Sec. 15. Incomplete instrument not delivered. - Where an incomplete instrument has not been delivered, it will not, if completed and negotiated without authority, be a valid contract in the hands of any holder, as against any person whose signature was placed thereon before delivery.
APPLICATION OF PROVISION
Section applies to an incomplete and undelivered instrument
INSTRUMENT NOT VALID AGAINST PARTY BEFORE DELIVERY
Situation: A signs a blank check, which was subsequently stolen by B and fills up the amount and a fictitious name as payee. He then indorses the same to C, C to D, D to E, and E to F. Can F enforce the instrument against A?
The answer is NO, because against A, whose signature was placed on the check prior to delivery, the instrument is not valid.
The answer would still be the same in case F was a holder in due course. Why? The law doesn’t discriminate on what kind of holder.
However, the invalidity of the instrument is only with reference to parties whose signature appears in the same prior to delivery. As to parties whose signature appears after delivery, it may be valid.
IT IS A REAL DEFENSE
The possible defense of a party whose signature appears on an instrument prior to delivery is that, as against him, the instrument is not valid for having been incomplete and undelivered
Want of delivery of a mechanically incomplete instrument—defense that cannot only be interposed against one who is not a holder in due course but also a holder in due course
DELIVERY IS NOT CONCLUSIVELY PRESUMED WHERE INSTRUMENT IS INCOMPLETE
Section 15 and 16 read together
BUT DELIVERY PRESUMED PRIMA FACIE
But where an incomplete and undelivered instrument is in the hands of a holder in due course, there is prima facie presumption of delivery which the maker may rebut by proof of non-delivery
Where the custody of an incomplete instrument has been entrusted to another, who wrongfully completes and negotiates it to a holder in due course, delivery to an agent or custodian is a sufficient delivery to bind the drawer or maker.