A person who received the consideration for his car by means of checks was surprised to discover that they originated in a checkbook that had reached the grantor of the check due to a mistake in the mail and that the signature on such was forged.
The Court held that the checks are invalid. A person who holds a note will be deemed a holder in due course, and as such will be entitled to consideration for the note if he received it in good faith and for value. This entitlement exists even if the note is taken from the drawer without his permission, provided that the drawer intended to honor the note per se. However, when the drawer had no intention of releasing the note from his possession, the note is deemed to be a note that is not complete and therefore the holder has no right to it. Here, the checks were from a checkbook that was never delivered to the owner and his signature on such was forged. Hence, it is a note that is not "complete" as the owner was not aware of its existence and certainly did not intend to issue it, and therefore the holder has no right to it and the checks are invalid.