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Answers in Essay Questions #1
Answers in Essay Questions #1
#1
D – Drawer; P – Payee
Check is for P50,000
x
P------------B-----------A
($50,000)
a. Section 14 of NIL
#2
a. X’s contention is not correct. W can validly deliver the instrument since the
blank indorsement of his indorser converts the instrument into a bearer
instrument.
b. H can not hold P liable. H can not trace his title to the indorsement of P as it
was cut off by the delivery of W to D.
c. H can hold Z liable. H can trace his title to the indorsement of Z. Also, he is an
immediate party.
d. H can either indorse or deliver the instrument. The instrument being originally
an order instrument was converted into a bearer instrument.
#3
M – maker; P – payee
P-----------A / T---------B(X)-----------C------------D
a. D can not hold M liable by virtue of the cut-off rule. M is a party prior to the
forgery, hence, can not be held liable.
c. X can not ask reimbursement from M since he has no privity with him. His
only privy is B, the one he accommodated. X, then, should ask reimbursement
from B.
#4
P(T)---------Y---------X
a. X bank can not debit the amount it paid against D. D is a party prior to the
forgery. The consequence of Y and X’s negligence can not be passed to D.
c. Y bank should bear the loss. As between two negligent parties, the one which
made the loss possible should bear the loss. Y’s recourse is to go after T, the
forger.