Section 23 of the Negotiable Instruments Law, adopted in all of the forty-eight states,' provides: "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 thereof 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.' In Nashville Trust Co. v. Southern Buyers the Tennessee Court of Appeals was faced with the question whether a principal was "precluded from setting up the want of authority" of his agent who drew several checks on the principal's bank account for the agent's own personal use. In short, the agent misappropriated the principal's funds. The unfaithful agent had been given express authority to draw checks on the account of his principal.
Paul J. Hartman,
Bills and Notes -- 1956 Tennessee Survey,
9 Vanderbilt Law Review
Available at: https://scholarship.law.vanderbilt.edu/vlr/vol9/iss5/3