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d. the drawee cannot recover from the holder since the forged d. none of the above
instrument is necessary to the holder.
2. Forgery is a real or absolute defense when

14. The following are precluded from raising the defense of forgery except: a. drawer is guilty of negligence
a. The forger as he cannot raise his own malfeasance as a defense b. drawer whose signature was forged
b. The indorsees and persons negotiating the instrument by delivery c. drawee’s negligence
as they do not warranted that the instrument is genuine and in all d. a&b
respects what it purports to be. e. b&c
c. Those who are barred by estoppels or by their own negligence from
raising the defense of forgery. 3. If a bank pays a forged check
d. The acceptor with respect to the signature of the drawer as he
admits the existence of the drawer, the genuineness of his a. bank is liable
signature, and his capacity and authority to draw the instrument. b. drawee bank bears the loss
c. drawee bank considered as paying out of its funds
15. The rules on liabilities of parties on a forged documents in a promissory d. b&c
note are: e. all of the above
Statement A: A party whose indorsement is forged on a note
payable to order and all parties prior to him including 4. In the case of PNB vs. CA, for bearer instrument the signature of payee or
the maker can be held liable by any holder. holder is
Statement B : A party whose indorsement is forged on a noted
originally payable to bearer and all other parties prior a. unnecessary to pass title to the instrument
to him including the maker may be held liable by the b. essential to transfer title to the instrument
holder in due course provided that it was mechanically c. necessary to indorse the instrument
complete before the forgery. d. unnecessary to indorse the instrument
Statement C : A maker whose signature was forged cannot be held e. none of the above
liable by any holder.
5. Indorser of order instrument warrants that
f. All statements are true.
g. Both statements A and B are true. a. instrument is genuine and in all respect what it purports to be
h. Both statements A and C are true. b. has a good title to it
i. Both statements B and C are true. c. all prior parties had capacity to contract
j. All statements are false. d. instrument is valid and subsisting
e. all of the above
NEGOTIABLE INSTRUMENTS LAW
6. In the case of PNB vs. CA, for order instruments the signature of its rightful
FORGERY order is

1. Forged signature makes the instrument a. unnecessary to pass the title to the instrument
b. essential to transfer title to the instrument
a. wholly inoperative c. necessary to indorse the instrument
b. unenforceable d. unnecessary to indorse the instrument
c. invalid e. none of the above