LC Brienne T.

Ilagan LAW 3
BSA 2A DEFENSES

PERSONAL DEFENSE REAL DEFENSE

“Defense Pro Tanto” Whether HDC OR HNDC; Nobody can recover
*if HDC - no knowledge of defect; can recover *available against ALL holders
*if HNDC - w/knowledge; cannot recover
E; Material alteration

 Sec. 14. Incomplete but
delivered Instrument
- either no payee or no amount
- can be negotiated/ transferred/ insert
an amount
- the person in possession has prima
facie authority to complete it
 Sec 16.Complete but
undelivered instrument
- complies w/ Sec. 1-13
- negotiation and insertion of amount
are not allowed
- prior to delivery an instrument is
revocable.
 Sec. 15. Incomplete & undelivered
instrument
- either no payee or no amount
- negotiation and insertion of amount are not
allowed
- not a valid contract in the hands of any holder.

- if in the hands of HDC, delivery

conclusively presumed

 Sec. 14. Breach of Trust/ Authority  Sec. 20. Want of authority

- w/ authorization; not followed the authority - no authority
GR: An agent is not liable on the instrument
- he must be duly authorized
 Sec. 28. Want/ Absence of Consideration - he signs in a representative capacity
- no consideration was intended to pass; consideration was intended but failed - he discloses the principal
to pass
- partial failure of consideration is a defense pro tanto
 Sec 22. Infancy/ Ultra Vires Act
- minority is a real defense and may be enforced against all holders but is only
available to the minor himself
 Sec 13. Insertion of date  Sec 23.
GR: Date cannot be inserted Forgery
E: To fix maturity - lack of consent
To fix interest - fraudulent alteration of signature;
To determine a reasonable period of time not presumed; must be proven
- no date existing
GR: Nobody can recover
E: Material alteration as to
fixing of maturity, interest &
determining a reasonable period of
time
 Sec 124. Material Alteration
- w/ authorization
- change in the instrument; date, sum
payable, time/place of payment
- date existing; altered
*If in the hands of HDC not a party to
the alteration, the holder can recover

 SPOLIATION  Sec 124. Material Alteration

- alteration by a stranger - alteration by parties

 SIMPLE FRAUD/ FRAUD IN INDUCEMENT  FRAUD IN FACTUM / FRAUD IN ESSE CONTRACT

- instrument is known as to its nature but was deceived as to value or terms - the person signing doesn’t know that the instrument being signed is a
negotiable instrument

 ILLEGALITY ON THE PART OF THE MAKER/ DRAWER  ILLEGALITY OF CONTRACT

- forced signature - void/ unenforceable contract