Final answer:
In this case, D, as a holder in due course, can recover only P3,000 from M, which is the original amount of the promissory note before it was fraudulently altered. P and A are liable for the alteration, whereas B and C's liability would depend on further details. The correct answer is B. D can recover P3,000 from M.
Step-by-step explanation:
The student's question involves a scenario where M makes a promissory note payable to P, with an amount raised fraudulently from P3,000 to P30,000 by A.
This question addresses the rights and liabilities of parties in a negotiable instruments transaction. D, a holder in due course, may recover the amount of the instrument, but because the note was tampered with, D can only recover the original amount of P3,000 from M.
This is because a holder in due course can enforce payment in full for a negotiable instrument, however, they are only entitled to enforce the instrument according to its original terms, not any fraudulent alterations.
P and A are both liable for the alteration, as P consented to A's action, and B and C's liability would depend on additional factors not provided in the question.