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d. none of the above

7. Payment under a forged instrument is
13. Irrespective of good faith in paying a forged check
a. violation of a bank’s duty
b. not the drawer’s order a. bank is not liable
c. drawee’s bank right to reimbursement b. bank is liable
d. none of the above c. bank and drawer are liable
d. b&c
8. In the case of Samsung vs. FEBTC, drawee who has paid upon the forged e. none of the above
signature bears the loss except when
14. Forgery is committed through
a. drawee’s negligence
b. negligence can be traced on the part of the drawer a. dishonor of checks
c. a&b b. counterfeit and alteration
d. none of the above c. counterfeit-making or fraudulent alteration of writing and may consist
in the signing of another’s name or the alteration of an instrument in
9. Fiduciary relationship exists between a bank and depositor where the name, amount, description of the person and the like, with intent
thereby to defraud
a. simple care and diligence is required d. none of the above
b. extraordinary care and diligence is required
c. highest degree of care and diligence is required 15. In the case of Samsung vs. FEBTC, condition which bars a party from
d. b&c setting up the defense of forgery

10. Concept of general indorser guarantees a. guilty of negligence

b. guilty of fraud
a. all prior indorsements c. a&b
b. only present indorsements d. none of the above
c. all prior indorsements including forged indorsement.
d. None of the above
Warranties and Liabilities
11. Chain of liability in cases involving forged indorsements
1. A person becomes a party to an instrument by:
a. does not end with the drawee bank and pass liability back through the a. certifying a check
collection chain to the party who took from the forger and to the b. accepting the instrument in which case the party becomes an
forger himself acceptor
b. ends with the drawee bank c. indorsing a bill or note
c. does not end with the drawee bank and collect reimbursement d. signing the instrument
d. a&c
12. Forge is real defense when A person becomes a party to an instrument by signing his name thereon.
The general rule is that no person is liable on an instrument unless his
a. it can be presumed signature appears thereon.
b. could be raised against any holder, including a holder in due course
c. raised against a holder 2. The following are true about promissory note except: