2017

IX.
A.
Alfred issued a check for ₱1,000.00 to Benjamin, his friend, as
payment for an electronic gadget. The check was drawn against
Alfred's account with Good Bank. Benjamin then indorsed the check
specially in favor of Cesar. However, Cesar misplaced the check.
Dexter, a dormmate of Cesar, found the check, altered its amount to
₱91,000.00, and forged Cesar's indorsement by way of a blank
indorsement in favor of Felix, a known jeweler. Felix then caused the
deposit of the check in his account with Solar Bank. As collecting
bank, Solar Bank stamped "all previous indorsements guaranteed" on
the check. Seeing such stamp of the collecting bank, Good Bank paid
the amount of ₱91,000.00 on the check.

May Good Bank claim reimbursement from Alfred? Explain your

answer. (4%)

ANS: Yes, Good Bank may claim reimbursement from Alfred but only
for the amount of P1,000. The Negotiable Instruments Law provides
that when an instrument has been materially altered and is in the
hands of a holder in due course, he may enforce payment according
to its original tenor. When Good Bank made payment under a
materially altered check it was not payment done in accordance with
the check’s original tenor. Thus, it has no right to claim
reimbursement from Alfred much less the right to deduct the
Php90,000 erroneous payment it made from Alfred’s account.

B.
In 2006, Donald, an American temporarily residing in Cebu City,
issued to Rhodora a check for $50,000.00 drawn against Wells Fargo
Bank with offices in San Francisco, California. Rhodora negotiated
the check and delivered it to Yaasmin, a Filipina socialite who
frequently travelled locally and internationally. Because of her
frequent travels, Yaasmin misplaced the check. It was only 11 years
later on, in 2017, when she found the check inside a diary kept in her
vault in her Hollywood, California house.

Discuss and explain the rights of Yaasmin on the check. (4%)

ANS: Yaasmin cannot enforce the check against Donald and
Rhodora. The Negotiable Instruments Law states that a check must
be presented within a reasonable time after issuance or the drawer
would be discharged from liability thereon to the extent of the loss
caused by the delay. Furthermore, it is also barred by the statute of
limitations since more than ten years had lapsed from check
issuance.

XI.

TRUE or FALSE - Explain briefly your answer.

(c) Forgery is a real defense but may only be raised against a holder
not in due course. (2%)
ANS: False. Forgery, as a real defense, can be raised even against a
holder in due course.