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Statement A: the drawer’s account cannot be charged by the drawee 9. Suppose C represents himself as Alex Santos when he is not to B. Due to
where the drawee paid
Statement B : the drawer has no right to recover from the collecting
bank
Statement C : the payee can recover from the drawer
Statement D : the payee can recover from the receipt of the payment,
such as the collecting bank
a. All statements are true.
b. Both statements A and B are true.
c. Both statements A and C are true.
d. Both statements B and C are true.
e. All statements are false.
6. A signature which is forged or made without the authority is wholly
inoperative.
a. Only the signature forged or made without authority is
inoperative, the instrument or other signatures which are genuine
are affected.
b. Signature made with authority is inoperative.
c. A signature which is not forged or made with authority is wholly
inoperative.
d. Signature forged or made with authority is wholly operative.
7. R, debtor of S, wrote a promissory note payable to the order of S. T, S’s
brother, misrepresenting himself as S’s agent, obtained the note from R,
then negotiated it to A after forging S’s signature. A indorsed it to B,
who indorsed it to F, a holder in due course. May F recover from B?
a. Yes, since the signature of S is immaterial, he being the payee.
b. No, since the forgery of S’s signature results in the discharge of B.
c. Yes, since only the forged signature is inoperative and B is bound
as indorser.
d. No, since the signature of S, the payee, was forged.
8. A found a check on the street, drawn by B against CHI Bank, with C as
payee. A forged C’s signature as an indorser then indorsed it personally
and delivered it to MET Bank. The latter, in turn, indorsed it to CHI Bank
which charged it to the B’s account. B later sued CHI Bank but it set up
the forgery as its defense. Will it prosper?
a. Yes, since forgery is only a personal defense.
b. Yes, since CHI Bank is bound to know the signature of B, its client.
c. No, since B’s remedy is to run after the forger, A.
d. No, since the payee’s signature has been forged.
such misrepresentation, he obtained from B a note payable to the order
of Alex Santos. If B intends that the proceeds of the note will go to the
real Alex Santos and not C, but to whom B issued the note on the belief
that C was Alex Santos, would be a forgery. This is an example of:
a. Fraudulent impersonation
b. Fraud amounting to forgery
c. Double intent in fraudulent impersonation
d. Fraud in factum
10. The effects of forgery of a signature are as follows except:
a. That the signature forged or made without authority is wholly
inoperative
b. That no right to retain the instrument, or to give discharge thereof,
c. to enforce payment thereof
d. When the party against whom it its sought to enforce such right is
precluded from setting up the forgery or want of authority as a
defense.
11. A holder in due course holds the instrument free from any defect of title
of prior parties and free from defenses available to prior parties among
themselves. An example of such a defense is –
a. duress amounting to forgery
b. fraud in inducement
c. alteration
d. fraud in esse contractus
12. Forgery of bills of exchange may be subdivided into, a) forgery of an
indorsement on the bill and b) forgery of the drawer’s signature, which
may either be with acceptance by the drawee, or
a. with acceptance but the bill is paid by the drawee.
b. without acceptance but the bill is paid by the drawer.
c. without acceptance but the bill is paid by the drawee.
d. with acceptance but the bill is paid by the drawer.
13. In case the bill is originally payable to bearer, the drawee may debit the
drawer’s account in spite of the forged instruments. The reason is that:
a. the forged instruments is necessary to the title of the holder.
b. the drawee can recover from the holder.
c. the forged instruments is not necessary to the title of the holder.
The drawee cannot recover from the holder.