Activity #2

Submission: May 4, 2020

1)True or false. Explain. "A bank is bound to know its depositor's signature" is an inflexible rule in
determining the liability of a bank in forgery cases. (10%)

2) kai found a check on his way home, drawn by Sehun against EXO Bank, with Chanyeol as payee. Kai
forged Chanyeol's signature as an indorser, then indorsed it personally and delivered it to BTS bank. The
latter, in turn, indorsed it to EXO bank which charged it to Sehun's account. Sehun later sued EXO bank
but it set up the forgery as its defense. Will it prosper. Explain. (10%)

3) Tom applied for a loan of P300k with Sony Bank. By way of accomodation, his friend, Andrew,
executed a promissory nite in favor of Sony Bank. When Tom defaulted, Sony Bank sued Andrew,
despite its knowledge that Andrew received no part of the loan.

A) May Sony Bank recover from Andrew if the latter interposes the absence of consideration? (10%)

Under the same facts, Andrew paid the P300K. May he recover the same amount from Tom? (5%)

4) a check for P60k was drawn against drawee bank bank and made payable to BSB Industries or order.
The check was deposited with BSB Industries' account at WL Bank which then sent the check for clearing
in drawee bank. Drawee bank refused to honor the check on ground that the serial number thereof had
been altered. BSB industries sued drawee bank.

A. Is it proper for the drawer bank to dishonor the check for alteration? Explain. (5%)

B. In the instant suit, drawee bank contented that

BSB Industries could not sue the drawee bank as there was no privity between the, hence there was no
basis to make it liable for the check. Rule on the contention. (10%)