This section of the book is from the "Canadian Banking Practice" book, by John T. P. Knight.
Question 176.— (1) A cheque payable to order is presented for payment by the payee, bearing above the endorsement the words " Without recourse to me." Should the bank refuse payment?
(2) Is there any danger in negotiating a marked cheque so endorsed by the payee?
Answer.— (1) If the payee of a cheque, who is receiving payment thereof from the bank on which it is drawn, chooses to write over his signature the words " Without recourse to me," we do not think that need effect the willingness of the bank to pay. The bank has in such a case no claim on him as endorser, and this disclaimer is mere surplusage. It would not relieve him from liability to return the money if it should prove that he is not the proper person to whom the money should have been paid, i.e., that he is not really the payee.
(2) The danger in negotiating a marked cheque on another bank so endorsed, is that the endorser would not be liable if the bank were to repudiate the marking or were to fail. Such an endorsement would not relieve the endorser from liability to return the money if it has been wrongly paid him.