This section of the book is from the "Canadian Banking Practice" book, by John T. P. Knight.
Question 199.— (1) The successful tenderer for a contract being let by the town of B, discovers after being awarded the contract, that he has made a mistake in his calculations. He asks to have his tender cancelled and the accompanying marked cheque returned, which the town refuses to do. Can he stop payment of the cheque?
(2) The town of B bring to a local bank the above mentioned cheque which is drawn on a hank in another place, and ask to have it cashed without recourse against the town. Would the bank be safe in cashing it ?
Answer.— (1) A customer cannot stop payment of a marked cheque which has reached the hands of the payee, without the payee's consent. If the customer chooses he can bring proceedings against the town for the return of the cheque, and can obtain, if the Court will grant it, an injunction preventing their dealing with it and preventing the bank from paying it, but short of restraint by the Court we do not see on what ground the bank could refuse to pay the cheque.
(2) A bank might be safe in negotiating a marked cheque without recourse to the payee if they knew of nothing affecting the payee's title to the cheque, or his right to negotiate the same. The proposal, however, would be so unusual it might almost constitute notice that something was wrong, and we think it would be unwise to adopt such a course.