Barnes sells his house to Louie and takes a mortgage and promissory note on the house as part of the purchase price. Much later Louie refinances the house with First Bank. At the closing (title company) the title company gives Louie the check payable to Barnes. The check being the payoff of Barnes mortgage. Louie forges Barnes endorsement and cashes the check at BCCI Bank. Third Bank is the drawee bank and BCCI forwards the check to Third Bank for payment and it is paid.

Louie stops paying Barnes mortgage and Barnes starts a foreclosure suit against Louie and First Bank. Barnes also learns that Louie cashed the check payable to Barnes.

What rights does Barnes have against:

1. Louie
2. Third Bank
3. BCCI Bank

Does Third Bank have defenses against payment to Barnes? Explain your answers.