from setting up such forgery against the present holder, D.

Irsd gritself
When A, B, and C indorsed the instrument, they warranted
19
that the instrument is genuine and in all respects what it
purports to be.
On the other hand, the forger will be deemed the
principal debtor because his wrongdoing prevented recovery
from M. He is in effect the maker of the instrument.
Yes, the answer would still be the same if the instrument
is a bearer instrument. The forged signature of M is still
inoperative as to him.
2
The indorsers are still secondarily liable because the
NIL provides that persons who indorse bearer instruments
are liable to subsequent parties who acquired title through
their indorsement. In this case, D acquired title through the
indorsement of A, B, and C.
Juan de la Cruz signs a promissory note payable to Pedro Lim or
bearer, and delivers it personally to Pedro Lim. The latter somehow
misplaces the said note and Carlos Ros finds the note lying around
the corridor of the building. Carlos Ros endorses the promissory
note to Juana Bond, for value, by forging the signature of Pedro
Lim. May Juana Bond hold Juan de la Cruz liable on the note?
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A:
Yes, Juana Bond may hold Juan de la Cruz liable. The promissory
note is payable to bearer, hence title is transferred through
negotiation by mere delivery of the note. Juana Bond may obtain
title even if there is no indorsement.
However, Juan de la Cruz may validly invoke the defense of
non-delivery of a complete instrument by Pedro Lim if Juana Bond
is not a holder in due course. It does not appear however that Juana
Bond is not a holder in due course, so she is presumed to be such
holder in due course (1980 Bar; See also 2010 Bar).
3.
A:
4.
Fenando forged the name of Daniel, manager of a Trading
Company, as the drawer of a check. The Bank of the Philippine
Islands, the drawee bank, did not detect the forgery and paid the
amount. May the bank charge the amount paid against the account
of the alleged drawer? Reasons.
No. The drawee may not charge the account of the trading
company. A bank is charged with the knowledge of the signature
of its customer and it should not honor any check bearing a forged
signature of the drawer (1977 Bar).
Hernan issued a check payable to the order of Fernando in the sum
of P12,000.00, and drawn on X Bank. The check was delivered to
Matilde by Adriano for encashment. At that time, the check had