“

Forgery
the counterfeit-making or fraudulent alteration of a
writing, and may consist in the signing of another's name or the alteration of
an instrument in the name, amount, description of the person and the like,,
with intent thereby to defraud.

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 23
Forged signature; effect of. - When a signature is
forged or made without the authority of the person
whose signature it purports to be, it is wholly
inoperative, and no right to retain the instrument, or to
give a discharge therefor, or to enforce payment there
of against any party thereto, can be acquired through or
under such signature, unless the party against whom it
is sought to enforce such right is precluded from setting
up the forgery or want of authority.

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Application
of
Sec. 23 Where the Where the
signature on signature is made
the instrument without the
authority of the
is forged person whose
signature it
purports to be.

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Thanks!

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Effects
of ▹ Basic rule: forged signature in wholly inoperative
but the instrument itself is operative.
Forgery
a. No right to retain the instrument by virtue of the
forged signature;
b. No right to give discharge by virtue of the forged
signature;
c. No right to enforce payment against any party prior
to the forgery.

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 Proof
of It must be proven clearly and convincingly, and the burden of
proof lies on the party alleging forgery. It cannot be presumed. A
forgery person who denies issuing a note or check puts into question the
genuineness and authenticity of the signature appearing thereon; it
is he who has the burden of proving the signature is a forgery.
Mere variance of signatures cannot be considered conclusive
proof that the same were forged.

(Chiang Yia Min v. Court of Appeals, 355 SCRA 608 [2001])

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 (1) P makes a promissory note payable to his own order,
Examples forging M's signature as maker.
The signature is inoperative and, therefore, it did not operate
to make M a party to the instrument. M is not liable even to
an innocent purchaser for value.
(2) X issues a promissory note payable to the order of P. X
signs M's name indicating that he signs for and on behalf of
M.
However, X has no authority to bind M.
The signature is also inoperative and M is not liable to any
holder.

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 Cases
of 1) Forgery of promissory (2) Forgery of bills of exchange
which may be subdivided into:
notes which may be
forgery subdivided into: (a) Forgery of an indorsement on
the bill; and
a) Forgery of an (b) Forgery of the drawer's
indorsement on the signature; either
note; and 1) with acceptance by the
drawee; or
b) Forgery of the
2) without such acceptance but
maker's signature. the bill is paid by the drawee.

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 Extent
of the ▹ It does not purport to declare the instrument
effect of totally void nor the genuine signatures thereon
inoperative.
forgery ▹ Only the forged or unauthorized signature is
declared to be inoperative.
▹ Rights may still exist and be enforced by virtue
of such instrument as to those whose signatures
thereto are found to be genuine.

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 Extent
of the ▹ A forged indorsement prevents any subsequent
effect of party from acquiring any right as against any
party whose name appears prior to the forgery
forgery ▹ Although rights may exist between and among
parties subsequent to the forged indorsement,
not one of them can acquire rights against
parties prior to the forgery.
(Gempesaw v. Court of Appeals, )

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 ▹ M makes a note payable to the order of P. P indorses it
Example to A. X obtains possession of the note fraudulently and
indorses it to B, by forging A's signature. B indorses to
C. Thus, the indorsements are as follows:
Pay to A
Sgd. P
Pay to B
Sgd. A (forged by X)
Pay to C
Sgd. B

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 (a) C cannot enforce the instrument against M and P because C's rights against
them are cut off by the forged signature of A which is wholly inoperative. C
Example could acquire rights against M or P to the instrument only through the forged
signature of A.
(b) Neither can C enforce the note against A because A's signature is wholly
inoperative. A has no privity with C. Under Section 23, C acquired no right to
retain, discharge, or enforce payment of the note under the forged signature of
A.
(c) But C may go against B whose signature is genuine and, therefore,
operative. B is a general indorser who warranted to C that the instrument is
genuine and was valid and subsisting at the time of B's indorsement,.
(d) Of course, B or C has a right of recourse against X, the forger.
(e) A can recover from M and P because his rights against them were not
affected by the forgery. The signatures of M and P are genuine and they are
liable to A on their contract.

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Exceptions
to the There are actually two (2) exceptions to the general rule that
no right or title can be acquired to a negotiable instrument
General through or under a forged or unauthorized signature,
Rule namely:
(1) If the party against whom it is sought to enforce such
right is precluded from setting up the forgery or want of
authority (Sec. 23.); and
(2) Where the forged signature is not necessary to the
holder's title in which case the forgery may be disregarded,
(see Sec. 48.)

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 Persons
precluded
from setting (a) Those who by their acts, silence, or negligence,
up the are estopped from setting up the defense of
defense of forgery; and
forgery.
(b) Those who warrant or admit the genuineness
of the signatures in question, namely:
1) indorsers;
2) acceptors; and
3) persons negotiating by delivery, (see
Sec. 65.)

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Thank you! ♥
Whoa! That’s a big number, aren’t you proud?

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