, he said that he had spent most of his life in Argentina; that he read and spoke Spanish as his native tongue, this being the language used in both Argentina and Nicaragua; that he had taken courses in college with particular reference to commerce or banking transactions; that he had been for seventeen years and was still employed in a bank in Argentina; that before he worked in the bank he was required to learn rules and regulations dealing with the appearance and validity of checks as they are related to the law of Argentina; that during his employment in the bank he had occasion to examine and pass upon the appearance of checks and to refuse payment of checks by reason of irregularities in their appearance; that he was well qualified to act as a manager of a branch bank or as a paying teller or cashier; that he was familiar with the banking practices in Latin American countries; and that the form of the checks in controversy is that generally used throughout Latin America. He further testified that he had never been in Nicaragua but that he was able to determine irregularities on the faces of checks similar to those in controversy. The testimony of other witnesses not controverted established that the commercial code of Nicaragua is based on that of Argentina and is nearly identical with it.

Concerning the law as to the qualifications of an expert, a witness has been permitted to testify as to the laws and customs of a country where he has studied them from books and writings even though he has never been there. (In re Johnson's Estate, 100 Cal.App. (2d) 73, 223 P.2d 105.)

King and Pillinger in Opinion Evidence in Illinois, at page 255, basing their opinion on People v. Jennings, 252 Ill. 534, and other cases, say:

"Expert evidence is not confined to classified or specified professions but is applicable wherever skill and judgment . . . are required. . . . It `is admissible when the witnesses offered as experts have peculiar knowledge or experience not common to the world which renders their opinions . . . and aid to the court or jury.'"

It is generally accepted practice to use expert testimony where disputed documents are concerned and a person having any superior knowledge which might aid and assist a jury is permitted to testify. (City of Chicago v. McNally, 227 Ill. 14.)

In Lafrentz & Karstens Co. v. Cavanagh, 166 Ill. App. 306, the question at issue was whether or not the words "To Bal. Acct." were placed on the check at the time it was written or subsequently thereto. The Appellate Court said that the trial court was correct in permitting an expert to testify that in his opinion the words were ...

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