Commercial Law, 2011 Bar — Question 65

MULTIPLE CHOICE

X found a check on the street, drawn by Y against ABC Bank, with Z as payee. X forged Z's signature as an indorser, then indorsed it personally and delivered it to DEF Bank. The latter, in turn, indorsed it to ABC Bank which charged it to the Y's account. Y later sued ABC Bank but it set up the forgery as its defense. Will it prosper? A) No, since the payee's signature has been forged. B) No, since Y’s remedy is to run after the forger, X. C) Yes, since forgery is only a personal defense. D) Yes, since ABC Bank is bound to know the signature of Y, its client.

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